Wavelet transforms that have an adaptive low-pass filter are useful in applications that require the signal singularities, sharp transitions, and image edges to be left intact in the low-pass signal. In scalable image coding, the spatial resolution scalability is achieved by reconstructing the low-pass signal subband, which corresponds to the desired resolution level, and discarding other high-frequency wavelet subbands. In such applications, it is vital to have low-pass subbands that are not affected by smoothing artifacts associated with low-pass filtering. We present the mathematical framework for achieving 1-D wavelet transforms that have a spatially adaptive low-pass filter (SALP) using the prediction-first lifting scheme. The adaptivity decisions are computed using the wavelet coefficients, and no bookkeeping is required for the perfect reconstruction. Then, 2-D wavelet transforms that have a spatially adaptive low-pass filter are designed by extending the 1-D SALP framework. Because the 2-D polyphase decompositions are used in this case, the 2-D adaptivity decisions are made nonseparable as opposed to the separable 2-D realization using 1-D transforms. We present examples using the 2-D 5/3 wavelet transform and their lossless image coding and scalable decoding performances in terms of quality and resolution scalability. The proposed 2-D–SALP scheme results in better performance compared to the existing adaptive update lifting schemes.