In this thesis, the implementation of a compact medical image workstation for radiological image processing is described. The workstation is desired to contain sufficient amount of utilities for medical image displaying purposes. Furthermore, it should be affordable for a practicing radiologist. Because of this, the well standardized and cheap PC (Personal computer) mediáis selected for the workstation machine. In order to handle large amount of digital image data, image compression techniques are studied and an implementation of the .Joint Photographic Experts Group (JPEG) standard is used. Furthermore, a class of transform techniques, namely the Block Wavelet Transform (BWT) is experimented for substituting the role of the Discrete Cosine Transform (DCT). The peripheral devices such as a gray tone scanner and high capacity optical discs are then integrated to the computer by the developed software.