A digital facsimile system suitable for the facsimile transmission of newspaper pages having screened picture portions and printed character portions is disclosed. The transmitter receives a digitized facsimile signal which is a train of pel codes formed by scanning a picture to be transmitted. In response to the digitized facsimile signal, a first reference generator produces first pel codes neighboring the present pel code, a second pel code spaced by the pitch of the screened picture from the present pel code, and third pel codes neighboring the second pel code. A ROM is addressed by the first, second and third pel codes to produce a first prediction code for the present pel code. The output of the ROM and the digitized facsimile signal are supplied to an Exclusive OR which provides a prediction error code according to the difference between the first prediction code and the present pel code. A train of prediction errors codes constitutes a prediction error signal which is encoded and transmitted. The receiver receives the encoded prediction error signal and decodes it to reproduce the prediction error signal. Another Exclusive OR produces the present pel code from each error code of the prediction error signal. A second reference code generator produces a second reference code corresponding to the first reference code on the basis of the output of the second Exclusive OR. A second ROM produces a second prediction code corresponding to the first prediction code on the basis of the second reference code and applies the second prediction code to the second Exclusive OR.