Abstract The inherent noise in the observed (e.g., scanned) binary document image degrades the image quality and harms the compression ratio through breaking the pattern repentance and adding entropy to the document images. In this paper, we design a cost function in Bayesian framework with dictionary learning. Minimizing our cost function produces a restored image which has better quality than that of the observed noisy image, and a dictionary for representing and encoding the image. After the restoration, we use this dictionary (from the same cost function) to encode the restored image following the symbol-dictionary framework by JBIG2 standard with the lossless mode. Experimental results with a variety of document images demonstrate that our method improves the image quality compared with the observed image, and simultaneously improves the compression ratio. For the test images with synthetic noise, our method reduces the number of flipped pixels by 48.2% and improves the compression ratio by 36.36% as compared with the best encoding methods. For the test images with real noise, our method visually improves the image quality, and outperforms the cutting-edge method by 28.27% in terms of the compression ratio