Epilepsy, a common neurological disorder, is generally detected by electroencephalogram (EEG) signals. Visual inspection and interpretation of EEGs is a slow, time consuming process that is vulnerable to error and subjective variability. Consequently, several efforts to develop automatic epileptic seizure detection and classification methods have been made. The present study proposes a novel computer aided diagnostic technique (CAD) based on the discrete wavelet transform (DWT) and arithmetic coding to differentiate epileptic seizure signals from normal (seizure-free) signals. The proposed CAD technique comprises three steps. The first step decomposes EEG signals into approximations and detail coefficients using DWT while discarding non-significant coefficients in view of threshold criteria; thus, limiting the number of significant wavelet coefficients. The second step converts significant wavelet coefficients to bit streams using arithmetic coding to compute the compression ratio. In the final step, the compression feature set is standardized, whereupon machine-learning classifiers detect seizure activity from seizure-free signals. We employed the widely used benchmark database from Bonn University to compare and validate the technique with results from prior approaches. The proposed method achieved a perfect classification performance (100 accuracy) for the detection of epileptic seizure activity from EEG data, using both linear and non-liner machine-learning classifiers. This CAD technique can thus be considered robust with an extraordinary detection capability that discriminates epileptic seizure activity from seizure-free and normal EEG activity with simple linear classifiers. The method has the potential for efficient application as an adjunct for the clinical diagnosis of epilepsy. © 2019 Elsevier Ltd