diff --git a/esphome/components/esphome/ota/__init__.py b/esphome/components/esphome/ota/__init__.py
index f5eb878260..cbab552fc2 100644
--- a/esphome/components/esphome/ota/__init__.py
+++ b/esphome/components/esphome/ota/__init__.py
@@ -283,7 +283,10 @@ FINAL_VALIDATE_SCHEMA = ota_esphome_final_validate
 
 
 FILTER_SOURCE_FILES = filter_source_files_from_defines(
-    {"ota_esphome_noise.cpp": "USE_OTA_ENCRYPTION"}
+    {
+        "ota_esphome_noise.cpp": "USE_OTA_ENCRYPTION",
+        "ota_esphome_inflate.c": "USE_OTA_DEFLATE",
+    }
 )
 
 
@@ -305,6 +308,11 @@ async def to_code(config: ConfigType) -> None:
     if config.get(CONF_ALLOW_PARTITION_ACCESS):
         cg.add_define("USE_OTA_PARTITIONS")
 
+    # ESP8266 inflates gzip in its bootloader; every other platform inflates
+    # a deflate stream on the fly while it receives the image
+    if not CORE.is_esp8266:
+        cg.add_define("USE_OTA_DEFLATE")
+
     # One key per device: an api encryption block supplies it (static or
     # runtime) and offers; the ota block only adds the requirement
     api_conf = CORE.config.get(CONF_API) or {}
diff --git a/esphome/components/esphome/ota/ota_esphome.cpp b/esphome/components/esphome/ota/ota_esphome.cpp
index 1005ed214b..208f1409a6 100644
--- a/esphome/components/esphome/ota/ota_esphome.cpp
+++ b/esphome/components/esphome/ota/ota_esphome.cpp
@@ -24,6 +24,8 @@
 
 #include <cerrno>
 #include <cstdio>
+#include <cstddef>
+#include <new>
 #include <sys/time.h>
 
 namespace esphome {
@@ -179,12 +181,15 @@ static constexpr uint8_t CLIENT_FEATURE_SUPPORTS_COMPRESSION = 0x01;
 static constexpr uint8_t CLIENT_FEATURE_SUPPORTS_SHA256_AUTH = 0x02;
 static constexpr uint8_t CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL = 0x04;
 static constexpr uint8_t CLIENT_FEATURE_SUPPORTS_NOISE = 0x08;
+static constexpr uint8_t CLIENT_FEATURE_SUPPORTS_DEFLATE = 0x10;
 // Noise needs the extended protocol: the prologue binds the 2-byte feature ack
 static constexpr uint8_t CLIENT_NOISE_FEATURES =
     CLIENT_FEATURE_SUPPORTS_NOISE | CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL;
 static constexpr uint8_t SERVER_FEATURE_SUPPORTS_COMPRESSION = 0x01;
 static constexpr uint8_t SERVER_FEATURE_SUPPORTS_PARTITION_ACCESS = 0x02;
 static constexpr uint8_t SERVER_FEATURE_SUPPORTS_NOISE = 0x04;
+// The device inflates a raw deflate stream (window <= OTA_INFLATE_WINDOW_SIZE)
+static constexpr uint8_t SERVER_FEATURE_SUPPORTS_DEFLATE = 0x08;
 
 inline bool ESPHomeOTAComponent::extended_proto_() const {
 #ifdef USE_OTA_ENCRYPTION_REQUIRED
@@ -310,6 +315,19 @@ void ESPHomeOTAComponent::handle_handshake_() {
 #elif defined(USE_OTA_ENCRYPTION)
         // A yaml key always exists: validation rejects the all-zeros key
         this->handshake_buf_[1] |= SERVER_FEATURE_SUPPORTS_NOISE;
+#endif
+#ifdef USE_OTA_DEFLATE
+        // The backend cannot store gzip here (USE_OTA_DEFLATE is not set on the
+        // one that can), so inflate on the fly when the client offers it and the
+        // session memory (a few KB) is in hand; otherwise stay uncompressed
+        if ((this->ota_features_ & CLIENT_FEATURE_SUPPORTS_DEFLATE) != 0 && !supports_compression) {
+          this->inflate_.reset(new (std::nothrow) InflateSession());
+          if (this->inflate_ != nullptr) {
+            this->handshake_buf_[1] |= SERVER_FEATURE_SUPPORTS_DEFLATE;
+          } else {
+            ESP_LOGW(TAG, "No memory to inflate, upload will be uncompressed");
+          }
+        }
 #endif
       } else {
         this->handshake_buf_[0] =
@@ -427,16 +445,11 @@ void ESPHomeOTAComponent::handle_data_() {
   // Backend calls overwrite this with OK; reset to UNKNOWN before any
   // goto error that follows a successful begin()/write()
   ota::OTAResponseTypes error_code = ota::OTA_RESPONSE_ERROR_UNKNOWN;
-  size_t total = 0;
-  uint32_t last_progress = 0;
-  uint32_t last_data_ms = 0;
+  DataTransfer xfer;
   uint8_t buf[OTA_BUFFER_SIZE];
   char *sbuf = reinterpret_cast<char *>(buf);
-  size_t ota_size;
+  size_t image_size;
   ota::OTAType ota_type = ota::OTA_TYPE_UPDATE_APP;
-#if USE_OTA_VERSION == 2
-  size_t size_acknowledged = 0;
-#endif
 
   // Set socket timeouts and blocking mode (see strategy table above)
   struct timeval tv;
@@ -464,9 +477,20 @@ void ESPHomeOTAComponent::handle_data_() {
     this->log_read_error_(LOG_STR("size"));
     goto error;  // NOLINT(cppcoreguidelines-avoid-goto)
   }
-  ota_size = (static_cast<size_t>(buf[0]) << 24) | (static_cast<size_t>(buf[1]) << 16) |
-             (static_cast<size_t>(buf[2]) << 8) | buf[3];
-  ESP_LOGV(TAG, "Size is %zu bytes", ota_size);
+  xfer.ota_size = encode_uint32(buf[0], buf[1], buf[2], buf[3]);
+  ESP_LOGV(TAG, "Size is %zu bytes", xfer.ota_size);
+  image_size = xfer.ota_size;
+#ifdef USE_OTA_DEFLATE
+  if (this->inflate_ != nullptr) {
+    // A deflate upload also announces the inflated size, 4 bytes MSB first
+    if (!this->data_readall_(buf, 4)) {
+      this->log_read_error_(LOG_STR("image size"));
+      goto error;  // NOLINT(cppcoreguidelines-avoid-goto)
+    }
+    image_size = encode_uint32(buf[0], buf[1], buf[2], buf[3]);
+    ESP_LOGV(TAG, "Inflated size is %zu bytes", image_size);
+  }
+#endif
 
