Speckle noise affects all coherent imaging systems including medical ultrasound. In medical images, noise suppression is a particularly delicate and difficult task. A trade off between noise reduction and the preservation of actual image features has to be made in a way that enhances the diagnostically relevant image content. Even though wavelets have been extensively used for denoising speckle images, we found that denoising using Contourlets gives much better performance in terms of SNR. It is shown that the proposed speckle noise removal using contourlets has superior performance in both the speckle reduction and edge preservation. We compare our technique with current state-of-the-art wavelet thresholding method applied on actual ultrasound medical images and we quantify the achieved performance improvement.