Accurate power estimation is essential for low power digital CMOS circuit design. Power dissipation is input pattern dependent. To obtain an accurate power estimate, a large input vector set must be used which leads to very long simulation time. One solution is to generate a compact vector set that is representative of the original input vector set and can be simulated in a reasonable time. In this paper, we propose an input vector compaction technique that preserves the statistical properties of the original sequence. Experimental results show that a compaction ratio of 100X is achieved with less than 2% average error in the power estimates.