diff --git a/internal/transport/handler_server_test.go b/internal/transport/handler_server_test.go
index fbd8058b79f..a6eb2028578 100644
--- a/internal/transport/handler_server_test.go
+++ b/internal/transport/handler_server_test.go
@@ -280,31 +280,36 @@ func (s) TestHandlerTransport_HandleStreams(t *testing.T) {
 			t.Errorf("stream method = %q; want %q", s.method, want)
 		}
 
-		err := s.SetHeader(metadata.Pairs("custom-header", "Custom header value"))
-		if err != nil {
+		if err := s.SetHeader(metadata.Pairs("custom-header", "Custom header value")); err != nil {
 			t.Error(err)
 		}
-		err = s.SetTrailer(metadata.Pairs("custom-trailer", "Custom trailer value"))
-		if err != nil {
+
+		if err := s.SetTrailer(metadata.Pairs("custom-trailer", "Custom trailer value")); err != nil {
+			t.Error(err)
+		}
+
+		if err := s.SetSendCompress("gzip"); err != nil {
 			t.Error(err)
 		}
 
 		md := metadata.Pairs("custom-header", "Another custom header value")
-		err = s.SendHeader(md)
-		delete(md, "custom-header")
-		if err != nil {
+		if err := s.SendHeader(md); err != nil {
 			t.Error(err)
 		}
+		delete(md, "custom-header")
 
-		err = s.SetHeader(metadata.Pairs("too-late", "Header value that should be ignored"))
-		if err == nil {
+		if err := s.SetHeader(metadata.Pairs("too-late", "Header value that should be ignored")); err == nil {
 			t.Error("expected SetHeader call after SendHeader to fail")
 		}
-		err = s.SendHeader(metadata.Pairs("too-late", "This header value should be ignored as well"))
-		if err == nil {
+
+		if err := s.SendHeader(metadata.Pairs("too-late", "This header value should be ignored as well")); err == nil {
 			t.Error("expected second SendHeader call to fail")
 		}
 
+		if err := s.SetSendCompress("snappy"); err == nil {
+			t.Error("expected second SetSendCompress call to fail")
+		}
+
 		st.bodyw.Close() // no body
 		st.ht.WriteStatus(s, status.New(codes.OK, ""))
 	}
@@ -317,6 +322,7 @@ func (s) TestHandlerTransport_HandleStreams(t *testing.T) {
 		"Content-Type":  {"application/grpc"},
 		"Trailer":       {"Grpc-Status", "Grpc-Message", "Grpc-Status-Details-Bin"},
 		"Custom-Header": {"Custom header value", "Another custom header value"},
+		"Grpc-Encoding": {"gzip"},
 	}
 	wantTrailer := http.Header{
 		"Grpc-Status":    {"0"},
diff --git a/internal/transport/http2_server.go b/internal/transport/http2_server.go
index bc3da706726..7dee882bf66 100644
--- a/internal/transport/http2_server.go
+++ b/internal/transport/http2_server.go
@@ -404,6 +404,17 @@ func (t *http2Server) operateHeaders(frame *http2.MetaHeadersFrame, handle func(
 			mdata[hf.Name] = append(mdata[hf.Name], hf.Value)
 			s.contentSubtype = contentSubtype
 			isGRPC = true
+
+		case "grpc-accept-encoding":
+			mdata[hf.Name] = append(mdata[hf.Name], hf.Value)
+			if hf.Value == "" {
+				continue
+			}
+			compressors := hf.Value
+			if s.clientAdvertisedCompressors != "" {
+				compressors = s.clientAdvertisedCompressors + "," + compressors
+			}
+			s.clientAdvertisedCompressors = compressors
 		case "grpc-encoding":
 			s.recvCompress = hf.Value
 		case ":method":
diff --git a/internal/transport/transport.go b/internal/transport/transport.go
index 0ac77ea4f8c..1b7d7fabc51 100644
--- a/internal/transport/transport.go
+++ b/internal/transport/transport.go
@@ -257,6 +257,9 @@ type Stream struct {
 	fc           *inFlow
 	wq           *writeQuota
 
