diff --git a/src/main/java/com/squareup/gifencoder/OctTreeQuantizer.java b/src/main/java/com/squareup/gifencoder/OctTreeQuantizer.java
new file mode 100644
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+++ b/src/main/java/com/squareup/gifencoder/OctTreeQuantizer.java
@@ -0,0 +1,170 @@
+/*
+ * Copyright (C) 2015 Square, Inc.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *      http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+package com.squareup.gifencoder;
+
+import java.util.HashSet;
+import java.util.Set;
+
+/**
+ * Implements qct-tree quantization.
+ * <p>
+ * The principle of algorithm: http://www.microsoft.com/msj/archive/S3F1.aspx
+ * </p>
+ */
+public final class OctTreeQuantizer implements ColorQuantizer {
+    public static final OctTreeQuantizer INSTANCE = new OctTreeQuantizer();
+
+    private static char[] mask = new char[]{0x80, 0x40, 0x20, 0x10, 0x08, 0x04, 0x02, 0x01};
+    private int leafCount;
+    private int inIndex;
+
+    private Node[] nodeList = new Node[8];
+
+    private OctTreeQuantizer() {
+    }
+
+    @Override
+    public Set<Color> quantize(Multiset<Color> originalColors, int maxColorCount) {
+        Node node = createNode(0);
+        Set<Color> distinctElements = originalColors.getDistinctElements();
+        for (Color color : distinctElements) {
+            addColor(node, color, 0);
+            while (leafCount > maxColorCount) {
+                reduceTree();
+            }
+        }
+        HashSet<Color> colors = new HashSet<>();
+        getColorPalette(node, colors);
+
+        leafCount = 0;
+        inIndex = 0;
+        for (int i = 0; i < 8; i++) {
+            nodeList[i] = null;
+        }
+
+        return colors;
+    }
+
+    private boolean addColor(Node node, Color color, int inLevel) {
+        int nIndex, shift;
+
+        if (node == null) {
+            node = createNode(inLevel);
+        }
+
+        int red = (int) (color.getComponent(0) * 255);
+        int green = (int) (color.getComponent(1) * 255);
+        int blue = (int) (color.getComponent(2) * 255);
+
+        if (node.isLeaf) {
+            node.pixelCount++;
+            node.redSum += red;
+            node.greenSum += green;
+            node.blueSum += blue;
+        } else {
+            shift = 7 - inLevel;
+            nIndex = (((red & mask[inLevel]) >> shift) << 2)
+                    | (((green & mask[inLevel]) >> shift) << 1)
+                    | ((blue & mask[inLevel]) >> shift);
+            Node tmpNode = node.child[nIndex];
+            if (tmpNode == null) {
+                tmpNode = createNode(inLevel + 1);
+            }
+            node.child[nIndex] = tmpNode;
+            if (!addColor(node.child[nIndex], color, inLevel + 1)) {
+                return false;
+            }
+        }
+        return true;
+    }
+
+    private Node createNode(int level) {
+        Node node = new Node();
+        node.level = level;
+        node.isLeaf = (level == 8);
+        if (node.isLeaf) {
+            leafCount++;
+        } else {
+            node.next = nodeList[level];
+            nodeList[level] = node;
+        }
+        return node;
+    }
+
+    private void reduceTree() {
+        int i;
+        int redSum = 0, greenSum = 0, blueSum = 0, count = 0;
+
+        for (i = 7; (i > 0) && (nodeList[i] == null); i--) {
+        }
+
+        Node tmpNode = nodeList[i];
+        nodeList[i] = tmpNode.next;
+
+        for (i = 0; i < 8; i++) {
+            if (tmpNode.child[i] != null) {
+                redSum += tmpNode.child[i].redSum;
+                greenSum += tmpNode.child[i].greenSum;
+                blueSum += tmpNode.child[i].blueSum;
+                count += tmpNode.child[i].pixelCount;
+                tmpNode.child[i] = null;
+                leafCount--;
+            }
+        }
+        tmpNode.isLeaf = true;
+        tmpNode.redSum = redSum;
+        tmpNode.greenSum = greenSum;
+        tmpNode.blueSum = blueSum;
+        tmpNode.pixelCount = count;
+
+        leafCount++;
+    }
+
+    private void getColorPalette(Node node, Set<Color> colors) {
+        if (node.isLeaf) {
+            node.colorIndex = inIndex;
+            node.redSum = node.redSum / node.pixelCount;
+            node.greenSum = node.greenSum / node.pixelCount;
+            node.blueSum = node.blueSum / node.pixelCount;
+            node.pixelCount = 1;
+            inIndex++;
+            double red = (double) node.redSum / 255;
+            double green = (double) node.greenSum / 255;
+            double blue = (double) node.blueSum / 255;
+            colors.add(new Color(red, green, blue));
+        } else {
+            for (int i = 0; i < 8; i++) {
+                if (node.child[i] != null) {
+                    getColorPalette(node.child[i], colors);
+                }
+            }
+        }
+    }
+
+    private static final class Node {
+        boolean isLeaf;
+        int level;
+        int colorIndex;
+
+        int redSum;
+        int greenSum;
+        int blueSum;
+        int pixelCount;
+
+        Node[] child = new Node[8];
+        Node next;
+    }
+}