diff --git a/public/png8.png b/public/png8.png
new file mode 100644
index 00000000..d85fd36e
Binary files /dev/null and b/public/png8.png differ
diff --git a/src/Intervention/Image/Image.php b/src/Intervention/Image/Image.php
index 66f1d342..d8bf2105 100644
--- a/src/Intervention/Image/Image.php
+++ b/src/Intervention/Image/Image.php
@@ -1162,6 +1162,41 @@ class Image
         return $this;
     }
 
+    /**
+     * Set a maximum number of colors for the current image
+     *
+     * @param integer $count
+     * @param mixed   $matte
+     * @return Image
+     */
+    public function limitColors($count = null, $matte = null)
+    {
+        // create empty canvas
+        $resource = imagecreatetruecolor($this->width, $this->height);
+
+        // define matte
+        $matte = is_null($matte) ? imagecolorallocatealpha($resource, 0, 0, 0, 127) : $this->parseColor($matte);
+
+        // fill with matte and copy original image
+        imagefill($resource, 0, 0, $matte);
+
+        // set transparency
+        imagecolortransparent($resource, $matte);
+
+        // copy original image
+        imagecopy($resource, $this->resource, 0, 0, 0, 0, $this->width, $this->height);
+
+        if (is_numeric($count) && $count <= 256) {
+            // decrease colors
+            imagetruecolortopalette($resource, true, intval($count));
+        }
+
+        // set new resource
+        $this->resource = $resource;
+
+        return $this;
+    }
+
     /**
      * Reset to original image resource
      *
diff --git a/tests/ImageTest.php b/tests/ImageTest.php
index 28f2c261..f51bff35 100644
--- a/tests/ImageTest.php
+++ b/tests/ImageTest.php
@@ -1193,6 +1193,49 @@ class ImageTest extends PHPUnit_Framework_Testcase
         $this->assertEquals($img->height, 600);
     }
 
+    public function testLimitColors()
+    {
+        // reduce colors
+        $img = Image::make('public/test.jpg');
+        $img->limitColors(10);
+        $this->assertEquals(imagecolorstotal($img->resource), 11);
+
+        // reduce colors + keep transparency with matte
+        $img = Image::make('public/mask2.png');
+        $img->limitColors(10, '#ff0000'); // red matte
+        $this->assertEquals(imagecolorstotal($img->resource), 11);
+        $color1 = $img->pickColor(0, 0); // full transparent
+        $color2 = $img->pickColor(9, 17); // part of matte gradient
+        $this->assertEquals($color1['r'], 255);
+        $this->assertEquals($color1['g'], 0);
+        $this->assertEquals($color1['b'], 0);
+        $this->assertEquals($color1['a'], 0);
+        $this->assertEquals($color2['r'], 252);
+        $this->assertEquals($color2['g'], 10);
+        $this->assertEquals($color2['b'], 11);
+        $this->assertEquals($color2['a'], 1);
+
+        // increase colors
+        $img = Image::make('public/png8.png');
+        $img->limitColors(null); // set image to true color
+        $this->assertEquals(imagecolorstotal($img->resource), 0);
+
+        // increase colors + keep transparency with matte
+        $img = Image::make('public/png8.png');
+        $img->limitColors(null); // set image to true color
+        $this->assertEquals(imagecolorstotal($img->resource), 0);
+        $color1 = $img->pickColor(0, 0); // full transparent
+        $color2 = $img->pickColor(10, 10); // solid color
+        $this->assertEquals($color1['r'], 0);
+        $this->assertEquals($color1['g'], 0);
+        $this->assertEquals($color1['b'], 0);
+        $this->assertEquals($color1['a'], 0);
+        $this->assertEquals($color2['r'], 140);
+        $this->assertEquals($color2['g'], 140);
+        $this->assertEquals($color2['b'], 140);
+        $this->assertEquals($color2['a'], 1);        
+    }
+
     public function testSaveImage()
     {
         $save_as = 'public/test2.jpg';