diff --git a/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptor.java b/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptor.java
index d5119ea55b71..2ab48f39eb4e 100644
--- a/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptor.java
+++ b/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/LibvirtStorageAdaptor.java
@@ -178,7 +178,8 @@ public KVMPhysicalDisk createDiskFromTemplateBacking(KVMPhysicalDisk template, S
      */
     public static boolean isTemplateExtractable(String templatePath) {
         String type = Script.runSimpleBashScript("file " + templatePath + " | awk -F' ' '{print $2}'");
-        return type.equalsIgnoreCase("bzip2") || type.equalsIgnoreCase("gzip") || type.equalsIgnoreCase("zip");
+        return type.equalsIgnoreCase("bzip2") || type.equalsIgnoreCase("gzip")
+                || type.equalsIgnoreCase("zip") || type.equalsIgnoreCase("xz");
     }
 
     /**
@@ -193,6 +194,8 @@ public static String getExtractCommandForDownloadedFile(String downloadedTemplat
             return "bunzip2 -c " + downloadedTemplateFile + " > " + templateUuid;
         } else if (downloadedTemplateFile.endsWith(".gz")) {
             return "gunzip -c " + downloadedTemplateFile + " > " + templateUuid;
+        } else if (downloadedTemplateFile.endsWith(".xz")) {
+            return "xz -d -c " + downloadedTemplateFile + " > " + templateUuid;
         } else {
             throw new CloudRuntimeException("Unable to extract template " + downloadedTemplateFile);
         }
diff --git a/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/MultipathSCSIAdapterBase.java b/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/MultipathSCSIAdapterBase.java
index 7ba29ffc26ea..63d310e6a0bb 100644
--- a/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/MultipathSCSIAdapterBase.java
+++ b/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/MultipathSCSIAdapterBase.java
@@ -426,7 +426,8 @@ public KVMPhysicalDisk createPhysicalDisk(String name, KVMStoragePool pool,
     boolean isTemplateExtractable(String templatePath) {
         ScriptResult result = runScript("file", 5000L, templatePath, "| awk -F' ' '{print $2}'");
         String type = result.getResult();
-        return type.equalsIgnoreCase("bzip2") || type.equalsIgnoreCase("gzip") || type.equalsIgnoreCase("zip");
+        return type.equalsIgnoreCase("bzip2") || type.equalsIgnoreCase("gzip")
+                || type.equalsIgnoreCase("zip") || type.equalsIgnoreCase("xz");
     }
 
     String getExtractCommandForDownloadedFile(String downloadedTemplateFile, String templateFile) {
@@ -436,6 +437,8 @@ String getExtractCommandForDownloadedFile(String downloadedTemplateFile, String
             return "bunzip2 -c " + downloadedTemplateFile + " > " + templateFile;
         } else if (downloadedTemplateFile.endsWith(".gz")) {
             return "gunzip -c " + downloadedTemplateFile + " > " + templateFile;
+        } else if (downloadedTemplateFile.endsWith(".xz")) {
+            return "xz -d -c " + downloadedTemplateFile + " > " + templateFile;
         } else {
             throw new CloudRuntimeException("Unable to extract template " + downloadedTemplateFile);
         }
diff --git a/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/ScaleIOStorageAdaptor.java b/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/ScaleIOStorageAdaptor.java
index efa8024a34b5..5ebf7a16a431 100644
--- a/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/ScaleIOStorageAdaptor.java
+++ b/plugins/hypervisors/kvm/src/main/java/com/cloud/hypervisor/kvm/storage/ScaleIOStorageAdaptor.java
@@ -613,7 +613,8 @@ public KVMPhysicalDisk createTemplateFromDirectDownloadFile(String templateFileP
 
     private boolean isTemplateExtractable(String templatePath) {
         String type = Script.runSimpleBashScript("file " + templatePath + " | awk -F' ' '{print $2}'");
-        return type.equalsIgnoreCase("bzip2") || type.equalsIgnoreCase("gzip") || type.equalsIgnoreCase("zip");
+        return type.equalsIgnoreCase("bzip2") || type.equalsIgnoreCase("gzip")
+                || type.equalsIgnoreCase("zip") || type.equalsIgnoreCase("xz");
     }
 
