Wireless capsule endoscopy (WCE) is a state-of-the-art technology to receive images of human intestine for medical diagnostics. In WCE, the patient ingests a specially designed electronic capsule which has imaging and wireless transmission capabilities inside it. While the capsule travels through the gastrointestinal tract, it captures images and sends them wirelessly to an outside data logger unit. The data logger stores the image data and then they are transferred to a personal computer where the images are reconstructed and displayed for diagnosis. In this book, the unique properties of WCE images are identified by analyzing endoscopic images, and then these properties are used to develop novel and low complexity compression algorithms tailored for capsule endoscopy. The algorithm has both lossy and lossless modes and is further customized to work with two lighting modes - conventional white light imaging (WLI) and emerging narrow band imaging (NBI). Prototypes of the WCE system including electronic capsule, data logger unit and image reconstruction software have been developed. Finally, ex-vivo testing of the system has been done in pig's intestine to validate its performance.