Compressed carbon felt electrodes with various percentages of compression are prepared by stacking pieces of PVC gaskets; the performance of VRFB cells prepared using these electrodes is evaluated in order to better understand the influence of the compressed electrodes on the fundamental properties of VRFBs. It is found that the specific resistance and porosity of the electrodes decreases with increase of the percentage of electrode compression. In addition, as the percentage of electrode compression increases, the discharge time and maximum power of the VRFB cells gradually increase due to the increased electron transfer. The energy efficiency of the cell increases with the increase of the percentage of electrode compression up to 20%. When the percentage of electrode compression is greater than 20%, the energy efficiency decreases due to the combined effects of reduced cell resistance, poor electrolyte transport, and longer charge/discharge time. Based on our results, it can be concluded that compressed electrodes have a positive effect on cell performance; however, their inevitable reduced porosity is detrimental to electrolyte transport, thereby resulting in a decrease of energy efficiency. Consequently, it is suggested that carbon felt electrodes with an optimized percentage of compression have considerable potential for use in VRFB applications without incurring additional cost.