diff --git a/README.md b/README.md
index ff49770..8d2fe26 100644
--- a/README.md
+++ b/README.md
@@ -10,6 +10,7 @@ The project is currently an early but usable Telnet client. Its interface is bui
 - Plain Telnet and certificate-verified TLS connections
 - UTF-8, Windows-1252, and ISO-8859-1 character encodings
 - Streaming Telnet negotiation with ECHO, Suppress Go Ahead, and Terminal Type support
+- MCCP2 compressed-stream negotiation and bounded streaming decompression
 - Streaming ANSI control-sequence filtering
 - Accessible scrollback and command entry
 - Automatic reading of incoming lines and prompts
@@ -51,12 +52,11 @@ Automated regression coverage now exercises the streaming Telnet parser and text
 
 Planned work, roughly in order:
 
-1. Add MCCP2 compressed-stream support.
-2. Add GMCP negotiation, bounded JSON parsing, typed package events, and an accessible inspector.
-3. Add opt-in MSP sound and music with safe URL handling, limits, caching, and independent playback controls.
-4. Add aliases, triggers, timers, optional transcripts, and configurable command shortcuts.
-5. Add multiple simultaneous sessions with independent output and speech queues.
-6. Add localization catalogs and package/signing automation for releases.
+1. Add GMCP negotiation, bounded JSON parsing, typed package events, and an accessible inspector.
+2. Add opt-in MSP sound and music with safe URL handling, limits, caching, and independent playback controls.
+3. Add aliases, triggers, timers, optional transcripts, and configurable command shortcuts.
+4. Add multiple simultaneous sessions with independent output and speech queues.
+5. Add localization catalogs and package/signing automation for releases.
 
 ## Running the tests
 
diff --git a/__app.rb b/__app.rb
index 6569b6d..4ec6fd6 100644
--- a/__app.rb
+++ b/__app.rb
@@ -3,7 +3,7 @@
   "id": "51a92051-84e0-415f-84e3-98f08a320a15",
   "name": "Meow",
   "version": "0.1.0",
-  "build_id": 2,
+  "build_id": 3,
   "EltenAPIVersion": "3.0.3",
   "author": "Talon",
   "main_language": "en",
diff --git a/lib/meow/session.rb b/lib/meow/session.rb
index 98c6e59..d3fbe4e 100644
--- a/lib/meow/session.rb
+++ b/lib/meow/session.rb
@@ -27,6 +27,7 @@ module MeowClient
     def run
       @form.wait
     ensure
+      @pipeline.close
       @transport.close
       @program.release(@transport, :close => false)
     end
@@ -83,6 +84,9 @@ module MeowClient
         receive_record(record) if record != nil
       end
       dispatch_speech
+    rescue Telnet::CompressionError
+      add_system_line(_("The compressed data stream could not be processed safely. The connection was closed."))
+      close_form
     rescue Exception => error
       Log.error("Meow session update failed: #{error.class}: #{error.message}") if defined?(Log)
       add_system_line(_("Session update error: %{message}") % {:message => error.message})
diff --git a/lib/meow/telnet.rb b/lib/meow/telnet.rb
index 4d979e4..39c3d7f 100644
--- a/lib/meow/telnet.rb
+++ b/lib/meow/telnet.rb
@@ -1,3 +1,5 @@
+require "zlib"
+
 module MeowClient
   module Telnet
     IAC = 255
@@ -11,10 +13,13 @@ module MeowClient
     ECHO = 1
     SUPPRESS_GO_AHEAD = 3
     TERMINAL_TYPE = 24
+    COMPRESS2 = 86
     TTYPE_IS = 0
     TTYPE_SEND = 1
+    MAX_INFLATED_BYTES_PER_FEED = 1_048_576
 
