diff --git a/.gitignore b/.gitignore
index ce17d0db..703cf466 100644
--- a/.gitignore
+++ b/.gitignore
@@ -21,6 +21,8 @@ tests/test_data/cesm2_native_TREFHT.json
 tests/test_data/daily_data_tas.json
 tests/test_data/daily_data_ta.json
 tests/test_data/daily_data_masked_ta.json
+tests/test_data/CMIP6_IPSL-CM6A-LR_tas_tas.json
+tests/test_data/obs4MIPS_CERES-EBAF_L3B_Ed2-8_rlut_rlut.json
 
 # test coverage
 .coverage
diff --git a/activestorage/dummy_data.py b/activestorage/dummy_data.py
index 03e6d598..edfb8282 100644
--- a/activestorage/dummy_data.py
+++ b/activestorage/dummy_data.py
@@ -67,6 +67,15 @@ def make_validrange_ncdata(filename='test_validrange.nc', chunksize=(3, 3, 1), n
     return make_ncdata(filename, chunksize, n, compression=None, valid_range=valid_range)
 
 
+def make_compressed_ncdata(filename='test_vanilla.nc', chunksize=(3, 3, 1), n=10, compression=None, shuffle=False):
+    """
+    Make a compressed and optionally shuffled vanilla test dataset which is
+    three dimensional with indices and values that aid in testing data
+    extraction.
+    """
+    return make_ncdata(filename, chunksize, n, compression=compression, shuffle=shuffle)
+
+
 def make_vanilla_ncdata(filename='test_vanilla.nc', chunksize=(3, 3, 1), n=10):
     """
     Make a vanilla test dataset which is three dimensional with indices and values that
@@ -81,7 +90,8 @@ def make_ncdata(filename, chunksize, n, compression=None,
                 valid_range=None,
                 valid_min=None,
                 valid_max=None,
-                partially_missing_data=False):
+                partially_missing_data=False,
+                shuffle=False):
     """ 
     If compression is required, it can be passed in via keyword
     and is applied to all variables.
@@ -96,6 +106,8 @@ def make_ncdata(filename, chunksize, n, compression=None,
     partially_missing_data = True makes half the data missing so we can 
     ensure we find some chunks which are all missing ... Can 
     only be used in combination with a missing value.
+
+    shuffle: if True, apply the HDF5 shuffle filter before compression.
     """
     if partially_missing_data and not missing:
         raise ValueError(f'Missing data value keyword provided and set to {missing} '
@@ -109,16 +121,19 @@ def make_ncdata(filename, chunksize, n, compression=None,
     ydim = ds.createDimension("ydim", n)
     zdim = ds.createDimension("zdim", n)
     
-    x = ds.createVariable("x","i4",("xdim",), fill_value=fillvalue, compression=compression)
-    y = ds.createVariable("y","i4",("ydim",), fill_value=fillvalue, compression=compression)
-    z = ds.createVariable("z","i4",("zdim",), fill_value=fillvalue, compression=compression)
+    x = ds.createVariable("x","i4",("xdim",), fill_value=fillvalue, compression=compression, shuffle=shuffle)
+    y = ds.createVariable("y","i4",("ydim",), fill_value=fillvalue, compression=compression, shuffle=shuffle)
+    z = ds.createVariable("z","i4",("zdim",), fill_value=fillvalue, compression=compression, shuffle=shuffle)
 
     for a,s in zip([x, y, z],[1, n, n * n]):
         a[:] = dd * s
     
     dvar = ds.createVariable("data","f8", ("xdim","ydim","zdim"),
-                             chunksizes=chunksize, compression=compression,
+                             chunksizes=chunksize,
+                             compression=compression,
+                             shuffle=shuffle,
                              fill_value=fillvalue)
+
     dvar[:] = data
 
     nm1, nm2 = n - 1, n - 2
@@ -179,7 +194,7 @@ def make_ncdata(filename, chunksize, n, compression=None,
     # all important close at the end!!
     ds.close()
 
