A highly nonlinear microstructured fiber is proposed to construct nonlinear optical loop mirrors (NOLMs) for pulse compression and pedestal suppression. The proposed fiber has high nonlinear coefficient and large anomalous dispersion. The compressions of pulses by the NOLMs are theoretically investigated and the compression mechanism is also discussed. It is shown fro mnumerical results that the proposed NOLMs compress the pulses efficiently and significantly suppress the pedestals with a short loop length. For a given input pulse, there exists an optimal loop length at which the high quality compressed pulse can be obtained. By appropriately choosing the power-coupling ratio and loop length, the pedestal can be removed entirely.