Side by side with the progress in computers and imaging, telemedicine has already been used successfully in a large number of specialties of medicine. But high-quality images are not always suitable for transfer via modem because of their file size. The present experimental study was conducted to determine the effects of image compression by the JPEG algorithm on image quality and on the reliability of diagnosis after compression. Digital photographs of the retina were taken and the JPEG compressed images assessed by an experienced ophthalmologist. The present study showed a high reliability of diagnosis and a good agreement between the observations taken at the patient and at the computer. For this reason, JPEG image compression algorithm is suitable for reducing image size for producing high-quality images manageable for transmitting via modem in a store-and-forward teleophthalmological system.