Be sure your supplied images are high resolution: 300 PPI for grayscale or CMYK images; 1200 PPI or more for line art (also known as 1-bit). Anything less will produce poor, fuzzy or pixilated results. Graphics and photos taken from the Internet (PNGs, GIFs or JPEGs) are discouraged, due to their low resolution and potential copyright issues. Scaling down an image improves print quality but scaling up an image will only reduce the print quality and therefore is not a solution to low resolution images.
It is best to supply images in CMYK color mode. RGB images will be converted to CMYK, but be aware that color shifts may occur.
How does Microsoft Word handle image quality?
By default, Microsoft Word compresses images to reduce file size. Once images are compressed, the original quality cannot be recovered. To ensure you use the highest-quality images, the image compression should be turned off before saving the document.
You can disable image compression in Word's settings:
PC: File > Options > Image Size and Quality > choose Do not compress images in file and set default to High fidelity
Mac: File > Preferences>Edit > Image Size and Quality > choose Do not compress images in file and set default to High fidelity