A method is used in managing inline data compression in storage systems. A request is received to update data of a data object previously stored in an allocation unit of a segment in a storage system. The segment comprises of a set of allocation units in a compressed format. A determination is made as to whether the updated data of the data object can be stored in the compressed format in the allocation unit of the segment. Based on the determination, the updated data is written in the compressed format to the allocation unit of the segment.