As XML has become the standard of data exchange and express of internet and e-commerce, it is being more and more widely used, while XML is a kind of self-described language, with a large number of redundant structural information, so that is the hot study now on how to use XML data stream to be reasonable and efficient. The existing compression techniques of XML require two-pass scan on data, which is not suitable for the data stream. In this paper, a new compression technology method is proposed to compress and decompress XML data stream, which first get the structure data through analyzing and parsing the XML Schema, then encode it with dynamic Huffman encoding, and finally complete the compression and decompression of XML data stream on real time. Experimental results show that this algorithm in the data compression ratio and time of compression is superior to the traditional algorithm