+	// Holds compressor names passed in grpc-accept-encoding metadata from the
+	// client. This is empty for the client side stream.
+	clientAdvertisedCompressors string
 	// Callback to state application's intentions to read data. This
 	// is used to adjust flow control, if needed.
 	requestRead func(int)
@@ -345,8 +348,24 @@ func (s *Stream) RecvCompress() string {
 }
 
 // SetSendCompress sets the compression algorithm to the stream.
-func (s *Stream) SetSendCompress(str string) {
-	s.sendCompress = str
+func (s *Stream) SetSendCompress(name string) error {
+	if s.isHeaderSent() || s.getState() == streamDone {
+		return errors.New("transport: set send compressor called after headers sent or stream done")
+	}
+
+	s.sendCompress = name
+	return nil
+}
+
+// SendCompress returns the send compressor name.
+func (s *Stream) SendCompress() string {
+	return s.sendCompress
+}
+
+// ClientAdvertisedCompressors returns the compressor names advertised by the
+// client via grpc-accept-encoding header.
+func (s *Stream) ClientAdvertisedCompressors() string {
+	return s.clientAdvertisedCompressors
 }
 
 // Done returns a channel which is closed when it receives the final status
diff --git a/server.go b/server.go
index d5a6e78be44..c225f044037 100644
--- a/server.go
+++ b/server.go
@@ -45,6 +45,7 @@ import (
 	"google.golang.org/grpc/internal/channelz"
 	"google.golang.org/grpc/internal/grpcrand"
 	"google.golang.org/grpc/internal/grpcsync"
+	"google.golang.org/grpc/internal/grpcutil"
 	"google.golang.org/grpc/internal/transport"
 	"google.golang.org/grpc/keepalive"
 	"google.golang.org/grpc/metadata"
@@ -1263,6 +1264,7 @@ func (s *Server) processUnaryRPC(t transport.ServerTransport, stream *transport.
 	var comp, decomp encoding.Compressor
 	var cp Compressor
 	var dc Decompressor
+	var sendCompressorName string
 
 	// If dc is set and matches the stream's compression, use it.  Otherwise, try
 	// to find a matching registered compressor for decomp.
@@ -1283,12 +1285,18 @@ func (s *Server) processUnaryRPC(t transport.ServerTransport, stream *transport.
 	// NOTE: this needs to be ahead of all handling, https://github.com/grpc/grpc-go/issues/686.
 	if s.opts.cp != nil {
 		cp = s.opts.cp
-		stream.SetSendCompress(cp.Type())
+		sendCompressorName = cp.Type()
 	} else if rc := stream.RecvCompress(); rc != "" && rc != encoding.Identity {
 		// Legacy compressor not specified; attempt to respond with same encoding.
 		comp = encoding.GetCompressor(rc)
 		if comp != nil {
-			stream.SetSendCompress(rc)
+			sendCompressorName = comp.Name()
+		}
+	}
+
+	if sendCompressorName != "" {
+		if err := stream.SetSendCompress(sendCompressorName); err != nil {
+			return status.Errorf(codes.Internal, "grpc: failed to set send compressor: %v", err)
 		}
 	}
 
@@ -1375,6 +1383,11 @@ func (s *Server) processUnaryRPC(t transport.ServerTransport, stream *transport.
 	}
 	opts := &transport.Options{Last: true}
 
