diff --git a/bin/bunyan b/bin/bunyan
index 3d31ab0..826063b 100755
--- a/bin/bunyan
+++ b/bin/bunyan
@@ -698,7 +698,12 @@ function processStdin(opts, stylize, callback) {
  * @param callback {Function} `function ()`
  */
 function processFile(file, opts, stylize, callback) {
-  var stream = fs.createReadStream(file, {encoding: 'utf8'});
+  var stream = fs.createReadStream(file);
+  if (/\.gz$/.test(file)) {
+    stream = stream.pipe(require('zlib').createGunzip());
+  }
+  // Manually decode streams - lazy load here as per node/lib/fs.js
+  var decoder = new (require('string_decoder').StringDecoder)('utf8');
 
   streams[file].stream = stream;
 
@@ -708,7 +713,11 @@ function processFile(file, opts, stylize, callback) {
   });
 
   var leftover = '';  // Left-over partial line from last chunk.
-  stream.on('data', function (chunk) {
+  stream.on('data', function (data) {
+    var chunk = decoder.write(data);
+    if (!chunk.length) {
+      return;
+    }
     var lines = chunk.split(/\r\n|\n/);
     var length = lines.length;
     if (length === 1) {
diff --git a/test/cli.test.js b/test/cli.test.js
index 9ba871b..1f29db9 100644
--- a/test/cli.test.js
+++ b/test/cli.test.js
@@ -168,3 +168,35 @@ test('multiple logs', function (t) {
     t.end();
   });
 });
+
+test('log1.log.gz', function (t) {
+  exec(BUNYAN + ' corpus/log1.log.gz', function (err, stdout, stderr) {
+    t.error(err);
+    t.equal(stdout, [
+      '[2012-05-08T16:57:55.586Z]  INFO: agent1/73267 on headnode: message\n',
+      '[2012-05-08T17:02:49.339Z]  INFO: agent1/73267 on headnode: message\n',
+      '[2012-05-08T17:02:49.404Z]  INFO: agent1/73267 on headnode: message\n',
+      '[2012-05-08T17:02:49.404Z]  INFO: agent1/73267 on headnode: message\n',
+    ].join(''));
+    t.end();
+  });
+});
+
+test('mixed text and gzip logs', function (t) {
+  exec(BUNYAN + ' corpus/log1.log.gz corpus/log2.log',
+      function (err, stdout, stderr) {
+    t.error(err);
+    t.equal(stdout, [
+      '[2012-05-08T16:57:55.586Z]  INFO: agent1/73267 on headnode: message\n',
+      '[2012-05-08T16:58:55.586Z]  INFO: agent2/73267 on headnode: message\n',
+      '[2012-05-08T17:01:49.339Z]  INFO: agent2/73267 on headnode: message\n',
+      '[2012-05-08T17:02:47.404Z]  INFO: agent2/73267 on headnode: message\n',
+      '[2012-05-08T17:02:49.339Z]  INFO: agent1/73267 on headnode: message\n',
+      '[2012-05-08T17:02:49.404Z]  INFO: agent1/73267 on headnode: message\n',
+      '[2012-05-08T17:02:49.404Z]  INFO: agent1/73267 on headnode: message\n',
+      '[2012-05-08T17:02:57.404Z]  INFO: agent2/73267 on headnode: message\n',
+      '[2012-05-08T17:08:01.105Z]  INFO: agent2/76156 on headnode: message\n',
+    ].join(''));
+    t.end();
+  });
+});
diff --git a/test/corpus/log1.log.gz b/test/corpus/log1.log.gz
new file mode 100644
index 0000000..43068dc
Binary files /dev/null and b/test/corpus/log1.log.gz differ