Abstract Deep Neural Networks trained as image auto-encoders have recently emerged as a promising direction for advancing the state-of-the-art in image compression. The key challenge in learning such networks is twofold: To deal with quantization, and to control the trade-off between reconstruction error (distortion) and entropy (rate) of the latent image representation. In this paper, we focus on the latter challenge and propose a new technique to navigate the ratedistortion trade-off for an image compression auto-encoder. The main idea is to directly model the entropy of the latent representation by using a context model: A 3D-CNN which learns a conditional probability model of the latent distribution of the auto-encoder. During training, the auto-encoder makes use of the context model to estimate the entropy of its representation, and the context model is concurrently updated to learn the dependencies between the symbols in the latent representation. Our experiments show that this approach, when measured in MS-SSIM, yields a state-of-theart image compression system based on a simple convolutional auto-encoder.