In order to improve the performance of block adaptive quantization (BAQ) when the output of the analog to digital converter (ADC)is saturated, this paper proposes an anti-saturation BAQ algorithm. First, the concept of the standard deviation of the output signal (SDOS) of the ADC is proposed. Also, unlike traditional normalization processing, SDOS is used and the mapping between SDOS and the average signal magnitude is deduced. Second, the saturation term is introduced to the Lloyd-Max quantizer and an optimal non-uniform scalar quantizer for saturated SAR raw data quantization is proposed. After this, the implementation scheme for the pro-posed algorithm using an FPGA is analyzed in detail. Third, the relationships among the saturation degree of the signal, the peak-to-peak value of the ADC, standard deviation of the input and output signal of the ADC and the average signal magnitude are deduced.Based on these relationships, a power compensation decoder is designed for encoding. Numerical experiment results based on ERS-1 and the simulated data show that the performance of the proposed algorithm is better than that of BAQ.