Major two functions that a PACS workstation is considered to be equipped with are 1) efficient retrieval of image data and 2) supporting or consultation of writing reports, as radiologists have to diagnose increasing number of digital images in routine clinical studies. The authors developed a prototype PACS workstation with high speed image retrieving architecture and computer aided diagnosis and reporting function by using an artificial intelligence technology (AIPACS workstation). When physician selects the patient and his studies, the system performs feature extraction and generates diagnostic report by the inference engine with backward reasoning using the knowledge installed as production rules. Clinical application to the system for thyroid diagnosis showed good correlation with the diagnosis done by the physician.