This paper proposes a new image-based rendering (IBR) technique called "concentric mosaic" for virtual reality applications. IBR using the plenoptic function is an efficient technique for rendering new views of a scene from a collection of sample images previously captured. It provides much better image quality and lower computational requirement for rendering than conventional three-dimensional (3-D) model-building approaches. The concentric mosaic is a 3-D plenoptic function with viewpoints constrained on a plane. Compared with other more sophisticated four-dimensional plenoptic functions such as the light field and the lumigraph, the file size of a concentric mosaic is much smaller. In contrast to a panorama, the concentric mosaic allows users to move freely in a circular region and observe significant parallax and lighting changes without recovering the geometric and photometric scene models. The rendering of concentric mosaics is very efficient, and involves the reordering and interpolating of previously captured slit images in the concentric mosaic. It typically consists of hundreds of high-resolution images which consume a significant amount of storage and bandwidth for transmission. An MPEG-like compression algorithm is therefore proposed in this paper taking into account the access patterns and redundancy of the mosaic images. The compression algorithms of two equivalent representations of the concentric mosaic, namely the multiperspective panoramas and the normal setup sequence, are investigated. A multiresolution representation of concentric mosaics using a nonlinear filter bank is also proposed.