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We propose a novel scheme for signal compression based on the discrete wavelet packet transform (DWPT) decompositon. The mother wavelet and the basis of wavelet packets were optimized and the wavelet coefficients were encoded with a modified version of the embedded zerotree algorithm. This signal dependant compression scheme was designed by a two-step process. The first (internal optimization) was the best basis selection that was performed for a given mother wavelet. For this purpose, three additive cost functions were applied and compared. The second (external optimization) was the selection of the mother wavelet based on the minimal distortion of the decoded signal given a fixed compression ratio. The mother wavelet was parameterized in the multiresolution analysis framework by the scaling filter, which is sufficient to define the entire decomposition in the orthogonal case. The method was tested on two sets of ten electromyographic (EMG) and ten electrocardiographic (ECG) signals that were compressed with compression ratios in the range of 50%-90%. For 90% compression ratio of EMG (ECG) signals, the percent residual difference after compression decreased from (mean ) 48.69.9% (21.58.4%) with discrete wavelet transform (DWT) using the wavelet leading to poorest performance to 28.43.0% (6.71.9%) with DWPT, with optimal basis selection and wavelet optimization. In conclusion, best basis selection and optimization of the mother wavelet through parameterization led to substantial improvement of performance in signal compression with respect to DWT and randon selection of the mother wavelet. The method provides an adaptive approach for optimal signal representation for compression and can thus be applied to any type of biomedical signal.