 #ifndef USE_OTA_PARTITIONS
   if (ota_type != ota::OTA_TYPE_UPDATE_APP) {
@@ -486,7 +510,7 @@ void ESPHomeOTAComponent::handle_data_() {
 #endif
 
   // begin() returns quickly; flash sectors are erased incrementally during write().
-  error_code = this->backend_->begin(ota_size, ota_type);
+  error_code = this->backend_->begin(image_size, ota_type);
   if (error_code != ota::OTA_RESPONSE_OK)
     goto error;  // NOLINT(cppcoreguidelines-avoid-goto)
 
@@ -506,76 +530,27 @@ void ESPHomeOTAComponent::handle_data_() {
   // Acknowledge MD5 OK - 1 byte
   this->data_write_byte_(ota::OTA_RESPONSE_BIN_MD5_OK);
 
-  // Track when we last received data so a silently-vanished peer (no FIN/RST
-  // delivered, e.g. uploader killed mid-transfer or NAT/router dropped state)
-  // can't wedge the device indefinitely. Without this, the loop only exits
-  // on actual data, EOF, or a non-EWOULDBLOCK error from read(), and lwIP
-  // TCP keepalive isn't enabled here.
-  last_data_ms = millis();
-  while (total < ota_size) {
-    if (millis() - last_data_ms > OTA_SOCKET_TIMEOUT_DATA) {
-      ESP_LOGW(TAG, "No data received for %u ms", (unsigned) OTA_SOCKET_TIMEOUT_DATA);
-      error_code = ota::OTA_RESPONSE_ERROR_UNKNOWN;
+  xfer.last_data_ms = millis();
+#ifdef USE_OTA_DEFLATE
+  if (this->inflate_ != nullptr) {
+    error_code = this->inflate_data_(buf, image_size, xfer);
+    if (error_code != ota::OTA_RESPONSE_OK)
       goto error;  // NOLINT(cppcoreguidelines-avoid-goto)
-    }
-    size_t remaining = ota_size - total;
-    size_t requested = remaining < OTA_BUFFER_SIZE ? remaining : OTA_BUFFER_SIZE;
-    ssize_t read;
-#ifdef USE_OTA_ENCRYPTION
-    if (this->noise_ != nullptr) {
-      // One frame per call; noise_read_data_ waits internally (readall_), so
-      // there is no would-block retry here and failures are already logged.
-      read = this->noise_read_data_(buf, requested);
-      if (read <= 0) {
+  } else
+#endif
+  {
+    while (xfer.total < xfer.ota_size) {
+      ssize_t read = this->receive_data_(buf, xfer);
+      if (read < 0) {
         error_code = ota::OTA_RESPONSE_ERROR_UNKNOWN;
         goto error;  // NOLINT(cppcoreguidelines-avoid-goto)
       }
-    } else
-#endif
-    {
-      read = this->client_->read(buf, requested);
-      if (read == -1) {
-        const int err = errno;
-        if (this->would_block_(err)) {
-          // read() already waited up to SO_RCVTIMEO for data, just feed WDT
-          App.feed_wdt();
-          continue;
-        }
-        ESP_LOGW(TAG, "Read err %d", err);
-        error_code = ota::OTA_RESPONSE_ERROR_UNKNOWN;
-        goto error;  // NOLINT(cppcoreguidelines-avoid-goto)
-      } else if (read == 0) {
-        ESP_LOGW(TAG, "Remote closed");
-        error_code = ota::OTA_RESPONSE_ERROR_UNKNOWN;
+      error_code = this->backend_->write(buf, read);
+      if (error_code != ota::OTA_RESPONSE_OK) {
+        ESP_LOGW(TAG, "Flash write err %d", error_code);
         goto error;  // NOLINT(cppcoreguidelines-avoid-goto)
       }
     }
-
-    last_data_ms = millis();
-    error_code = this->backend_->write(buf, read);
-    if (error_code != ota::OTA_RESPONSE_OK) {
-      ESP_LOGW(TAG, "Flash write err %d", error_code);
-      goto error;  // NOLINT(cppcoreguidelines-avoid-goto)
-    }
-    total += read;
-#if USE_OTA_VERSION == 2
-    while (size_acknowledged + OTA_BLOCK_SIZE <= total || (total == ota_size && size_acknowledged < ota_size)) {
-      this->data_write_byte_(ota::OTA_RESPONSE_CHUNK_OK);
-      size_acknowledged += OTA_BLOCK_SIZE;
-    }
-#endif
-
-    uint32_t now = millis();
-    if (now - last_progress > 1000) {
-      last_progress = now;
-      float percentage = (total * 100.0f) / ota_size;
-      ESP_LOGD(TAG, "Progress: %0.1f%%", percentage);
-#ifdef USE_OTA_STATE_LISTENER
-      this->notify_state_(ota::OTA_IN_PROGRESS, percentage, 0);
-#endif
-      // feed watchdog and give other tasks a chance to run
-      this->yield_and_feed_watchdog_();
-    }
   }
 
   // Acknowledge receive OK - 1 byte
@@ -771,6 +746,128 @@ bool ESPHomeOTAComponent::try_write_(size_t to_write, const LogString *desc) {
   return this->handshake_buf_pos_ >= to_write;
 }
 
