Objective: Implements huffman bigram algorithm for data compression process in .txt extension files. Method: This study used literature study to study books relevant to existing literatures, then experiment with data compression process using the huffman bigram algorithm. Samples of data used as experiments were created in various formats and saved in the .txt extension. Hardware and software used in this experiment is a computer with Intel pentium 4 E 2.8 Ghz Processor, 2 GB RAM, 500 GB Hard Drive, Win XP Pro edition, VB 6.0. Results: The experimental results are measured from the size of the file after compression, then compared to the size of the file before it is compressed. The duration of the compression process is also observed to assess the performance of hardware and software used. Conclusion: Huffman bigram algorithm can compress the size of file extension .txt become smaller than the previous size, more the number of the same pairs of characters in a file then the compression process will be maximized.