A method and means of arithmetic coding of conditional binary sources permitting instantaneous decoding and minimizing the number of encoding operations per iteration. A single shift and subtract operation for each encoding cycle can be achieved if an integer valued parameter representative of a probability interval embracing each source symbol relative frequency is used for string encoding and control. If the symbol being encoded is the most probable, then nothing is added to the arithmetic code string. However, an internal variable is updated by replacing it with an augend amount. If the updated internal variable has a leading zero, then both it and the code string are shifted left by one position. If the symbol being encoded is the least probable, then a computed augend is added to the code string and the code string is shifted by an amount equal to the integer valued parameter.