+ssize_t ESPHomeOTAComponent::receive_data_(uint8_t *buf, DataTransfer &xfer) {
+  const size_t remaining = xfer.ota_size - xfer.total;
+  const size_t requested = std::min(remaining, OTA_BUFFER_SIZE);
+  ssize_t read;
+  for (;;) {
+    // A silently-vanished peer (no FIN/RST delivered, e.g. uploader killed
+    // mid-transfer or NAT/router dropped state) must not wedge the device:
+    // read() only fails on EOF or a real error, and lwIP TCP keepalive isn't
+    // enabled here.
+    if (millis() - xfer.last_data_ms > OTA_SOCKET_TIMEOUT_DATA) {
+      ESP_LOGW(TAG, "No data received for %u ms", (unsigned) OTA_SOCKET_TIMEOUT_DATA);
+      return -1;
+    }
+#ifdef USE_OTA_ENCRYPTION
+    if (this->noise_ != nullptr) {
+      // One frame per call; noise_read_data_ waits internally (readall_), so
+      // there is no would-block retry here and failures are already logged.
+      read = this->noise_read_data_(buf, requested);
+      if (read <= 0)
+        return -1;
+      break;
+    }
+#endif
+    read = this->client_->read(buf, requested);
+    if (read > 0)
+      break;
+    if (read == 0) {
+      ESP_LOGW(TAG, "Remote closed");
+      return -1;
+    }
+    const int err = errno;
+    if (!this->would_block_(err)) {
+      ESP_LOGW(TAG, "Read err %d", err);
+      return -1;
+    }
+    // read() already waited up to SO_RCVTIMEO for data, just feed WDT
+    App.feed_wdt();
+  }
+
+  const uint32_t now = millis();
+  xfer.last_data_ms = now;
+  xfer.total += read;
+#if USE_OTA_VERSION == 2
+  while (xfer.acknowledged + OTA_BLOCK_SIZE <= xfer.total ||
+         (xfer.total == xfer.ota_size && xfer.acknowledged < xfer.ota_size)) {
+    this->data_write_byte_(ota::OTA_RESPONSE_CHUNK_OK);
+    xfer.acknowledged += OTA_BLOCK_SIZE;
+  }
+#endif
+  if (now - xfer.last_progress > 1000) {
+    xfer.last_progress = now;
+    float percentage = (xfer.total * 100.0f) / xfer.ota_size;
+    ESP_LOGD(TAG, "Progress: %0.1f%%", percentage);
+#ifdef USE_OTA_STATE_LISTENER
+    this->notify_state_(ota::OTA_IN_PROGRESS, percentage, 0);
+#endif
+    // feed watchdog and give other tasks a chance to run
+    this->yield_and_feed_watchdog_();
+  }
+  return read;
+}
+
+#ifdef USE_OTA_DEFLATE
+int ESPHomeOTAComponent::inflate_read_cb_(ota_inflate_state *d) {
+  // state is the first member, so the session is the same address (checked below)
+  auto *session = reinterpret_cast<InflateSession *>(d);
+  ssize_t read = session->self->receive_data_(session->in, *session->xfer);
+  if (read <= 0)
+    return -1;
+  d->source = session->in + 1;
+  d->source_limit = session->in + read;
+  return session->in[0];
+}
+
+// The window doubles as the output buffer: the decoder fills it, we flush it to
+// the backend, and its bytes remain available as the back-reference history for
+// the next windowful.
+ota::OTAResponseTypes ESPHomeOTAComponent::inflate_data_(uint8_t *in, size_t image_size, DataTransfer &xfer) {
+  static_assert(offsetof(InflateSession, state) == 0, "inflate_read_cb_ recovers the session from &state");
+  InflateSession &session = *this->inflate_;
+  ota_inflate_state &state = session.state;
+  session.self = this;
+  session.xfer = &xfer;
+  session.in = in;
+  ota_inflate_init(&state, session.window, OTA_INFLATE_WINDOW_SIZE);
+  state.source_read_cb = &ESPHomeOTAComponent::inflate_read_cb_;
+
+  size_t written = 0;
+  int res;
+  do {
+    state.dest = session.window;
+    state.dest_limit = session.window + OTA_INFLATE_WINDOW_SIZE;
+    res = ota_inflate(&state);
+    if (res < 0) {
+      // eof means the read callback failed, which is already logged
+      if (!state.eof) {
+        ESP_LOGW(TAG, "Inflate err %d", res);
+      }
+      return ota::OTA_RESPONSE_ERROR_UNKNOWN;
+    }
+    const size_t produced = state.dest - session.window;
+    if (produced > image_size - written) {
+      ESP_LOGW(TAG, "Image exceeds announced size");
+      return ota::OTA_RESPONSE_ERROR_UNKNOWN;
+    }
+    ota::OTAResponseTypes write_result = this->backend_->write(session.window, produced);
+    if (write_result != ota::OTA_RESPONSE_OK) {
+      ESP_LOGW(TAG, "Flash write err %d", write_result);
+      return write_result;
+    }
+    written += produced;
+  } while (res != OTA_INFLATE_DONE);
+
+  if (written != image_size || xfer.total != xfer.ota_size) {
+    ESP_LOGW(TAG, "Inflated %zu of %zu bytes from %zu of %zu", written, image_size, xfer.total, xfer.ota_size);
+    return ota::OTA_RESPONSE_ERROR_UNKNOWN;
+  }
+  ESP_LOGD(TAG, "Inflated %zu bytes from %zu", written, xfer.total);
+  return ota::OTA_RESPONSE_OK;
+}
+#endif  // USE_OTA_DEFLATE
+
 void ESPHomeOTAComponent::cleanup_connection_() {
   this->client_->close();
   this->client_ = nullptr;
@@ -784,6 +881,9 @@ void ESPHomeOTAComponent::cleanup_connection_() {
 #endif
 #ifdef USE_OTA_ENCRYPTION
   this->noise_ = nullptr;
+#endif
+#ifdef USE_OTA_DEFLATE
+  this->inflate_ = nullptr;
 #endif
   // Intentionally no disable_loop() — letting loop() run one more iteration catches
   // any connection that queued on the listener mid-session (otherwise the wake flag,
diff --git a/esphome/components/esphome/ota/ota_esphome.h b/esphome/components/esphome/ota/ota_esphome.h
index c6f710b3fc..3187e20e6d 100644
--- a/esphome/components/esphome/ota/ota_esphome.h
+++ b/esphome/components/esphome/ota/ota_esphome.h
@@ -7,6 +7,9 @@
 #ifdef USE_OTA_ENCRYPTION
 #include "esphome/components/noise/noise_handshake.h"
 #endif
+#ifdef USE_OTA_DEFLATE
+#include "ota_esphome_inflate.h"
+#endif
 #include "esphome/core/helpers.h"
 #include "esphome/core/log.h"
 #include "esphome/core/preferences.h"
@@ -119,6 +122,21 @@ class ESPHomeOTAComponent final : public ota::OTAComponent {
     return this->readall_(buf, len);
   }
 
+  // Upload accounting shared by the data loop and the inflate read callback
+  struct DataTransfer {
+    size_t ota_size;  // bytes the client sends
+    size_t total{0};  // bytes received so far
+#if USE_OTA_VERSION == 2
+    size_t acknowledged{0};
+#endif
+    uint32_t last_data_ms;
+    uint32_t last_progress{0};
+  };
+  // Receives up to OTA_BUFFER_SIZE bytes of upload data into buf, waiting up to
+  // the data timeout; updates xfer and sends chunk acks. Returns bytes read, -1
+  // on failure (logged).
+  ssize_t receive_data_(uint8_t *buf, DataTransfer &xfer);
+
   bool try_read_(size_t to_read, const LogString *desc);
   bool try_write_(size_t to_write, const LogString *desc);
 
