This paper carves out an image compression approach that integrates our parameter-assistant inpainting (PAI) technique to exploit the visual redundancy inherent in color-gradation image regions. In our scheme, an input image is first classified at block level according to the degree of edge content as well as chromatic variation in each block. An exemplar selection approach is then adopted to skip a majority of the gradation blocks during encoding. Only their positions and certain parameters extracted for condensed description are encoded along with the reserved blocks. At the decoder side, the skipped regions are recovered through image inpainting, relying on both the delivered parameters and reserved regions. Experimental results show that our proposed method outperforms baseline JPEG at colorgradation regions by nearly 80% bits-saving, at similar visual quality levels.