Systems and methods provide image compression based on parameter-assisted inpainting. In one implementation of an encoder, an image is partitioned into blocks and the blocks classified as smooth or unsmooth, based on the degree of visual edge content and chromatic variation in each block. Image content of the unsmooth blocks is compressed, while image content of the smooth blocks is summarized by parameters, but not compressed. The parameters, once obtained, may also be compressed. At a decoder, the compressed image content of the unsmooth blocks and the compressed parameters of the smooth blocks are each decompressed. Each smooth block is then reconstructed by inpainting, guided by the parameters in order to impart visual detail from the original image that cannot be implied from the image content of neighboring blocks that have been decoded.