+	// Server handler could have set new compressor by calling SetSendCompressor.
+	// In case it is set, we need to use it for compressing outbound message.
+	if stream.SendCompress() != sendCompressorName {
+		comp = encoding.GetCompressor(stream.SendCompress())
+	}
 	if err := s.sendResponse(t, stream, reply, cp, opts, comp); err != nil {
 		if err == io.EOF {
 			// The entire stream is done (for unary RPC only).
@@ -1597,12 +1610,18 @@ func (s *Server) processStreamingRPC(t transport.ServerTransport, stream *transp
 	// NOTE: this needs to be ahead of all handling, https://github.com/grpc/grpc-go/issues/686.
 	if s.opts.cp != nil {
 		ss.cp = s.opts.cp
-		stream.SetSendCompress(s.opts.cp.Type())
+		ss.sendCompressorName = s.opts.cp.Type()
 	} else if rc := stream.RecvCompress(); rc != "" && rc != encoding.Identity {
 		// Legacy compressor not specified; attempt to respond with same encoding.
 		ss.comp = encoding.GetCompressor(rc)
 		if ss.comp != nil {
-			stream.SetSendCompress(rc)
+			ss.sendCompressorName = rc
+		}
+	}
+
+	if ss.sendCompressorName != "" {
+		if err := stream.SetSendCompress(ss.sendCompressorName); err != nil {
+			return status.Errorf(codes.Internal, "grpc: failed to set send compressor: %v", err)
 		}
 	}
 
@@ -1935,6 +1954,60 @@ func SendHeader(ctx context.Context, md metadata.MD) error {
 	return nil
 }
 
+// SetSendCompressor sets a compressor for outbound messages from the server.
+// It must not be called after any event that causes headers to be sent
+// (see ServerStream.SetHeader for the complete list). Provided compressor is
+// used when below conditions are met:
+//
+//   - compressor is registered via encoding.RegisterCompressor
+//   - compressor name must exist in the client advertised compressor names
+//     sent in grpc-accept-encoding header. Use ClientSupportedCompressors to
+//     get client supported compressor names.
+//
+// The context provided must be the context passed to the server's handler.
+// It must be noted that compressor name encoding.Identity disables the
+// outbound compression.
+// By default, server messages will be sent using the same compressor with
+// which request messages were sent.
+//
+// It is not safe to call SetSendCompressor concurrently with SendHeader and
+// SendMsg.
+//
+// # Experimental
+//
+// Notice: This function is EXPERIMENTAL and may be changed or removed in a
+// later release.
+func SetSendCompressor(ctx context.Context, name string) error {
+	stream, ok := ServerTransportStreamFromContext(ctx).(*transport.Stream)
+	if !ok || stream == nil {
+		return fmt.Errorf("failed to fetch the stream from the given context")
+	}
+
+	if err := validateSendCompressor(name, stream.ClientAdvertisedCompressors()); err != nil {
+		return fmt.Errorf("unable to set send compressor: %w", err)
+	}
+
+	return stream.SetSendCompress(name)
+}
+
+// ClientSupportedCompressors returns compressor names advertised by the client
+// via grpc-accept-encoding header.
+//
+// The context provided must be the context passed to the server's handler.
+//
+// # Experimental
+//
+// Notice: This function is EXPERIMENTAL and may be changed or removed in a
+// later release.
+func ClientSupportedCompressors(ctx context.Context) ([]string, error) {
+	stream, ok := ServerTransportStreamFromContext(ctx).(*transport.Stream)
+	if !ok || stream == nil {
+		return nil, fmt.Errorf("failed to fetch the stream from the given context %v", ctx)
+	}
+
+	return strings.Split(stream.ClientAdvertisedCompressors(), ","), nil
+}
+
 // SetTrailer sets the trailer metadata that will be sent when an RPC returns.
 // When called more than once, all the provided metadata will be merged.
 //
@@ -1969,3 +2042,22 @@ type channelzServer struct {
 func (c *channelzServer) ChannelzMetric() *channelz.ServerInternalMetric {
 	return c.s.channelzMetric()
 }
+
+// validateSendCompressor returns an error when given compressor name cannot be
+// handled by the server or the client based on the advertised compressors.
+func validateSendCompressor(name, clientCompressors string) error {
+	if name == encoding.Identity {
+		return nil
+	}
+
+	if !grpcutil.IsCompressorNameRegistered(name) {
+		return fmt.Errorf("compressor not registered %q", name)
+	}
+
+	for _, c := range strings.Split(clientCompressors, ",") {
+		if c == name {
+			return nil // found match
+		}
+	}
+	return fmt.Errorf("client does not support compressor %q", name)
+}
diff --git a/stream.go b/stream.go
index 93231af2ac5..89936a4f166 100644
--- a/stream.go
+++ b/stream.go
@@ -1511,6 +1511,8 @@ type serverStream struct {
 	comp   encoding.Compressor
 	decomp encoding.Compressor
 