-    return mindices, findices, vrindices, vm1indices, vm2indices 
+    return mindices, findices, vrindices, vm1indices, vm2indices
 
 
 if __name__=="__main__":
diff --git a/activestorage/storage.py b/activestorage/storage.py
index c66f5367..28d91f35 100644
--- a/activestorage/storage.py
+++ b/activestorage/storage.py
@@ -8,6 +8,8 @@ def reduce_chunk(rfile, offset, size, compression, filters, missing, dtype, shap
     
     rfile - the actual file with the data 
     offset, size - where and what we want ...
+    compression - optional `numcodecs.abc.Codec` compression codec
+    filters - optional list of `numcodecs.abc.Codec` filter codecs
     dtype - likely float32 in most cases. 
     shape - will be a tuple, something like (3,3,1), this is the dimensionality of the 
             chunk itself
@@ -22,15 +24,12 @@ def reduce_chunk(rfile, offset, size, compression, filters, missing, dtype, shap
                     
     """
     
-    if compression is not None:
-        raise NotImplementedError("Compression is not yet supported!")
-    if filters is not None:
-        raise NotImplementedError("Filters are not yet supported!")
-
     #FIXME: for the moment, open the file every time ... we might want to do that, or not
     with open(rfile,'rb') as open_file:
         # get the data
         chunk = read_block(open_file, offset, size)
+        # reverse any compression and filters
+        chunk = filter_pipeline(chunk, compression, filters)
         # make it a numpy array of bytes
         chunk = ensure_ndarray(chunk)
         # convert to the appropriate data type
@@ -51,6 +50,26 @@ def reduce_chunk(rfile, offset, size, compression, filters, missing, dtype, shap
     else:
         return tmp, None
 
