Large test data volume is one of the major problems in the emerging System-on-Chip (SoC) and this can be reduced by test data compression techniques. Variable-to-variable length compression is one among the test data compression techniques. This study demonstrates a variable-to-variable length based compression technique called Run-Length based Efficient Compression. The patterns which are selected for doing compression can be partitioned into blocks having equal width. The partitioned blocks can be compared with the adjacent one and can be merged. A control code is used to denote the number of blocks merged. The proposed method can be tested by calculating the effect of compression on larger ISCAS’89 benchmark circuits.