This work deals with the use of Karhunen-Loeve Expansion (KLE) for astronomical image compression. A mathematical algorithm of KLE has been derived using characteristics of(N×N)-dimensional Hilbert space. The KLE frequency domains and their reductions leading to image compression have been studied in comparison with other integral transforms. The following important results have been obtained during accuracy and suitability testing of KLE in astronomical photometry measurements. The achieved results show that KLE is suitable and probably the best method of astronomical image compression. ©2000 American Institute of Physics.