@@ -171,6 +189,24 @@ class ESPHomeOTAComponent final : public ota::OTAComponent {
   static_assert(OTA_BUFFER_SIZE >= NOISE_CLIENT_MAX_PLAINTEXT + noise::MAC_SIZE,
                 "OTA_BUFFER_SIZE must fit a full encrypted data frame");
 #endif
+#ifdef USE_OTA_DEFLATE
+  // Deflate back references reach 1 << espota2.DEFLATE_WINDOW_BITS bytes; the
+  // ring window must be at least that. It also serves as the inflate output
+  // buffer, so it is flushed to the backend one windowful at a time.
+  static constexpr size_t OTA_INFLATE_WINDOW_SIZE = 4096;
+  // Heap-allocated only while a deflate-compressed upload is negotiated.
+  struct InflateSession {
+    ota_inflate_state state;  // first member: the read callback casts back from it
+    ESPHomeOTAComponent *self;
+    DataTransfer *xfer;
+    uint8_t *in;  // caller's buffer for the compressed input, valid during inflate_data_
+    uint8_t window[OTA_INFLATE_WINDOW_SIZE];
+  };
+  static int inflate_read_cb_(ota_inflate_state *d);
+  ota::OTAResponseTypes inflate_data_(uint8_t *in, size_t image_size, DataTransfer &xfer);
+  std::unique_ptr<InflateSession> inflate_;
+#endif
+
   static constexpr uint8_t MAGIC_BYTES[5] = {0x6C, 0x26, 0xF7, 0x5C, 0x45};
   // Derived from the feature byte; storing it would pad the trailing bytes
   bool extended_proto_() const;
diff --git a/esphome/components/esphome/ota/ota_esphome_inflate.c b/esphome/components/esphome/ota/ota_esphome_inflate.c
new file mode 100644
index 0000000000..8494fb276c
--- /dev/null
+++ b/esphome/components/esphome/ota/ota_esphome_inflate.c
@@ -0,0 +1,494 @@
+/*
+ * uzlib  -  tiny deflate/inflate library (deflate, gzip, zlib)
+ *
+ * Copyright (c) 2003 by Joergen Ibsen / Jibz
+ * All Rights Reserved
+ * http://www.ibsensoftware.com/
+ *
+ * Copyright (c) 2014-2018 by Paul Sokolovsky
+ *
+ * This software is provided 'as-is', without any express
+ * or implied warranty.  In no event will the authors be
+ * held liable for any damages arising from the use of
+ * this software.
+ *
+ * Permission is granted to anyone to use this software
+ * for any purpose, including commercial applications,
+ * and to alter it and redistribute it freely, subject to
+ * the following restrictions:
+ *
+ * 1. The origin of this software must not be
+ *    misrepresented; you must not claim that you
+ *    wrote the original software. If you use this
+ *    software in a product, an acknowledgment in
+ *    the product documentation would be appreciated
+ *    but is not required.
+ *
+ * 2. Altered source versions must be plainly marked
+ *    as such, and must not be misrepresented as
+ *    being the original software.
+ *
+ * 3. This notice may not be removed or altered from
+ *    any source distribution.
+ */
+
+/*
+ * Altered for ESPHome: this is the raw deflate decoder from uzlib's
+ * tinflate.c (v2.9.5) with the gzip/zlib header parsers, checksums,
+ * runtime table builder and in-memory (non ring window) output path
+ * removed, and the public names prefixed with ota_inflate.
+ */
+
+#include "ota_esphome_inflate.h"
+
+#define TINF_OK OTA_INFLATE_OK
+#define TINF_DONE OTA_INFLATE_DONE
+#define TINF_DATA_ERROR OTA_INFLATE_DATA_ERROR
+#define TINF_DICT_ERROR OTA_INFLATE_DICT_ERROR
+#define TINF_DATA struct ota_inflate_state
+#define TINF_TREE ota_inflate_tree_t
+#define TINF_ARRAY_SIZE(arr) (sizeof(arr) / sizeof(*(arr)))
+
+/* every output byte also goes into the ring window */
+#define TINF_PUT(d, c) \
+  { \
+    *d->dest++ = c; \
+    d->dict_ring[d->dict_idx++] = c; \
+    if (d->dict_idx == d->dict_size) \
+      d->dict_idx = 0; \
+  }
+
+/* --------------------------------------------------- *
+ * -- uninitialized global data (static structures) -- *
+ * --------------------------------------------------- */
+
+static const unsigned char LENGTH_BITS[30] = {0, 0, 0, 0, 0, 0, 0, 0, 1, 1, 1, 1, 2, 2,
+                                              2, 2, 3, 3, 3, 3, 4, 4, 4, 4, 5, 5, 5, 5};
+static const unsigned short LENGTH_BASE[30] = {3,  4,  5,  6,  7,  8,  9,  10, 11,  13,  15,  17,  19,  23, 27,
+                                               31, 35, 43, 51, 59, 67, 83, 99, 115, 131, 163, 195, 227, 258};
+
+static const unsigned char DIST_BITS[30] = {0, 0, 0, 0, 1, 1, 2, 2,  3,  3,  4,  4,  5,  5,  6,
+                                            6, 7, 7, 8, 8, 9, 9, 10, 10, 11, 11, 12, 12, 13, 13};
+static const unsigned short DIST_BASE[30] = {1,    2,    3,    4,    5,    7,    9,    13,    17,    25,
+                                             33,   49,   65,   97,   129,  193,  257,  385,   513,   769,
+                                             1025, 1537, 2049, 3073, 4097, 6145, 8193, 12289, 16385, 24577};
+
+/* special ordering of code length codes */
+static const unsigned char CLCIDX[] = {16, 17, 18, 0, 8, 7, 9, 6, 10, 5, 11, 4, 12, 3, 13, 2, 14, 1, 15};
+
+/* ----------------------- *
+ * -- utility functions -- *
+ * ----------------------- */
+
+/* build the fixed huffman trees */
+static void tinf_build_fixed_trees(TINF_TREE *lt, TINF_TREE *dt) {
+  int i;
+
+  /* build fixed length tree */
+  for (i = 0; i < 7; ++i)
+    lt->table[i] = 0;
+
+  lt->table[7] = 24;
+  lt->table[8] = 152;
+  lt->table[9] = 112;
+
+  for (i = 0; i < 24; ++i)
+    lt->trans[i] = 256 + i;
+  for (i = 0; i < 144; ++i)
+    lt->trans[24 + i] = i;
+  for (i = 0; i < 8; ++i)
+    lt->trans[24 + 144 + i] = 280 + i;
+  for (i = 0; i < 112; ++i)
+    lt->trans[24 + 144 + 8 + i] = 144 + i;
+
+  /* build fixed distance tree */
+  for (i = 0; i < 5; ++i)
+    dt->table[i] = 0;
+
+  dt->table[5] = 32;
+
+  for (i = 0; i < 32; ++i)
+    dt->trans[i] = i;
+}
+
+/* given an array of code lengths, build a tree */
+static void tinf_build_tree(TINF_TREE *t, const unsigned char *lengths, unsigned int num) {
+  unsigned short offs[16];
+  unsigned int i, sum;
+
+  /* clear code length count table */
+  for (i = 0; i < 16; ++i)
+    t->table[i] = 0;
+
+  /* scan symbol lengths, and sum code length counts */
+  for (i = 0; i < num; ++i)
+    t->table[lengths[i]]++;
+
+  /* In the lengths array, 0 means unused code. So, t->table[0] now contains
+     number of unused codes. But table's purpose is to contain # of codes of
+     particular length, and there're 0 codes of length 0. */
+  t->table[0] = 0;
+
+  /* compute offset table for distribution sort */
+  for (sum = 0, i = 0; i < 16; ++i) {
+    offs[i] = sum;
+    sum += t->table[i];
+  }
+
+  /* create code->symbol translation table (symbols sorted by code) */
+  for (i = 0; i < num; ++i) {
+    if (lengths[i])
+      t->trans[offs[lengths[i]]++] = i;
+  }
+}
+
+/* ---------------------- *
+ * -- decode functions -- *
+ * ---------------------- */
+
+static unsigned char uzlib_get_byte(TINF_DATA *d) {
+  /* If end of source buffer is not reached, return next byte from source
+     buffer. */
+  if (d->source < d->source_limit) {
+    return *d->source++;
+  }
+
+  /* Otherwise if there's callback and we haven't seen EOF yet, try to
+     read next byte using it. (Note: the callback can also update ->source
+     and ->source_limit). */
+  if (d->source_read_cb && !d->eof) {
+    int val = d->source_read_cb(d);
+    if (val >= 0) {
+      return (unsigned char) val;
+    }
+  }
+
+  /* Otherwise, we hit EOF (either from ->source_read_cb() or from exhaustion
+     of the buffer), and it will be "sticky", i.e. further calls to this
+     function will end up here too. */
+  d->eof = true;
+
+  return 0;
+}
+
+/* get one bit from source stream */
+static int tinf_getbit(TINF_DATA *d) {
+  unsigned int bit;
+
+  /* check if tag is empty */
+  if (!d->bitcount--) {
+    /* load next tag */
+    d->tag = uzlib_get_byte(d);
+    d->bitcount = 7;
+  }
+
+  /* shift bit out of tag */
+  bit = d->tag & 0x01;
+  d->tag >>= 1;
+
+  return bit;
+}
+
+/* read a num bit value from a stream and add base */
+static unsigned int tinf_read_bits(TINF_DATA *d, int num, int base) {
+  unsigned int val = 0;
+
+  /* read num bits */
+  if (num) {
+    unsigned int limit = 1 << (num);
+    unsigned int mask;
+
+    for (mask = 1; mask < limit; mask *= 2)
+      if (tinf_getbit(d))
+        val += mask;
+  }
+
+  return val + base;
+}
+
+/* given a data stream and a tree, decode a symbol */
+static int tinf_decode_symbol(TINF_DATA *d, TINF_TREE *t) {
+  int sum = 0, cur = 0, len = 0;
+
+  /* get more bits while code value is above sum */
+  do {
+    cur = 2 * cur + tinf_getbit(d);
+
+    if (++len == TINF_ARRAY_SIZE(t->table)) {
+      return TINF_DATA_ERROR;
+    }
+
+    sum += t->table[len];
+    cur -= t->table[len];
+
+  } while (cur >= 0);
+
+  sum += cur;
+  if (sum < 0 || sum >= TINF_ARRAY_SIZE(t->trans)) {
+    return TINF_DATA_ERROR;
+  }
+
+  return t->trans[sum];
+}
+
+/* given a data stream, decode dynamic trees from it */
+static int tinf_decode_trees(TINF_DATA *d, TINF_TREE *lt, TINF_TREE *dt) {
+  /* code lengths for 288 literal/len symbols and 32 dist symbols */
+  unsigned char lengths[288 + 32];
+  unsigned int hlit, hdist, hclen, hlimit;
+  unsigned int i, num, length;
+
+  /* get 5 bits HLIT (257-286) */
+  hlit = tinf_read_bits(d, 5, 257);
+
+  /* get 5 bits HDIST (1-32) */
+  hdist = tinf_read_bits(d, 5, 1);
+
+  /* get 4 bits HCLEN (4-19) */
+  hclen = tinf_read_bits(d, 4, 4);
+
+  for (i = 0; i < 19; ++i)
+    lengths[i] = 0;
+
+  /* read code lengths for code length alphabet */
+  for (i = 0; i < hclen; ++i) {