+	sendCompressorName string
+
 	maxReceiveMessageSize int
 	maxSendMessageSize    int
 	trInfo                *traceInfo
@@ -1603,6 +1605,13 @@ func (ss *serverStream) SendMsg(m interface{}) (err error) {
 		}
 	}()
 
+	// Server handler could have set new compressor by calling SetSendCompressor.
+	// In case it is set, we need to use it for compressing outbound message.
+	if sendCompressorsName := ss.s.SendCompress(); sendCompressorsName != ss.sendCompressorName {
+		ss.comp = encoding.GetCompressor(sendCompressorsName)
+		ss.sendCompressorName = sendCompressorsName
+	}
+
 	// load hdr, payload, data
 	hdr, payload, data, err := prepareMsg(m, ss.codec, ss.cp, ss.comp)
 	if err != nil {
diff --git a/test/end2end_test.go b/test/end2end_test.go
index 0f5cbc34577..d3c339ccb8d 100644
--- a/test/end2end_test.go
+++ b/test/end2end_test.go
@@ -59,6 +59,7 @@ import (
 	"google.golang.org/grpc/internal"
 	"google.golang.org/grpc/internal/binarylog"
 	"google.golang.org/grpc/internal/channelz"
+	"google.golang.org/grpc/internal/envconfig"
 	"google.golang.org/grpc/internal/grpcsync"
 	"google.golang.org/grpc/internal/grpctest"
 	"google.golang.org/grpc/internal/stubserver"
@@ -5080,6 +5081,340 @@ func (s) TestClientForwardsGrpcAcceptEncodingHeader(t *testing.T) {
 	}
 }
 
