diff --git a/netwerk/protocol/http/HttpBaseChannel.cpp b/netwerk/protocol/http/HttpBaseChannel.cpp
index de344b10ec1..d5bcfd603e9 100644
--- a/netwerk/protocol/http/HttpBaseChannel.cpp
+++ b/netwerk/protocol/http/HttpBaseChannel.cpp
@@ -589,14 +589,43 @@ HttpBaseChannel::ApplyContentConversions()
     return NS_OK;
   }
 
-  const char *val = mResponseHead->PeekHeader(nsHttp::Content_Encoding);
-  if (gHttpHandler->IsAcceptableEncoding(val)) {
-    nsCOMPtr<nsIStreamConverterService> serv;
-    nsresult rv = gHttpHandler->
-            GetStreamConverterService(getter_AddRefs(serv));
-    // we won't fail to load the page just because we couldn't load the
-    // stream converter service.. carry on..
-    if (NS_SUCCEEDED(rv)) {
+  nsCAutoString contentEncoding;
+  char *cePtr, *val;
+  nsresult rv;
+
+  rv = mResponseHead->GetHeader(nsHttp::Content_Encoding, contentEncoding);
+  if (NS_FAILED(rv) || contentEncoding.IsEmpty())
+    return NS_OK;
+
+  // The encodings are listed in the order they were applied
+  // (see rfc 2616 section 14.11), so they need to removed in reverse
+  // order. This is accomplished because the converter chain ends up
+  // being a stack with the last converter created being the first one
+  // to accept the raw network data.
+
+  cePtr = contentEncoding.BeginWriting();
+  PRUint32 count = 0;
+  while ((val = nsCRT::strtok(cePtr, HTTP_LWS ",", &cePtr))) {
+    if (++count > 16) {
+      // That's ridiculous. We only understand 2 different ones :)
+      // but for compatibility with old code, we will just carry on without
+      // removing the encodings
+      LOG(("Too many Content-Encodings. Ignoring remainder.\n"));
+      break;
+    }
+
+    if (gHttpHandler->IsAcceptableEncoding(val)) {
+      nsCOMPtr<nsIStreamConverterService> serv;
+      rv = gHttpHandler->GetStreamConverterService(getter_AddRefs(serv));
+
+      // we won't fail to load the page just because we couldn't load the
+      // stream converter service.. carry on..
+      if (NS_FAILED(rv)) {
+        if (val)
+          LOG(("Unknown content encoding '%s', ignoring\n", val));
+        continue;
+      }
+
       nsCOMPtr<nsIStreamListener> converter;
       nsCAutoString from(val);
       ToLowerCase(from);
@@ -605,13 +634,18 @@ HttpBaseChannel::ApplyContentConversions()
                                   mListener,
                                   mListenerContext,
                                   getter_AddRefs(converter));
-      if (NS_SUCCEEDED(rv)) {
-        LOG(("converter installed from \'%s\' to \'uncompressed\'\n", val));
-        mListener = converter;
+      if (NS_FAILED(rv)) {
+        LOG(("Unexpected failure of AsyncConvertData %s\n", val));
+        return rv;
       }
+
+      LOG(("converter removed '%s' content-encoding\n", val));
+      mListener = converter;
+    }
+    else {
+      if (val)
+        LOG(("Unknown content encoding '%s', ignoring\n", val));
     }
-  } else if (val != nsnull) {
-    LOG(("Unknown content encoding '%s', ignoring\n", val));
   }
 
   return NS_OK;
diff --git a/netwerk/test/unit/test_content_encoding_gzip.js b/netwerk/test/unit/test_content_encoding_gzip.js