     private String getExtractCommandForDownloadedFile(String downloadedTemplateFile, String templateFile) {
@@ -623,6 +624,8 @@ private String getExtractCommandForDownloadedFile(String downloadedTemplateFile,
             return "bunzip2 -c " + downloadedTemplateFile + " > " + templateFile;
         } else if (downloadedTemplateFile.endsWith(".gz")) {
             return "gunzip -c " + downloadedTemplateFile + " > " + templateFile;
+        } else if (downloadedTemplateFile.endsWith(".xz")) {
+            return "xz -d -c " + downloadedTemplateFile + " > " + templateFile;
         } else {
             throw new CloudRuntimeException("Unable to extract template " + downloadedTemplateFile);
         }
diff --git a/plugins/storage/volume/storpool/src/main/java/com/cloud/hypervisor/kvm/storage/StorPoolStorageAdaptor.java b/plugins/storage/volume/storpool/src/main/java/com/cloud/hypervisor/kvm/storage/StorPoolStorageAdaptor.java
index 4dcc67f3f06b..2471d44bf14b 100644
--- a/plugins/storage/volume/storpool/src/main/java/com/cloud/hypervisor/kvm/storage/StorPoolStorageAdaptor.java
+++ b/plugins/storage/volume/storpool/src/main/java/com/cloud/hypervisor/kvm/storage/StorPoolStorageAdaptor.java
@@ -539,7 +539,8 @@ private String extractTemplate(String templateFilePath, File sourceFile, String
 
     private boolean isTemplateExtractable(String templatePath) {
         String type = Script.runSimpleBashScript("file " + templatePath + " | awk -F' ' '{print $2}'");
-        return type.equalsIgnoreCase("bzip2") || type.equalsIgnoreCase("gzip") || type.equalsIgnoreCase("zip");
+        return type.equalsIgnoreCase("bzip2") || type.equalsIgnoreCase("gzip")
+                || type.equalsIgnoreCase("zip") || type.equalsIgnoreCase("xz");
     }
 
     private String getExtractCommandForDownloadedFile(String downloadedTemplateFile, String templateFile) {
@@ -549,6 +550,8 @@ private String getExtractCommandForDownloadedFile(String downloadedTemplateFile,
             return "bunzip2 -c " + downloadedTemplateFile + " > " + templateFile;
         } else if (downloadedTemplateFile.endsWith(".gz")) {
             return "gunzip -c " + downloadedTemplateFile + " > " + templateFile;
+        } else if (downloadedTemplateFile.endsWith(".xz")) {
+            return "xz -d -c " + downloadedTemplateFile + " > " + templateFile;
         } else {
             throw new CloudRuntimeException("Unable to extract template " + downloadedTemplateFile);
         }
diff --git a/scripts/installer/createtmplt.sh b/scripts/installer/createtmplt.sh
index db3cfd71ee19..b9b403a94bb7 100755
--- a/scripts/installer/createtmplt.sh
+++ b/scripts/installer/createtmplt.sh
@@ -87,6 +87,8 @@ uncompress() {
          ;;
   [zZ][iI][pP])  unzip -p $1 | cat > $tmpfile
         ;;
+  XZ)   xz -d -c $1 > $tmpfile
+        ;;
   *)	printf "$1"
         return 0
 	;;
diff --git a/scripts/installer/createvolume.sh b/scripts/installer/createvolume.sh
index 52792e9fc3aa..4726404b76a4 100755
--- a/scripts/installer/createvolume.sh
+++ b/scripts/installer/createvolume.sh
@@ -88,6 +88,8 @@ uncompress() {
          ;;
   ZIP)  unzip -p $1 | cat > $tmpfile
         ;;
+  XZ)   xz -d -c $1 > $tmpfile
+        ;;
   *)	printf "$1"
         return 0
 	;;
diff --git a/scripts/storage/qcow2/createtmplt.sh b/scripts/storage/qcow2/createtmplt.sh
index 4bb955e130c7..de7010b0a25e 100755
--- a/scripts/storage/qcow2/createtmplt.sh
+++ b/scripts/storage/qcow2/createtmplt.sh
@@ -65,6 +65,8 @@ uncompress() {
          ;;
   [zZ][iI][pP])  unzip -p $1 | cat > $tmpfile
         ;;
+  XZ)   xz -d -c $1 > $tmpfile
+        ;;
   *)	printf "$1"
         return 0
 	;;
diff --git a/scripts/storage/qcow2/createvolume.sh b/scripts/storage/qcow2/createvolume.sh
index ff04ee3fe5e0..b2ce249a3d1b 100755
--- a/scripts/storage/qcow2/createvolume.sh
+++ b/scripts/storage/qcow2/createvolume.sh
@@ -66,6 +66,8 @@ uncompress() {
          ;;
   ZIP)  unzip -p $1 | cat > $tmpfile
         ;;
+  XZ)   xz -d -c $1 > $tmpfile
+        ;;
   *)	printf "$1"
         return 0
 	;;
diff --git a/scripts/storage/secondary/createtmplt.sh b/scripts/storage/secondary/createtmplt.sh
index ed9bbe869e1b..cfc4be28a012 100755
--- a/scripts/storage/secondary/createtmplt.sh
+++ b/scripts/storage/secondary/createtmplt.sh
@@ -63,6 +63,8 @@ is_compressed() {
          ;;
   [zZ][iI][pP])  ctype="zip"
         ;;
+  XZ)   ctype="xz"
+        ;;
     *) echo "File $1 does not appear to be compressed" >&2
         return 1
 	;;
@@ -82,6 +84,8 @@ uncompress() {
          ;;
   [zZ][iI][pP])  unzip -q -p $1 | cat > $tmpfile
         ;;
+  XZ)   xz -d -c $1 > $tmpfile
+        ;;
     *) printf "$1"
        return 0
 	;;
diff --git a/scripts/storage/secondary/createvolume.sh b/scripts/storage/secondary/createvolume.sh
index ac69ebe88aba..a47d1fdc2d38 100755
--- a/scripts/storage/secondary/createvolume.sh
+++ b/scripts/storage/secondary/createvolume.sh
@@ -85,6 +85,8 @@ is_compressed() {
          ;;
   ZIP)  ctype="zip"
         ;;
+  XZ)   ctype="xz"
+        ;;
     *) echo "File $1 does not appear to be compressed" >&2
         return 1
 	;;
@@ -104,6 +106,8 @@ uncompress() {
          ;;
   ZIP)  unzip -q -p $1 | cat > $tmpfile
         ;;
+  XZ)   xz -d -c $1 > $tmpfile
+        ;;
     *) printf "$1"
        return 0
 	;;
diff --git a/tools/devcloud4/common/development-installation/files/default/createtmplt.sh b/tools/devcloud4/common/development-installation/files/default/createtmplt.sh
index 2f8f3421350a..ca5022bae4f0 100755
--- a/tools/devcloud4/common/development-installation/files/default/createtmplt.sh
+++ b/tools/devcloud4/common/development-installation/files/default/createtmplt.sh
@@ -75,6 +75,8 @@ is_compressed() {
          ;;
   ZIP)  ctype="zip"
         ;;
+  XZ)  ctype="xz"
+        ;;
     *) echo "File $1 does not appear to be compressed" >&2
         return 1
 	;;
@@ -94,6 +96,8 @@ uncompress() {
          ;;
   ZIP)  unzip -q -p $1 | cat > $tmpfile
         ;;
+  XZ)   xz -d -c $1 > $tmpfile
+        ;;
     *) printf "$1"
        return 0
 	;;
diff --git a/utils/src/main/java/com/cloud/utils/UriUtils.java b/utils/src/main/java/com/cloud/utils/UriUtils.java
index 961c121597f5..42603237888c 100644
--- a/utils/src/main/java/com/cloud/utils/UriUtils.java
+++ b/utils/src/main/java/com/cloud/utils/UriUtils.java
@@ -431,7 +431,7 @@ public static List<String> getMetalinkUrls(String metalinkUrl) {
         return urls;
     }
 
