diff --git a/src/pack-objects.c b/src/pack-objects.c
index 8475f64f2..8b65ac26a 100644
--- a/src/pack-objects.c
+++ b/src/pack-objects.c
@@ -291,7 +291,6 @@ static int write_object(
 	void *delta_data = NULL;
 	void *data;
 	size_t hdr_len, zbuf_len = COMPRESS_BUFLEN, data_len;
-	ssize_t written;
 	int error;
 
 	if (po->delta) {
@@ -337,19 +336,15 @@ static int write_object(
 		GITERR_CHECK_ALLOC(zbuf);
 
 		git_zstream_reset(&pb->zstream);
+		git_zstream_set_input(&pb->zstream, data, data_len);
 
-		while ((written = git_zstream_deflate(zbuf, zbuf_len, &pb->zstream, data, data_len)) > 0) {
-			if ((error = write_cb(zbuf, written, cb_data)) < 0 ||
-				(error = git_hash_update(&pb->ctx, zbuf, written)) < 0)
+		while (!git_zstream_done(&pb->zstream)) {
+			if ((error = git_zstream_get_output(zbuf, &zbuf_len, &pb->zstream)) < 0 ||
+				(error = write_cb(zbuf, zbuf_len, cb_data)) < 0 ||
+				(error = git_hash_update(&pb->ctx, zbuf, zbuf_len)) < 0)
 				goto done;
 
-			data = (char *)data + written;
-			data_len -= written;
-		}
-
-		if (written < 0) {
-			error = (int)written;
-			goto done;
+			zbuf_len = COMPRESS_BUFLEN; /* reuse buffer */
 		}
 
 		if (po->delta)
diff --git a/src/zstream.c b/src/zstream.c
index 0bca72ff3..c83602297 100644
--- a/src/zstream.c
+++ b/src/zstream.c
@@ -10,14 +10,18 @@
 #include "zstream.h"
 #include "buffer.h"
 
-#define BUFFER_SIZE (1024 * 1024)
+#define ZSTREAM_BUFFER_SIZE (1024 * 1024)
+#define ZSTREAM_BUFFER_MIN_EXTRA 8
 
-static int zstream_seterr(int zerr, git_zstream *zstream)
+static int zstream_seterr(git_zstream *zs)
 {
-	if (zerr == Z_MEM_ERROR)
+	if (zs->zerr == Z_OK || zs->zerr == Z_STREAM_END)
+		return 0;
+
+	if (zs->zerr == Z_MEM_ERROR)
 		giterr_set_oom();
-	else if (zstream->msg)
-		giterr_set(GITERR_ZLIB, zstream->msg);
+	else if (zs->z.msg)
+		giterr_set(GITERR_ZLIB, zs->z.msg);
 	else
 		giterr_set(GITERR_ZLIB, "Unknown compression error");
 
@@ -26,69 +30,123 @@ static int zstream_seterr(int zerr, git_zstream *zstream)
 
 int git_zstream_init(git_zstream *zstream)
 {
-	int zerr;
-
-	if ((zerr = deflateInit(zstream, Z_DEFAULT_COMPRESSION)) != Z_OK)
-		return zstream_seterr(zerr, zstream);
-
-	return 0;
-}
-
-ssize_t git_zstream_deflate(void *out, size_t out_len, git_zstream *zstream, const void *in, size_t in_len)
-{
-	int zerr;
-
-	if ((ssize_t)out_len < 0)
-		out_len = INT_MAX;
-
-	zstream->next_in = (Bytef *)in;
-	zstream->avail_in = in_len;
-	zstream->next_out = out;
-	zstream->avail_out = out_len;
-
-	if ((zerr = deflate(zstream, Z_FINISH)) == Z_STREAM_ERROR)
-		return zstream_seterr(zerr, zstream);
-
-	return (out_len - zstream->avail_out);
-}
-
-void git_zstream_reset(git_zstream *zstream)
-{
-	deflateReset(zstream);
+	zstream->zerr = deflateInit(&zstream->z, Z_DEFAULT_COMPRESSION);
+	return zstream_seterr(zstream);
 }
 
