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To reduce the size of a 26-megabyte file, images can be compressed in two ways. The first method involves selecting a picture, going to the picture format tab, choosing compress pictures, and selecting an option like high fidelity. You can also delete cropped areas and choose to compress just the selected picture or all pictures. The second method is to click file, compress pictures, and automatically compress all pictures in the file. After making these changes, save the file to see the reduced size.