Disclosed is one embodiment of a system and method for negotiating a compression technique while signaling is occurring in a communications network, the method comprising sending a message with a compression negotiation indicator, receiving a response to the message, determining if the response contains an error code in response to the compression header, if the message contains an error code, then continuing signaling without using compression techniques. On the other hand, if the message does not contain an error code, then the method negotiates a compression technique and may continue signaling with the negotiated compression technique.