The objective of radiologic image compression is to reduce the data volume of and to achieve a low bit rate in the digital representation of radiologic images without perceived loss of image quality. However, the demand for transmission bandwidth and storage space in the digital radiology environment, especially picture archiving and communication systems (PACS) and teleradiology, and the proliferating use of various imaging modalities, such as magnetic resonance imaging, computed tomography, ultrasonography, nuclear medicine, computed radiography, and digital subtraction angiography, continue to outstrip the capabilities of existing technologies. The availability of lossy coding techniques for clinical diagnoses further implicates many complex legal and regulatory issues. This paper reviews the recent progress of lossless and lossy radiologic image compression and presents the legal challenges of using lossy compression of medical records. To do so, we first describe the fundamental concepts of radiologic imaging and digitization. Then, we examine current compression technology in the field of medical imaging and discuss important regulatory policies and legal questions facing the use of compression in this field. We conclude with a summary of future challenges and research directions.>