Wavelet tree-based image compression algorithms have excellent rate distortion performance. However, they have a major drawback in their memory consumption. A new approach based on backward coding of wavelet trees (BCWT) has been recently developed. Although the BCWT algorithm itself uses much less memory than the SPIHT algorithm, the total system memory usage in BCWT coding is still high due to the large memory consumption of the wavelet transform. In this paper, the line-based BCWT algorithm is presented, which utilizes the line-based wavelet transform to achieve BCWT coding. Due to the backward coding feature of the BCWT algorithm, the line-based BCWT algorithm can significantly reduce the overall system memory usage. Depending upon the image size, the memory usage of the line-based BCWT algorithm can be less than 1% of the memory usage of the SPIHT algorithm. Compared with the original BCWT algorithm, the line-based BCWT algorithm can use less than 2% of the memory that the BCWT algorithm consumes, thus making this algorithm extremely suitable for implementation on resource-limited platforms.