In this paper, a new approach to edge detection and image compression of bilevel error-diffused images is proposed. The proposed approach is directly applied to the error-diffused images without any inverse halftoning technique. The main idea behind the proposed edge detection method is to compute the consistency value of each pixel of the error-diffused image, and the computed values are then clustered into two classes to obtain the desired edges. Here, the consistency value is a function of the mass center and geometric center of the window; more precisely, it represents the possibility that the area covered by the window can be uniform. As for compression, each error-diffused input image is compressed by dividing the image into non-overlapping blocks with size 8×8, then each highly-consistent block is encoded by its average illumination, and each lowly-consistent block is transmitted directly using the original bitmap. The threshold to distinguish these two kinds of blocks is automatically calculated based on the compression rate required by the users. The complexity of our compression technique is low, and this fast method can be used in real-time application.