JPEG2000 is the latest international standard for image compression. It combines state of the art image compression performance with a rich feature set. JPEG2000 codestreams are highly scalable. Many different image products can be extracted from a JPEG2000 codestream without decompression. For instance, lower resolution and/or lower quality imagery maybe extracted from a compressed codestream of higher resolution and/or higher quality. Digital Cinema Initiatives (DCI) has selected JPEG2000 for future distribution of motion pictures. This selection was based in part on the fact that JPEG2000 is an open international standard that can support both 2K and 4K resolution projectors from a single codestream. The JPEG2000 feature set is discussed, followed by a high level description of the JPEG2000 algorithm.