diff --git a/lib/sdk/server/build.gradle b/lib/sdk/server/build.gradle
index 9d2eac0..a93dab6 100644
--- a/lib/sdk/server/build.gradle
+++ b/lib/sdk/server/build.gradle
@@ -71,7 +71,7 @@ ext.versions = [
     "guava": "32.0.1-jre",
     "jackson": "2.11.2",
     "launchdarklyJavaSdkCommon": "2.1.1",
-    "launchdarklyJavaSdkInternal": "1.4.0",
+    "launchdarklyJavaSdkInternal": "1.5.0",
     "launchdarklyLogging": "1.1.0",
     "okhttp": "4.9.3", // specify this for the SDK build instead of relying on the transitive dependency from okhttp-eventsource
     "okhttpEventsource": "4.1.0",
diff --git a/lib/sdk/server/contract-tests/service/src/main/java/sdktest/Representations.java b/lib/sdk/server/contract-tests/service/src/main/java/sdktest/Representations.java
index 5447cfe..94772cc 100644
--- a/lib/sdk/server/contract-tests/service/src/main/java/sdktest/Representations.java
+++ b/lib/sdk/server/contract-tests/service/src/main/java/sdktest/Representations.java
@@ -45,6 +45,7 @@ public static class SdkConfigEventParams {
     boolean allAttributesPrivate;
     int capacity;
     boolean enableDiagnostics;
+    boolean enableGzip;
     String[] globalPrivateAttributes;
     Long flushIntervalMs;
   }
diff --git a/lib/sdk/server/contract-tests/service/src/main/java/sdktest/SdkClientEntity.java b/lib/sdk/server/contract-tests/service/src/main/java/sdktest/SdkClientEntity.java
index c7f43b0..db70d6c 100644
--- a/lib/sdk/server/contract-tests/service/src/main/java/sdktest/SdkClientEntity.java
+++ b/lib/sdk/server/contract-tests/service/src/main/java/sdktest/SdkClientEntity.java
@@ -390,7 +390,8 @@ private LDConfig buildSdkConfig(SdkConfigParams params, String tag) {
     } else {
       endpoints.events(params.events.baseUri);
       EventProcessorBuilder eb = Components.sendEvents()
-          .allAttributesPrivate(params.events.allAttributesPrivate);
+          .allAttributesPrivate(params.events.allAttributesPrivate)
+          .enableGzipCompression(params.events.enableGzip);
       if (params.events.capacity > 0) {
         eb.capacity(params.events.capacity);
       }
diff --git a/lib/sdk/server/contract-tests/service/src/main/java/sdktest/TestService.java b/lib/sdk/server/contract-tests/service/src/main/java/sdktest/TestService.java
index 994cffe..84bbb3e 100644
--- a/lib/sdk/server/contract-tests/service/src/main/java/sdktest/TestService.java
+++ b/lib/sdk/server/contract-tests/service/src/main/java/sdktest/TestService.java
@@ -31,10 +31,12 @@ public class TestService {
     "client-prereq-events",
     "context-type",
     "evaluation-hooks",
+    "event-gzip",
     "event-sampling",
     "filtering",
     "inline-context-all",
     "migrations",
+    "optional-event-gzip",
     "server-side",
     "service-endpoints",
     "strongly-typed",
diff --git a/lib/sdk/server/src/main/java/com/launchdarkly/sdk/server/ComponentsImpl.java b/lib/sdk/server/src/main/java/com/launchdarkly/sdk/server/ComponentsImpl.java
index 0433a28..ea40f41 100644
--- a/lib/sdk/server/src/main/java/com/launchdarkly/sdk/server/ComponentsImpl.java
+++ b/lib/sdk/server/src/main/java/com/launchdarkly/sdk/server/ComponentsImpl.java
@@ -222,6 +222,7 @@ public EventProcessor build(ClientContext context) {
             null, // use default request path for server-side events
             null, // use default request path for client-side events
             0, // 0 means default retry delay
+            enableGzipCompression,
             context.getBaseLogger().subLogger(Loggers.EVENTS_LOGGER_NAME));
       } else {
         eventSender = new EventSenderWrapper(eventSenderConfigurer.build(context));
diff --git a/lib/sdk/server/src/main/java/com/launchdarkly/sdk/server/integrations/EventProcessorBuilder.java b/lib/sdk/server/src/main/java/com/launchdarkly/sdk/server/integrations/EventProcessorBuilder.java
index 4c79c4e..c818c9f 100644
--- a/lib/sdk/server/src/main/java/com/launchdarkly/sdk/server/integrations/EventProcessorBuilder.java
+++ b/lib/sdk/server/src/main/java/com/launchdarkly/sdk/server/integrations/EventProcessorBuilder.java
@@ -66,6 +66,7 @@ public abstract class EventProcessorBuilder implements ComponentConfigurer<Event
   protected int userKeysCapacity = DEFAULT_USER_KEYS_CAPACITY;
   protected Duration userKeysFlushInterval = DEFAULT_USER_KEYS_FLUSH_INTERVAL;
   protected ComponentConfigurer<EventSender> eventSenderConfigurer = null;
+  protected boolean enableGzipCompression = false;
 
   /**
    * Sets whether or not all optional user attributes should be hidden from LaunchDarkly.
@@ -211,4 +212,20 @@ public EventProcessorBuilder userKeysFlushInterval(Duration userKeysFlushInterva
     this.userKeysFlushInterval = userKeysFlushInterval == null ? DEFAULT_USER_KEYS_FLUSH_INTERVAL : userKeysFlushInterval;
     return this;
   }
+
+  /**
+   * Enables gzip compression for event payloads.
+   * <p>
+   * When enabled, event payloads will be compressed using gzip before being sent to LaunchDarkly.
+   * This can significantly reduce bandwidth usage when sending large event payloads.
+   * <p>
+   * The default value is false.
+   *
+   * @param enableGzipCompression whether to enable gzip compression
+   * @return the builder
+   */
+  public EventProcessorBuilder enableGzipCompression(boolean enableGzipCompression) {
+    this.enableGzipCompression = enableGzipCompression;
+    return this;
+  }
 }