SAR image compression is important for space-borne SAR systems. Many compression methods were proposed, conventional methods were based on digital processing. Traditional methods are much computation and storage consumption. A novel SAR image compression method is proposed here. In the method, SAR image compression is based on the discrete cosine transform (DCT), and it is applied using optronic processing. Both the speckle denoising and the processing of cosine spectrum coefficient are presented in authors’ experiments, which are the crucial parts in SAR image compression. The final experimental result verifies the feasibility of the method.