diff --git a/mongoose.c b/mongoose.c
index 22d59c83..1cc814e4 100644
--- a/mongoose.c
+++ b/mongoose.c
@@ -1683,28 +1683,30 @@ void mg_http_serve_file(struct mg_connection *c, struct mg_http_message *hm,
                         const struct mg_http_serve_opts *opts) {
   char etag[64], tmp[MG_PATH_MAX];
   struct mg_fs *fs = opts->fs == NULL ? &mg_fs_posix : opts->fs;
-  struct mg_fd *fd = path == NULL ? NULL : mg_fs_open(fs, path, MG_FS_READ);
+  struct mg_fd *fd = NULL;
   size_t size = 0;
   time_t mtime = 0;
   struct mg_str *inm = NULL;
   struct mg_str mime = guess_content_type(mg_str(path), opts->mime_types);
   bool gzip = false;
 
-  // If file does not exist, we try to open file PATH.gz - and if such
-  // pre-compressed .gz file exists, serve it with the Content-Encoding: gzip
-  // Note - we ignore Accept-Encoding, cause we don't have a choice
-  if (fd == NULL) {
-    MG_DEBUG(("NULL [%s]", path));
-    mg_snprintf(tmp, sizeof(tmp), "%s.gz", path);
-    if ((fd = mg_fs_open(fs, tmp, MG_FS_READ)) != NULL) {
-      gzip = true;
-      path = tmp;
-    } else if (opts->page404 != NULL) {
-      // No precompressed file, serve 404
-      fd = mg_fs_open(fs, opts->page404, MG_FS_READ);
-      mime = guess_content_type(mg_str(path), opts->mime_types);
-      path = opts->page404;
+  if (path != NULL) {
+    // If a browser sends us "Accept-Encoding: gzip", try to open .gz first
+    struct mg_str *ae = mg_http_get_header(hm, "Accept-Encoding");
+    if (ae != NULL && mg_strstr(*ae, mg_str("gzip")) != NULL) {
+      mg_snprintf(tmp, sizeof(tmp), "%s.gz", path);
+      fd = mg_fs_open(fs, tmp, MG_FS_READ);
+      if (fd != NULL) gzip = true, path = tmp;
     }
+    // No luck opening .gz? Open what we've told to open
+    if (fd == NULL) fd = mg_fs_open(fs, path, MG_FS_READ);
+  }
+
+  // Failed to open, and page404 is configured? Open it, then
+  if (fd == NULL && opts->page404 != NULL) {
+    fd = mg_fs_open(fs, opts->page404, MG_FS_READ);
+    mime = guess_content_type(mg_str(path), opts->mime_types);
+    path = opts->page404;
   }
 
   if (fd == NULL || fs->st(path, &size, &mtime) == 0) {
diff --git a/src/http.c b/src/http.c
index c63a051c..3136dfcd 100644
--- a/src/http.c
+++ b/src/http.c
@@ -453,28 +453,30 @@ void mg_http_serve_file(struct mg_connection *c, struct mg_http_message *hm,
                         const struct mg_http_serve_opts *opts) {
   char etag[64], tmp[MG_PATH_MAX];
   struct mg_fs *fs = opts->fs == NULL ? &mg_fs_posix : opts->fs;
-  struct mg_fd *fd = path == NULL ? NULL : mg_fs_open(fs, path, MG_FS_READ);
+  struct mg_fd *fd = NULL;
   size_t size = 0;
   time_t mtime = 0;
   struct mg_str *inm = NULL;
   struct mg_str mime = guess_content_type(mg_str(path), opts->mime_types);
   bool gzip = false;
 