+// wrapCompressor is a wrapper of encoding.Compressor which maintains count of
+// Compressor method invokes.
+type wrapCompressor struct {
+	encoding.Compressor
+	compressInvokes int32
+}
+
+func (wc *wrapCompressor) Compress(w io.Writer) (io.WriteCloser, error) {
+	atomic.AddInt32(&wc.compressInvokes, 1)
+	return wc.Compressor.Compress(w)
+}
+
+func setupGzipWrapCompressor(t *testing.T) *wrapCompressor {
+	oldC := encoding.GetCompressor("gzip")
+	c := &wrapCompressor{Compressor: oldC}
+	encoding.RegisterCompressor(c)
+	t.Cleanup(func() {
+		encoding.RegisterCompressor(oldC)
+	})
+	return c
+}
+
+func (s) TestSetSendCompressorSuccess(t *testing.T) {
+	for _, tt := range []struct {
+		name                string
+		desc                string
+		dialOpts            []grpc.DialOption
+		resCompressor       string
+		wantCompressInvokes int32
+	}{
+		{
+			name:                "identity_request_and_gzip_response",
+			desc:                "request is uncompressed and response is gzip compressed",
+			resCompressor:       "gzip",
+			wantCompressInvokes: 1,
+		},
+		{
+			name:          "gzip_request_and_identity_response",
+			desc:          "request is gzip compressed and response is uncompressed with identity",
+			resCompressor: "identity",
+			dialOpts: []grpc.DialOption{
+				// Use WithCompressor instead of UseCompressor to avoid counting
+				// the client's compressor usage.
+				grpc.WithCompressor(grpc.NewGZIPCompressor()),
+			},
+			wantCompressInvokes: 0,
+		},
+	} {
+		t.Run(tt.name, func(t *testing.T) {
+			t.Run("unary", func(t *testing.T) {
+				testUnarySetSendCompressorSuccess(t, tt.resCompressor, tt.wantCompressInvokes, tt.dialOpts)
+			})
+
+			t.Run("stream", func(t *testing.T) {
+				testStreamSetSendCompressorSuccess(t, tt.resCompressor, tt.wantCompressInvokes, tt.dialOpts)
+			})
+		})
+	}
+}
+
+func testUnarySetSendCompressorSuccess(t *testing.T, resCompressor string, wantCompressInvokes int32, dialOpts []grpc.DialOption) {
+	wc := setupGzipWrapCompressor(t)
+	ss := &stubserver.StubServer{
+		EmptyCallF: func(ctx context.Context, in *testpb.Empty) (*testpb.Empty, error) {
+			if err := grpc.SetSendCompressor(ctx, resCompressor); err != nil {
+				return nil, err
+			}
+			return &testpb.Empty{}, nil
+		},
+	}
+	if err := ss.Start(nil, dialOpts...); err != nil {
+		t.Fatalf("Error starting endpoint server: %v", err)
+	}
+	defer ss.Stop()
+
+	ctx, cancel := context.WithTimeout(context.Background(), defaultTestTimeout)
+	defer cancel()
+
+	if _, err := ss.Client.EmptyCall(ctx, &testpb.Empty{}); err != nil {
+		t.Fatalf("Unexpected unary call error, got: %v, want: nil", err)
+	}
+
+	compressInvokes := atomic.LoadInt32(&wc.compressInvokes)
+	if compressInvokes != wantCompressInvokes {
+		t.Fatalf("Unexpected compress invokes, got:%d, want: %d", compressInvokes, wantCompressInvokes)
+	}
+}
+
+func testStreamSetSendCompressorSuccess(t *testing.T, resCompressor string, wantCompressInvokes int32, dialOpts []grpc.DialOption) {
+	wc := setupGzipWrapCompressor(t)
+	ss := &stubserver.StubServer{
+		FullDuplexCallF: func(stream testpb.TestService_FullDuplexCallServer) error {
+			if _, err := stream.Recv(); err != nil {
+				return err
+			}
+
+			if err := grpc.SetSendCompressor(stream.Context(), resCompressor); err != nil {
+				return err
+			}
+
+			return stream.Send(&testpb.StreamingOutputCallResponse{})
+		},
+	}
+	if err := ss.Start(nil, dialOpts...); err != nil {
+		t.Fatalf("Error starting endpoint server: %v", err)
+	}
+	defer ss.Stop()
+
+	ctx, cancel := context.WithTimeout(context.Background(), defaultTestTimeout)
+	defer cancel()
+
+	s, err := ss.Client.FullDuplexCall(ctx)
