A system and method for dynamically selecting a level of compression to be applied to data to be served to a client. The level of compression may be selected on the basis of one or more factors, such as: the bandwidth of a communication link between the client and a server, the amount of data requested by the client, the workload of the server, whether the data are cacheable, etc. The server can readily obtain information such as the amount of requested data and the available CPU time on the server. To determine the bandwidth, the server may conduct a test transfer of a known amount of data to or from the client, or consult a database identifying known or expected bandwidths for specific client connections (or addresses). Based on the selected factor(s), the server dynamically selects a level of compression for the data.