This invention enables to generate encoded data without noticeable image quality degradation when reproducing an image at a lower resolution not to mention the original resolution. An image a digital camera can capture takes three sizes L, M, and S. When the size L is designated, stream conversion information SC is set to “2”. When the size M is designated, the stream conversion information SC is set to “1”. When the size S is designated, the stream conversion information SC is set to “0”. When encoding image data in compression processing, block overlap processing of suppressing discontinuity of data at the boundary between adjacent blocks is executed as many times as the count set in the stream conversion information.