The paper describes the analysis of paper machine process data using discrete wavelet transforms. The techniques have been adapted from a general signal analysis theory. The authors previously showed (1996) that wavelets are an effective representation for the detection of basis weight and moisture process variations in noisy data and lead to improved estimation and visualization of the machine direction and cross machine variations. This paper discusses data storage using the wavelet representation, and shows that the method also allows significant compression of the scanned data without diminishing the accuracy with which profiles can be reconstructed. It is shown that the compression method can be embedded into the estimation algorithm, producing excellent results without major expense in computation time. The ability to reduce data storage requirements is of increasing importance in mill-wide process monitoring systems and quality assurance.