This paper presents a scheme for incorporating error-resilient mechanisms into a wavelet based image encoder. The scheme combines an effective packetization of wavelet coefficients along with a method for further partitioning of packetized data for protection against both packet losses and random bit errors. The partitioning allows for independent error protection and decoding of different sections of the bitstream with minimal amounts of redundancy. Uncorrectable errors are detected and corresponding coefficients are estimated by interpolation. Experimental results indicate high image quality for reconstructed images at various combinations of packet loss and bit error rates.