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A fast vector quantization algorithm for data compression of hyperspectral imagery is proposed in this paper. It makes use of the fact that in the full search of the generalized Lloyd algorithm (GLA) a training vector does not require a search to find the minimum distance partition if its distance to the partition is improved in the current iteration compared to that of the previous iteration. The proposed method has the advantage of being simple, producing a large computation time saving and yielding compression fidelity as good as the GLA. Four hyperspectral data cubes covering a wide variety of scene types were tested. The loss of spectral information due to compression was evaluated using the spectral angle mapper and a remote sensing application.