PURPOSE The size of medical data has increased significantly over the last few years. This poses severe problems for the rapid transmission of medical data across the hospital network resulting into longer access times of the images. Also long-term storage of data becomes more and more a problem. In an attempt to overcome the increasing data size often lossless or lossy compression algorithms are being used. This paper compares the existing JPEG2000 compression algorithm and the new emerging JP3D standard (also called JPEG2000/3D) for compression of volumetric medical datasets. METHOD AND MATERIALS For this paper we used a CTA thoracic aneurysm dataset with 201 slices of 512x512 pixels. Slice thickness is 3 mm and the bit depth of the images is 12 bit. The dataset has been compressed with the existing JPEG2000 standard and the new emerging JP3D standard. Using RMSE and PSNR metrics we measure which compression algorithm performs best. We also performed a psycho visual analysis to measure visibility of compression artifacts. A numerical observer was used for this purpose. For this numerical observer simulation we have set the model parameters to represent a medical 2 Mega Pixel color display, viewing distance 40 cm, room ambient light 1 cd/m², and display brightness 400 cd/m². RESULTS Both objective and psycho visual measurements show improved compression performance of JP3D compared to JPEG2000 and the difference increases with increasing compression ratio. For medium and high levels of compression JP3D requires approximately only half the bitrate of JPEG2000 to obtain the same visual quality. Moreover, since JP3D is still under construction it is to be expected that even better performance will be achieved in the future. Especially improved context modeling could further increase compression performance. CONCLUSION JP3D has shown to be a compression algorithm with improved performance compared to JPEG2000. JP3D is close to being standardized and efforts will be done to integrate JP3D in the DICOM standard. CLINICAL RELEVANCE/APPLICATION Due to the increase in the size of medical data it is unavoidable that lossless or even lossy compression will need to be used. JP3D is a good candidate for compression of volumetric medical data.