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Over the last decade, a picture archiving and communications system (PACS) has been accepted by an increasing number of clinical organizations. Today, PACS is considered as an essential image management and productivity enhancement tool. Image compression could further increase the attractiveness of PACS by reducing the time and cost in image transmission and storage as long as 1) image quality is not degraded and 2) compression and decompression can be done fast and inexpensively. Compared to JPEG, JPEG 2000 is a new image compression standard that has been designed to provide improved image quality at the expense of increased computation. Typically, the decompression time has a direct impact on the overall response time taken to display images after they are requested by the radiologist or referring clinician. We present a fast JPEG 2000 decoder running on a low-cost programmable processor. It can decode a losslessly compressed 2048×2048 CR image in 1.51 s. Using this kind of a decoder, performing JPEG 2000 decompression at the PACS display workstation right before images are displayed becomes viable. A response time of 2 s can be met with an effective transmission throughput between the central short-term archive and the workstation of 4.48 Mb/s in case of CT studies and 20.2 Mb/s for CR studies. We have found that JPEG 2000 decompression at the workstation is advantageous in that the desired response time can be obtained with slower communication channels compared to transmission of uncompressed images.