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This paper presents a chipset including an asymmetrical QPSK/OOK transceiver SoC and a JPEG image encoder for wireless capsule endoscopy. The transceiver SoC supports bi-directional telemetry for high data-rate image transmission with QPSK modulation and low data-rate command link with OOK modulation. A low power JPEG encoder is designed to compress raw image data with compression ratio as high as 15:1 using sub-sampling technique in YUV color plane. Implemented in 0.18 μm CMOS, the QPSK TX consumes 5 mW at -6 dBm of output power with 3 Mb/s data rate while the OOK RX achieves -65 dBm of sensitivity at 500 kb/s data rate with 4.5 mW power consumption. A prototype capsule has been implemented with the chipset and the performance has been verified with in vivo animal experiment. With duty cycling, the average power consumption of TX is 2.5 mW when transmitting at 3 fps frame rate.