+    /* get 3 bits code length (0-7) */
+    unsigned int clen = tinf_read_bits(d, 3, 0);
+
+    lengths[CLCIDX[i]] = clen;
+  }
+
+  /* build code length tree, temporarily use length tree */
+  tinf_build_tree(lt, lengths, 19);
+
+  /* decode code lengths for the dynamic trees */
+  hlimit = hlit + hdist;
+  for (num = 0; num < hlimit;) {
+    int sym = tinf_decode_symbol(d, lt);
+    unsigned char fill_value = 0;
+    int lbits, lbase = 3;
+
+    /* error decoding */
+    if (sym < 0)
+      return sym;
+
+    switch (sym) {
+      case 16:
+        /* copy previous code length 3-6 times (read 2 bits) */
+        if (num == 0)
+          return TINF_DATA_ERROR;
+        fill_value = lengths[num - 1];
+        lbits = 2;
+        break;
+      case 17:
+        /* repeat code length 0 for 3-10 times (read 3 bits) */
+        lbits = 3;
+        break;
+      case 18:
+        /* repeat code length 0 for 11-138 times (read 7 bits) */
+        lbits = 7;
+        lbase = 11;
+        break;
+      default:
+        /* values 0-15 represent the actual code lengths */
+        lengths[num++] = sym;
+        /* continue the for loop */
+        continue;
+    }
+
+    /* special code length 16-18 are handled here */
+    length = tinf_read_bits(d, lbits, lbase);
+    if (num + length > hlimit)
+      return TINF_DATA_ERROR;
+    for (; length; --length) {
+      lengths[num++] = fill_value;
+    }
+  }
+
+  /* Check that there's "end of block" symbol */
+  if (lengths[256] == 0) {
+    return TINF_DATA_ERROR;
+  }
+
+  /* build dynamic trees */
+  tinf_build_tree(lt, lengths, hlit);
+  tinf_build_tree(dt, lengths + hlit, hdist);
+
+  return TINF_OK;
+}
+
+/* ----------------------------- *
+ * -- block inflate functions -- *
+ * ----------------------------- */
+
+/* given a stream and two trees, inflate next chunk of output (a byte or more) */
+static int tinf_inflate_block_data(TINF_DATA *d, TINF_TREE *lt, TINF_TREE *dt) {
+  if (d->curlen == 0) {
+    unsigned int offs;
+    int dist;
+    int sym = tinf_decode_symbol(d, lt);
+
+    if (d->eof) {
+      return TINF_DATA_ERROR;
+    }
+
+    /* literal byte */
+    if (sym < 256) {
+      TINF_PUT(d, sym);
+      return TINF_OK;
+    }
+
+    /* end of block */
+    if (sym == 256) {
+      return TINF_DONE;
+    }
+
+    /* substring from sliding dictionary */
+    sym -= 257;
+    if (sym >= 29) {
+      return TINF_DATA_ERROR;
+    }
+
+    /* possibly get more bits from length code */
+    d->curlen = tinf_read_bits(d, LENGTH_BITS[sym], LENGTH_BASE[sym]);
+
+    dist = tinf_decode_symbol(d, dt);
+    if (dist >= 30) {
+      return TINF_DATA_ERROR;
+    }
+
+    /* possibly get more bits from distance code */
+    offs = tinf_read_bits(d, DIST_BITS[dist], DIST_BASE[dist]);
+
+    /* calculate and validate actual LZ offset to use */
+    if (offs > d->dict_size) {
+      return TINF_DICT_ERROR;
+    }
+    /* Note: we don't try to catch offset which points to not yet filled
+       part of the dictionary here. Doing so would require keeping another
+       variable to track "filled in" size of the dictionary. Appearance of
+       such an offset cannot lead to accessing memory outside of the
+       dictionary buffer, and clients which don't want to leak unrelated
+       information, should explicitly initialize dictionary buffer passed
+       to uzlib. */
+
+    d->lz_off = d->dict_idx - offs;
+    if (d->lz_off < 0) {
+      d->lz_off += d->dict_size;
+    }
+  }
+
+  /* copy next byte from dict substring */
+  TINF_PUT(d, d->dict_ring[d->lz_off]);
+  if ((unsigned) ++d->lz_off == d->dict_size) {
+    d->lz_off = 0;
+  }
+  d->curlen--;
+  return TINF_OK;
+}
+
+/* inflate next byte from uncompressed block of data */
+static int tinf_inflate_uncompressed_block(TINF_DATA *d) {
+  if (d->curlen == 0) {
+    unsigned int length, invlength;
+
+    /* get length */
+    length = uzlib_get_byte(d);
+    length += 256 * uzlib_get_byte(d);
+    /* get one's complement of length */
+    invlength = uzlib_get_byte(d);
+    invlength += 256 * uzlib_get_byte(d);
+    /* check length */
+    if (length != (~invlength & 0x0000ffff))
+      return TINF_DATA_ERROR;
+
+    /* increment length to properly return TINF_DONE below, without
+       producing data at the same time */
+    d->curlen = length + 1;
+
+    /* make sure we start next block on a byte boundary */
+    d->bitcount = 0;
+  }
+
+  if (--d->curlen == 0) {
+    return TINF_DONE;
+  }
+
+  unsigned char c = uzlib_get_byte(d);
+  TINF_PUT(d, c);
+  return TINF_OK;
+}
+
+/* ---------------------- *
+ * -- public functions -- *
+ * ---------------------- */
+
+/* initialize decompression structure */
+void ota_inflate_init(TINF_DATA *d, unsigned char *dict, unsigned int dict_len) {
+  d->eof = 0;
+  d->bitcount = 0;
+  d->bfinal = 0;
+  d->btype = -1;
+  d->dict_size = dict_len;
+  d->dict_ring = dict;
+  d->dict_idx = 0;
+  d->curlen = 0;
+}
+
+/* inflate next output bytes from compressed stream */
+int ota_inflate(TINF_DATA *d) {
+  do {
+    int res;
+
+    /* start a new block */
+    if (d->btype == -1) {
+      int old_btype;
+    next_blk:
+      old_btype = d->btype;
+      /* read final block flag */
+      d->bfinal = tinf_getbit(d);
+      /* read block type (2 bits) */
+      d->btype = tinf_read_bits(d, 2, 0);
+
+      if (d->btype == 1 && old_btype != 1) {
+        /* build fixed huffman trees */
+        tinf_build_fixed_trees(&d->ltree, &d->dtree);
+      } else if (d->btype == 2) {
+        /* decode trees from stream */
+        res = tinf_decode_trees(d, &d->ltree, &d->dtree);
+        if (res != TINF_OK) {
+          return res;
+        }
+      }
+    }
+
+    /* process current block */
+    switch (d->btype) {
+      case 0:
+        /* decompress uncompressed block */
+        res = tinf_inflate_uncompressed_block(d);
+        break;
+      case 1:
+      case 2:
+        /* decompress block with fixed/dynamic huffman trees */
+        /* trees were decoded previously, so it's the same routine for both */
+        res = tinf_inflate_block_data(d, &d->ltree, &d->dtree);
+        break;
+      default:
+        return TINF_DATA_ERROR;
+    }
+
+    if (res == TINF_DONE && !d->bfinal) {
+      /* the block has ended (without producing more data), but we
+         can't return without data, so start procesing next block */
+      goto next_blk;
+    }
+
+    if (res != TINF_OK) {
+      return res;
+    }
+
+  } while (d->dest < d->dest_limit);
+
+  return TINF_OK;
+}
diff --git a/esphome/components/esphome/ota/ota_esphome_inflate.h b/esphome/components/esphome/ota/ota_esphome_inflate.h
new file mode 100644
index 0000000000..61d82e1489
--- /dev/null
+++ b/esphome/components/esphome/ota/ota_esphome_inflate.h
@@ -0,0 +1,63 @@
+#pragma once
+// Raw deflate decoder for compressed OTA uploads, cut down from uzlib
+// (https://github.com/pfalcon/uzlib, zlib licence, see the .c file).
+// Kept in C so it stays close to upstream; the decoder writes through a
+// ring window so the image never has to be held in RAM.
+
+#include <stdbool.h>
+#include <stdint.h>
+
+#ifdef __cplusplus
+extern "C" {
+#endif
+
+enum ota_inflate_result {
+  OTA_INFLATE_OK = 0,   /* more data produced, call again */
+  OTA_INFLATE_DONE = 1, /* end of compressed stream reached */
+  OTA_INFLATE_DATA_ERROR = -3,
+  OTA_INFLATE_DICT_ERROR = -5,
+};
+
+typedef struct {
+  unsigned short table[16];  /* table of code length counts */
+  unsigned short trans[288]; /* code -> symbol translation table */
+} ota_inflate_tree_t;
+
+struct ota_inflate_state {
+  /* Next byte in the input buffer and one past its end */
+  const unsigned char *source;
+  const unsigned char *source_limit;
+  /* Called when source is exhausted; returns the next byte or -1 at EOF.
+     It may refill source/source_limit for buffered operation. */
+  int (*source_read_cb)(struct ota_inflate_state *d);
+
+  unsigned int tag;
+  unsigned int bitcount;
+
+  /* Output cursor and one past the end of the output buffer */
+  unsigned char *dest;
+  unsigned char *dest_limit;
+
+  bool eof;
+
+  int btype;
+  int bfinal;
+  unsigned int curlen;
+  int lz_off;
+  /* Ring window holding the last dict_size output bytes for back references */
+  unsigned char *dict_ring;
+  unsigned int dict_size;
+  unsigned int dict_idx;
+
+  ota_inflate_tree_t ltree; /* dynamic length/symbol tree */
+  ota_inflate_tree_t dtree; /* dynamic distance tree */
+};
+
+/* dict must be at least as large as the window the encoder used (its max back reference distance) */
+void ota_inflate_init(struct ota_inflate_state *d, unsigned char *dict, unsigned int dict_len);
+/* Produce output until dest reaches dest_limit (OK), the stream ends (DONE) or an error occurs */
+int ota_inflate(struct ota_inflate_state *d);
+
+#ifdef __cplusplus
+}
+#endif
diff --git a/esphome/core/defines.h b/esphome/core/defines.h
index eaece6d5ff..4c3fbca6b6 100644
--- a/esphome/core/defines.h
+++ b/esphome/core/defines.h
@@ -244,6 +244,7 @@
 #define USE_RUNTIME_IMAGE_QOI
 #define USE_RUNTIME_STATS
 #define USE_OTA
+#define USE_OTA_DEFLATE
 #define USE_OTA_ENCRYPTION
 #define USE_OTA_ENCRYPTION_FROM_API
 #define USE_OTA_ENCRYPTION_PROVISIONED
diff --git a/esphome/espota2.py b/esphome/espota2.py
index ce403c398d..529763aeac 100644
--- a/esphome/espota2.py
+++ b/esphome/espota2.py
@@ -11,6 +11,7 @@ import secrets
 import socket
 import time
 from typing import Any
+import zlib
 
