A mobile terminal and a method for displaying an image in the mobile terminal. The method includes registering a counterparty's image in a counterparty's phone number information, extracting an image containing the counterparty's image based on the registered image, and displaying the registered image and the extracted image. At least one image from the registered image and the extracted image may be selected and displayed, wherein the at least one selected image may be displayed by sequentially changing the displayed image according to a rule. The mobile terminal and the method enable the mobile terminal to display various images associated with a counterparty, thus providing user satisfaction and eliminating an inconvenience of requiring the user to change an image.