Summary: Principal Component Analysis (PCA) has been applied in various areas such as pattern recognition and data compression. In some cases, however, PCA does not extract the characteristics of the data-distribution efficiently. In order to overcome this problem, we have proposed a novel method of Nonlinear PCA which preserves the order of the principal components. In this paper, we reduce the dimensionality of image data using the proposed method, and examine its effectiveness in the compression and recognition of images.