diff --git a/.claude/CLAUDE.md b/.claude/CLAUDE.md
index ffcf3dc7d..38560f93b 100644
--- a/.claude/CLAUDE.md
+++ b/.claude/CLAUDE.md
@@ -112,6 +112,7 @@ oxen push origin main               # Push to remote
 - The Python project calls into the Rust project. Whenever changing the Rust code, check to see if the Python code needs to be updated.
 - After changing any Rust or Python code, verify that Rust tests pass with `bin/test-rust` and Python tests pass with `bin/test-rust -p`
 - When updating a dependency, prefer updating to the latest stable version.
+- Any new or changed Rust code that touches IO (file system, network, etc.) should be async code. Instead of std::io or std::fs, use equivalents from tokio. When an external dependency doesn't support async, use tokio's spawn_blocking functionality.
 
 # Testing Rules
 - Use the test helpers in `crates/lib/src/test.rs` (e.g., `run_empty_local_repo_test`) for unit tests in the lib code.
diff --git a/TODO.md b/TODO.md
index cc4f05785..70126d2da 100644
--- a/TODO.md
+++ b/TODO.md
@@ -35,4 +35,10 @@
 * Storage Backends
   * Local Backend
   * S3 Backend
-    * This would be ridiculous # of files if chunking is turned on...
\ No newline at end of file
+    * This would be ridiculous # of files if chunking is turned on...
+
+# Large File Support
+
+- First phase: S3 backend -- gives us room on the server to store files
+- Second phase: Stream version files from disk -- allows manipulating files that don't fit in memory
+- Third phase: Move to chunked version file storage(?). We should discuss the pros/cons of this approach. See [Merkle Tree Refactor](#merkle-tree-refactor) above.
diff --git a/crates/lib/src/api/client/entries.rs b/crates/lib/src/api/client/entries.rs
index d39023337..4a859cc20 100644
--- a/crates/lib/src/api/client/entries.rs
+++ b/crates/lib/src/api/client/entries.rs
@@ -239,12 +239,13 @@ pub async fn download_entries_to_repo(
 
             // Save contents to version store
             let version_store = local_repo.version_store()?;
-            let file = std::fs::read(local_path).map_err(|e| {
-                OxenError::basic_str(format!("Failed to read file '{remote_path:?}': {e}"))
-            })?;
-            let hash = util::hasher::hash_buffer(&file);
+
+            let file_bytes = tokio::fs::read(local_path).await?;
+            let hash = util::hasher::hash_buffer(&file_bytes);
+            let size = file_bytes.len() as u64;
+            let cursor = std::io::Cursor::new(file_bytes);
             version_store
-                .store_version_from_path(&hash, local_path)
+                .store_version_from_reader(&hash, Box::new(cursor), size)
                 .await?;
         }
     }
diff --git a/crates/lib/src/core/v_latest/add.rs b/crates/lib/src/core/v_latest/add.rs
index 91cbc4469..fe368abe1 100644
--- a/crates/lib/src/core/v_latest/add.rs
+++ b/crates/lib/src/core/v_latest/add.rs
@@ -494,10 +494,14 @@ pub async fn process_add_dir(
                                             &conflicts,
                                         ) {
                                             Ok(Some(node)) => {
+                                                let file = tokio::fs::File::open(&path).await?;
+                                                let size = file.metadata().await?.len();
+                                                let reader = tokio::io::BufReader::new(file);
                                                 version_store
-                                                    .store_version_from_path(
+                                                    .store_version_from_reader(
                                                         &file_status.hash.to_string(),
-                                                        &path,
+                                                        Box::new(reader),
+                                                        size,
                                                     )
                                                     .await?;
 
@@ -657,8 +661,11 @@ async fn add_file_inner(
 
     let file_name = path.file_name().unwrap_or_default().to_string_lossy();
     let file_status = determine_file_status(&maybe_dir_node, &file_name, path)?;
+    let file = tokio::fs::File::open(path).await?;
+    let size = file.metadata().await?.len();
+    let reader = tokio::io::BufReader::new(file);
     version_store
-        .store_version_from_path(&file_status.hash.to_string(), path)
+        .store_version_from_reader(&file_status.hash.to_string(), Box::new(reader), size)
         .await?;
 
     let seen_dirs = Arc::new(Mutex::new(HashSet::new()));
diff --git a/crates/lib/src/core/v_latest/branches.rs b/crates/lib/src/core/v_latest/branches.rs
index fd55c41ab..dc5781eeb 100644
--- a/crates/lib/src/core/v_latest/branches.rs
+++ b/crates/lib/src/core/v_latest/branches.rs
@@ -416,8 +416,11 @@ async fn cleanup_removed_files(
         let version_store = repo.version_store()?;
         for (hash, full_path) in files_to_store {
             log::debug!("Storing hash {hash:?} and path {full_path:?}");
+            let file = tokio::fs::File::open(&full_path).await?;
+            let size = file.metadata().await?.len();
+            let reader = tokio::io::BufReader::new(file);
             version_store
-                .store_version_from_path(&hash.to_string(), &full_path)
+                .store_version_from_reader(&hash.to_string(), Box::new(reader), size)
                 .await?;
         }
     }
diff --git a/crates/lib/src/core/v_latest/workspaces/files.rs b/crates/lib/src/core/v_latest/workspaces/files.rs
index cda1f0cc3..a42ce98a9 100644
--- a/crates/lib/src/core/v_latest/workspaces/files.rs
+++ b/crates/lib/src/core/v_latest/workspaces/files.rs
@@ -899,8 +899,11 @@ async fn p_add_file(
 
