In order to reduce the frame memory usage in LCD overdrive, there is basic technique called block truncation coding (BTC) is commonly used due to its efficient coding and low implementation cost. However, there are some limitation of BTC that causes severe perceptual artifacts and degrades overdrive performance. To overcome the problem of BTC here we propose an adaptive multi-level BTC (AM-BTC) in this paper. The AM-BTC as suggested firstly overcomes the limitation by adaptively selection of 2-level or 4-level BTC according to the edge property of the coding block. Then, to reduce the bit rate of AM-BTC we improve the 2-level and 4-level BTCs by using only luminance bit-map to represent three color bit-maps, depending upon the color bit-maps advancement can be done . Moreover, as a result of this paper different types of images are compared for different PSNR values.