Abstract: An adaptive lossless data compression system with systolic string matching logic performs compression and decompression at the maximum rate of one symbol per clock cycle. The adaptive data compression system uses an improvement of the LZ1 algorithm. A content addressable memory (CAM) is used to store the last n input symbols. The CAM is stationary, stored data is not shifted throughout the CAM, but rather the CAM is used as a circular queue controlled by a Write Address Pointer Counter (WREN). During a compression operation, a new input symbol may be written to the CAM on each clock cycle, while simultaneously the rest of the CAM is searched for the input symbol. Associated with each word of the CAM array is a String Match State Machine (SMSM) and, an address logic module (ALM). These modules detect the occurrence of strings stored in the CAM array that match the current input string and report the address of the longest matching string nearest to the Write Address Pointer.