This application provides a data processing method and a storage device, and belongs to the field of storage technologies. In this application, the storage device performs deduplication and compression based on different granularities, deduplicates data based on a large granularity, and compresses the data based on a small granularity. Therefore, a limitation that a deduplication granularity and a compression granularity need to be the same is removed. A deduplication ratio decrease caused by an excessively large granularity and a compression ratio decrease caused by an excessively small granularity are avoided to some extent, to improve an overall reduction ratio of deduplication and compression.