Abstract: The present invention provides for a compression scheme tailored to the compression of large radiological images processed with image processing workstations. The compression scheme is a variation of the CCITT JPEG compression scheme with special care taken to suppress blocking effects of the 8.times.8 discrete cosine transform used therein. In accordance with the present invention, an original image is downsampled, then interpolated back to its original size, resulting in a smoothed image. The difference between the smoothed image and the original image is then compressed using an 8.times.8 discrete cosine transform with 12 bit data. Major artifacts present in the original image are due to the mismatching of the low frequency components of the image at the edges of the blocks. When the low frequencies are removed by subtracting out the low frequency components, the artifacts disappear except in areas having very large dynamic changes.