This paper proposes a color image coding algorithm based on shape-adaptive all phase biorthogonal transform (SA-APBT). This algorithm is implemented through four procedures: color space conversion, image segmentation, shape coding, and texture coding. Region-of-interest (ROI) and background area are obtained by image segmentation. Shape coding uses chain code. The texture coding of the ROI is prior to the background area. SA-APBT and uniform quantization are adopted in texture coding. Compared with the color image coding algorithm based on shape-adaptive discrete cosine transform (SA-DCT) at the same bit rates, experimental results on test color images reveal that the objective quality and subjective effects of the reconstructed images using the proposed algorithm are better, especially at low bit rates. Moreover, the complexity of the proposed algorithm is reduced because of uniform quantization.