In this paper, an improved VQ index reassignment algorithm is proposed to reduce the block degradation of VQ encoded images caused by noisy channels. By reassigning the indices of a VQ codebook, the VQ-compressed images can be transmitted through a noisy channel while preserving the quality of reconstructed VQ images. Pseudo-Gray coding (PGC) and anti-Gray coding (AGC) are two famous index reassignment schemes. By combining the virtues of PGC and AGC skillfully, a novel VQ reassignment algorithm is proposed. Experimental results show that the proposed algorithm outperforms AGC and PGC. Additionally, the computational complexity of index reassignment in the proposed algorithm is reduced significantly