A data compression method and system is disclosed. In one embodiment, the data compression method includes receiving a data packet. Also, the method includes compressing the data packet using a confirmed compression history, wherein the confirmed compression history includes previously acknowledged data packets. Further, the method includes sending a compressed data packet to a downstream device. Moreover, the method includes detecting a delivery acknowledgement associated with the compressed data packet. Continuing, the method includes updating the confirmed compression history by incorporating the data packet information into the confirmed compression history based upon receipt of the delivery acknowledgement.