+	if err != nil {
+		t.Fatalf("Unexpected full duplex call error, got: %v, want: nil", err)
+	}
+
+	if err := s.Send(&testpb.StreamingOutputCallRequest{}); err != nil {
+		t.Fatalf("Unexpected full duplex call send error, got: %v, want: nil", err)
+	}
+
+	if _, err := s.Recv(); err != nil {
+		t.Fatalf("Unexpected full duplex recv error, got: %v, want: nil", err)
+	}
+
+	compressInvokes := atomic.LoadInt32(&wc.compressInvokes)
+	if compressInvokes != wantCompressInvokes {
+		t.Fatalf("Unexpected compress invokes, got:%d, want: %d", compressInvokes, wantCompressInvokes)
+	}
+}
+
+func (s) TestUnregisteredSetSendCompressorFailure(t *testing.T) {
+	resCompressor := "snappy2"
+	wantErr := status.Error(codes.Unknown, "unable to set send compressor: compressor not registered \"snappy2\"")
+
+	t.Run("unary", func(t *testing.T) {
+		testUnarySetSendCompressorFailure(t, resCompressor, wantErr)
+	})
+
+	t.Run("stream", func(t *testing.T) {
+		testStreamSetSendCompressorFailure(t, resCompressor, wantErr)
+	})
+}
+
+func (s) TestUnadvertisedSetSendCompressorFailure(t *testing.T) {
+	// Disable client compressor advertisement.
+	defer func(b bool) { envconfig.AdvertiseCompressors = b }(envconfig.AdvertiseCompressors)
+	envconfig.AdvertiseCompressors = false
+
+	resCompressor := "gzip"
+	wantErr := status.Error(codes.Unknown, "unable to set send compressor: client does not support compressor \"gzip\"")
+
+	t.Run("unary", func(t *testing.T) {
+		testUnarySetSendCompressorFailure(t, resCompressor, wantErr)
+	})
+
+	t.Run("stream", func(t *testing.T) {
+		testStreamSetSendCompressorFailure(t, resCompressor, wantErr)
+	})
+}
+
+func testUnarySetSendCompressorFailure(t *testing.T, resCompressor string, wantErr error) {
+	ss := &stubserver.StubServer{
+		EmptyCallF: func(ctx context.Context, in *testpb.Empty) (*testpb.Empty, error) {
+			if err := grpc.SetSendCompressor(ctx, resCompressor); err != nil {
+				return nil, err
+			}
+			return &testpb.Empty{}, nil
+		},
+	}
+	if err := ss.Start(nil); err != nil {
+		t.Fatalf("Error starting endpoint server: %v", err)
+	}
+	defer ss.Stop()
+
+	ctx, cancel := context.WithTimeout(context.Background(), defaultTestTimeout)
+	defer cancel()
+
+	if _, err := ss.Client.EmptyCall(ctx, &testpb.Empty{}); !equalError(err, wantErr) {
+		t.Fatalf("Unexpected unary call error, got: %v, want: %v", err, wantErr)
+	}
+}
+
+func testStreamSetSendCompressorFailure(t *testing.T, resCompressor string, wantErr error) {
+	ss := &stubserver.StubServer{
+		FullDuplexCallF: func(stream testpb.TestService_FullDuplexCallServer) error {
+			if _, err := stream.Recv(); err != nil {
+				return err
+			}
+
+			if err := grpc.SetSendCompressor(stream.Context(), resCompressor); err != nil {
+				return err
+			}
+
+			return stream.Send(&testpb.StreamingOutputCallResponse{})
+		},
+	}
+	if err := ss.Start(nil); err != nil {
+		t.Fatalf("Error starting endpoint server: %v, want: nil", err)
+	}
+	defer ss.Stop()
+
+	ctx, cancel := context.WithTimeout(context.Background(), defaultTestTimeout)
+	defer cancel()
+
+	s, err := ss.Client.FullDuplexCall(ctx)
+	if err != nil {
+		t.Fatalf("Unexpected full duplex call error, got: %v, want: nil", err)
+	}
+
+	if err := s.Send(&testpb.StreamingOutputCallRequest{}); err != nil {
+		t.Fatalf("Unexpected full duplex call send error, got: %v, want: nil", err)
+	}
+
+	if _, err := s.Recv(); !equalError(err, wantErr) {
+		t.Fatalf("Unexpected full duplex recv error, got: %v, want: nil", err)
+	}
+}
+
+func (s) TestUnarySetSendCompressorAfterHeaderSendFailure(t *testing.T) {
+	ss := &stubserver.StubServer{
