This study was designed to evaluate radiologists’ ability to identify highly-compressed, digitized mammographic images displayed on high-resolution, monitors. Mammography films were digitized at 50 micron pixel dimensions using a high-resolution laser film digitizer. Image data were compressed using the irreversible (lossy), wavelet-based JPEG 2000 method. Twenty images were randomly presented in pairs (one image per monitor) in three modes: mode 1, non-compressed versus 50:1 compression; mode 2, non-compressed versus 75:1 compression; and mode 3, 50:1 versus 75:1 compression with 20 random pairs presented twice (80 pairs total). Six radiologists were forced to choose which image had the lower level of data compression in a two-alternative forced choice paradigm. The average percent correct across the six radiologists for modes 1, 2 and 3 were 52.5% (+/-11.3), 58.3% (+/-14.7), and 58.3% (+/-7.5), respectively. Intra-reader agreement ranged from 10 to 50% and Kappa from -0.78 to -0.19. Kappa for inter-reader agreement ranged from -0.47 to 0.37. The “monitor effect” (left/right) was of the same order of magnitude as the radiologists’ ability to identify the lower level of image compression. In this controlled evaluation, radiologists did not accurately discriminate non-compressed and highly-compressed images. Therefore, 75:1 image compression should be acceptable for review of digitized mammograms in a telemammography system.