Image encryption is a suitable method to protect image data. The encryption algorithms based on position confusion and pixel substitution change compression ratio greatly. In this paper, a novel image encryption algorithm combining with JPEG encoding is proposed. In luminance and chrominance plane, the DCT blocks are confused by pseudo-random SFCs (Space Filling Curves). In each DCT block, DCT coefficients are confused according to different frequency bands and their signs are encrypted by a chaotic stream cipher. The security of the cryptosystem against brute-force attack and known-plaintext attack is also analyzed. Experimental results show that, the algorithm is of high security and low cost. What's more, it supports direct bit-rate control or recompression, which means that the encrypted image can still be decrypted correctly even if its compression ratio has been changed. These advantages make it suitable for image transmission over network.