One embodiment of the present invention provides an apparatus for compressing data, comprising a compression mechanism which includes N channels. During operation, the compression mechanism receives a set of data words from an input bit-stream, compresses the data words into a set of variable-length words, and stores an I-th variable-length word in the set of variable-length words into a fixed-packet for an I-th channel. Then, the compression mechanism assembles each fixed-length packet into an output stream when the packet becomes full. Some other embodiments of the present invention provide an apparatus for data decompression, comprising a parallel-processing mechanism which includes N decompression mechanisms. During operation, each decompression mechanism retrieves a fixed-length packet from a corresponding channel in an input stream, retrieves and decompresses a set of variable-length words from the fixed-length packet, and assembles the decompressed variable-length words into every N-th position of an output stream beginning at an offset I corresponding to the channel.