We develop a statistical model to describe the spatially varying behavior of local neighborhoods of coefficients in a multi- scale image representation. Neighborhoods are modeled as samples of a multivariate Gaussian density that are modulated and rotated according to the values of two hidden random variables, thus al- lowing the model to adapt to the local amplitude and orientation of the signal. A third hidden variable selects between this oriented process and a nonoriented scale mixture of Gaussians process, thus providing adaptability to the local orientedness of the signal. Based on this model, we develop an optimal Bayesian least squares esti- mator for denoising images and show through simulations that the resulting method exhibits significant improvement over previously published results obtained with Gaussian scale mixtures.