This paper presents a high-quality multi-mode mipmapping texture compression with alpha map (MMMTC) system. Based on wavelet transform, a hierarchical approach is adopted for mipmap in YCbCr color space to embed three levels of mipmap in a single bitstream. In addition, by inspecting the similarity between alpha channel and luminance channel, the alpha high coefficients are efficiently encoded with linear prediction from the luminance high coefficients in three modes. Simulation results show that MMMTC can provide better image quality with similar memory bandwidth for RGB channels and outperform other texture compression systems for alpha channel. VLSI implementation result shows that the hardware cost of MMMTC is similar to that of DXTC and is suitable to be integrated in GPU to provide high-quality textures with low memory bandwidth requirement.