Abstract: A system for compressing and drying a gas from a gas source comprises a compressor operatively connected to the source for compressing the gas. A regenerative dryer for collecting water from the gas is operatively connected to the compressor such that the compressor is within a path of gas flow between the source and the dryer. The dryer is also operatively connected to the source such that water collected from the gas and removed from the dryer does not enter the compressor. A method of compressing and drying a gas is also provided comprising the steps of: supplying a compressor with gas from a source; compressing the gas; collecting water from the gas with a regenerative dryer; regenerating the dryer by removing collected water from said dryer with a purge gas; and delivering the purge gas to the source such that no purge gas or collected water is supplied to the compressor.