An improved television bandwidth compression system allows two television programs to simultaneously utilize the bandwidth normally allowed for one television program. The basic bandwidth compression system comprises a transmitter which receives composite video signals from two program sources. The video processing circuitry of the transmitter provides an output signal wherein time-compressed chrominance information for the two program sources is sent on alternate lines during the normal horizontal retrace time and the luminance information for both program sources is sent during the active video time for each line. The receiver synthesizes a composite video signal of a selected program from the output signal transmitted from the transmitter. This basic system is improved by interlacing high and low bandwidth-limited luminance signals for alternating fields of each program in a manner such that when a high bandwidth-limited luminance signal is transmitted for one program, a low bandwidth-limited luminance signal is transmitted for the other program so that the total bandwidth allocated for the luminance signals is not exceeded.