The Internet Information Services (IIS) World Wide Web Publishing Service (W3SVC) can be configured to collect performance data and do HTTP compression. If the W3SVC is configured to perform HTTP compression, a valid compression directory that resides on an NTFS volume must be specified.
Check the compression directory
IIS uses a directory where compressed versions of static files can be temporarily cached. The default directory is %SystemDrive%\inetpub\temp\IIS Temporary Compressed Files. To improve file look-up times and security, IIS 7 creates a subfolder in this folder for each application pool, and a subfolder in each application pool folder for each compression scheme.
You can specify a different cache folder by using IIS Manager. This setting is made at the server level. The cache folder setting is stored in the directory attribute of the httpCompression section under system.webServer in the ApplicationHost.config file. If the directory location that is specified does not exist or is inaccessible, static compression will be disabled.
To resolve this error, check the currently configured value by using IIS Manager. If the specified directory does not exist, either create the directory, or specify a new location that does exist. To use IIS Manager, follow these steps.
To modify the compression directory location by using IIS Manager:
Click Start, click Control Panel, and then click Administrative Tools.
Right-click Internet Information Services (IIS) Manager and select Run as administrator.
In the IIS Manager Connections pane, click the computer name.
In Features View, double-click Compression.
Under Cache directory:, note the value that is configured.
If the configured directory does not exist or is inaccessible, create the directory or specify a new one.
In the Actions pane, click Apply.
Close IIS Manager.
For more information about the httpCompression section, see IIS 7: httpCompression Element (IIS Settings Schema).