+
+def filter_pipeline(chunk, compression, filters):
+    """
+    Reverse any compression and filters applied to the chunk.
+
+    When a chunk is written, the filters are applied in order, then compression
+    is applied. For reading, we must reverse this pipeline.
+
+    :param chunk: possibly filtered and compressed bytes
+    :param compression: optional `numcodecs.abc.Codec` compression codec
+    :param filters: optional list of `numcodecs.abc.Codec` filter codecs
+    :returns: decompressed and defiltered chunk bytes
+    """
+    if compression is not None:
+        chunk = compression.decode(chunk)
+    for filter in reversed(filters or []):
+        chunk = filter.decode(chunk)
+    return chunk
+
+
 def remove_missing(data, missing):
     """ 
     As we are using numpy, we can use a masked array, storage implementations
diff --git a/tests/test_compression.py b/tests/test_compression.py
new file mode 100644
index 00000000..e32ab70e
--- /dev/null
+++ b/tests/test_compression.py
@@ -0,0 +1,98 @@
+import os
+import numpy as np
+import pytest
+
+from netCDF4 import Dataset
+from pathlib import Path
+
+from activestorage.active import Active
+from activestorage.config import *
+from activestorage.dummy_data import make_compressed_ncdata
+
+import utils
+
+
+def check_dataset_filters(temp_file: str, ncvar: str, compression: str, shuffle: bool):
+    # Sanity check that test data is compressed and filtered as expected.
+    with Dataset(temp_file) as test_data:
+        test_data_filters = test_data.variables[ncvar].filters()
+        print(test_data_filters)
+        assert test_data_filters[compression]
+        assert test_data_filters['shuffle'] == shuffle
+
+
+def create_compressed_dataset(tmp_path: str, compression: str, shuffle: bool):
+    """
+    Make a vanilla test dataset which is compressed and optionally shuffled.
+    """
+    temp_file = str(tmp_path / "test_compression.nc")
+    test_data = make_compressed_ncdata(filename=temp_file, compression=compression, shuffle=shuffle)
+
+    check_dataset_filters(temp_file, "data", compression, shuffle)
+
+    test_file = utils.write_to_storage(temp_file)
+    if USE_S3:
+        os.remove(temp_file)
+    return test_file
+
+
+@pytest.mark.skipif(USE_S3, reason="Compression and filtering not supported in S3 yet")
+@pytest.mark.parametrize('compression', ['zlib'])
+@pytest.mark.parametrize('shuffle', [False, True])
+def test_compression_and_filters(tmp_path: str, compression: str, shuffle: bool):
+    """
+    Test use of datasets with compression and filters applied.
+    """
+    test_file = create_compressed_dataset(tmp_path, compression, shuffle)
+
+    active = Active(test_file, 'data', utils.get_storage_type())
+    active._version = 1
+    active._method = "min"
+    result = active[0:2,4:6,7:9]
+    assert result == 740.0
+
+
+@pytest.mark.skipif(USE_S3, reason="Compression and filtering not supported in S3 yet")
+def test_compression_and_filters_cmip6_data():
+    """
+    Test use of datasets with compression and filters applied for a real
+    CMIP6 dataset (CMIP6_IPSL-CM6A-LR_tas).
+    """
+    test_file = str(Path(__file__).resolve().parent / 'test_data' / 'CMIP6_IPSL-CM6A-LR_tas.nc')
+
+    check_dataset_filters(test_file, "tas", "zlib", False)
+
+    with Dataset(test_file) as nc_data:
+        nc_min = np.min(nc_data["tas"][0:2,4:6,7:9])
+    print(f"Numpy min from compressed file {nc_min}")
+
+    active = Active(test_file, 'tas', utils.get_storage_type())
+    active._version = 1
+    active._method = "min"
+    result = active[0:2,4:6,7:9]
+    assert nc_min == result
+    assert result == 239.25946044921875
+
+
+@pytest.mark.skipif(USE_S3, reason="Compression and filtering not supported in S3 yet")
+def test_compression_and_filters_obs4mips_data():
+    """
+    Test use of datasets with compression and filters applied for a real
+    obs4mips dataset (obs4MIPS_CERES-EBAF_L3B_Ed2-8_rlut.nc) at CMIP5 MIP standard
+    but with CMIP6-standard file packaging.
+    """
+    test_file = str(Path(__file__).resolve().parent / 'test_data' / 'obs4MIPS_CERES-EBAF_L3B_Ed2-8_rlut.nc')
+
+    check_dataset_filters(test_file, "rlut", "zlib", False)
+
+    with Dataset(test_file) as nc_data:
+        nc_min = np.min(nc_data["rlut"][0:2,4:6,7:9])
+    print(f"Numpy min from compressed file {nc_min}")
+
+    active = Active(test_file, 'rlut', utils.get_storage_type())
+    active._version = 1
+    active._method = "min"
+    result = active[0:2,4:6,7:9]
+    print(nc_min)
+    assert nc_min == result
+    assert result == 124.0
diff --git a/tests/test_data/CMIP6_IPSL-CM6A-LR_tas.nc b/tests/test_data/CMIP6_IPSL-CM6A-LR_tas.nc
new file mode 100644
index 00000000..fcbb8e4f
Binary files /dev/null and b/tests/test_data/CMIP6_IPSL-CM6A-LR_tas.nc differ
diff --git a/tests/test_data/obs4MIPS_CERES-EBAF_L3B_Ed2-8_rlut.nc b/tests/test_data/obs4MIPS_CERES-EBAF_L3B_Ed2-8_rlut.nc
new file mode 100644
index 00000000..c2c935a0
Binary files /dev/null and b/tests/test_data/obs4MIPS_CERES-EBAF_L3B_Ed2-8_rlut.nc differ
diff --git a/tests/unit/test_storage.py b/tests/unit/test_storage.py
index 168e8bbc..22e6dfbb 100644
--- a/tests/unit/test_storage.py
+++ b/tests/unit/test_storage.py
@@ -21,26 +21,6 @@ def test_reduce_chunk():
     assert rc[0] == -1
     assert rc[1] == 15
 
-    # with compression
-    with pytest.raises(NotImplementedError) as exc:
-        rc = st.reduce_chunk(rfile, offset, size,
-                             compression="Blosc", filters=None,
-                             missing=[None, 2050, None, None],
-                             dtype="i2", shape=(8, 8),
-                             order="C", chunk_selection=slice(0, 2, 1),
-                             method=np.max)
-    assert str(exc.value) == "Compression is not yet supported!"
-
-    # with filters
-    with pytest.raises(NotImplementedError) as exc:
-        rc = st.reduce_chunk(rfile, offset, size,
-                             compression=None, filters="filters",
-                             missing=[None, 2050, None, None],
-                             dtype="i2", shape=(8, 8),
-                             order="C", chunk_selection=slice(0, 2, 1),
-                             method=np.max)
-    assert str(exc.value) == "Filters are not yet supported!"
-
 
 def test_reduced_chunk_masked_data():
     """Test method with masked data."""