     Result = Struct.new(:data, :replies, :events, keyword_init: true)
+    CompressionError = Class.new(StandardError)
 
     class Parser
       attr_reader :remote_echo
@@ -27,56 +32,101 @@ module MeowClient
         @remote_echo = false
         @remote_options = {}
         @local_options = {}
+        @inflater = nil
+        @compression_finished = false
       end
 
       def feed(bytes)
         output = +"".b
         replies = []
         events = []
-        bytes.to_s.b.each_byte do |byte|
-          case @state
-          when :data
-            if byte == IAC
-              @state = :iac
-            else
-              output << byte
-            end
-          when :iac
-            handle_iac(byte, output)
-          when :negotiation
-            reply, event = negotiate(@negotiation_command, byte)
-            replies << reply if reply != nil
-            events << event if event != nil
-            @state = :data
-          when :sb_option
-            @subnegotiation_option = byte
-            @subnegotiation.clear
-            @state = :sb
-          when :sb
-            if byte == IAC
-              @state = :sb_iac
-            else
-              @subnegotiation << byte
-            end
-          when :sb_iac
-            if byte == IAC
-              @subnegotiation << IAC
-              @state = :sb
-            elsif byte == SE
-              reply, event = finish_subnegotiation
-              replies << reply if reply != nil
-              events << event if event != nil
-              @state = :data
-            else
-              @state = :data
-            end
+        input = bytes.to_s.b
+        if @compression_finished && input != ""
+          raise CompressionError, "Data followed the end of the MCCP2 stream."
+        end
+
+        index = 0
+        while index < input.bytesize
+          if @inflater != nil
+            inflate(input.byteslice(index..-1), output, replies, events)
+            index = input.bytesize
+          else
+            consume_byte(input.getbyte(index), output, replies, events)
+            index += 1
           end
         end
         Result.new(:data => output, :replies => replies, :events => events)
+      rescue Zlib::Error => error
+        raise CompressionError, "Invalid MCCP2 stream: #{error.message}"
+      end
+
+      def close
+        inflater = @inflater
+        @inflater = nil
+        inflater.close if inflater != nil && !inflater.closed?
+        nil
+      rescue Zlib::Error
+        nil
       end
 
       private
 
+      def consume_byte(byte, output, replies, events)
+        case @state
+        when :data
+          if byte == IAC
+            @state = :iac
+          else
+            output << byte
+          end
+        when :iac
+          handle_iac(byte, output)
+        when :negotiation
+          reply, event = negotiate(@negotiation_command, byte)
+          replies << reply if reply != nil
+          events << event if event != nil
+          @state = :data
+        when :sb_option
+          @subnegotiation_option = byte
+          @subnegotiation.clear
+          @state = :sb
+        when :sb
+          if byte == IAC
+            @state = :sb_iac
+          else
+            @subnegotiation << byte
+          end
+        when :sb_iac
+          if byte == IAC
+            @subnegotiation << IAC
+            @state = :sb
+          elsif byte == SE
+            reply, event = finish_subnegotiation
+            replies << reply if reply != nil
+            events << event if event != nil
+            @state = :data
+          else
+            @state = :data
+          end
+        end
+      end
+
+      def inflate(bytes, output, replies, events)
+        inflated_bytes = 0
+        consume = proc do |chunk|
+          inflated_bytes += chunk.bytesize
+          if inflated_bytes > MAX_INFLATED_BYTES_PER_FEED
+            raise CompressionError, "MCCP2 output exceeded the safety limit."
+          end
+          chunk.each_byte { |byte| consume_byte(byte, output, replies, events) }
+        end
+
+        @inflater.inflate(bytes) { |chunk| consume.call(chunk) }
+        pending = @inflater.flush_next_out
+        consume.call(pending) if pending != ""
+        @compression_finished = true if @inflater.finished?
+      end
+
       def handle_iac(byte, output)
         case byte
         when IAC
@@ -99,7 +149,7 @@ module MeowClient
       def negotiate(command, option)
         case command
         when WILL
-          enabled = [ECHO, SUPPRESS_GO_AHEAD].include?(option)
+          enabled = [ECHO, SUPPRESS_GO_AHEAD, COMPRESS2].include?(option)
           changed = @remote_options[option] != enabled
           @remote_options[option] = enabled
           return [nil, nil] unless changed
@@ -131,6 +181,13 @@ module MeowClient
       end
 
       def finish_subnegotiation
+        if @subnegotiation_option == COMPRESS2 &&
+            @remote_options[COMPRESS2] == true &&
+            @subnegotiation.empty?
+          raise CompressionError, "MCCP2 compression was started more than once." if @inflater != nil
+          @inflater = Zlib::Inflate.new
+          return [nil, [:compression, true]]
+        end
         if @subnegotiation_option == TERMINAL_TYPE &&
             @local_options[TERMINAL_TYPE] == true &&
             @subnegotiation.getbyte(0) == TTYPE_SEND
diff --git a/lib/meow/text_pipeline.rb b/lib/meow/text_pipeline.rb
index 19314de..f45aafe 100644
--- a/lib/meow/text_pipeline.rb
+++ b/lib/meow/text_pipeline.rb
@@ -94,6 +94,10 @@ module MeowClient
       prompt == nil ? [] : [prompt]
     end
 