 from esphome.core import EsphomeError
 from esphome.helpers import ProgressBar, resolve_ip_address
@@ -65,9 +66,15 @@ CLIENT_FEATURE_SUPPORTS_COMPRESSION = 0x01
 CLIENT_FEATURE_SUPPORTS_SHA256_AUTH = 0x02
 CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL = 0x04
 CLIENT_FEATURE_SUPPORTS_NOISE = 0x08
+CLIENT_FEATURE_SUPPORTS_DEFLATE = 0x10
 SERVER_FEATURE_SUPPORTS_COMPRESSION = 0x01
 SERVER_FEATURE_SUPPORTS_PARTITION_ACCESS = 0x02
 SERVER_FEATURE_SUPPORTS_NOISE = 0x04
+SERVER_FEATURE_SUPPORTS_DEFLATE = 0x08
+
+# Window of the raw deflate stream sent to a device that inflates on the fly;
+# the device's OTA_INFLATE_WINDOW_SIZE (4 KB) must be at least 1 << this
+DEFLATE_WINDOW_BITS = 12
 
 NOISE_FRAME_INDICATOR = 0x01
 NOISE_HANDSHAKE_OK = 0x00
@@ -547,6 +554,7 @@ def perform_ota(
         CLIENT_FEATURE_SUPPORTS_COMPRESSION
         | CLIENT_FEATURE_SUPPORTS_SHA256_AUTH
         | CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL
+        | CLIENT_FEATURE_SUPPORTS_DEFLATE
     )
     if noise_psk:
         features_to_send |= CLIENT_FEATURE_SUPPORTS_NOISE
@@ -640,9 +648,17 @@ def perform_ota(
                 f"retry {flag_name}."
             )
 
