Digital echocardiography offers several advantages over videotape, including easy review, comparison, storage, postprocessing, and sharing of studies, quantitative analysis, and superior resolution. Newer echocardiography systems can write digital data to computer hardware, whereas older systems require digitization of analog data. Clinical and digital data compression is required to reduce study size. Clinical compression has been validated in several adult studies and one pediatric study. JPEG and MPEG digital compression ratios of 26:1 and 200:1, respectively, approximate S-videotape quality. JPEG is the DICOM 3.0 standard and is ideal for short loops, serial comparisons, and quantitative analysis. MPEG (the motion picture standard) lends itself to digitization of video streams and may be more attractive to pediatric cardiologists. Options for data storage and transfer range from limited local review to multiple offline review stations linked by a wide-area network. Telemedicine expands the capabilities of digital echocardiography in a "store and forward" or "real-time" format. Real-time neonatal telecardiology is accurate, impacts patient care, is cost-effective, and does not increase utilization. Cost, increased reliance on sonographers' skills, lack of accepted standards, and legal, licensure, and billing issues are obstacles to widespread acceptance of digital echocardiography and telemedicine.