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A microcontroller-based data logger has been designed, prototyped, and field-tested for recording galvanic skin response data and relaying them to a computer for physiological analysis. Focusing on system design issues concerning battery-driven ambulatory applications, this paper presents a special data compression algorithm based on relative encoding to optimize memory utilization and reduce data transfer time. Data flow coordination and timing control are enabled by a PIC microcontroller. A handheld prototype measuring 180×90×30 mm was built and tested for ease of use, safety, and reliability.