In packet switched networks, packets may get lost during transmission. As these networks are more and more used for image and video communication, there is a growing need for efficient reconstruction algorithms. In wavelet coded images, the lost coefficients are typically replaced by zeros. This results in annoying black holes in the received image, mainly due to the loss of the low frequency content. In this chapter, we present a novel locally adaptive interpolation method for the reconstruction of the lost low frequency coefficients. We interpolate a lost low frequency coefficient from its four neighbors, and we determine the interpolation weights by the energy of the corresponding coefficients in the high frequency subbands. Compared to older methods of similar complexity, the proposed scheme estimates the lost coefficients much better: the Peak Signal to Noise Ratio is increased with up to 4.3 dB. The results demonstrate a significant improvement of the visual quality.