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This paper presents a new progressive contour coding method based on digital polygonal approximation. By applying digital geometry concepts such as digital contours, segments and distances at the approximation stage, it is possible to design an inherently progressive encoding scheme which directly exploits the resulting geometrical knowledge. Experimental results show a performance similar to that of state of the art polygon encoding methods that do not achieve progressive transmission. Applications include indexing and retrieval of arbitrarily shaped objects in image databases, as well as composition and manipulation of such image objects in the compressed domain as targeted by the future video compression standard MPEG-4.