+    def close
+      @telnet.close
+    end
+
     private
 
     def decode(bytes)
diff --git a/test/telnet_test.rb b/test/telnet_test.rb
index 8acd986..821d5e6 100644
--- a/test/telnet_test.rb
+++ b/test/telnet_test.rb
@@ -1,5 +1,7 @@
 # encoding: UTF-8
 
+require "zlib"
+
 require_relative "test_helper"
 require_relative "../lib/meow/telnet"
 
@@ -94,4 +96,104 @@ module MeowTelnetTest
     MeowTest.assert_empty(result.replies)
     MeowTest.assert_empty(result.events)
   end
+
+  MeowTest.test("Telnet negotiates MCCP2 once") do
+    parser = Telnet::Parser.new
+    packet = bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2)
+    first = parser.feed(packet)
+    duplicate = parser.feed(packet)
+
+    MeowTest.assert_equal([bytes(Telnet::IAC, Telnet::DO, Telnet::COMPRESS2)], first.replies)
+    MeowTest.assert_empty(duplicate.replies)
+  end
+
+  MeowTest.test("Telnet starts MCCP2 only after negotiation") do
+    marker = bytes(Telnet::IAC, Telnet::SB, Telnet::COMPRESS2, Telnet::IAC, Telnet::SE)
+    parser = Telnet::Parser.new
+    before = parser.feed(marker)
+    parser.feed(bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2))
+    after = parser.feed(marker + Zlib::Deflate.deflate("compressed text".b))
+
+    MeowTest.assert_equal([[:subnegotiation, Telnet::COMPRESS2]], before.events)
+    MeowTest.assert_equal("compressed text".b, after.data)
+    MeowTest.assert_equal([[:compression, true]], after.events)
+  ensure
+    parser.close if parser != nil
+  end
+
+  MeowTest.test("MCCP2 survives every activation and compressed input boundary") do
+    negotiation = bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2)
+    marker = bytes(Telnet::IAC, Telnet::SB, Telnet::COMPRESS2, Telnet::IAC, Telnet::SE)
+    payload = "room description\r\n".b
+    packet = negotiation + marker + Zlib::Deflate.deflate(payload)
+    whole_parser = Telnet::Parser.new
+    split_parser = Telnet::Parser.new
+    whole = collect(whole_parser, [packet])
+    split = collect(split_parser, packet.bytes.map { |byte| bytes(byte) })
+
+    MeowTest.assert_equal(whole, split)
+    MeowTest.assert_equal(payload, split[:data])
+    MeowTest.assert_equal([[:compression, true]], split[:events])
+  ensure
+    whole_parser.close if whole_parser != nil
+    split_parser.close if split_parser != nil
+  end
+
+  MeowTest.test("MCCP2 inflated bytes continue through Telnet parsing") do
+    parser = Telnet::Parser.new
+    parser.feed(bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2))
+    marker = bytes(Telnet::IAC, Telnet::SB, Telnet::COMPRESS2, Telnet::IAC, Telnet::SE)
+    payload = "hello".b + bytes(Telnet::IAC, Telnet::WILL, Telnet::ECHO) + " world".b
+    result = parser.feed(marker + Zlib::Deflate.deflate(payload))
+
+    MeowTest.assert_equal("hello world".b, result.data)
+    MeowTest.assert_equal([bytes(Telnet::IAC, Telnet::DO, Telnet::ECHO)], result.replies)
+    MeowTest.assert_equal([[:compression, true], [:remote_echo, true]], result.events)
+  ensure
+    parser.close if parser != nil
+  end
+
+
+
+  MeowTest.test("MCCP2 keeps one compressed stream across input chunks") do
+    parser = Telnet::Parser.new
+    deflater = Zlib::Deflate.new
+    parser.feed(bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2))
+    marker = bytes(Telnet::IAC, Telnet::SB, Telnet::COMPRESS2, Telnet::IAC, Telnet::SE)
+    first = deflater.deflate("first ".b, Zlib::SYNC_FLUSH)
+    MeowTest.assert_equal("first ".b, parser.feed(marker + first).data)
+
+    second = deflater.deflate("second".b, Zlib::SYNC_FLUSH)
+    MeowTest.assert_equal("second".b, parser.feed(second).data)
+  ensure
+    parser.close if parser != nil
+    deflater.close if deflater != nil && !deflater.closed?
+  end
+
+  MeowTest.test("MCCP2 rejects malformed streams and data after stream end") do
+    marker = bytes(Telnet::IAC, Telnet::SB, Telnet::COMPRESS2, Telnet::IAC, Telnet::SE)
+    malformed = Telnet::Parser.new
+    malformed.feed(bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2))
+    MeowTest.assert_raises(Telnet::CompressionError) { malformed.feed(marker + "not zlib".b) }
+
+    finished = Telnet::Parser.new
+    finished.feed(bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2))
+    finished.feed(marker + Zlib::Deflate.deflate("done".b))
+    MeowTest.assert_raises(Telnet::CompressionError) { finished.feed("extra".b) }
+  ensure
+    malformed.close if malformed != nil
+    finished.close if finished != nil
+  end
+
+  MeowTest.test("MCCP2 limits inflated output per feed") do
+    parser = Telnet::Parser.new
+    parser.feed(bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2))
+    marker = bytes(Telnet::IAC, Telnet::SB, Telnet::COMPRESS2, Telnet::IAC, Telnet::SE)
+    oversized = "a".b * (Telnet::MAX_INFLATED_BYTES_PER_FEED + 1)
+    MeowTest.assert_raises(Telnet::CompressionError) do
+      parser.feed(marker + Zlib::Deflate.deflate(oversized))
+    end
+  ensure
+    parser.close if parser != nil
+  end
 end
diff --git a/test/test_helper.rb b/test/test_helper.rb
index 67c183f..a404833 100644
--- a/test/test_helper.rb
+++ b/test/test_helper.rb
@@ -29,6 +29,16 @@ module MeowTest
       assert(value.empty?, message || "Expected #{value.inspect} to be empty")
     end
 
