diff --git a/changelog/912.improvement.md b/changelog/912.improvement.md
new file mode 100644
index 000000000..962676632
--- /dev/null
+++ b/changelog/912.improvement.md
@@ -0,0 +1,3 @@
+Added the ability to decompress deflate encoded
+json payloads for the webhook endpoint of the 
+action server.
\ No newline at end of file
diff --git a/rasa_sdk/endpoint.py b/rasa_sdk/endpoint.py
index 9b1aaccf0..9a846bd39 100644
--- a/rasa_sdk/endpoint.py
+++ b/rasa_sdk/endpoint.py
@@ -2,6 +2,8 @@
 import logging
 import os
 import types
+import zlib
+import json
 from typing import List, Text, Union, Optional, Any
 from ssl import SSLContext
 
@@ -90,7 +92,13 @@ async def health(_) -> HTTPResponse:
     @app.post("/webhook")
     async def webhook(request: Request) -> HTTPResponse:
         """Webhook to retrieve action calls."""
-        action_call = request.json
+        if request.headers.get("Content-Encoding") == "deflate":
+            # Decompress the request data using zlib
+            decompressed_data = zlib.decompress(request.body)
+            # Load the JSON data from the decompressed request data
+            action_call = json.loads(decompressed_data)
+        else:
+            action_call = request.json
         if action_call is None:
             body = {"error": "Invalid body request"}
             return response.json(body, status=400)
diff --git a/tests/test_endpoint.py b/tests/test_endpoint.py
index 7ce1d48c5..9cc082707 100644
--- a/tests/test_endpoint.py
+++ b/tests/test_endpoint.py
@@ -1,5 +1,6 @@
 import pytest
 import json
+import zlib
 
 import rasa_sdk.endpoint as ep
 from rasa_sdk.events import SlotSet
@@ -90,3 +91,21 @@ def test_arg_parser_actions_params_module_style():
     args = ["--actions", "actions.act"]
     cmdline_args = parser.parse_args(args)
     assert cmdline_args.actions == "actions.act"
+
+
+def test_server_webhook_custom_action_encoded_data_returns_200():
+    data = {
+        "next_action": "custom_action",
+        "tracker": {"sender_id": "1", "conversation_id": "default"},
+        "domain": {"intents": ["greet", "goodbye"]},
+    }
+
+    request, response = app.test_client.post(
+        "/webhook",
+        data=zlib.compress(json.dumps(data).encode()),
+        headers={"Content-encoding": "deflate"},
+    )
+    events = response.json.get("events")
+
+    assert events == [SlotSet("test", "bar")]
+    assert response.status == 200