Abstract: A new method is presented to improve the efficiency of lossless compression of medical images instead of the low-efficiency method conventionally used. Its operating principle and the implementation of relevant algorithm are described and discussed in detail. Base approach of medical image lossless compression is described briefly. After analyzing and implementing the effect of differential pulse code modulation (DPCM) on lossless compression, a new method combining integer wavelet transform (IWT) with DPCM is proposed and tested to compress medical images. Comparing the different methods and analyzing the test results, the method proposed shows simpler and more useful with high compression ratio and practicability in lossless compression of medical images.