With the popularity of the Internet and development of multimedia technology, media distribution and traitor tracing issues have become critical and urgent. In this paper, a joint fingerprinting and decryption (JFD) scheme based on vector quantization for protecting media distribution is proposed. Before transmission, the proposed method encrypts plain-images using permutation and codeword substitution on the sender side. The decryption key, which is used to decode image and to present a user's identity, is stored in advance in the receiver's device, such as a set-top box or iPod player. When the subscriber receives the encrypted images, these images are jointly decrypted and fingerprinted and are slightly different from original images. The proposed method, to the best of our knowledge, is the first JFD method for VQ compressed images. The experimental results show that the encrypted image possesses unintelligibility and the recovered image has desirable image quality resistant to noise interference.