Continuous tone images are images that are stored in a format where there are many shades of brightness for each color component. Grayscale images and 24-bit color images are both continuous tone images; grayscale images contain 256 shades of brightness, while 24-bit color images contain 256 shades of brightness of red, green, and blue, which are mixed to create the full range of reproducible color. Continuous tone images preserve a much greater amount of information than bitonal images, as well as providing room for interpolation of pixel values when pixels are moved or scaled.

However, the jump from 1-bit per pixel to 8-bit or 24-bits results in a far greater image size than bitonal images, and the continuous tone format’s ability to store subtle differences in brightness makes the standard run length encoding used by lossless bitonal compression formats far less effective. Compression methods for continuous tone images typically attempt to break the image data down into curves or wavelets, and in the process discard information likely to be unimportant.  At high compression factors, this process can also lead to the creation of artifacts, particularly around sharp, high contrast boundaries.

Some image processing operations, particularly ones that deal with color differences and brightness and contrast, work best in the domain of continuous tone images. Operations dealing with brightness and contrast work on any continuous tone image, while operations dealing with color aspects are limited to color images only.