An algorithm for recognition and retrieval of image from image collection is developed. Basis of the algorithm is the progressive wavelet correlation. The final result is the recognition and retrieval of the wanted image, if it is in the image collection. Instructions for the choice of correlation threshold value for obtaining desired results are defined. The areas where the algorithm can be applied are also discussed. To increase efficiency is presented two phases solution. The first phase uses well-known methods of image retrieving by descriptors based on the content of the searched image. In the second phase the progressive wavelet correlation method is applied on the small number of image candidates selected in previous phase. Experiments are performed with data bases of 1000 and 10 000 images, using Oracle data base and the Matlab component Database Toolbox for operations with data bases. The algorithm is applicable to different formats of images.