Right click on the clip and select Scale to Frame Size.
What are the pixel x pixel dimensions of these still images?
What is your Sequence Preset's Frame Size?
Harm's suggestion of Scale to Frame will work, but depending on the answers above, you might get much better quality and a lower processing overhead, if you Scale your stills in PS, before Importing them. This ARTICLE will give you some background, and tips for doing the Scaling in PS.