New methods for both color palette design and dithering based on human visual system (HVS) characteristics are proposed. Color quantization for palette design uses the relative visual sensitivity and spatial masking effect of HVS. The dithering operation for printing uses nonlinear quantization, which considers the overlapping phenomena among neighbor printing dots, and then a modified dot-diffusion algorithm is followed to compensate the degradation produced in the quantization process. The proposed techniques can produce high-quality images in low-bit color devices.