We conducted a pilot study to compare the diagnostic quality of digital telepathology images compressed using two software packages, each of which incorporated the MPEG-4 standard. Both software packages produced lossy (rather than lossless) compressed images. Lossy images can be less reliable for diagnostic purposes and the aim of the study was to examine how the MPEG-4 standard affects image quality. The results showed that manipulation of the images by the software did not dramatically alter the image quality but they highlighted the need to develop both pixel-mapping software and associated standards. Standards will help to determine which bits of a diagnostic image can be safely removed during compression while ensuring the integrity and reliability of images for diagnostic purposes.