In　this　article,　a　new　ECG　compression　method　applying　2-step　vector　quantization　(VQ)　on　DCT　coefficients　of　ECG　data　was　introduced.　The　algorithm　inherits　the　virtue　of　high　compression　ratio　(CR)　of　VQ.　Compared　with　traditional　VQ,　it　exhibited　a　new　feature　of　space　saving　which　makes　it　practical　for　space-critical　embedded　systems.　Through　experiments　with　large　amount　data　of　MIT　ECG　Database,　the　algorithm　proved　to　be　a　good　ECG　compression　algorithm　with　high　CR　and　perfect　reconstruction　quality.