diff --git a/mercurial/bundle2.py b/mercurial/bundle2.py
--- a/mercurial/bundle2.py
+++ b/mercurial/bundle2.py
@@ -599,6 +599,10 @@
         self.capabilities = dict(capabilities)
         self._compengine = util.compengines.forbundletype('UN')
         self._compopts = None
+        # If compression is being handled by a consumer of the raw
+        # data (e.g. the wire protocol), unsetting this flag tells
+        # consumers that the bundle is best left uncompressed.
+        self.prefercompressed = True
 
     def setcompression(self, alg, compopts=None):
         """setup core part compression to <alg>"""
diff --git a/mercurial/exchange.py b/mercurial/exchange.py
--- a/mercurial/exchange.py
+++ b/mercurial/exchange.py
@@ -1763,6 +1763,8 @@
         func(bundler, repo, source, bundlecaps=bundlecaps, b2caps=b2caps,
              **pycompat.strkwargs(kwargs))
 
+    info['prefercompressed'] = bundler.prefercompressed
+
     return info, bundler.getchunks()
 
 @getbundle2partsgenerator('stream')
@@ -1770,6 +1772,12 @@
                      b2caps=None, heads=None, common=None, **kwargs):
     if not kwargs.get('stream', False):
         return
+
+    # Stream clones don't compress well. And compression undermines a
+    # goal of stream clones, which is to be fast. Communicate the desire
+    # to avoid compression to consumers of the bundle.
+    bundler.prefercompressed = False
+
     filecount, bytecount, it = streamclone.generatev2(repo)
     requirements = ' '.join(sorted(repo.requirements))
     part = bundler.newpart('stream', data=it)
diff --git a/mercurial/wireproto.py b/mercurial/wireproto.py
--- a/mercurial/wireproto.py
+++ b/mercurial/wireproto.py
@@ -862,7 +862,7 @@
             raise error.Abort(bundle2requiredmain,
                               hint=bundle2requiredhint)
 
-    preferuncompressed = False
+    prefercompressed = True
 
     try:
         if repo.ui.configbool('server', 'disablefullbundle'):
@@ -879,6 +879,7 @@
 
         info, chunks = exchange.getbundlechunks(repo, 'serve',
                                                 **pycompat.strkwargs(opts))
+        prefercompressed = info.get('prefercompressed', True)
     except error.Abort as exc:
         # cleanly forward Abort error to the client
         if not exchange.bundle2requested(opts.get('bundlecaps')):
@@ -894,9 +895,9 @@
         bundler.addpart(bundle2.bundlepart('error:abort',
                                            manargs, advargs))
         chunks = bundler.getchunks()
-        preferuncompressed = True
+        prefercompressed = False
 
-    return streamres(gen=chunks, prefer_uncompressed=preferuncompressed)
+    return streamres(gen=chunks, prefer_uncompressed=not prefercompressed)
 
 @wireprotocommand('heads')
 def heads(repo, proto):
diff --git a/tests/test-clone-uncompressed.t b/tests/test-clone-uncompressed.t
--- a/tests/test-clone-uncompressed.t
+++ b/tests/test-clone-uncompressed.t
@@ -47,6 +47,32 @@
   rbc-revs-v1
 #endif
 
+getbundle requests with stream=1 are uncompressed
+
+  $ get-with-headers.py $LOCALIP:$HGPORT '?cmd=getbundle' content-type --bodyfile body --hgproto '0.1 0.2 comp=zlib,none' --requestheader "x-hgarg-1=bundlecaps=HG20%2Cbundle2%3DHG20%250Abookmarks%250Achangegroup%253D01%252C02%250Adigests%253Dmd5%252Csha1%252Csha512%250Aerror%253Dabort%252Cunsupportedcontent%252Cpushraced%252Cpushkey%250Ahgtagsfnodes%250Alistkeys%250Aphases%253Dheads%250Apushkey%250Aremote-changegroup%253Dhttp%252Chttps&cg=0&common=0000000000000000000000000000000000000000&heads=c17445101a72edac06facd130d14808dfbd5c7c2&stream=1"
+  200 Script output follows
+  content-type: application/mercurial-0.2
+  
+
+  $ f --size --hex --bytes 256 body
+  body: size=112328
+  0000: 04 6e 6f 6e 65 48 47 32 30 00 00 00 00 00 00 00 |.noneHG20.......|
+  0010: 72 06 53 54 52 45 41 4d 00 00 00 00 04 00 09 05 |r.STREAM........|
+  0020: 09 04 0c 2d 07 02 62 79 74 65 63 6f 75 6e 74 39 |...-..bytecount9|
+  0030: 38 37 35 38 66 69 6c 65 63 6f 75 6e 74 31 30 33 |8758filecount103|
+  0040: 30 72 65 71 75 69 72 65 6d 65 6e 74 73 64 6f 74 |0requirementsdot|
+  0050: 65 6e 63 6f 64 65 20 66 6e 63 61 63 68 65 20 67 |encode fncache g|
+  0060: 65 6e 65 72 61 6c 64 65 6c 74 61 20 72 65 76 6c |eneraldelta revl|
+  0070: 6f 67 76 31 20 73 74 6f 72 65 76 65 72 73 69 6f |ogv1 storeversio|
+  0080: 6e 76 32 00 00 10 00 73 08 42 64 61 74 61 2f 30 |nv2....s.Bdata/0|
+  0090: 2e 69 00 03 00 01 00 00 00 00 00 00 00 02 00 00 |.i..............|
+  00a0: 00 01 00 00 00 00 00 00 00 01 ff ff ff ff ff ff |................|
+  00b0: ff ff 80 29 63 a0 49 d3 23 87 bf ce fe 56 67 92 |...)c.I.#....Vg.|
+  00c0: 67 2c 69 d1 ec 39 00 00 00 00 00 00 00 00 00 00 |g,i..9..........|
+  00d0: 00 00 75 30 73 08 42 64 61 74 61 2f 31 2e 69 00 |..u0s.Bdata/1.i.|
+  00e0: 03 00 01 00 00 00 00 00 00 00 02 00 00 00 01 00 |................|
+  00f0: 00 00 00 00 00 00 01 ff ff ff ff ff ff ff ff f9 |................|
+
 --uncompressed is an alias to --stream
 
 #if stream-legacy