You can open the file like this, if you have PerlIO::gzip installed:

use strict;
use PerlIO::gzip;

( @ARGV == 1 and -f $ARGV[0] and $ARGV[0] =~ /\.gz$/ )
    or die "Usage: $0  file.gz\n";

open( IN, "<:gzip", $ARGV[0] ) or die "open failed on $ARGV[0]: $!\n";
while (<IN>) {
    # $_ contains one line of uncompressed text data per iteration
    do_something($_);
}
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UPDATE: (2010-10-18) It seems that PerlIO::gzip should be viewed as superseded by PerlIO::via:gzip. (see PerlIO::gzip or PerlIO::via::gzip).