Methods and systems for JPEG encoding and decoding are disclosed. In the encoding method, an image is split into 8×8 pixel blocks and the 8×8 pixel blocks are grouped into a number of minimum coded units (MCU's), such that each MCU consists of a constant number of 8×8 pixel blocks. The MCU's are then scanned to forward discrete cosine transform, quantization, zigzag scanning and entropy encoding processes and are subsequently converted into bitstreams according to entropy encoding coding tables. In the entropy encoding process, AC coefficients are run-length encoded, while DC coefficients are not subjected to differential pulse-code modulation. The bitstreams are byte-aligned by stuffing zeroes and compression data for a special JPEG file are generated from the byte-aligned bitstreams. A position table is established, recording positions of the bitstreams in the compression data. The method enables fast positioning of bitstreams corresponding to an image region of interest.