     // Store the file in the version store using the hash as the key
     let hash_str = file_status.hash.to_string();
+    let file = tokio::fs::File::open(&full_path).await?;
+    let size = file.metadata().await?.len();
+    let reader = tokio::io::BufReader::new(file);
     version_store
-        .store_version_from_path(&hash_str, &full_path)
+        .store_version_from_reader(&hash_str, Box::new(reader), size)
         .await?;
     let conflicts: HashSet<PathBuf> = repositories::merge::list_conflicts(workspace_repo)?
         .into_iter()
diff --git a/crates/lib/src/repositories/remote_mode/checkout.rs b/crates/lib/src/repositories/remote_mode/checkout.rs
index a19e19c69..a6431f361 100644
--- a/crates/lib/src/repositories/remote_mode/checkout.rs
+++ b/crates/lib/src/repositories/remote_mode/checkout.rs
@@ -55,8 +55,11 @@ pub async fn create_checkout(
         let full_path = repo.path.join(&path);
 
         if full_path.exists() {
+            let file = tokio::fs::File::open(&full_path).await?;
+            let size = file.metadata().await?.len();
+            let reader = tokio::io::BufReader::new(file);
             version_store
-                .store_version_from_path(&node.hash.to_string(), &full_path)
+                .store_version_from_reader(&node.hash.to_string(), Box::new(reader), size)
                 .await?;
         }
     }
@@ -448,7 +451,7 @@ mod tests {
     // Regression test: checkout in remote mode should not fail when a file
     // exists in the source branch's tree but is not materialized on disk.
     // Previously, r_remove_if_not_in_target would push non-existent paths
-    // into files_to_store, causing store_version_from_path to fail with NotFound.
+    // into files_to_store, causing store_version_from_reader to fail with NotFound.
     #[tokio::test]
     async fn test_remote_mode_checkout_file_in_tree_but_not_on_disk() -> Result<(), OxenError> {
         test::run_remote_repo_test_bounding_box_csv_pushed(|_local_repo, remote_repo| async move {
diff --git a/crates/lib/src/storage/local.rs b/crates/lib/src/storage/local.rs
index 3fd43e8c5..41e3857e0 100644
--- a/crates/lib/src/storage/local.rs
+++ b/crates/lib/src/storage/local.rs
@@ -79,17 +79,6 @@ impl VersionStore for LocalVersionStore {
         Ok(())
     }
 
-    async fn store_version_from_path(&self, hash: &str, file_path: &Path) -> Result<(), OxenError> {
-        let version_dir = self.version_dir(hash);
-        fs::create_dir_all(&version_dir).await?;
-
-        let version_path = self.version_path(hash);
-        if !version_path.exists() {
-            fs::copy(file_path, &version_path).await?;
-        }
-        Ok(())
-    }
-
     async fn store_version_from_reader(
         &self,
         hash: &str,
diff --git a/crates/lib/src/storage/s3.rs b/crates/lib/src/storage/s3.rs
index de986115c..809210a7e 100644
--- a/crates/lib/src/storage/s3.rs
+++ b/crates/lib/src/storage/s3.rs
@@ -10,7 +10,6 @@ use bytes::Bytes;
 use futures::StreamExt;
 use log;
 use std::collections::HashMap;
-use std::io::Read;
 use std::path::{Path, PathBuf};
 use std::sync::Arc;
 use tokio::io::{AsyncReadExt, AsyncWriteExt};
@@ -155,33 +154,6 @@ impl VersionStore for S3VersionStore {
         }
     }
 
-    async fn store_version_from_path(&self, hash: &str, file_path: &Path) -> Result<(), OxenError> {
-        // get the client
-        let client = self.init_client().await?;
-        // get file content from the path
-        let mut file = std::fs::File::open(file_path).map_err(|e| {
-            OxenError::basic_str(format!("Failed to open file {}: {e}", file_path.display()))
-        })?;
-
-        let mut buffer = Vec::new();
-        file.read_to_end(&mut buffer).map_err(|e| {
-            OxenError::basic_str(format!("Failed to read file {}: {e}", file_path.display()))
-        })?;
-
-        let key = self.generate_key(hash);
-        let body = ByteStream::from(buffer);
-        client
-            .put_object()
-            .bucket(&self.bucket)
-            .key(&key)
-            .body(body)
-            .send()
-            .await
-            .map_err(|e| OxenError::basic_str(format!("Failed to store version in S3: {e}")))?;
-
-        Ok(())
-    }
-
     /// Streams file content to S3 without writing to disk.
     ///
     /// The caller must provide the file size up front. Files up to 100 MB are uploaded in a
diff --git a/crates/lib/src/storage/version_store.rs b/crates/lib/src/storage/version_store.rs
index e9781e70f..a415809a0 100644
--- a/crates/lib/src/storage/version_store.rs
+++ b/crates/lib/src/storage/version_store.rs
@@ -91,13 +91,6 @@ pub trait VersionStore: Debug + Send + Sync + 'static {
     /// Initialize the storage backend
     async fn init(&self) -> Result<(), OxenError>;
 
-    /// Store a version file from a file path
-    ///
-    /// # Arguments
-    /// * `hash` - The content hash that identifies this version
-    /// * `file_path` - Path to the file to store
-    async fn store_version_from_path(&self, hash: &str, file_path: &Path) -> Result<(), OxenError>;
-
     /// Store a version file from an async reader
     ///
     /// # Arguments