Using receiver-operating characteristic (ROC) methodology, the ability to diagnose acute appendicitis with computed tomography (CT) images displayed at varying levels of lossy compression was evaluated. Nine sequential images over the ileocecal region were obtained from 53 consecutive patients with right lower quadrant pain who were clinically suspected to have acute appendicitis. Thirty were proven surgically to have acute appendicitis, alternative diagnoses con庐rmed in 23. The image sets were subjected to a lossy wavelet-based compression algorithm``Embedded Predictive Wavelet Image Coder'' (EPWIC). Compression levels were: none, 8:1, 16:1, and 24:1, resulting in 4 sets of images per patient. Image sets were randomized and evaluated separately by 4 body radiologists on a 1,024麓768-pixel SVGA color PC monitor in 512麓512 format. The readers were aware of the clinical suspicion of appendicitis but were unaware of the positive fraction of cases. Individual and combined reader ROC and v 2 analyses of sensitivity, speci庐city, and accuracy were determined. For all readers, sensitivity decreases at 16:1 and 24:1 levels (P < 0.01, P < 0.001, respectively). Accuracy decreased at 24:1 levels (P < 0.01). Speci庐city was unaected. By ROC analysis there was statistically signi庐cantly decreased area under the curve at 24:1 levels (P < 0.02) as compared with uncompressed images. Finite levels of lossy wavelet compression may be applied to CT images without compromising diagnostic performance.