The gamma decay in the quasicontinuum from selected configurations of the rotational nucleus 163Er has been measured with the EUROBALL array. A new analysis technique has allowed for the first time to directly measure the compound and rotational damping widths Gamma (micro) and Gamma (rot). Values of Gamma (micro) approximately 20 keV and Gamma (rot) approximately 200 keV are obtained in the spin region I approximately 30-40 variant Planck's over 2pi, in good agreement with microscopic cranked shell model calculations. A dependence of Gamma (micro) and Gamma (rot) on the K-quantum number of the nuclear states is also presented.