-    public static final Set<String> COMPRESSION_FORMATS = ImmutableSet.of("zip", "bz2", "gz");
+    public static final Set<String> COMPRESSION_FORMATS = ImmutableSet.of("zip", "bz2", "gz", "xz");
 
     public static final Set<String> buildExtensionSet(boolean metalink, String... baseExtensions) {
         final ImmutableSet.Builder<String> builder = ImmutableSet.builder();
diff --git a/utils/src/test/java/com/cloud/utils/UriUtilsParametrizedTest.java b/utils/src/test/java/com/cloud/utils/UriUtilsParametrizedTest.java
index 3f1e707c6074..2a4c5c34102b 100644
--- a/utils/src/test/java/com/cloud/utils/UriUtilsParametrizedTest.java
+++ b/utils/src/test/java/com/cloud/utils/UriUtilsParametrizedTest.java
@@ -44,7 +44,7 @@ public interface ThrowingBlock<E extends Exception> {
     }
 
     private static final Set<String> COMMPRESSION_FORMATS = ImmutableSet.of("",".zip", ".bz2", ".gz");
-    private static final Set<String> ILLEGAL_COMMPRESSION_FORMATS = ImmutableSet.of(".7z", ".xz");
+    private static final Set<String> ILLEGAL_COMMPRESSION_FORMATS = ImmutableSet.of(".7z");
     private final static Set<String> FORMATS = ImmutableSet.of(
             "vhd",
             "vhdx",
diff --git a/utils/src/test/java/com/cloud/utils/UriUtilsTest.java b/utils/src/test/java/com/cloud/utils/UriUtilsTest.java
index 47fd389e3aef..8e6408f77835 100644
--- a/utils/src/test/java/com/cloud/utils/UriUtilsTest.java
+++ b/utils/src/test/java/com/cloud/utils/UriUtilsTest.java
@@ -271,6 +271,7 @@ public void testIsUrlForCompressedFile() {
         Assert.assertTrue(UriUtils.isUrlForCompressedFile("https://abc.com/xyz.bz2"));
         Assert.assertTrue(UriUtils.isUrlForCompressedFile("http://abc.com/xyz.zip"));
         Assert.assertTrue(UriUtils.isUrlForCompressedFile("https://abc.com/xyz.gz"));
+        Assert.assertTrue(UriUtils.isUrlForCompressedFile("http://abc.com/xyz.xz"));
         Assert.assertFalse(UriUtils.isUrlForCompressedFile("http://abc.com/xyz.qcow2"));
     }