A context based arithmetic coding of Lapped Biorthogonal Transform (LBT) coefficients is proposed. Aiming at the shortcut of precision and computation complexity of binary integer LBT in DSP implementation, a fixed point algorithm of LBT which fits parallel processing in DSP is proposed. There are 60 context models in the algorithm. The coder of entropy coding is MQ-coder. For the purpose of parallel processing, the MQ-coding is isolated from the bit plane scanning. Based on the characteristic of coding algorithm after isolated coding, a modified MQ-coder is designed. Meanwhile, the implementation in TMS320C6000 DSP of the algorithm is studied. Experiments show that the algorithm's coding performance is mostly the same as SPIHT and very competitive with JPEG2000. The tests on the hardware platform show that the algorithm is simple for parallel processing and the computation complexity is very low.