High-resolution digital images that are used in geo-spatial and remote sensing technologies tend to be of large sizes, especially with newer satellite imageries that provide better than 5 m spatial resolution, and thereby consuming large storage space, large transmission bandwidth, and long transmission times. Therefore, method of compressing the archived images is required before storage and transmission. JPEG2000 is the latest image compression standard offering superior compression performance. JPEG2000 compresses and decompresses the images using discrete wavelet transformation and allowing image information to be retained without much distortion or loss. Compression in JPEG2000 can be performed in both lossy and lossless fashion. Lossy compression is preferred because of its higher compression ratio. When lossy compression is performed, some amount of data is lost during the compression. Such loss of data may lead to erroneous results when analysis is performed using computer based image applications. Thus, there is a need for image quality assessment of compressed and reconstructed images using JPEG2000 at various compression ratios. This paper focuses on such studies and, using image quality metrics, experiments are conducted to compute benchmarks of compression ratios for GIS systems that can be identified for the intended use of the image without significant degradation in the results.