JPG (or JPEG) is a lossy compression format ideal for photographs and complex images. It significantly reduces file size by discarding some image data unnoticeable to the human eye, prioritizing smaller storage and faster loading. PNG, in contrast, uses lossless compression, meaning it preserves every pixel's original data perfectly when decompressed. Crucially, PNG supports transparency (alpha channels), unlike standard JPG, making it essential for graphics with transparent backgrounds.

JPG is widely used for web photography (e.g., blog photos, product images on e-commerce sites) and digital cameras due to its efficiency. PNG is the preferred choice for web graphics requiring sharp edges or transparency, such as logos, icons, illustrations, screenshots containing text, and graphics needing layered backgrounds. Design tools like Photoshop leverage PNG for preserving quality in editing workflows.

JPG excels in small file sizes but suffers from compression artifacts (blurring/pixelation) at high compression levels and cannot handle transparency. PNG guarantees perfect quality and supports transparency but creates larger files, especially for photos. This size trade-off influences website performance. PNG's ability to display sharp text and transparency aids accessibility. For photographs needing high quality and compression efficiency, newer formats like WebP often combine the best of both.