This paper presents a novel multiresolution image segmentation method based on the discrete wavelet transform and Markov Random Field (MRF) modelling. A major contribution of this work is to add spatial scalability to the segmentation algorithm producing the same segmentation pattern at different resolutions. This property makes it suitable for the scalable object-based wavelet coding. The correlation between different resolutions of pyramid is considered by a multiresolution analysis which is incorporated into the objective function of the MRF segmentation algorithm. Allowing for smoothness terms in the objective function at different resolutions improves border smoothness and creates visually more pleasing objects/regions, particularly at lower resolutions where downsampling distortions are more visible. Application of the spatial segmentation in video segmentation, compared to traditional image/video object extraction algorithms, produces more visually pleasing shape masks at different resolutions which is applicable for object-based video wavelet coding. Moreover it allows for larger motion, better noise tolerance and less computational complexity. In addition to spatial scalability, the proposed algorithm outperforms the standard image/video segmentation algorithms, in both objective and subjective tests.