jp2 The JP2 file extension, also known as JPEG2000, was created by the JPEG Committee in the year 2000. The JP2 succeeded the first JPEG Standard in 1992 which was cosine transform based. It features the use of a "wavelet-base", unlike its predecessor JPEG standards. This file format uses a different image compression method. The compression method involves altering certain sections of the image, in terms of quality reduction. This method of compression ensures smaller file sizes and optimal storage. The JP2 file format has made several improvements over the JPEG Standard since 1992. The JP2 files can make use of both the lossless and lossy compression techniques.