In this paper, we describe a Trellis Coded Quantization (TCQ)-based quantization and watermarking technique in the framework of JPEG2000 still image compression. Furthermore, we investigate the design of a novel joint compression and watermarking scheme based on a hybrid TCQ module which can perform at the same time quantization and watermark embedding. The watermark extraction process can be achieved both during and after image decompression. Another advantage is the lower complexity of the system because the quantization stage is used for both compression and watermarking purposes. Experimental results have demonstrated that the proposed joint scheme successfully survives JPEG2000 compression with minimal degradation of the image quality. We also studied the robustness of the scheme against gaussian filtering attack, gaussian noise attack, valumetric attack and jpeg attack.