diff --git a/src/main/java/com/google/devtools/build/lib/remote/GrpcCacheClient.java b/src/main/java/com/google/devtools/build/lib/remote/GrpcCacheClient.java
index d39bdd55baaba4..679fcebb4f7554 100644
--- a/src/main/java/com/google/devtools/build/lib/remote/GrpcCacheClient.java
+++ b/src/main/java/com/google/devtools/build/lib/remote/GrpcCacheClient.java
@@ -26,8 +26,7 @@
 import build.bazel.remote.execution.v2.FindMissingBlobsResponse;
 import build.bazel.remote.execution.v2.GetActionResultRequest;
 import build.bazel.remote.execution.v2.RequestMetadata;
-import build.bazel.remote.execution.v2.UpdateActionResultRequest;
-import com.github.luben.zstd.ZstdInputStream;
+import build.bazel.remote.execution.v2.UpdateActionResultRequest
 import com.google.bytestream.ByteStreamGrpc;
 import com.google.bytestream.ByteStreamGrpc.ByteStreamStub;
 import com.google.bytestream.ByteStreamProto.ReadRequest;
@@ -61,9 +60,7 @@
 import io.grpc.StatusRuntimeException;
 import io.grpc.stub.StreamObserver;
 
-import java.io.ByteArrayInputStream;
 import java.io.IOException;
-import java.io.InputStream;
 import java.io.OutputStream;
 import java.util.ArrayList;
 import java.util.List;
@@ -298,6 +295,14 @@ public ListenableFuture<Void> downloadBlob(
       out = digestOut;
     }
 
+    if (options.cacheByteStreamCompression) {
+      try {
+        out = new ZstdDecompressingOutputStream(out);
+      } catch (IOException e) {
+        return Futures.immediateFailedFuture(e);
+      }
+    }
+
     return downloadBlob(context, digest, out, digestSupplier);
   }
 
@@ -352,41 +357,13 @@ private ListenableFuture<Void> requestRead(
                 .setReadOffset(offset.get())
                 .build(),
             new StreamObserver<ReadResponse>() {
-              InputStream inner;
-              ZstdInputStream zis;
-
-              {
-                initialise();
-              }
-
-              private void initialise() throws IOException {
-                if (options.cacheByteStreamCompression) {
-                  zis =
-                      new ZstdInputStream(
-                          new InputStream() {
-                            @Override
-                            public int read() throws IOException {
-                              return inner.read();
-                            }
-                          });
-
-                  zis.setContinuous(true);
-                }
-              }
 
               @Override
               public void onNext(ReadResponse readResponse) {
                 ByteString data = readResponse.getData();
                 try {
-                  if (options.cacheByteStreamCompression) {
-                    inner = new ByteArrayInputStream(data.toByteArray());
-                    ByteString bs = ByteString.readFrom(zis);
-                    bs.writeTo(out);
-                    offset.addAndGet(bs.size());
-                  } else {
-                    data.writeTo(out);
-                    offset.addAndGet(data.size());
-                  }
+                  data.writeTo(out);
+                  offset.addAndGet(data.size());
                 } catch (IOException e) {
                   // Cancel the call.
                   throw new RuntimeException(e);
diff --git a/src/main/java/com/google/devtools/build/lib/remote/ZstdDecompressingOutputStream.java b/src/main/java/com/google/devtools/build/lib/remote/ZstdDecompressingOutputStream.java
new file mode 100644
index 00000000000000..cb644888522bcc
--- /dev/null
+++ b/src/main/java/com/google/devtools/build/lib/remote/ZstdDecompressingOutputStream.java
@@ -0,0 +1,40 @@
+package com.google.devtools.build.lib.remote;
+
+import com.github.luben.zstd.ZstdInputStream;
+
+import java.io.ByteArrayOutputStream;
+import java.io.IOException;
+import java.io.InputStream;
+import java.io.OutputStream;
+
+public class ZstdDecompressingOutputStream extends OutputStream {
+  private final ByteArrayOutputStream baos;
+  private final ZstdInputStream zis;
+  private final OutputStream out;
+  private int lastByte;
+
+  ZstdDecompressingOutputStream(OutputStream out) throws IOException {
+    this.out = out;
+    baos = new ByteArrayOutputStream();
+    zis =
+        new ZstdInputStream(
+            new InputStream() {
+              @Override
+              public int read() throws IOException {
+                int value = lastByte;
+                lastByte = -1;
+                return value;
+              }
+            });
+    zis.setContinuous(true);
+  }
+
+  @Override
+  public void write(int b) throws IOException {
+    lastByte = b;
+    int c;
+    while ((c = zis.read()) != -1) {
+      out.write(c);
+    }
+  }
+}