Compressing web traffic using standard GZIP is becoming both popular and challenging due to the huge increase in wireless web devices, where bandwidth is limited. Security and other content based networking devices are required to decompress the traffic of tens of thousands concurrent connections in order to insp ect the content for different signatures. The major limiting factor in this pro cess is the high memory requirements of 32KB p er connection that leads to hundreds of megabytes to gigabytes of main memory consumption. This requirement inhibits most devices from handling compressed traffic, which in turn either limits traffic compression or intro duces security holes and other dysfunctionalities. In this paper we introduce new algorithms and techniques that drastically reduce this space requirement by over 80%, with only a slight increase in the time overhead, thus making real-time compressed traffic inspection a viable option for network devices.