A data compression system for a liquid crystal display (LCD) includes a host and a drive circuit. The host is utilized for outputting image data in a first data format or a second data format according to an operation mode of the LCD. The drive circuit includes a bypass path, for transmitting the image data according to the operation mode; a compression unit, coupled to the host, for receiving the image data and performing a compression procedure on the image data to generate a compression data according to the operation mode; a storage unit, coupled to the compression unit, for storing the compression data and the image data; a de-compression unit, coupled to the storage unit, for receiving the compression data and performing a de-compression procedure on the compression data to recover the image data according to the operation mode; and a display unit, for displaying the image data.