new file mode 100644
index 00000000000..f37ab3cc234
--- /dev/null
+++ b/netwerk/test/unit/test_content_encoding_gzip.js
@@ -0,0 +1,72 @@
+do_load_httpd_js();
+
+var httpserver = new nsHttpServer();
+var index = 0;
+var tests = [
+    {url: "/test/cegzip1", 
+     flags: CL_EXPECT_GZIP,
+     ce: "gzip",
+     body: [
+	 0x1f, 0x8b, 0x08, 0x08, 0x5a, 0xa0, 0x31, 0x4f, 0x00, 0x03, 0x74, 0x78, 0x74, 0x00, 0x2b, 0xc9,
+	 0xc8, 0x2c, 0x56, 0x00, 0xa2, 0x92, 0xd4, 0xe2, 0x12, 0x43, 0x2e, 0x00, 0xb9, 0x23, 0xd7, 0x3b,
+	 0x0e, 0x00, 0x00, 0x00],
+     datalen: 14 // the data length of the uncompressed document
+    },
+
+    {url: "/test/cegzip2", 
+     flags: CL_EXPECT_GZIP,
+     ce: "gzip, gzip",
+     body: [
+	 0x1f, 0x8b, 0x08, 0x00, 0x72, 0xa1, 0x31, 0x4f, 0x00, 0x03, 0x93, 0xef, 0xe6, 0xe0, 0x88, 0x5a, 
+	 0x60, 0xe8, 0xcf, 0xc0, 0x5c, 0x52, 0x51, 0xc2, 0xa0, 0x7d, 0xf2, 0x84, 0x4e, 0x18, 0xc3, 0xa2, 
+	 0x49, 0x57, 0x1e, 0x09, 0x39, 0xeb, 0x31, 0xec, 0x54, 0xbe, 0x6e, 0xcd, 0xc7, 0xc0, 0xc0, 0x00, 
+	 0x00, 0x6e, 0x90, 0x7a, 0x85, 0x24, 0x00, 0x00, 0x00],
+     datalen: 14 // the data length of the uncompressed document
+    },
+];
+
+function setupChannel(url) {
+    var ios = Components.classes["@mozilla.org/network/io-service;1"].
+                         getService(Ci.nsIIOService);
+    var chan = ios.newChannel("http://localhost:4444" + url, "", null);
+    return chan;
+}
+
+function startIter() {
+    var channel = setupChannel(tests[index].url);
+    channel.asyncOpen(new ChannelListener(completeIter, channel, tests[index].flags), null);
+}
+
+function completeIter(request, data, ctx) {
+    do_check_true(data.length == tests[index].datalen);
+    if (++index < tests.length) {
+	startIter();
+    } else {
+        httpserver.stop(do_test_finished);
+    }
+}
+
+function run_test() {
+    httpserver.registerPathHandler("/test/cegzip1", handler);
+    httpserver.registerPathHandler("/test/cegzip2", handler);
+    httpserver.start(4444);
+
+    startIter();
+    do_test_pending();
+}
+
+function handler(metadata, response) {
+    response.setStatusLine(metadata.httpVersion, 200, "OK");
+    response.setHeader("Content-Type", "text/plain", false);
+    response.setHeader("Content-Encoding", tests[index].ce, false);
+    response.setHeader("Content-Length", "" + tests[index].body.length, false);
+  
+    var bos = Components.classes["@mozilla.org/binaryoutputstream;1"]
+	.createInstance(Components.interfaces.nsIBinaryOutputStream);
+    bos.setOutputStream(response.bodyOutputStream);
+
+    response.processAsync();
+    bos.writeByteArray(tests[index].body, tests[index].body.length);
+    response.finish();
+}
+ 
diff --git a/netwerk/test/unit/xpcshell.ini b/netwerk/test/unit/xpcshell.ini
index 837b94cc401..795cd3d7614 100644
--- a/netwerk/test/unit/xpcshell.ini
+++ b/netwerk/test/unit/xpcshell.ini
@@ -87,6 +87,7 @@ fail-if = os == "android"
 [test_channel_close.js]
 [test_compareURIs.js]
 [test_compressappend.js]
+[test_content_encoding_gzip.js]
 [test_content_sniffer.js]
 [test_cookie_header.js]
 [test_data_protocol.js]