A Micro-controller-based physiological sensing unit has been designed, prototyped, and field-tested for recording galvanic skin response data and relaying them to a computer for physiological analysis. Focusing on system design issues concerning battery-driven ambulatory applications, this paper presents a special data compression algorithm based on relative encoding to optimize memory utilization and reduce data transfer time. Data flow coordination and timing control are enabled by a PIC micro-controller. The embedded block is connected with the computer through serial port and the patient reaches an abnormal condition, automatically an alert message will given to the doctor.