In clinical surgery, there are frequent needs for communication between the house staff and the attending physician in an emergency situation. To overcome the limitation of voice communication through the telephone line, we have designed an 'emergency teleradiology system' which can be used for emergency surgical and medical decision making. This system can transmit the high quality images of CT, MRI, and other X-ray data using a PC attached to a modem through the conventional telephone line. It is based on the progressive transmission system which enables the successive update of a received image. The iterative residual coding/decoding algorithm efficiently compresses the image to maximally utilize the low bandwidth PSTN channels. This system also satisfies design requirements such as low-cost, ease of operation, fast transmission, and interactive image communication including voice. Test results using several CT, MR, and X-ray images evaluate the compression performance, image quality, transmission time and computational time of the coding and decoding processes, thus demonstrate the usefulness of this system in an emergency situation.