+    deflate = False
     if features & SERVER_FEATURE_SUPPORTS_COMPRESSION:
+        # The device stores the gzip file and inflates it when it reboots
         upload_contents = gzip.compress(file_contents, compresslevel=9)
         _LOGGER.info("Compressed to %s bytes", len(upload_contents))
+    elif extended_proto and features & SERVER_FEATURE_SUPPORTS_DEFLATE:
+        # The device inflates while receiving through a small ring window
+        compressor = zlib.compressobj(9, zlib.DEFLATED, -DEFLATE_WINDOW_BITS)
+        upload_contents = compressor.compress(file_contents) + compressor.flush()
+        deflate = True
+        _LOGGER.info("Compressed to %s bytes (deflate)", len(upload_contents))
     else:
         upload_contents = file_contents
 
@@ -701,22 +717,23 @@ def perform_ota(
         send_check(sock, ota_type, "ota type")
 
     upload_size = len(upload_contents)
-    upload_size_encoded = [
-        (upload_size >> 24) & 0xFF,
-        (upload_size >> 16) & 0xFF,
-        (upload_size >> 8) & 0xFF,
-        (upload_size >> 0) & 0xFF,
-    ]
+    upload_size_encoded = upload_size.to_bytes(4, "big")
     # The device erases flash between receiving the size and acking the
     # prepare, so this window shows the erase cost (near zero when the
     # device erases lazily during the upload)
     prepare_start = time.perf_counter()
     send_check(sock, upload_size_encoded, "binary size")
+    if deflate:
+        # The device sizes the partition by the inflated image; its own frame,
+        # as an encrypted session carries one field per frame
+        send_check(sock, len(file_contents).to_bytes(4, "big"), "image size")
     receive_exactly(sock, 1, "update prepare result", RESPONSE_UPDATE_PREPARE_OK)
     prepare_duration = time.perf_counter() - prepare_start
     _LOGGER.info("Preparing for upload took %.2f seconds", prepare_duration)
 
-    upload_md5 = hashlib.md5(upload_contents).hexdigest()
+    # The device hashes what it writes to flash: the inflated image for a
+    # deflate upload, the received bytes otherwise (the gzip file on ESP8266)
+    upload_md5 = hashlib.md5(file_contents if deflate else upload_contents).hexdigest()
     _LOGGER.debug("MD5 of upload is %s", upload_md5)
 
     send_check(sock, upload_md5, "file checksum")
diff --git a/script/ci-custom.py b/script/ci-custom.py
index e2b7cd8d37..4f30ba945d 100755
--- a/script/ci-custom.py
+++ b/script/ci-custom.py
@@ -823,6 +823,8 @@ def lint_relative_py_import(fname: Path, line, col, content):
         # neither can live in a C++ namespace.
         "esphome/components/esp32_hosted/esp_now_hosted.cpp",
         "esphome/components/esp32_hosted/esp_now_hosted_rpc.h",
+        # C header shared with the vendored decoder
+        "esphome/components/esphome/ota/ota_esphome_inflate.h",
     ],
 )
 def lint_namespace(fname: Path, content: str) -> str | None:
diff --git a/tests/integration/test_host_ota.py b/tests/integration/test_host_ota.py
index f8c122c6e1..75a779e6b2 100644
--- a/tests/integration/test_host_ota.py
+++ b/tests/integration/test_host_ota.py
@@ -180,10 +180,14 @@ async def test_host_ota_self_update(
         )
     )
     staged = asyncio.Event()
+    inflated = asyncio.Event()
 