+		EmptyCallF: func(ctx context.Context, in *testpb.Empty) (*testpb.Empty, error) {
+			// Send headers early and then set send compressor.
+			grpc.SendHeader(ctx, metadata.MD{})
+			err := grpc.SetSendCompressor(ctx, "gzip")
+			if err == nil {
+				t.Error("Wanted set send compressor error")
+				return &testpb.Empty{}, nil
+			}
+			return nil, err
+		},
+	}
+	if err := ss.Start(nil); err != nil {
+		t.Fatalf("Error starting endpoint server: %v", err)
+	}
+	defer ss.Stop()
+
+	ctx, cancel := context.WithTimeout(context.Background(), defaultTestTimeout)
+	defer cancel()
+
+	wantErr := status.Error(codes.Unknown, "transport: set send compressor called after headers sent or stream done")
+	if _, err := ss.Client.EmptyCall(ctx, &testpb.Empty{}); !equalError(err, wantErr) {
+		t.Fatalf("Unexpected unary call error, got: %v, want: %v", err, wantErr)
+	}
+}
+
+func (s) TestStreamSetSendCompressorAfterHeaderSendFailure(t *testing.T) {
+	ss := &stubserver.StubServer{
+		FullDuplexCallF: func(stream testpb.TestService_FullDuplexCallServer) error {
+			// Send headers early and then set send compressor.
+			grpc.SendHeader(stream.Context(), metadata.MD{})
+			err := grpc.SetSendCompressor(stream.Context(), "gzip")
+			if err == nil {
+				t.Error("Wanted set send compressor error")
+			}
+			return err
+		},
+	}
+	if err := ss.Start(nil); err != nil {
+		t.Fatalf("Error starting endpoint server: %v", err)
+	}
+	defer ss.Stop()
+
+	ctx, cancel := context.WithTimeout(context.Background(), defaultTestTimeout)
+	defer cancel()
+
+	wantErr := status.Error(codes.Unknown, "transport: set send compressor called after headers sent or stream done")
+	s, err := ss.Client.FullDuplexCall(ctx)
+	if err != nil {
+		t.Fatalf("Unexpected full duplex call error, got: %v, want: nil", err)
+	}
+
+	if _, err := s.Recv(); !equalError(err, wantErr) {
+		t.Fatalf("Unexpected full duplex recv error, got: %v, want: %v", err, wantErr)
+	}
+}
+
+func (s) TestClientSupportedCompressors(t *testing.T) {
+	for _, tt := range []struct {
+		desc string
+		ctx  context.Context
+		want []string
+	}{
+		{
+			desc: "No additional grpc-accept-encoding header",
+			ctx:  context.Background(),
+			want: []string{"gzip"},
+		},
+		{
+			desc: "With additional grpc-accept-encoding header",
+			ctx: metadata.AppendToOutgoingContext(context.Background(),
+				"grpc-accept-encoding", "test-compressor-1",
+				"grpc-accept-encoding", "test-compressor-2",
+			),
+			want: []string{"gzip", "test-compressor-1", "test-compressor-2"},
+		},
+		{
+			desc: "With additional empty grpc-accept-encoding header",
+			ctx: metadata.AppendToOutgoingContext(context.Background(),
+				"grpc-accept-encoding", "",
+			),
+			want: []string{"gzip"},
+		},
+	} {
+		t.Run(tt.desc, func(t *testing.T) {
+			ss := &stubserver.StubServer{
+				EmptyCallF: func(ctx context.Context, in *testpb.Empty) (*testpb.Empty, error) {
+					got, err := grpc.ClientSupportedCompressors(ctx)
+					if err != nil {
+						return nil, err
+					}
+
+					if !reflect.DeepEqual(got, tt.want) {
+						t.Errorf("unexpected client compressors got: %v, want: %v", got, tt.want)
+					}
+
+					return &testpb.Empty{}, nil
+				},
+			}
+			if err := ss.Start(nil); err != nil {
+				t.Fatalf("Error starting endpoint server: %v, want: nil", err)
+			}
+			defer ss.Stop()
+
+			ctx, cancel := context.WithTimeout(tt.ctx, defaultTestTimeout)
+			defer cancel()
+
+			_, err := ss.Client.EmptyCall(ctx, &testpb.Empty{})
+			if err != nil {
+				t.Fatalf("Unexpected unary call error, got: %v, want: nil", err)
+			}
+		})
+	}
+}
+
 func (s) TestUnaryProxyDoesNotForwardMetadata(t *testing.T) {
 	const mdkey = "somedata"