 void git_zstream_free(git_zstream *zstream)
 {
-	deflateEnd(zstream);
+	deflateEnd(&zstream->z);
+}
+
+void git_zstream_reset(git_zstream *zstream)
+{
+	deflateReset(&zstream->z);
+	zstream->in = NULL;
+	zstream->in_len = 0;
+	zstream->zerr = Z_STREAM_END;
+}
+
+int git_zstream_set_input(git_zstream *zstream, const void *in, size_t in_len)
+{
+	zstream->in = in;
+	zstream->in_len = in_len;
+	zstream->zerr = Z_OK;
+	return 0;
+}
+
+bool git_zstream_done(git_zstream *zstream)
+{
+	return (!zstream->in_len && zstream->zerr == Z_STREAM_END);
+}
+
+size_t git_zstream_suggest_output_len(git_zstream *zstream)
+{
+	if (zstream->in_len > ZSTREAM_BUFFER_SIZE)
+		return ZSTREAM_BUFFER_SIZE;
+	else if (zstream->in_len > ZSTREAM_BUFFER_MIN_EXTRA)
+		return zstream->in_len;
+	else
+		return ZSTREAM_BUFFER_MIN_EXTRA;
+}
+
+int git_zstream_get_output(void *out, size_t *out_len, git_zstream *zstream)
+{
+	int zflush = Z_FINISH;
+	size_t out_remain = *out_len;
+
+	while (out_remain > 0 && zstream->zerr != Z_STREAM_END) {
+		size_t out_queued, in_queued, out_used, in_used;
+
+		/* set up in data */
+		zstream->z.next_in  = (Bytef *)zstream->in;
+		zstream->z.avail_in = (uInt)zstream->in_len;
+		if ((size_t)zstream->z.avail_in != zstream->in_len) {
+			zstream->z.avail_in = INT_MAX;
+			zflush = Z_NO_FLUSH;
+		} else {
+			zflush = Z_FINISH;
+		}
+		in_queued = (size_t)zstream->z.avail_in;
+
+		/* set up out data */
+		zstream->z.next_out = out;
+		zstream->z.avail_out = (uInt)out_remain;
+		if ((size_t)zstream->z.avail_out != out_remain)
+			zstream->z.avail_out = INT_MAX;
+		out_queued = (size_t)zstream->z.avail_out;
+
+		/* compress next chunk */
+		zstream->zerr = deflate(&zstream->z, zflush);
+		if (zstream->zerr == Z_STREAM_ERROR)
+			return zstream_seterr(zstream);
+
+		out_used = (out_queued - zstream->z.avail_out);
+		out_remain -= out_used;
+		out = ((char *)out) + out_used;
+
+		in_used = (in_queued - zstream->z.avail_in);
+		zstream->in_len -= in_used;
+		zstream->in += in_used;
+	}
+
+	/* either we finished the input or we did not flush the data */
+	assert(zstream->in_len > 0 || zflush == Z_FINISH);
+
+	/* set out_size to number of bytes actually written to output */
+	*out_len = *out_len - out_remain;
+
+	return 0;
 }
 
 int git_zstream_deflatebuf(git_buf *out, const void *in, size_t in_len)
 {
-	git_zstream zstream = GIT_ZSTREAM_INIT;
-	size_t out_len;
-	ssize_t written;
+	git_zstream zs = GIT_ZSTREAM_INIT;
 	int error = 0;
 
-	if ((error = git_zstream_init(&zstream)) < 0)
+	if ((error = git_zstream_init(&zs)) < 0)
 		return error;
 
-	do {
-		if (out->asize - out->size < BUFFER_SIZE)
-			git_buf_grow(out, out->asize + BUFFER_SIZE);
+	if ((error = git_zstream_set_input(&zs, in, in_len)) < 0)
+		goto done;
 
-		out_len = out->asize - out->size;
+	while (!git_zstream_done(&zs)) {
+		size_t step = git_zstream_suggest_output_len(&zs), written;
 
-		if ((written = git_zstream_deflate(out->ptr + out->size, out_len, &zstream, in, in_len)) <= 0)
-			break;
+		if ((error = git_buf_grow(out, out->asize + step)) < 0)
+			goto done;
+
+		written = out->asize - out->size;
+
+		if ((error = git_zstream_get_output(
+				out->ptr + out->size, &written, &zs)) < 0)
+			goto done;
 
-		in = (char *)in + written;
-		in_len -= written;
 		out->size += written;
-	} while (written > 0);
+		out->ptr[out->size] = '\0';
+	}
 
-	if (written < 0)
-		error = written;
-
-	git_zstream_free(&zstream);
+done:
+	git_zstream_free(&zs);
 	return error;
 }
diff --git a/src/zstream.h b/src/zstream.h
index 9672903c0..9b5bf6ace 100644
--- a/src/zstream.h
+++ b/src/zstream.h
@@ -12,15 +12,28 @@
 #include "common.h"
 #include "buffer.h"
 
-#define git_zstream z_stream
+typedef struct {
+	z_stream z;
+	const char *in;
+	size_t in_len;
+	int zerr;
+} git_zstream;
 
-#define GIT_ZSTREAM_INIT {0}
+#define GIT_ZSTREAM_INIT {{0}}
 
 int git_zstream_init(git_zstream *zstream);
-ssize_t git_zstream_deflate(void *out, size_t out_len, git_zstream *zstream, const void *in, size_t in_len);
-void git_zstream_reset(git_zstream *zstream);
 void git_zstream_free(git_zstream *zstream);
 
