An image recording and reproducing apparatus for re-compressing and re-recording once stored data, and a method thereof. The image recording and reproducing apparatus comprises an encoder for compressing input digital image data by a first compression rate, thereby generating and outputting first compressed data, a storage part for storing the first compressed data, a decoder for expanding the first compressed data of the storage part to restore a digital image data, and outputting the digital image data, and a controller for controlling the decoder such that the digital image data output from the decoder is transmitted to the encoder, compressed by the encoder by a second compression rate into second compressed data, and stored to the storage part.