A novel technique for real-time electroencephalogram (EEG) compression is proposed in this paper. This technique makes use of the redundancy between the different frequency subbands present in EEG segments of one channel. It uses discrete wavelet transform (DWT) and dynamic reference lists to compute and send the decorrelated subband coefficients. Set partitioning in hierarchical trees (SPIHT) is also used as source coder. Experimental results showed that the proposed method can not only compress EEG channels in one dimension (1- D), but also detect seizure-like activity. A diagnostics-oriented performance assessment was performed to evaluate the performance of both the compression and detection capabilities of the proposed method. In this paper, we show that the algorithm can positively detect seizure sections in the recordings at bitrates down to 2 bits per sample.