The present invention provides a method for data compression and decompression of redundant serial data. The first and second elements of the serial data are combined to form a first pair group which is assigned a code designation and stored in a group list. Thereafter, the code designation of the previous pair group and the next element are combined to form a further pair group which is assigned to form a further code designation and this process is reiterated until a closing character is reached. For the second and subsequent sequences of serial data, the elements of the code data are combined and assigned a code designation as discussed above but with further checking to determine whether the first pair group is identical with the first pair group of a previously stored data component. If so, the code designation of the previously stored pair group is combined with the element and the data list and the subsequent incoming data is compared with the previously stored data list until the end of the identity between the data list is reached. When this occurs, a code designation of the last identical pair group in the previously stored group list is assigned a code designation which is stored in memory and the above process is repeated until the end of the serial data.