On an NTFS file system volume, each file and directory has a compression attribute. Other file systems may also implement a compression attribute for individual files and directories.
You can determine whether a file system supports a compression attribute for files and directories by calling the GetVolumeInformation function and examining the FS_FILE_COMPRESSION bit flag.
If a file's compression attribute is set (FILE_ATTRIBUTE_COMPRESSED), all data in the file is compressed. If the attribute is clear, none of the data in the file is compressed. There is no partially compressed state from a user-mode programming perspective; the compression attribute is a simple Boolean indicator of compression state.
A directory's compression attribute provides a default compression attribute for newly created files and subdirectories. When you call CreateFile or CreateDirectory to create a new file or directory, the new file or directory inherits the compression attribute of its parent directory.