A block based backup system may store backed up data from multiple clients by maintaining backup databases for each client, where each backup database may include blocks of data. The backup system may perform a de-duplication process by examining the databases to identify common blocks and moving the common blocks to a common database. The common blocks may be removed from the client backup databases and a pointer substituted for the data, thus compacting the client backup databases. The de-duplication operation may be performed at an opportunistic time, such as after the clients have completed any data transfer to the backup system.