Optical pulse compression using similariton propagation in an optical fibre with decreasing dispersion has been demonstrated for the first time. This compression scheme does not develop any side pedestals or deformation in pulse characteristics. Unlike the adiabatic compression technique, rapid compression can be achieved in a fibre with a specifically designed dispersion profile. A cost- effective and efficient method of construction of a similariton compressor has been developed using a comb-like dispersion profiling technique and its feasibility has been experimentally demonstrated.