A method is provided for payload header suppression within a wireless network in which a limited number of suppression indices are used to map suppression rules to data streams. Network resources are conserved by implementing precise classification algorithms to correctly identify incoming packets at the wireless device as belonging to a particular data stream, which ensures that a minimum number of suppression indices are utilized. Additionally, network resources are conserved by utilizing sophisticated algorithms for reusing suppression indices when new data streams are detected by the wireless device. One such reuse algorithm involves recycling the suppression index that has been least recently used in transmitting a packet with a suppressed payload header.