Intercomputer communications involves the transfer of information between intelligent hosts. Since communication costs are almost proportional to the amount of data transferred, the processing capability of the respective hosts might advantageously be applied through pre-processing and post-processing of data to reduce redundancy. The major emphasis of this research is development of the Substitution Method which minimizes data transfer between hosts required to reconstruct user JCL files, Fortran source files, and data files. The technique requires that a set of user files for each category of files be examined to determine the frequency distribution of symbols, fixed strings, and repeated symbol strings to determine symbol and structural redundancy. Information gathered during the examination of these files when combined with the user created Source Language Syntax Table generate Encoding/Decoding Tables which are used to reduce both symbol and structural redundancy. The Encoding/Decoding Tables allow frequently encountered strings to be represented by only one or two symbols through the utilization of table shift symbols. The table shift symbols allow less frequently encountered symbols of the original alphabet to be represented as an entry in a Secondary Encoding/Decoding Table. A technique is described which enables a programmer to easily modify his Fortran program such that he can take advantage of the Substitution Method's ability to compress data files by removing both informational and structural redundancy. Each user file requested to be transferred is preprocessed at cost, C[prep], to reduce data (both symbol and structural redundancy) which need not be transferred for faithful reproduction of the file. The file is transferred over a noiseless channel at cost, C[ptran]. The channel consists of presently available or proposed services of the common-carriers and specialized common-carriers. The received file is post-processed to reconstruct the original source file at cost, C[post]. The costs associated with pre-processing, transferring, and post-processing are compared with the cost, C[otran], of transferring the entire file in its original form. / Ph. D.