This paper reviews the state of medical color digital imaging with respect to image compression. Only recently has the creation and storage of color medical images become technically and economically feasible. This has allowed medical images to become a part of an electronic medical record, to be used in telemedicine, or to be used for medical education. The Internet has become an important medium for the dissemination of medical images, whether through file transferring or through the World Wide Web. There is a growing need to evaluate the degree and types of image compression that are clinically acceptable (either for diagnostic or archival purposes) for different specialties. The focus will be on gastrointestinal endoscopic images, although work in other medical specialties will be mentioned.