The invention discloses a data transmission processing method and system. The method comprises: A, data is compressed at a data transmitting terminal, the size of the compressed data is compared with the size of the original data, if the size of the compressed data is less than that of the original data, the compressed data is sent, otherwise the original data is sent; and B, at a data receiving terminal, the received original data is directly stored, and the received compressed data is decompressed and then stored. The system comprises the data transmitting terminal and the data receiving terminal, wherein the transmitting terminal is used for executing the step A, and the receiving terminal is used for executing the step B. The invention also discloses a light-emitting diode (LED) display system, comprising a display control module, an LED control panel, a memorizer and an LED display screen, wherein the display control module is taken as the data transmitting terminal in the methoddisclosed by the invention, and the LED control panel is taken as the data receiving terminal in the method disclosed by the invention. According to the invention, the transmission speed for displaying data in a low-cost display system and the operational performance can be improved.