Abstract: A high-speed data processor and data compression method includes an input module for receiving an input data stream from an input port. An encoder is coupled to the input module and performs arithmetic coding to encode the input data stream. An output module provides an encoded data stream from the encoder to an output port. During the encoding process, the encoder performs a combination of parallel and serial processing steps on data in the input data stream. As a result, the processing cycle time for the encoding process is significantly reduced.