string SourceFile = "C:\\file.txt";
string DestinationFile = "C:\\file.gzip";

using (FileStream streamWriter = new FileStream(DestinationFile, FileMode.Create, FileAccess.Write, FileShare.None))
{
  using (FileStream streamReader = new FileStream(SourceFile, FileMode.Open, FileAccess.Read, FileShare.Read))
  {
    using (GZipStream gzip = new GZipStream(streamWriter, CompressionMode.Compress, true))
    {
      byte[] buffer = new byte[streamReader.Length];
      streamReader.Read(buffer, 0, buffer.Length);
      gzip.Write(buffer, 0, buffer.Length);
    }
  }
}

string SourceFile = "C:\\file.gzip";
string DestinationFile = "C:\\file.txt";

using (FileStream streamReader = new FileStream(SourceFile, FileMode.Open, FileAccess.Read, FileShare.Read))
{
  using (FileStream streamWriter = new FileStream(DestinationFile, FileMode.Create, FileAccess.Write, FileShare.None))
  {
    using (GZipStream gzip = new GZipStream(streamReader, CompressionMode.Decompress, true))
    {
      const int bufferSize = 1024;
      byte[] buffer = new byte[bufferSize];

      while (true)
      {
        int count = gzip.Read(buffer, 0, bufferSize);
        if (count != 0)
          streamWriter.Write(buffer, 0, count);
        else
          break;
      }
    }
  }
}