Abstract: A connection specific compression system is selectively implemented in connections having the greatest data redundancy and utilizes modularity in implementing data compression in a layered network communication system. A data compression facility is interfaced in the layered system and intercepts data at a protocol layer prior to the data being packetized for transmission. A system acting as a compression host comprises a data packet switch driver which intercepts application data packets passing over layered network interfaces and routes selected client application data packets to an associated local compression process which has an integral network protocol and which compresses the data stream in accordance with a selected compression algorithm. The compressed data passes through the system network protocol and the packet switch driver subsequently sends the compressed data back into the communications stream through a network driver.