diff --git a/.kitchen.local.yml b/.kitchen.local.yml
index 5f9cc2cf..79c513ca 100644
--- a/.kitchen.local.yml
+++ b/.kitchen.local.yml
@@ -39,3 +39,4 @@ suites:
             password: r4nd0m
             database: intercity_sample_app
           ruby_version: 2.1.2
+          gzip_enabled: true
diff --git a/.kitchen.yml b/.kitchen.yml
index bdf36bc7..efb41142 100644
--- a/.kitchen.yml
+++ b/.kitchen.yml
@@ -33,3 +33,4 @@ suites:
             password: r4nd0m
             database: intercity_sample_app
           ruby_version: 2.1.2
+          gzip_enabled: true
diff --git a/Gemfile.lock b/Gemfile.lock
index 39ee0fc5..059a9349 100644
--- a/Gemfile.lock
+++ b/Gemfile.lock
@@ -87,10 +87,11 @@ GEM
     mixlib-config (2.1.0)
     mixlib-log (1.6.0)
     mixlib-shellout (1.4.0)
+    multi_json (1.10.1)
     multipart-post (2.0.0)
     net-scp (1.2.1)
       net-ssh (>= 2.6.5)
-    net-ssh (2.9.1)
+    net-ssh (2.9.2)
     net-ssh-gateway (1.2.0)
       net-ssh (>= 2.6.5)
     net-ssh-multi (1.2.0)
@@ -120,28 +121,29 @@ GEM
       faraday
     rest-client (1.6.7)
       mime-types (>= 1.16)
-    rspec (3.0.0)
-      rspec-core (~> 3.0.0)
-      rspec-expectations (~> 3.0.0)
-      rspec-mocks (~> 3.0.0)
-    rspec-core (3.0.4)
-      rspec-support (~> 3.0.0)
-    rspec-expectations (3.0.4)
+    rspec (3.1.0)
+      rspec-core (~> 3.1.0)
+      rspec-expectations (~> 3.1.0)
+      rspec-mocks (~> 3.1.0)
+    rspec-core (3.1.7)
+      rspec-support (~> 3.1.0)
+    rspec-expectations (3.1.2)
       diff-lcs (>= 1.2.0, < 2.0)
-      rspec-support (~> 3.0.0)
-    rspec-its (1.0.1)
-      rspec-core (>= 2.99.0.beta1)
-      rspec-expectations (>= 2.99.0.beta1)
-    rspec-mocks (3.0.4)
-      rspec-support (~> 3.0.0)
-    rspec-support (3.0.4)
+      rspec-support (~> 3.1.0)
+    rspec-its (1.1.0)
+      rspec-core (>= 3.0.0)
+      rspec-expectations (>= 3.0.0)
+    rspec-mocks (3.1.3)
+      rspec-support (~> 3.1.0)
+    rspec-support (3.1.2)
     safe_yaml (1.0.4)
-    serverspec (2.0.1)
-      rspec (~> 3.0.0)
+    serverspec (2.7.1)
+      multi_json
+      rspec (~> 3.0)
       rspec-its
-      specinfra (~> 2.0)
+      specinfra (~> 2.10)
     slop (3.6.0)
-    specinfra (2.0.2)
+    specinfra (2.11.3)
       net-scp
       net-ssh
     systemu (2.6.4)
diff --git a/nodes/sample_host.json b/nodes/sample_host.json
index 1525a285..81e5d8f4 100644
--- a/nodes/sample_host.json
+++ b/nodes/sample_host.json
@@ -53,7 +53,8 @@
         "username": "<db username, max 10 characters>",
         "password": "<enter a random password>",
         "database": "<appname>_<stage>"
-      }
+      },
+      "gzip_enabled": false
     }
   }
 }
diff --git a/test/integration/full-stack/serverspec/nginx_spec.rb b/test/integration/full-stack/serverspec/nginx_spec.rb
index c5b4826f..525144d5 100644
--- a/test/integration/full-stack/serverspec/nginx_spec.rb
+++ b/test/integration/full-stack/serverspec/nginx_spec.rb
@@ -7,3 +7,13 @@
   end
 
 end
+
+describe file("/etc/nginx/sites-available/intercity_sample_app.conf") do
+  it { should be_file }
+
+  context "GZip support enabled" do
+    its(:content) do
+      should match /location ~ \^\/\(assets\)\/.*gzip_static on;/m
+    end
+  end
+end
diff --git a/vendor/cookbooks/rails/libraries/default.rb b/vendor/cookbooks/rails/libraries/default.rb
index f60d2bfa..2934bb5d 100644
--- a/vendor/cookbooks/rails/libraries/default.rb
+++ b/vendor/cookbooks/rails/libraries/default.rb
@@ -16,5 +16,13 @@ def nginx_custom_configuration(app_info)
 
