diff --git a/processing/src/main/java/org/apache/druid/java/util/http/client/HttpClientConfig.java b/processing/src/main/java/org/apache/druid/java/util/http/client/HttpClientConfig.java
index b652c0a27450..3d16c857228b 100644
--- a/processing/src/main/java/org/apache/druid/java/util/http/client/HttpClientConfig.java
+++ b/processing/src/main/java/org/apache/druid/java/util/http/client/HttpClientConfig.java
@@ -52,13 +52,25 @@ public String getEncodingString()
       {
         return "deflate";
       }
+    },
+    LZ4 {
+      @Override
+      public String getEncodingString()
+      {
+        return "x-lz4";
+      }
+    },
+    ZSTD {
+      @Override
+      public String getEncodingString()
+      {
+        return "zstd";
+      }
     };
 
     /**
      * Get the header-ified name of this encoding, which should go in "Accept-Encoding" and
-     * "Content-Encoding" headers. This is not just the lowercasing of the enum name, since
-     * we may one day support x- encodings like LZ4, which would likely be an enum named
-     * "LZ4" that has an encoding string like "x-lz4".
+     * "Content-Encoding" headers.
      *
      * @return encoding name
      */
diff --git a/server/src/main/java/org/apache/druid/client/DirectDruidClient.java b/server/src/main/java/org/apache/druid/client/DirectDruidClient.java
index ec4ab6f289ae..3479b3a3f9c4 100644
--- a/server/src/main/java/org/apache/druid/client/DirectDruidClient.java
+++ b/server/src/main/java/org/apache/druid/client/DirectDruidClient.java
@@ -23,10 +23,12 @@
 import com.fasterxml.jackson.databind.ObjectMapper;
 import com.fasterxml.jackson.dataformat.smile.SmileFactory;
 import com.fasterxml.jackson.jaxrs.smile.SmileMediaTypes;
+import com.github.luben.zstd.ZstdInputStream;
 import com.google.common.base.Preconditions;
 import com.google.common.util.concurrent.FutureCallback;
 import com.google.common.util.concurrent.Futures;
 import com.google.common.util.concurrent.ListenableFuture;
+import net.jpountz.lz4.LZ4BlockInputStream;
 import org.apache.druid.java.util.common.RE;
 import org.apache.druid.java.util.common.StringUtils;
 import org.apache.druid.java.util.common.concurrent.Execs;
@@ -159,6 +161,7 @@ public Sequence<T> run(final QueryPlus<T> queryPlus, final ResponseContext conte
     final JavaType queryResultType = isBySegment ? toolChest.getBySegmentResultType() : toolChest.getBaseResultType();
 
     final ListenableFuture<InputStream> future;
+    final AtomicReference<String> responseContentEncoding = new AtomicReference<>("");
     final String url = scheme + "://" + host + "/druid/v2/";
     final String cancelUrl = url + query.getId();
 
@@ -247,6 +250,8 @@ public ClientResponse<InputStream> handleResponse(HttpResponse response, Traffic
                 query.getId(),
                 query.getSubQueryId()
             );
+            final String encoding = response.headers().get(HttpHeaders.Names.CONTENT_ENCODING);
+            responseContentEncoding.set(encoding != null ? encoding : "");
             final String responseContext = response.headers().get(QueryResource.HEADER_RESPONSE_CONTEXT);
             context.addRemainingResponse(query.getMostSpecificId(), VAL_TO_REDUCE_REMAINING_RESPONSES);
             // context may be null in case of error or query timeout
@@ -516,7 +521,7 @@ public JsonParserIterator<T> make()
           {
             return new JsonParserIterator<>(
                 queryResultType,
-                future,
+                wrapFutureWithDecompressor(future, responseContentEncoding.get()),
                 url,
                 query,
                 host,
@@ -587,6 +592,35 @@ private void cancelQuery(Query<T> query, String cancelUrl)
     queryCancellationExecutor.submit(cancelRunnable);
   }
 
+  private static ListenableFuture<InputStream> wrapFutureWithDecompressor(
+      ListenableFuture<InputStream> future,
+      String contentEncoding
+  )
+  {
+    if ("x-lz4".equals(contentEncoding)) {
+      return Futures.transform(future, DirectDruidClient::newLz4InputStream, Execs.directExecutor());
+    }
+    if ("zstd".equals(contentEncoding)) {
+      return Futures.transform(future, DirectDruidClient::newZstdInputStream, Execs.directExecutor());
+    }
+    return future;
+  }
+
+  private static InputStream newLz4InputStream(InputStream in)
+  {
+    return new LZ4BlockInputStream(in);
+  }
+
+  private static InputStream newZstdInputStream(InputStream in)
+  {
+    try {
+      return new ZstdInputStream(in);
+    }
+    catch (IOException e) {
+      throw new RuntimeException(e);
+    }
+  }
+
   @Override
   public String toString()
   {
diff --git a/server/src/main/java/org/apache/druid/server/QueryResultPusher.java b/server/src/main/java/org/apache/druid/server/QueryResultPusher.java
index ee9849a7b119..dd8ae6b6dfe1 100644
--- a/server/src/main/java/org/apache/druid/server/QueryResultPusher.java
+++ b/server/src/main/java/org/apache/druid/server/QueryResultPusher.java
@@ -21,8 +21,10 @@
 
 import com.fasterxml.jackson.core.JsonProcessingException;
 import com.fasterxml.jackson.databind.ObjectMapper;
+import com.github.luben.zstd.ZstdOutputStream;
 import com.google.common.collect.ImmutableMap;
 import com.google.common.io.CountingOutputStream;
+import net.jpountz.lz4.LZ4BlockOutputStream;
 import org.apache.druid.client.DirectDruidClient;
 import org.apache.druid.error.DruidException;
 import org.apache.druid.error.ErrorResponse;
@@ -385,6 +387,36 @@ public interface Writer extends Closeable
     void writeResponseEnd() throws IOException;
   }
 
+  /**
+   * Picks the best compression encoding the client accepts. Prefers zstd over x-lz4.
+   * Returns null if no supported encoding is advertised.
+   */
+  @Nullable
+  private static String negotiateContentEncoding(@Nullable String acceptEncoding)
+  {
+    if (acceptEncoding == null) {
+      return null;
+    }
+    if (acceptEncoding.contains("zstd")) {
+      return "zstd";
+    }
+    if (acceptEncoding.contains("x-lz4")) {
+      return "x-lz4";
+    }
+    return null;
+  }
+
+  private static OutputStream wrapWithCompressor(OutputStream out, @Nullable String contentEncoding) throws IOException
+  {
+    if ("zstd".equals(contentEncoding)) {
+      return new ZstdOutputStream(out);
+    }
+    if ("x-lz4".equals(contentEncoding)) {
+      return new LZ4BlockOutputStream(out);
+    }
+    return out;
+  }
+
   public class StreamingHttpResponseAccumulator implements Accumulator<Response, Object>, Closeable
   {
     private final ResponseContext responseContext;
@@ -442,8 +474,14 @@ public void initialize()
 
         response.setTrailerFields(() -> trailerFields);
 
+        final String contentEncoding = negotiateContentEncoding(request.getHeader("Accept-Encoding"));
+        if (contentEncoding != null) {
+          response.setHeader("Content-Encoding", contentEncoding);
+        }
+
         try {
-          out = new CountingOutputStream(response.getOutputStream());
+          final OutputStream responseOs = response.getOutputStream();
+          out = new CountingOutputStream(wrapWithCompressor(responseOs, contentEncoding));
           writer = resultsWriter.makeWriter(out);
         }
         catch (IOException e) {