Purpose : To determine the proper image compression method and ratio without image quality degradation in intraoral digital radiographic images, comparing the discrete cosine transform (DCT)-based JPEG with the wavelet-based JPEG 2000 algorithm. Materials and Methods : Thirty extracted sound teeth and thirty extracted teeth with occlusal caries were used for this study. Twenty plaster blocks were made with three teeth each. They were radiographically exposed using CDR sensors (Schick Inc., Long Island, USA). Digital images were compressed to JPEG format, using Adobe Photoshop v.7.0 and JPEG 2000 format using Jasper program with compression ratios of 5 : 1,9 : 1, 14 : 1,28 : 1 each. To evaluate the lesion detectability, receiver operating characteristic (ROC) analysis was performed by the three oral and maxillofacial radiologists. To evaluate the image quality, all the compressed images were assessed subjectively using 5 grades, in comparison to the original uncompressed images. Results: Compressed images up to compression ratio of 14 : 1 in JPEG and 28 : 1 in JPEG 2000 showed nearly the same the lesion detectability as the original images. In the subjective assessment of image quality, images up to compression ratio of 9 : 1 in JPEG and 14 : 1 in JPEG 2000 showed minute mean paired differences from the original Images. Conclusion : The results showed that the clinically acceptable compression ratios were up to 9 : 1 for JPEG and 14 : 1 for JPEG 2000. The wavelet-based JPEG 2000 is a better compression method, comparing to DCT-based JPEG for intraoral digital radiographic images.