diff --git a/.env.example b/.env.example
index 6974d8554611a..dddbb4be4c260 100644
--- a/.env.example
+++ b/.env.example
@@ -14,6 +14,10 @@ LOCAL_PORT=8889
 # Where to run WordPress from. Valid options are 'src' and 'build'.
 LOCAL_DIR=src
 
+# Whether or not to enable text compression (gzip) in the web server.
+# Valid options are 'on' and 'off'.
+LOCAL_NGINX_COMPRESSION=off
+
 # The PHP version to use. Valid options are 'latest', and '{version}-fpm'.
 LOCAL_PHP=latest
 
diff --git a/docker-compose.yml b/docker-compose.yml
index 7ab6ae8c9b4d5..02cd542c245db 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -14,13 +14,14 @@ services:
 
     environment:
       LOCAL_DIR: ${LOCAL_DIR-src}
+      LOCAL_NGINX_COMPRESSION: ${LOCAL_NGINX_COMPRESSION:-off}
 
     volumes:
       - ./tools/local-env/default.template:/etc/nginx/conf.d/default.template
       - ./:/var/www
 
     # Load our config file, substituting environment variables into the config.
-    command: /bin/sh -c "envsubst '$$LOCAL_DIR' < /etc/nginx/conf.d/default.template > /etc/nginx/conf.d/default.conf && exec nginx -g 'daemon off;'"
+    command: /bin/sh -c "envsubst '$$LOCAL_DIR $$LOCAL_NGINX_COMPRESSION' < /etc/nginx/conf.d/default.template > /etc/nginx/conf.d/default.conf && exec nginx -g 'daemon off;'"
 
     depends_on:
       php:
diff --git a/tools/local-env/default.template b/tools/local-env/default.template
index 995913fb453a2..4d8dec3c131fc 100644
--- a/tools/local-env/default.template
+++ b/tools/local-env/default.template
@@ -15,6 +15,21 @@ server {
 
 	absolute_redirect off;
 
+	gzip ${LOCAL_NGINX_COMPRESSION};
+	gzip_vary on;
+	gzip_proxied any;
+	gzip_comp_level 5;
+	gzip_min_length 256;
+	gzip_types
+		application/javascript
+		text/javascript
+		application/json
+		application/xml
+		application/rss+xml
+		text/css
+		text/plain
+		image/svg+xml;
+
 	if (!-e $request_filename) {
 		rewrite /wp-admin$ $scheme://$host$request_uri/ permanent;
 		rewrite ^(/[^/]+)?(/wp-.*) $2 last;