In this paper we assess lossy image compression of digitalized chest x-rays using radiologist assessment of anatomic structures and numerical measurements of image accuracy. Forty chest x-rays were digitized and compressed using an irreversible wavelet technique at 10, 20, 40 and 80:1. These were presented in a blinded fashion with an uncompressed image for subjective A-B comparison of 11 anatomic structures as well as overall quality. Mean error, RMS error, maximum pixel error, and number of pixels within 1 percent of original value were also computed for compression ratios from 10:1 to 80:1. We found that at low compression there was a slight preference for compressed images. There was no significant difference at 20:1 and 40:1. There was a slight preference on some structures for the original compared with 80:1 compressed images. Numerical measures demonstrated high image faithfulness, both in terms of number of pixels that were within 1 percent of their original value, and by the average error for all pixels. Our findings suggest that lossy compression at 40:1 or more can be used without perceptible loss in the demonstration of anatomic structures.