       empty_conf.merge(app_info["nginx_custom"] || {})
     end
+
+    # Builds a public root path on server
+    #
+    #   nginx_server_root("/u/apps", "my_app") # => "/u/apps/my_app/current/public"
+    #
+    def nginx_server_root(applications_root, app)
+      "#{applications_root}/#{app}/current/public"
+    end
   end
 end
diff --git a/vendor/cookbooks/rails/recipes/default.rb b/vendor/cookbooks/rails/recipes/default.rb
index 8c1022a2..9b6bd482 100644
--- a/vendor/cookbooks/rails/recipes/default.rb
+++ b/vendor/cookbooks/rails/recipes/default.rb
@@ -118,7 +118,10 @@
         domain_names: app_info["domain_names"],
         redirect_domain_names: app_info["redirect_domain_names"],
         enable_ssl: File.exists?("#{applications_root}/#{app}/shared/config/certificate.crt"),
-        custom_configuration: nginx_custom_configuration(app_info))
+        server_root_public_path: nginx_server_root(applications_root, app),
+        custom_configuration: nginx_custom_configuration(app_info),
+        gzip_enabled: app_info["gzip_enabled"]
+      )
       notifies :reload, resources(service: "nginx")
     end
 
diff --git a/vendor/cookbooks/rails/recipes/passenger.rb b/vendor/cookbooks/rails/recipes/passenger.rb
index aab970b6..6c1ee103 100644
--- a/vendor/cookbooks/rails/recipes/passenger.rb
+++ b/vendor/cookbooks/rails/recipes/passenger.rb
@@ -134,7 +134,10 @@
         rails_env: rails_env,
         domain_names: app_info["domain_names"],
         enable_ssl: File.exists?("#{applications_root}/#{app}/shared/config/certificate.crt"),
-        custom_configuration: nginx_custom_configuration(app_info))
+        server_root_public_path: nginx_server_root(applications_root, app),
+        custom_configuration: nginx_custom_configuration(app_info),
+        gzip_enabled: app_info["gzip_enabled"]
+      )
       notifies :reload, resources(:service => "nginx")
     end
 
diff --git a/vendor/cookbooks/rails/templates/default/_app_nginx_location_assets.erb b/vendor/cookbooks/rails/templates/default/_app_nginx_location_assets.erb
new file mode 100644
index 00000000..cd5de56d
--- /dev/null
+++ b/vendor/cookbooks/rails/templates/default/_app_nginx_location_assets.erb
@@ -0,0 +1,6 @@
+location ~ ^/(assets)/ {
+    root <%= @server_root_public_path %>;
+    gzip_static on;
+    expires max;
+    add_header Cache-Control public;
+  }
diff --git a/vendor/cookbooks/rails/templates/default/app_nginx.conf.erb b/vendor/cookbooks/rails/templates/default/app_nginx.conf.erb
index de13df6a..002949f5 100644
--- a/vendor/cookbooks/rails/templates/default/app_nginx.conf.erb
+++ b/vendor/cookbooks/rails/templates/default/app_nginx.conf.erb
@@ -14,7 +14,7 @@ server {
 server {
   listen <%= node['nginx']['port'] || '80' %>;
   server_name <%= @domain_names.join(' ') %>;
-  root <%= node['rails']['applications_root'] %>/<%= @name %>/current/public;
+  root <%= @server_root_public_path %>
 
   try_files $uri/index.html $uri.html $uri @app;
 
@@ -39,7 +39,7 @@ server {
 
   server_name <%= @domain_names.join(' ') %>;
 
-  root <%= node['rails']['applications_root'] %>/<%= @name %>/current/public;
+  root <%= @server_root_public_path %>
 
   location / {
     try_files $uri @app;
diff --git a/vendor/cookbooks/rails/templates/default/app_passenger_nginx.conf.erb b/vendor/cookbooks/rails/templates/default/app_passenger_nginx.conf.erb
index bd91afb7..f0a3a884 100644
--- a/vendor/cookbooks/rails/templates/default/app_passenger_nginx.conf.erb
+++ b/vendor/cookbooks/rails/templates/default/app_passenger_nginx.conf.erb
@@ -1,12 +1,16 @@
+
 <%= @custom_configuration["before_server"] %>
 
 server {
   listen <%= node['nginx']['port'] || '80' %>;
   server_name <%= @domain_names.join(' ') %>;
-  root <%= node['rails']['applications_root'] %>/<%= @name %>/current/public;
+  root <%= @server_root_public_path %>;
 
   passenger_enabled on;
   passenger_app_env <%= @rails_env %>;
+
+  <%= render '_app_nginx_location_assets.erb', variables: { server_root_public_path: @server_root_public_path } if @gzip_enabled %>
+
   <%= @custom_configuration["server_main"] %>
 }
 
@@ -23,7 +27,10 @@ server {
 
   server_name <%= @domain_names.join(' ') %>;
 
-  root <%= node['rails']['applications_root'] %>/<%= @name %>/current/public;
+  root <%= @server_root_public_path %>; 
+
+  <%= render '_app_nginx_location_assets.erb', variables: { server_root_public_path: @server_root_public_path } if @gzip_enabled %>
+
   <%= @custom_configuration["ssl_main"] %>
 }