In this paper, we propose a new dynamic compressed index of O(w) space for a dynamic text T , where w = O(min(z log N log * M, N )) is the size of the signature encoding of T , z is the size of the Lempel-Ziv77 (LZ77) factorization of T , N is the length of T , and M ≥ 4N is an integer that can be handled in constant time under word RAM model. Our index supports searching for a pattern P in T in O(|P |fA + log w log |P | log * M (log N + log |P | log * M ) + occ log N ) time and insertion/deletion of a substring of length y in O((y + log N log * M ) log w log N log * M ) time, where fA = O(min{ log log M log log w log log log M , log w log log w }). Also, we propose a new space-efficient LZ77 factorization algorithm for a given text of length N , which runs in O(N fA + z log w log 3 N (log * N ) 2 ) time with O(w) working space.