diff --git a/cmd/cloudinitsave/cloudinitsave.go b/cmd/cloudinitsave/cloudinitsave.go
index d715c988..67525163 100644
--- a/cmd/cloudinitsave/cloudinitsave.go
+++ b/cmd/cloudinitsave/cloudinitsave.go
@@ -182,6 +182,11 @@ func fetchAndSave(ds datasource.Datasource) error {
 		log.Errorf("Failed fetching user-data from datasource: %v", err)
 		return err
 	}
+	userDataBytes, err = decompressIfGzip(userDataBytes)
+	if err != nil {
+		log.Errorf("Failed decompressing user-data from datasource: %v", err)
+		return err
+	}
 	log.Infof("Fetching meta-data from datasource of type %v", ds.Type())
 	metadata, err = ds.FetchMetadata()
 	if err != nil {
@@ -367,3 +372,13 @@ func composeToCloudConfig(bytes []byte) ([]byte, error) {
 		},
 	})
 }
+
+const gzipMagicBytes = "\x1f\x8b"
+
+func decompressIfGzip(userdataBytes []byte) ([]byte, error) {
+	if !bytes.HasPrefix(userdataBytes, []byte(gzipMagicBytes)) {
+		return userdataBytes, nil
+	}
+
+	return config.DecompressGzip(userdataBytes)
+}
diff --git a/config/cloudinit/config/decode.go b/config/cloudinit/config/decode.go
index f5847aa9..3c520e02 100644
--- a/config/cloudinit/config/decode.go
+++ b/config/cloudinit/config/decode.go
@@ -18,7 +18,12 @@ func DecodeBase64Content(content string) ([]byte, error) {
 }
 
 func DecodeGzipContent(content string) ([]byte, error) {
-	gzr, err := gzip.NewReader(bytes.NewReader([]byte(content)))
+	byteContent := []byte(content)
+	return DecompressGzip(byteContent)
+}
+
+func DecompressGzip(content []byte) ([]byte, error) {
+	gzr, err := gzip.NewReader(bytes.NewReader(content))
 
 	if err != nil {
 		return nil, fmt.Errorf("Unable to decode gzip: %q", err)