diff --git a/imageio/imageio-jpeg/src/main/java/com/twelvemonkeys/imageio/plugins/jpeg/JPEGLosslessDecoder.java b/imageio/imageio-jpeg/src/main/java/com/twelvemonkeys/imageio/plugins/jpeg/JPEGLosslessDecoder.java
index 01656649..2fdaacb2 100644
--- a/imageio/imageio-jpeg/src/main/java/com/twelvemonkeys/imageio/plugins/jpeg/JPEGLosslessDecoder.java
+++ b/imageio/imageio-jpeg/src/main/java/com/twelvemonkeys/imageio/plugins/jpeg/JPEGLosslessDecoder.java
@@ -212,7 +212,9 @@ final class JPEGLosslessDecoder {
 
             final int[] firstValue = new int[numComp];
             for (int i = 0; i < numComp; i++) {
-                firstValue[i] = (1 << (precision - 1));
+            	// scan.approxLow is the point transformation (Pt) value
+            	// ref. ISO/IEC 10918-1 H.1.2.1
+                firstValue[i] = (1 << (precision - scan.approxLow - 1));
             }
 
             final int[] pred = new int[numComp];
@@ -232,6 +234,11 @@ final class JPEGLosslessDecoder {
                         output(pred);
                         current = decode(pred, temp, index);
                     }
+                    
+                    if ((current == JPEG.EOI) && (xLoc == xDim - 1) && (yLoc == yDim - 1)) {
+                    	// Output value left in pred if EOI is hit while decoding last pixel
+                    	output(pred);
+                    }
 
                     break; //current=MARKER
                 }
@@ -268,6 +275,17 @@ final class JPEGLosslessDecoder {
         // TODO oe: 05.05.2018 Is it correct loop? Content of outputData from previous iteration is always lost.
         } while ((current != JPEG.EOI) && ((xLoc < xDim) && (yLoc < yDim)) && (scanNum == 0));
 
+        // Apply point transform to output. This must be done after it has finished being
+        // used for predictive purposes.
+        if (scan.approxLow != 0) {
+        	for (int componentIndex = 0; componentIndex < numComp; ++componentIndex) {
+        		int[] comp = outputData[componentIndex];
+        		for (int i = 0; i < comp.length; i++) {
+        			comp[i] = mask & (comp[i] << scan.approxLow);
+        		}
+        	}
+        }
+        
         return outputData;
     }
 
@@ -329,9 +347,11 @@ final class JPEGLosslessDecoder {
     private int decodeSingle(final int[] prev, final int[] temp, final int[] index) throws IOException {
         // At the beginning of the first line and
         // at the beginning of each restart interval the prediction value of 2P – 1 is used, where P is the input precision.
+    	// If the point transformation parameter (see A.4) is non-zero, the prediction value at the beginning of the first lines and the
+    	// beginning of each restart interval is 2P – Pt – 1 , where Pt is the value of the point transformation parameter
         if (restarting) {
             restarting = false;
-            prev[0] = (1 << (frame.samplePrecision - 1));
+            prev[0] = (1 << (frame.samplePrecision - scan.approxLow - 1));
         }
         else {
             final int[] outputData = this.outputData[0];
@@ -686,7 +706,7 @@ final class JPEGLosslessDecoder {
             return getPreviousY(data);
         }
         else {
-            return (1 << (frame.samplePrecision - 1));
+            return (1 << (frame.samplePrecision - scan.approxLow - 1));
         }
     }
 
diff --git a/imageio/imageio-jpeg/src/test/java/com/twelvemonkeys/imageio/plugins/jpeg/JPEGImageReaderTest.java b/imageio/imageio-jpeg/src/test/java/com/twelvemonkeys/imageio/plugins/jpeg/JPEGImageReaderTest.java
index b0dd0994..12f08716 100644
--- a/imageio/imageio-jpeg/src/test/java/com/twelvemonkeys/imageio/plugins/jpeg/JPEGImageReaderTest.java
+++ b/imageio/imageio-jpeg/src/test/java/com/twelvemonkeys/imageio/plugins/jpeg/JPEGImageReaderTest.java
@@ -2033,4 +2033,65 @@ public class JPEGImageReaderTest extends ImageReaderAbstractTest<JPEGImageReader
             }
         });
     }
+    
+    @Test
+    public void testReadLosslessJPEGGradient() throws IOException {
+    	 JPEGImageReader reader = createReader();
+
+         try (ImageInputStream stream = ImageIO.createImageInputStream(getClassLoaderResource("/jpeg-lossless/gradient_ls.jpg"))) {
+             reader.setInput(stream);
+
+             assertEquals(256, reader.getWidth(0));
+             assertEquals(256, reader.getHeight(0));
+             
+             BufferedImage image = reader.read(0, null);
+
+             assertNotNull(image);
+             assertEquals(256, image.getWidth());
+             assertEquals(256, image.getHeight());
+             assertEquals(16, image.getColorModel().getComponentSize(0));
+             
+             for (int y = 0; y < 256; y++) {
+            	 for (int x = 0; x < 256; x++) {
+            		 assertEquals((y << 8) | x, image.getRaster().getSample(x, y, 0));
+            	 }
+             }
+         }
+         finally {
+             reader.dispose();
+         }
+    }
+    
+    @Test
+    public void testReadLosslessJPEGGradientWithPointTransform() throws IOException {
+    	 JPEGImageReader reader = createReader();
+
+         try (ImageInputStream stream = ImageIO.createImageInputStream(getClassLoaderResource("/jpeg-lossless/gradient_ls_pt.jpg"))) {
+             reader.setInput(stream);
+
+             assertEquals(256, reader.getWidth(0));
+             assertEquals(256, reader.getHeight(0));
+
+             BufferedImage image = reader.read(0, null);
+
+             assertNotNull(image);
+             assertEquals(256, image.getWidth());
+             assertEquals(256, image.getHeight());
+             assertEquals(16, image.getColorModel().getComponentSize(0));
+             
+             for (int y = 0; y < 256; y++) {
+            	 for (int x = 0; x < 256; x++) {
+            		 int expected = (y << 8) | x;
+            		 
+            		 // Simulate effect of precision loss due to point transform = 4
+            		 expected = (expected >> 4) << 4;
+            		 
+            		 assertEquals(expected, image.getRaster().getSample(x, y, 0));
+            	 }
+             }
+         }
+         finally {
+             reader.dispose();
+         }
+    }
 }
diff --git a/imageio/imageio-jpeg/src/test/resources/jpeg-lossless/gradient_ls.jpg b/imageio/imageio-jpeg/src/test/resources/jpeg-lossless/gradient_ls.jpg
new file mode 100644
index 00000000..6ec52075
Binary files /dev/null and b/imageio/imageio-jpeg/src/test/resources/jpeg-lossless/gradient_ls.jpg differ
diff --git a/imageio/imageio-jpeg/src/test/resources/jpeg-lossless/gradient_ls_pt.jpg b/imageio/imageio-jpeg/src/test/resources/jpeg-lossless/gradient_ls_pt.jpg
new file mode 100644
index 00000000..b27940ab
Binary files /dev/null and b/imageio/imageio-jpeg/src/test/resources/jpeg-lossless/gradient_ls_pt.jpg differ