diff --git a/cache/cache.go b/cache/cache.go
index 1c665cd..6b1eb59 100644
--- a/cache/cache.go
+++ b/cache/cache.go
@@ -1,6 +1,9 @@
 package libpack_cache
 
 import (
+	"bytes"
+	"compress/gzip"
+	"io"
 	"sync/atomic"
 	"time"
 
@@ -76,6 +79,28 @@ func CacheLookup(hash string) []byte {
 	obj, found := config.Client.Get(hash)
 	if found {
 		atomic.AddInt64(&cacheStats.CacheHits, 1)
+		// If the cached data is compressed, decompress it
+		if len(obj) > 2 && obj[0] == 0x1f && obj[1] == 0x8b {
+			reader, err := gzip.NewReader(bytes.NewReader(obj))
+			if err != nil {
+				config.Logger.Error(&libpack_logger.LogMessage{
+					Message: "Failed to create gzip reader for cached data",
+					Pairs:   map[string]interface{}{"error": err.Error(), "hash": hash},
+				})
+				return nil
+			}
+			defer reader.Close()
+
+			decompressed, err := io.ReadAll(reader)
+			if err != nil {
+				config.Logger.Error(&libpack_logger.LogMessage{
+					Message: "Failed to decompress cached data",
+					Pairs:   map[string]interface{}{"error": err.Error(), "hash": hash},
+				})
+				return nil
+			}
+			return decompressed
+		}
 		return obj
 	}
 	atomic.AddInt64(&cacheStats.CacheMisses, 1)
diff --git a/proxy.go b/proxy.go
index 3ff07ff..aa35a5d 100644
--- a/proxy.go
+++ b/proxy.go
@@ -1,8 +1,11 @@
 package main
 
 import (
+	"bytes"
+	"compress/gzip"
 	"crypto/tls"
 	"fmt"
+	"io"
 	"net/url"
 	"time"
 
@@ -93,6 +96,30 @@ func proxyTheRequest(c *fiber.Ctx, currentEndpoint string) error {
 		logDebugResponse(c)
 	}
 
+	if c.Response().Header.Peek("Content-Encoding") != nil && string(c.Response().Header.Peek("Content-Encoding")) == "gzip" {
+		reader, err := gzip.NewReader(bytes.NewReader(c.Response().Body()))
+		if err != nil {
+			cfg.Logger.Error(&libpack_logger.LogMessage{
+				Message: "Failed to create gzip reader",
+				Pairs:   map[string]interface{}{"error": err.Error()},
+			})
+			return err
+		}
+		defer reader.Close()
+
+		decompressed, err := io.ReadAll(reader)
+		if err != nil {
+			cfg.Logger.Error(&libpack_logger.LogMessage{
+				Message: "Failed to decompress response",
+				Pairs:   map[string]interface{}{"error": err.Error()},
+			})
+			return err
+		}
+
+		c.Response().SetBody(decompressed)
+		c.Response().Header.Del("Content-Encoding")
+	}
+
 	if c.Response().StatusCode() != 200 {
 		if ifNotInTest() {
 			cfg.Monitoring.Increment(libpack_monitoring.MetricsFailed, nil)
diff --git a/server.go b/server.go
index 5b02d60..c88959c 100644
--- a/server.go
+++ b/server.go
@@ -189,6 +189,7 @@ func processGraphQLRequest(c *fiber.Ctx) error {
 			})
 			c.Set("X-Cache-Hit", "true")
 			wasCached = true
+			c.Set("Content-Type", "application/json")
 			return c.Send(cachedResponse)
 		}