Ant colony algorithm is a newly emerged stochastic searching optimization algorithm in recent years. In this paper, vector quantization image coding is modeled as a stochastic optimization problem in an Ant colony system (ACS). An appropriately adapted ant colony algorithm is proposed for vector quantization codebook design. Experimental results show that the ACS-based algorithm can produce a better codebook and the improvement of Pixel signal-to-noise ratio (PSNR) exceeds 1dB compared with the conventional LBG algorithm.