diff --git a/restkit/client/request.py b/restkit/client/request.py
index 94abc98d..a8a24d64 100644
--- a/restkit/client/request.py
+++ b/restkit/client/request.py
@@ -248,7 +248,6 @@ def request(self, url, method='GET', body=None, headers=None):
         
         self.found_headers = found_headers
         
-
         # Finally do the request
         return self.do_send()
         
@@ -266,7 +265,7 @@ def _req_headers(self):
 
 
         ua = self.found_headers.get('USER-AGENT')
-        accept_encoding = self.found_headers.get('CONTENT-ENCODING')
+        accept_encoding = self.found_headers.get('ACCEPT-ENCODING')
         connection = self.found_headers.get('CONNECTION')
         
         # default host header
@@ -280,7 +279,7 @@ def _req_headers(self):
         req_headers = [
             "%s %s %s\r\n" % (self.method, req_path, httpver),
             "Host: %s\r\n" % host,
-            "User-Agent: %s\r\n" % ua or USER-AGENT,
+            "User-Agent: %s\r\n" % ua or USER_AGENT,
             "Accept-Encoding: %s\r\n" % accept_encoding or 'identity'
         ]
 
diff --git a/restkit/http/body.py b/restkit/http/body.py
index 0ce47fd4..71d06127 100644
--- a/restkit/http/body.py
+++ b/restkit/http/body.py
@@ -135,6 +135,7 @@ def read(self, size):
                 break
             data = self.unreader.read()
         
+        
         buf = buf.getvalue()
         ret, rest = buf[:size], buf[size:]
         self.unreader.unread(rest)
@@ -289,10 +290,10 @@ def readlines(self, size=None):
                 ret.append(line)
         return ret
         
-        
+
 class GzipBody(Body):
     def __init__(self, reader):
-        Body.__init__(self, reader)
+        super(GzipBody, self).__init__(reader)
         self._d = zlib.decompressobj(16+zlib.MAX_WBITS)
         
     def _decompress(self, data):
@@ -308,21 +309,20 @@ def read(self, size=None):
             ret, rest = data[:size], data[size:]
             self.buf.truncate(0)
             self.buf.write(rest)
-            return ret
+            return self._decompress(ret)
 
         while size > self.buf.tell():
             data = self.reader.read(1024)
             if not len(data):
                 self.close()
                 break
-            data = self._decompress(data)
             self.buf.write(data)
 
         data = self.buf.getvalue()
         ret, rest = data[:size], data[size:]
         self.buf.truncate(0)
         self.buf.write(rest)
-        return ret
+        return self._decompress(ret)
     
     def readline(self, size=None):
         size = self.getsize(size)
@@ -335,8 +335,7 @@ def readline(self, size=None):
             if not len(data):
                 self.close()
                 break
-            data = self._decompress(data)
-            self.buf.write(data)
+            self.buf.write(self._decompress(data))
             idx = self.buf.getvalue().find("\n")
             if size < self.buf.tell():
                 break
@@ -358,6 +357,10 @@ def readline(self, size=None):
         self.buf.truncate(0)
         self.buf.write(rest)
         return ret
-        
-        
-    
+
+
+class DeflateBody(GzipBody):
+    def __init__(self, reader):
+        super(DeflateBody, self).__init__(reader)
+        self._d = zlib.decompressobj()
+
diff --git a/restkit/http/message.py b/restkit/http/message.py
index 0a73eb36..fcca649c 100644
--- a/restkit/http/message.py
+++ b/restkit/http/message.py
@@ -12,7 +12,7 @@
     from StringIO import StringIO
 
 from restkit.http.body import ChunkedReader, LengthReader, EOFReader, Body, \
-GzipBody
+GzipBody, DeflateBody
 from restkit.errors import InvalidHeader, InvalidHeaderName, NoMoreData, \
 InvalidRequestLine, InvalidRequestMethod, InvalidHTTPVersion, InvalidHTTPStatus
 
@@ -105,7 +105,6 @@ def parse_headers(self, data):
     def set_body_reader(self):
         chunked = False
         clength = None
-
         for (name, value) in self.headers:
             if name.upper() == "CONTENT-LENGTH":
                 try:
@@ -117,9 +116,6 @@ def set_body_reader(self):
             elif name.upper() == "CONTENT-ENCODING":
                 self.encoding = value.lower()
 
-            if clength is not None or chunked:
-                break
-        
         if chunked:
             self.body = Body(ChunkedReader(self, self.unreader))
         elif clength is not None:
@@ -223,5 +219,7 @@ def set_body_reader(self):
         super(Response, self).set_body_reader()
         if self.encoding == "gzip":
             self.body = GzipBody(self.body.reader)
+        elif self.encoding == "deflate":
+            self.body = DeflateBody(self.body.reader)
         
         
diff --git a/tests/responses/008.http b/tests/responses/008.http
new file mode 100644
index 00000000..6b48a03c
Binary files /dev/null and b/tests/responses/008.http differ
diff --git a/tests/responses/008.py b/tests/responses/008.py
new file mode 100644
index 00000000..f69f2261
--- /dev/null
+++ b/tests/responses/008.py
@@ -0,0 +1,11 @@
+response = {
+    "status": "200 OK",
+    "version": (1, 1),
+    "headers": [
+        ('Content-Type', 'text/html; charset=UTF-8'),
+        ('Content-Length', '31'),
+        ('Content-Encoding', 'gzip'),
+        ('Date', 'Thu, 31 Dec 2009 20:55:48 +0000'),
+    ],
+    "body": "hello world"
+}
diff --git a/tests/treq.py b/tests/treq.py
index c600a7a8..58eedd20 100644
--- a/tests/treq.py
+++ b/tests/treq.py
@@ -336,4 +336,4 @@ def same(self, resp, sizer, matcher, exp):
         t.eq(resp.version, exp["version"])
         t.eq(resp.headers, exp["headers"])
         matcher(resp, exp["body"], sizer)
-        t.eq(resp.trailers, exp.get("trailers", []))
\ No newline at end of file
+        t.eq(resp.trailers, exp.get("trailers", []))