+int git_zstream_set_input(git_zstream *zstream, const void *in, size_t in_len);
+
+size_t git_zstream_suggest_output_len(git_zstream *zstream);
+
+int git_zstream_get_output(void *out, size_t *out_len, git_zstream *zstream);
+
+bool git_zstream_done(git_zstream *zstream);
+
+void git_zstream_reset(git_zstream *zstream);
+
 int git_zstream_deflatebuf(git_buf *out, const void *in, size_t in_len);
 
 #endif /* INCLUDE_zstream_h__ */
diff --git a/tests/core/zstream.c b/tests/core/zstream.c
new file mode 100644
index 000000000..63ff8c93a
--- /dev/null
+++ b/tests/core/zstream.c
@@ -0,0 +1,98 @@
+#include "clar_libgit2.h"
+#include "buffer.h"
+#include "zstream.h"
+
+static const char *data = "This is a test test test of This is a test";
+
+#define INFLATE_EXTRA 2
+
+static void assert_zlib_equal_(
+	const void *expected, size_t e_len,
+	const void *compressed, size_t c_len,
+	const char *msg, const char *file, int line)
+{
+	z_stream stream;
+	char *expanded = git__calloc(1, e_len + INFLATE_EXTRA);
+	cl_assert(expanded);
+
+	memset(&stream, 0, sizeof(stream));
+	stream.next_out  = (Bytef *)expanded;
+	stream.avail_out = (uInt)(e_len + INFLATE_EXTRA);
+	stream.next_in   = (Bytef *)compressed;
+	stream.avail_in  = (uInt)c_len;
+
+	cl_assert(inflateInit(&stream) == Z_OK);
+	cl_assert(inflate(&stream, Z_FINISH));
+	inflateEnd(&stream);
+
+	clar__assert_equal(
+		file, line, msg, 1,
+		"%d", (int)stream.total_out, (int)e_len);
+	clar__assert_equal(
+		file, line, "Buffer len was not exact match", 1,
+		"%d", (int)stream.avail_out, (int)INFLATE_EXTRA);
+
+	clar__assert(
+		memcmp(expanded, expected, e_len) == 0,
+		file, line, "uncompressed data did not match", NULL, 1);
+
+	git__free(expanded);
+}
+
+#define assert_zlib_equal(E,EL,C,CL) \
+	assert_zlib_equal_(E, EL, C, CL, #EL " != " #CL, __FILE__, (int)__LINE__)
+
+void test_core_zstream__basic(void)
+{
+	git_zstream z = GIT_ZSTREAM_INIT;
+	char out[128];
+	size_t outlen = sizeof(out);
+
+	cl_git_pass(git_zstream_init(&z));
+	cl_git_pass(git_zstream_set_input(&z, data, strlen(data) + 1));
+	cl_git_pass(git_zstream_get_output(out, &outlen, &z));
+	cl_assert(git_zstream_done(&z));
+	cl_assert(outlen > 0);
+	git_zstream_free(&z);
+
+	assert_zlib_equal(data, strlen(data) + 1, out, outlen);
+}
+
+void test_core_zstream__buffer(void)
+{
+	git_buf out = GIT_BUF_INIT;
+	cl_git_pass(git_zstream_deflatebuf(&out, data, strlen(data) + 1));
+	assert_zlib_equal(data, strlen(data) + 1, out.ptr, out.size);
+	git_buf_free(&out);
+}
+
+#define BIG_STRING_PART "Big Data IS Big - Long Data IS Long - We need a buffer larger than 1024 x 1024 to make sure we trigger chunked compression - Big Big Data IS Bigger than Big - Long Long Data IS Longer than Long"
+
+void test_core_zstream__big_data(void)
+{
+	git_buf in = GIT_BUF_INIT;
+	git_buf out = GIT_BUF_INIT;
+	size_t scan;
+
+	/* make a big string that's easy to compress */
+	while (in.size < 1024 * 1024)
+		cl_git_pass(git_buf_put(&in, BIG_STRING_PART, strlen(BIG_STRING_PART)));
+
+	cl_git_pass(git_zstream_deflatebuf(&out, in.ptr, in.size));
+	assert_zlib_equal(in.ptr, in.size, out.ptr, out.size);
+
+	git_buf_free(&out);
+
+	/* make a big string that's hard to compress */
+
+	srand(0xabad1dea);
+	for (scan = 0; scan < in.size; ++scan)
+		in.ptr[scan] = (char)rand();
+
+	cl_git_pass(git_zstream_deflatebuf(&out, in.ptr, in.size));
+	assert_zlib_equal(in.ptr, in.size, out.ptr, out.size);
+
+	git_buf_free(&out);
+
+	git_buf_free(&in);
+}