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Medical images, such as computed radiography (CR), and digital mammographic images will require large storage facilities and long transmission times for picture archiving and communications system (PACS) implementation. American College of Radiology and National Equipment Manufacturers Association (ACR/NEMA) group is planning to adopt a JPEG2000 compression algorithm in digital imaging and communications in medicine (DICOM) standard to better utilize medical images. The purpose of the study was to evaluate the compression ratios of JPEG2000 for digital mammographic images using peak signal-to-noise ratio (PSNR), receiver operating characteristic (ROC) analysis, and the t-test. The traditional statistical quality measures such as PSNR, which is a commonly used measure for the evaluation of reconstructed images, measures how the reconstructed image differs from the original by making pixel-by-pixel comparisons. The ability to accurately discriminate diseased cases from normal cases is evaluated using ROC curve analysis. ROC curves can be used to compare the diagnostic performance of two or more reconstructed images. The t test can be also used to evaluate the subjective image quality of reconstructed images. The results of the t test suggested that the possible compression ratios using JPEG2000 for digital mammographic images may be as much as 15:1 without visual loss or with preserving significant medical information at a confidence level of 99%, although both PSNR and ROC analyses suggest as much as 80:1 compression ratio can be achieved without affecting clinical diagnostic performance.