     def on_log(line: str) -> None:
         if "OTA staged at" in line:
             staged.set()
+        # The host backend has no gzip support, so the upload negotiates deflate
+        if "Inflated " in line:
+            inflated.set()
         dev.on_log(line)
 
     async with run_binary(dev.binary_path, line_callback=on_log) as (proc, _lines):
@@ -195,6 +199,7 @@ async def test_host_ota_self_update(
 
         await dev.ota(None, None, "espota2 reported failure")
         assert staged.is_set()
+        assert inflated.is_set(), "upload was not deflate compressed"
 
         async with wait_and_connect_api_client(port=dev.api_port) as client:
             info_after = await client.device_info()
diff --git a/tests/unit_tests/test_espota2.py b/tests/unit_tests/test_espota2.py
index 8867e2c215..54112e4d2b 100644
--- a/tests/unit_tests/test_espota2.py
+++ b/tests/unit_tests/test_espota2.py
@@ -12,6 +12,7 @@ from pathlib import Path
 import socket
 import struct
 from unittest.mock import Mock, call, patch
+import zlib
 
 import pytest
 from pytest import CaptureFixture
@@ -354,6 +355,7 @@ def test_perform_ota_successful_md5_auth(
                 espota2.CLIENT_FEATURE_SUPPORTS_COMPRESSION
                 | espota2.CLIENT_FEATURE_SUPPORTS_SHA256_AUTH
                 | espota2.CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL
+                | espota2.CLIENT_FEATURE_SUPPORTS_DEFLATE
             ]
         )
     )
@@ -1051,6 +1053,7 @@ def test_perform_ota_successful_sha256_auth(
                 espota2.CLIENT_FEATURE_SUPPORTS_COMPRESSION
                 | espota2.CLIENT_FEATURE_SUPPORTS_SHA256_AUTH
                 | espota2.CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL
+                | espota2.CLIENT_FEATURE_SUPPORTS_DEFLATE
             ]
         )
     )
@@ -1107,6 +1110,7 @@ def test_perform_ota_sha256_fallback_to_md5(
                 espota2.CLIENT_FEATURE_SUPPORTS_COMPRESSION
                 | espota2.CLIENT_FEATURE_SUPPORTS_SHA256_AUTH
                 | espota2.CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL
+                | espota2.CLIENT_FEATURE_SUPPORTS_DEFLATE
             ]
         )
     )
@@ -1216,6 +1220,7 @@ def test_perform_ota_extended_protocol_app(
                 espota2.CLIENT_FEATURE_SUPPORTS_COMPRESSION
                 | espota2.CLIENT_FEATURE_SUPPORTS_SHA256_AUTH
                 | espota2.CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL
+                | espota2.CLIENT_FEATURE_SUPPORTS_DEFLATE
             ]
         )
     )
@@ -1276,6 +1281,7 @@ def test_perform_ota_successful_partition_table(
                 espota2.CLIENT_FEATURE_SUPPORTS_COMPRESSION
                 | espota2.CLIENT_FEATURE_SUPPORTS_SHA256_AUTH
                 | espota2.CLIENT_FEATURE_SUPPORTS_EXTENDED_PROTOCOL
+                | espota2.CLIENT_FEATURE_SUPPORTS_DEFLATE
             ]
         )
     )
@@ -1504,3 +1510,57 @@ def test_check_error_passes_non_error_when_expect_is_none() -> None:
     espota2.check_error([espota2.RESPONSE_OK], None)
     espota2.check_error([espota2.RESPONSE_HEADER_OK], None)
     espota2.check_error([espota2.RESPONSE_FEATURE_FLAGS], None)
+
+
+def _deflate_handshake(server_features: int) -> list[bytes]:
+    return [
+        bytes([espota2.RESPONSE_OK]),
+        bytes([espota2.OTA_VERSION_2_0]),
+        bytes([espota2.RESPONSE_FEATURE_FLAGS]),
+        bytes([server_features]),
+        bytes([espota2.RESPONSE_AUTH_OK]),
+        bytes([espota2.RESPONSE_UPDATE_PREPARE_OK]),
+        bytes([espota2.RESPONSE_BIN_MD5_OK]),
+        bytes([espota2.RESPONSE_CHUNK_OK]),
+        bytes([espota2.RESPONSE_RECEIVE_OK]),
+        bytes([espota2.RESPONSE_UPDATE_END_OK]),
+    ]
+
+
+@pytest.mark.usefixtures("mock_time")
+def test_perform_ota_with_deflate(mock_socket: Mock) -> None:
+    """A device that inflates on the fly gets a raw deflate stream, both sizes and the image MD5."""
+    original_content = b"firmware" * 100
+    mock_socket.recv.side_effect = _deflate_handshake(
+        espota2.SERVER_FEATURE_SUPPORTS_DEFLATE
+    )
+
+    espota2.perform_ota(mock_socket, None, io.BytesIO(original_content), "test.bin")
+
+    sent = [c[0][0] for c in mock_socket.sendall.call_args_list]
+    # magic, features, ota type, size, image size, md5, data, end ack
+    sent_size = struct.unpack(">I", sent[3])[0]
+    assert sent[4] == len(original_content).to_bytes(4, "big")
+    payload = sent[6]
+    assert len(payload) == sent_size < len(original_content)
+    # The device decodes through a window of 1 << DEFLATE_WINDOW_BITS bytes
+    assert zlib.decompress(payload, -espota2.DEFLATE_WINDOW_BITS) == original_content
+    assert sent[5] == hashlib.md5(original_content).hexdigest().encode()
+
+
+@pytest.mark.usefixtures("mock_time")
+def test_perform_ota_gzip_wins_over_deflate(mock_socket: Mock) -> None:
+    """A device that can store gzip keeps getting gzip even when it also offers deflate."""
+    original_content = b"firmware" * 100
+    mock_socket.recv.side_effect = _deflate_handshake(
+        espota2.SERVER_FEATURE_SUPPORTS_COMPRESSION
+        | espota2.SERVER_FEATURE_SUPPORTS_DEFLATE
+    )
+
+    espota2.perform_ota(mock_socket, None, io.BytesIO(original_content), "test.bin")
+
+    sent = [c[0][0] for c in mock_socket.sendall.call_args_list]
+    compressed = gzip.compress(original_content, compresslevel=9)
+    assert sent[3] == len(compressed).to_bytes(4, "big")
+    assert sent[4] == hashlib.md5(compressed).hexdigest().encode()
+    assert sent[5] == compressed