An optical disk data storage system and method are disclosed. In a data storage or "write" operation, up to a fixed number of variable-length records are written to the optical disk in close proximity to an embedded directory, which stores record length information describing the records associated therewith. A high-level directory is constructed providing a list of addresses for the embedded directories. The embedded directories comprise up to a fixed maximum number of entries each indicating the length in bytes of a corresponding record. In a data retrieval or "read" operation, the high-level directory is first accessed to determine the addresses for the embedded directories, with reference to positional information permanently written to the disk. Bytes of data are then counted in accordance with the record length stored by the embedded directory to access the record sought by the host computer. In this way, varying-length records can be efficiently stored on an optical disk divided into fixed-length data storage sectors. All data is buffered in random access memory during both read and write data transfer operations.