'How many bits per picture element does a display need?'For the display resolutions now commonly in use, only 4 bits per picture element (pel) are needed for the display of monochrome images. A total of 8 bits per pel are needed for color images. These conclusions are based both on experiment and on the theoretical model of the visual system in which the detectors in the eye are treated as simple photon-detectors. The results are applicable to'natural'images and also to computer-generated images. A particular 8-bit color encoding scheme is described that also has the advantage that natural images are displayable on monochrome displays.