Abstract-In this paper we propose an adaptive non-linear image representation based on the divisive normalization of localfrequency transforms used in contrast masking models. This normalized representation has two effects: (1) it increases the statistical independence of the coefficients of the representation and (2) it is Euclidean from a perceptual point of view.Experimental results show that reducing the remaining statistical and perceptual dependence using normalized representations for transform coding may make a big difference in the quality of the reconstructed images.