diff --git a/src/transforms/compression.js b/src/transforms/compression.js
index 718e7fed..2352ac96 100644
--- a/src/transforms/compression.js
+++ b/src/transforms/compression.js
@@ -4,6 +4,11 @@ const [readVarInt, writeVarInt, sizeOfVarInt] = require('protodef').types.varint
 const zlib = require('zlib')
 const Transform = require('readable-stream').Transform
 
+// The protocol caps the uncompressed size of a packet at 2^23 bytes (8 MiB). A compressed
+// packet that declares — or inflates to — more than this is rejected, so a malicious peer
+// cannot force an unbounded synchronous allocation (a "decompression bomb"). See #664.
+const MAX_UNCOMPRESSED_LENGTH = 8388608 // 2 ** 23
+
 module.exports.createCompressor = function (threshold) {
   return new Compressor(threshold)
 }
@@ -53,9 +58,15 @@ class Decompressor extends Transform {
     if (value === 0) {
       this.push(chunk.slice(size))
       return cb()
+    } else if (value > MAX_UNCOMPRESSED_LENGTH) {
+      // Declared uncompressed length exceeds the protocol maximum; refuse to inflate.
+      if (!this.hideErrors) {
+        console.error('uncompressed length ' + value + ' exceeds maximum of ' + MAX_UNCOMPRESSED_LENGTH)
+      }
+      return cb()
     } else {
       try {
-        const newBuf = zlib.unzipSync(chunk.slice(size), { finishFlush: 2 })
+        const newBuf = zlib.unzipSync(chunk.slice(size), { maxOutputLength: MAX_UNCOMPRESSED_LENGTH, finishFlush: 2 })
         if (newBuf.length !== value && !this.hideErrors) {
           console.error('uncompressed length should be ' + value + ' but is ' + newBuf.length)
         }
diff --git a/test/compressionTest.js b/test/compressionTest.js
new file mode 100644
index 00000000..b290f287
--- /dev/null
+++ b/test/compressionTest.js
@@ -0,0 +1,66 @@
+/* eslint-env mocha */
+// Tests the compression transforms, in particular that the decompressor enforces the
+// protocol's maximum uncompressed packet size so a malicious peer cannot send a
+// "decompression bomb" that inflates to an unbounded synchronous allocation. See #664.
+const assert = require('assert')
+const zlib = require('zlib')
+const [, writeVarInt, sizeOfVarInt] = require('protodef').types.varint
+const { supportedVersions } = require('../src/version')
+const { createCompressor, createDecompressor } = require('../src/transforms/compression')
+
+const MAX_UNCOMPRESSED_LENGTH = 8388608 // 2 ** 23
+
+// Push a single chunk through a transform and resolve with the array of emitted chunks.
+function pump (transform, chunk) {
+  return new Promise((resolve, reject) => {
+    const out = []
+    transform.on('data', (d) => out.push(d))
+    transform.on('error', reject)
+    transform.write(chunk, (err) => {
+      if (err) return reject(err)
+      setImmediate(() => resolve(out))
+    })
+  })
+}
+
+// Build a compressed-packet frame: a VarInt declared uncompressed length followed by `payload`.
+function framePacket (declaredLength, payload) {
+  const header = Buffer.alloc(sizeOfVarInt(declaredLength))
+  writeVarInt(declaredLength, header, 0)
+  return Buffer.concat([header, payload])
+}
+
+// The transforms are version-independent, but the test job filters by `-g <version>v`,
+// so the suite is registered per supported version to run under CI.
+for (const supportedVersion of supportedVersions) {
+  describe('compression ' + supportedVersion + 'v', () => {
+    it('round-trips a compressed packet', async () => {
+      const original = Buffer.from('a payload long enough to be worth compressing'.repeat(8))
+      const [compressed] = await pump(createCompressor(0), original)
+      const [restored] = await pump(createDecompressor(0), compressed)
+      assert.ok(restored.equals(original), 'decompressed output should equal the original')
+    })
+
+    it('passes through an uncompressed packet (declared length 0)', async () => {
+      const original = Buffer.from('small')
+      // threshold above the payload size -> compressor emits it uncompressed (VarInt 0 prefix)
+      const [framed] = await pump(createCompressor(256), original)
+      const [restored] = await pump(createDecompressor(256), framed)
+      assert.ok(restored.equals(original))
+    })
+
+    it('drops a decompression bomb instead of allocating past the maximum', async () => {
+      // Payload inflates to more than the protocol maximum, but declares a small length.
+      const bomb = zlib.deflateSync(Buffer.alloc(MAX_UNCOMPRESSED_LENGTH + 1024))
+      const packet = framePacket(100, bomb)
+      const out = await pump(createDecompressor(0, true), packet)
+      assert.strictEqual(out.length, 0, 'oversized inflate should be dropped, not emitted')
+    })
+
+    it('rejects a packet whose declared uncompressed length exceeds the maximum', async () => {
+      const packet = framePacket(MAX_UNCOMPRESSED_LENGTH + 1, zlib.deflateSync(Buffer.from('x')))
+      const out = await pump(createDecompressor(0, true), packet)
+      assert.strictEqual(out.length, 0, 'over-cap declared length should be dropped before inflating')
+    })
+  })
+}