diff --git a/scene/main/http_request.cpp b/scene/main/http_request.cpp
index bec378dd912..f5b528cff7e 100644
--- a/scene/main/http_request.cpp
+++ b/scene/main/http_request.cpp
@@ -48,6 +48,7 @@ Error HTTPRequest::_parse_url(const String &p_url) {
 	body_len = -1;
 	body.clear();
 	downloaded.set(0);
+	final_body_size.set(0);
 	redirections = 0;
 
 	String scheme;
@@ -198,6 +199,7 @@ void HTTPRequest::cancel_request() {
 	}
 
 	file.unref();
+	decompressor.unref();
 	client->close();
 	body.clear();
 	got_response = false;
@@ -219,6 +221,9 @@ bool HTTPRequest::_handle_response(bool *ret_value) {
 	client->get_response_headers(&rheaders);
 	response_headers.clear();
 	downloaded.set(0);
+	final_body_size.set(0);
+	decompressor.unref();
+
 	for (const String &E : rheaders) {
 		response_headers.push_back(E);
 	}
@@ -259,6 +264,7 @@ bool HTTPRequest::_handle_response(bool *ret_value) {
 				body_len = -1;
 				body.clear();
 				downloaded.set(0);
+				final_body_size.set(0);
 				redirections = new_redirs;
 				*ret_value = false;
 				return true;
@@ -266,6 +272,19 @@ bool HTTPRequest::_handle_response(bool *ret_value) {
 		}
 	}
 
+	// Check if we need to start streaming decompression.
+	String content_encoding;
+	if (accept_gzip) {
+		content_encoding = get_header_value(response_headers, "Content-Encoding").to_lower();
+	}
+	if (content_encoding == "gzip") {
+		decompressor.instantiate();
+		decompressor->start_decompression(false, get_download_chunk_size() * 2);
+	} else if (content_encoding == "deflate") {
+		decompressor.instantiate();
+		decompressor->start_decompression(true, get_download_chunk_size() * 2);
+	}
+
 	return false;
 }
 
@@ -375,9 +394,28 @@ bool HTTPRequest::_update_connection() {
 			}
 
 			PackedByteArray chunk = client->read_response_body_chunk();
+			downloaded.add(chunk.size());
+
+			// Decompress chunk if needed.
+			if (decompressor.is_valid()) {
+				Error err = decompressor->put_data(chunk.ptr(), chunk.size());
+				if (err == OK) {
+					chunk.resize(decompressor->get_available_bytes());
+					err = decompressor->get_data(chunk.ptrw(), chunk.size());
+				}
+				if (err != OK) {
+					call_deferred(SNAME("_request_done"), RESULT_BODY_DECOMPRESS_FAILED, response_code, response_headers, PackedByteArray());
+					return true;
+				}
+			}
+			final_body_size.add(chunk.size());
+
+			if (body_size_limit >= 0 && final_body_size.get() > body_size_limit) {
+				call_deferred(SNAME("_request_done"), RESULT_BODY_SIZE_LIMIT_EXCEEDED, response_code, response_headers, PackedByteArray());
+				return true;
+			}
 
 			if (chunk.size()) {
-				downloaded.add(chunk.size());
 				if (file.is_valid()) {
 					const uint8_t *r = chunk.ptr();
 					file->store_buffer(r, chunk.size());
@@ -390,11 +428,6 @@ bool HTTPRequest::_update_connection() {
 				}
 			}
 
-			if (body_size_limit >= 0 && downloaded.get() > body_size_limit) {
-				call_deferred(SNAME("_request_done"), RESULT_BODY_SIZE_LIMIT_EXCEEDED, response_code, response_headers, PackedByteArray());
-				return true;
-			}
-
 			if (body_len >= 0) {
 				if (downloaded.get() == body_len) {
 					call_deferred(SNAME("_request_done"), RESULT_SUCCESS, response_code, response_headers, body);
@@ -425,38 +458,6 @@ bool HTTPRequest::_update_connection() {
 void HTTPRequest::_request_done(int p_status, int p_code, const PackedStringArray &p_headers, const PackedByteArray &p_data) {
 	cancel_request();
 
-	// Determine if the request body is compressed.
-	bool is_compressed;
-	String content_encoding = get_header_value(p_headers, "Content-Encoding").to_lower();
-	Compression::Mode mode;
-	if (content_encoding == "gzip") {
-		mode = Compression::Mode::MODE_GZIP;
-		is_compressed = true;
-	} else if (content_encoding == "deflate") {
-		mode = Compression::Mode::MODE_DEFLATE;
-		is_compressed = true;
-	} else {
-		is_compressed = false;
-	}
-
-	if (accept_gzip && is_compressed && p_data.size() > 0) {
-		// Decompress request body
-		PackedByteArray decompressed;
-		int result = Compression::decompress_dynamic(&decompressed, body_size_limit, p_data.ptr(), p_data.size(), mode);
-		if (result == OK) {
-			emit_signal(SNAME("request_completed"), p_status, p_code, p_headers, decompressed);
-			return;
-		} else if (result == -5) {
-			WARN_PRINT("Decompressed size of HTTP response body exceeded body_size_limit");
-			p_status = RESULT_BODY_SIZE_LIMIT_EXCEEDED;
-			// Just return the raw data if we failed to decompress it.
-		} else {
-			WARN_PRINT("Failed to decompress HTTP response body");
-			p_status = RESULT_BODY_DECOMPRESS_FAILED;
-			// Just return the raw data if we failed to decompress it.
-		}
-	}
-
 	emit_signal(SNAME("request_completed"), p_status, p_code, p_headers, p_data);
 }
 
diff --git a/scene/main/http_request.h b/scene/main/http_request.h
index 290bacd9d20..4b669050ded 100644
--- a/scene/main/http_request.h
+++ b/scene/main/http_request.h
@@ -32,6 +32,7 @@
 #define HTTP_REQUEST_H
 
 #include "core/io/http_client.h"
+#include "core/io/stream_peer_gzip.h"
 #include "core/os/thread.h"
 #include "core/templates/safe_refcount.h"
 #include "scene/main/node.h"
@@ -84,10 +85,12 @@ private:
 
 	String download_to_file;
 
+	Ref<StreamPeerGZIP> decompressor;
 	Ref<FileAccess> file;
 
 	int body_len = -1;
 	SafeNumeric<int> downloaded;
+	SafeNumeric<int> final_body_size;
 	int body_size_limit = -1;
 
 	int redirections = 0;