+    def assert_raises(error_class)
+      yield
+    rescue error_class => error
+      return error
+    rescue StandardError => error
+      raise Failure, "Expected #{error_class}, got #{error.class}: #{error.message}"
+    else
+      raise Failure, "Expected #{error_class} to be raised"
+    end
+
     def run!
       failures = []
       @tests.each do |name, test|
diff --git a/test/text_pipeline_test.rb b/test/text_pipeline_test.rb
index 1805055..0a5d8dc 100644
--- a/test/text_pipeline_test.rb
+++ b/test/text_pipeline_test.rb
@@ -1,5 +1,7 @@
 # encoding: UTF-8
 
+require "zlib"
+
 require_relative "test_helper"
 require_relative "../lib/meow/telnet"
 require_relative "../lib/meow/text_pipeline"
@@ -74,4 +76,18 @@ module MeowTextPipelineTest
     MeowTest.assert_equal([[:remote_echo, true]], result.events)
     MeowTest.assert(pipeline.remote_echo?)
   end
+
+  MeowTest.test("Text pipeline processes MCCP2 output normally") do
+    pipeline = MeowClient::TextPipeline.new("UTF-8")
+    negotiation = bytes(Telnet::IAC, Telnet::WILL, Telnet::COMPRESS2)
+    marker = bytes(Telnet::IAC, Telnet::SB, Telnet::COMPRESS2, Telnet::IAC, Telnet::SE)
+    payload = "red\e[31m text\e[0m\r\n".b
+    result = pipeline.feed(negotiation + marker + Zlib::Deflate.deflate(payload))
+
+    MeowTest.assert_equal(["red text"], result.records)
+    MeowTest.assert_equal([bytes(Telnet::IAC, Telnet::DO, Telnet::COMPRESS2)], result.replies)
+    MeowTest.assert_equal([[:compression, true]], result.events)
+  ensure
+    pipeline.close if pipeline != nil
+  end
 end