We investigate the deformation of a thin elastic sheet floating on a liquid surface and subject to a uniaxial compression. We show that at a critical compression the sheet delaminates from the liquid over a finite region forming a delamination "blister." This blistering regime adds to the wrinkling and localized folding regimes that have been studied previously. The transition from wrinkled to blistered states occurs when delamination becomes energetically favorable compared with wrinkling. We determine the initial blister size and the evolution of blister size with continuing compression before verifying our theoretical results with experiments at a macroscopic scale. © 2011 American Physical Society.