This thesis investigates the design and implementation of a real time, low computational complexity, lossless data compression system for the Investigation of Cusp Irregularities (ICI) series of sounding rockets used by the University of Oslo (UiO) at Andøya Space Center (ASC). The constructed algorithm is implemented on a FPGA, and a Linux driven testing environment is developed for the design at UiO. The sounding rocket is a scientific instrument-carrying rocket. It performes measurements and experiments while in flight and transmits the data to the ground. The transmitted data is measurements from scientific sensors measuring: electron density, electric and magnetic fields, the rockets attitude, and housekeeping signals like rocket voltage and temperature. Its purpose is to perform measurements and collect data from irregularities in the plasma in the ionosphere that leads to global navigation satellite system (GNSS) scintillations. The compression algorithm exploits the sensor continuity data and that frequently sampled data tends to vary little from one measurement to the next. Compression is then achieved by transmitting the value of the distance from one measutement to another. With the addition of control bits in the data stream, lossless telemetry compression can be achieved, with a maximized reconstruction possibility, even in the case of package loss or data corruption in the transmission.