A method of trace data compression receives trace data on a first port and a second port stores a prior data value. If trace data is received on only one port, then that trace data is transmitted as an indication of matching and non-matching sections between the current trace data and the stored data value and the non-matching sections of the current trace data on the one port. If trace data is received on both ports, then the first port trace data is transmitted relative to the prior stored value and the second port trace data is transmitted relative to the first port trace data. The stored prior data is reset to zero upon each initiation or termination of trace data on either port. The stored prior value is set to the second port value or the first port value if no second port value is received.