A space-efficient approximation algorithm for the grammar-based compression problem, which requests for a given string to find a smallest context-free grammar deriving the string, is presented. For the input length n and an optimum CFG size g, the algorithm consumes only O(g log g) space and O(n log*n) time to achieve O((log*n)log n) approximation ratio to the optimum compression, where log*n is the maximum number of logarithms satisfying log log…log n > 1. This ratio is thus regarded to almost O(log n), which is the currently best approximation ratio. While g depends on the string, it is known that g =Ω(log n) and $g=\\Omega(\\log n)$ and $g=O\\left(\\frac{n}{log_kn}\\ ight)$ for strings from k-letter alphabet[12].