Image data compression provides a means for efficient storage and transmission of digitized industrial radiographs and can result in significant cost savings when the amount of data involved is large. Image compression methods are generally classified into two categories: lossless and lossy. In lossless compression, the image data are compressed in such a way that exact reconstruction of the original images is possible. But, the compression factors obtained are generally low and image dependent i.e., they cannot be fixed. In lossy compression, some amount of distortion is introduced in the reconstructed images. The compression factors are however larger and can be fixed irrespective of the activity levels of the images.