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In wireless sensor networks, the energy consumption of participating nodes has crucial impact on the resulting network lifetime. Data compression is a viable approach towards preserving energy by reducing packet sizes and thus minimizing the activity periods of the radio transceiver. In this paper, we propose a compression framework utilizing a stream-oriented compression scheme for sensor networks. It is specifically tailored to the capabilities of employed nodes and network traffic characteristics, which we determine in a characterization of WSN traffic patterns. To mitigate the inapplicability of traditional compression approaches, we present the squeeze KOM compression layer. By shifting data compression into a dedicated layer, only minor modifications to applications are required, while efficient data transfer between nodes is provided. As a proof-of-concept, we implement a stream-based compression algorithm on sensor nodes and perform an experimental analysis to determine the potential gains under realistic traffic conditions. Results indicate that our presented lossless stream-oriented payload compression leads to considerable savings.