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The efficient compression of radiographic images is of importance for improved storage and network utilization in support of picture archiving and communication systems (PACS) applications. The DICOM Working Group 4 adopted JPEG2000 as an additional compression standard in Supplement 61 over the existing JPEG. The wavelet-based JPEG2000 can achieve higher compression ratios with less distortion than the Discrete Cosine Transform (DCT)-based JPEG algorithm. However, the degradation of JPEG2000-compressed computed radiography (CR) chest images has not been tested comprehensively clinically. The authors evaluated the diagnostic quality of JPEG2000-compressed CR chest images with compression ratios from 5:1 to 200:1. An ROC (receiver operating characteristic analysis) and t test were performed to ascertain clinical performance using the JPEG2000-compressed images. The authors found that compression ratios as high as 20:1 can be utilized without affecting lesion detectability. Significant differences between the original and the compressed CR images were not recognized up to compression ratio of 50:1 within a confidence level of 99%.