This paper presents an optimized speech compression algorithm using discrete wavelet transform, and its real time implementation on fixed-point Digital Signal Processor (DSP). The optimized speech compression algorithm presents the advantages to ensure low complexity, low bit rate and achieve high speech coding efficiency and this by adding a Voice Activity Detector (VAD) module before the application of the discrete wavelet transform. The VAD module avoids the computation of the discrete wavelet coefficients during the inactive voice signal.