The compression method in which the original data can be restored from the compressed data is called lossless compression. It would be meaningless to compress and reduce the size of text and program data if data is lost in the process. That is why lossless compression is used to compress data so that the exact original data can be reconstructed from the compressed file.

ZIP and LHA, which are used for downloading programs from websites and combining multiple files into one, use typical lossless compression methods. ZIP and LHA compression software often have an archiver function which enables multiple files to be compressed into a single file. The process of restoring compressed data to its original state is referred to as expansion, extraction, decompression, etc. The decompressed data is identical to the original data.

With image, audio and video data, it is possible to delete some of the data during compression as long as the changes are not very noticeable and because this facilitates high compression rates, lossy compression is often used. However, lossless compression is also used in certain cases. Although lossless compression is less effective in comparison to lossy compression in terms of the compression rate, it is used if quality is the main concern or if the data is to be edited. The image format, PNG, intended for network use, utilizes a lossless compression method. Various lossless compression methods have also been devised for audio and video data.