diff --git a/ChangeLog b/ChangeLog
index ce5acf3e1..f4cf546da 100644
--- a/ChangeLog
+++ b/ChangeLog
@@ -2,6 +2,7 @@
 ==== Core ====
   * Implement #1063 option to delete torrent file copy on torrent removal - patch from Ghent
   * Implement #457 progress bars for folders
+  * Implement #1012 httpdownloader supports gzip decoding
   * #496: Remove deprecated functions in favour of get_session_status()
 
 ==== Blocklist ====
diff --git a/deluge/httpdownloader.py b/deluge/httpdownloader.py
index 6fc004ea3..bb0144d77 100644
--- a/deluge/httpdownloader.py
+++ b/deluge/httpdownloader.py
@@ -39,6 +39,7 @@ from twisted.internet import reactor
 from deluge.log import setupLogger, LOG as log
 from common import get_version
 import os.path
+import zlib
 
 class HTTPDownloader(client.HTTPDownloader):
     """
@@ -56,8 +57,9 @@ class HTTPDownloader(client.HTTPDownloader):
         :param headers: any optional headers to send
         :type headers: dictionary
         """
-        self.__part_callback = part_callback
+        self.part_callback = part_callback
         self.current_length = 0
+        self.decoder = None
         self.value = filename
         self.force_filename = force_filename
         agent = "Deluge/%s (http://deluge-torrent.org)" % get_version()
@@ -74,6 +76,11 @@ class HTTPDownloader(client.HTTPDownloader):
             else:
                 self.total_length = 0
 
+            if "content-encoding" in headers and headers["content-encoding"][0] in ("gzip", "x-gzip", "deflate"):
+                # Adding 32 to the wbits enables gzip & zlib decoding (with automatic header detection)
+                # Adding 16 just enables gzip decoding (no zlib)
+                self.decoder = zlib.decompressobj(zlib.MAX_WBITS + 32)
+
             if "content-disposition" in headers and not self.force_filename:
                 try:
                     new_file_name = str(headers["content-disposition"][0]).split(";")[1].split("=")[1]
@@ -95,11 +102,19 @@ class HTTPDownloader(client.HTTPDownloader):
     def pagePart(self, data):
         if self.code == http.OK:
             self.current_length += len(data)
-            if self.__part_callback:
-                self.__part_callback(data, self.current_length, self.total_length)
+            if self.decoder:
+                data = self.decoder.decompress(data)
+            if self.part_callback:
+                self.part_callback(data, self.current_length, self.total_length)
 
         return client.HTTPDownloader.pagePart(self, data)
 
+    def pageEnd(self):
+        if self.decoder:
+            client.HTTPDownloader.pagePart(self, self.decoder.flush())
+
+        return client.HTTPDownloader.pageEnd(self)
+
 def sanitise_filename(filename):
     """
     Sanitises a filename to use as a download destination file.
@@ -132,7 +147,7 @@ def sanitise_filename(filename):
 
     return filename
 
-def download_file(url, filename, callback=None, headers=None, force_filename=False):
+def download_file(url, filename, callback=None, headers=None, force_filename=False, allow_compression=True):
     """
     Downloads a file from a specific URL and returns a Deferred.  You can also
     specify a callback function to be called as parts are received.
@@ -149,6 +164,8 @@ def download_file(url, filename, callback=None, headers=None, force_filename=Fal
     :param force_filename: force us to use the filename specified rather than
                            one the server may suggest
     :type force_filename: boolean
+    :param allow_compression: allows gzip & deflate decoding
+    :type allow_compression: boolean
 
     :returns: the filename of the downloaded file
     :rtype: Deferred
@@ -163,6 +180,11 @@ def download_file(url, filename, callback=None, headers=None, force_filename=Fal
         for key, value in headers.items():
             headers[str(key)] = str(value)
 
+    if allow_compression:
+        if not headers:
+            headers = {}
+        headers["accept-encoding"] = "gzip, deflate"
+
     scheme, host, port, path = client._parse(url)
     factory = HTTPDownloader(url, filename, callback, headers, force_filename)
     if scheme == "https":