Apparatus and method for lossy displaced mesh compression. For example, one embodiment of an apparatus comprises: displacement mapping circuitry/logic to generate an original displacement-mapped mesh by performing a displacement mapping of a plurality of vertices of a base subdivision mesh; and mesh compression circuitry/logic to compress the original displacement-mapped mesh, the mesh compression circuitry/logic comprising a quantizer to quantize the displacement mapping of the plurality of vertices in view of a base mesh to generate a displacement array.