Abstract: An automatic bagging system useful for packaging a stack of a compressible material, such as a stack of folded disposable diapers into a drawstring type plastic bag. The apparatus includes means for compressing gradually the stack of diapers while reorienting the stack so that when the stack is packaged, the diapers will fit snugly in the bag with the folded portion of the diaper near the open end of the bag, for convenience in removing each diaper from the bag. Further the apparatus comprises means for handling and conditioning the bag for the insertion of the diaper stack that includes collapsible funnels for holding the bag open in a box-like shape in order to receive the compressed stack of diapers.