-  // If file does not exist, we try to open file PATH.gz - and if such
-  // pre-compressed .gz file exists, serve it with the Content-Encoding: gzip
-  // Note - we ignore Accept-Encoding, cause we don't have a choice
-  if (fd == NULL) {
-    MG_DEBUG(("NULL [%s]", path));
-    mg_snprintf(tmp, sizeof(tmp), "%s.gz", path);
-    if ((fd = mg_fs_open(fs, tmp, MG_FS_READ)) != NULL) {
-      gzip = true;
-      path = tmp;
-    } else if (opts->page404 != NULL) {
-      // No precompressed file, serve 404
-      fd = mg_fs_open(fs, opts->page404, MG_FS_READ);
-      mime = guess_content_type(mg_str(path), opts->mime_types);
-      path = opts->page404;
+  if (path != NULL) {
+    // If a browser sends us "Accept-Encoding: gzip", try to open .gz first
+    struct mg_str *ae = mg_http_get_header(hm, "Accept-Encoding");
+    if (ae != NULL && mg_strstr(*ae, mg_str("gzip")) != NULL) {
+      mg_snprintf(tmp, sizeof(tmp), "%s.gz", path);
+      fd = mg_fs_open(fs, tmp, MG_FS_READ);
+      if (fd != NULL) gzip = true, path = tmp;
     }
+    // No luck opening .gz? Open what we've told to open
+    if (fd == NULL) fd = mg_fs_open(fs, path, MG_FS_READ);
+  }
+
+  // Failed to open, and page404 is configured? Open it, then
+  if (fd == NULL && opts->page404 != NULL) {
+    fd = mg_fs_open(fs, opts->page404, MG_FS_READ);
+    mime = guess_content_type(mg_str(path), opts->mime_types);
+    path = opts->page404;
   }
 
   if (fd == NULL || fs->st(path, &size, &mtime) == 0) {
diff --git a/test/data/gzip.txt b/test/data/gzip.txt
new file mode 100644
index 00000000..45b983be
--- /dev/null
+++ b/test/data/gzip.txt
@@ -0,0 +1 @@
+hi
diff --git a/test/data/gzip.txt.gz b/test/data/gzip.txt.gz
new file mode 100644
index 00000000..1e11fd8d
Binary files /dev/null and b/test/data/gzip.txt.gz differ
diff --git a/test/unit_test.c b/test/unit_test.c
index 325c9a4a..698ba309 100644
--- a/test/unit_test.c
+++ b/test/unit_test.c
@@ -635,21 +635,25 @@ static int fetch(struct mg_mgr *mgr, char *buf, const char *url,
   return fd.code;
 }
 
-static int cmpbody(const char *buf, const char *str) {
+static struct mg_http_message gethm(const char *buf) {
   struct mg_http_message hm;
+  memset(&hm, 0, sizeof(hm));
+  mg_http_parse(buf, strlen(buf), &hm);
+  return hm;
+}
+
+static int cmpbody(const char *buf, const char *str) {
   struct mg_str s = mg_str(str);
+  struct mg_http_message hm = gethm(buf);
   size_t len = strlen(buf);
   mg_http_parse(buf, len, &hm);
-  if (hm.body.len > len) hm.body.len = len - (size_t)(hm.body.ptr - buf);
+  if (hm.body.len > len) hm.body.len = len - (size_t) (hm.body.ptr - buf);
   return mg_strcmp(hm.body, s);
 }
 
 static bool cmpheader(const char *buf, const char *name, const char *value) {
-  struct mg_http_message hm;
-  struct mg_str *h;
-  size_t len = strlen(buf);
-  mg_http_parse(buf, len, &hm);
-  h = mg_http_get_header(&hm, name);
+  struct mg_http_message hm = gethm(buf);
+  struct mg_str *h = mg_http_get_header(&hm, name);
   return h != NULL && mg_strcmp(*h, mg_str(value)) == 0;
 }
 
@@ -765,10 +769,24 @@ static void test_http_server(void) {
   ASSERT(fetch(&mgr, buf, url, "GET /dredir/ HTTP/1.0\n\n") == 200);
   ASSERT(cmpbody(buf, "hi\n") == 0);
 
-  ASSERT(fetch(&mgr, buf, url, "GET /dredirgz/ HTTP/1.0\n\n") == 200);
+  ASSERT(fetch(&mgr, buf, url,
+               "GET /dredirgz/ HTTP/1.0\n"
+               "Accept-Encoding: gzip\n\n") == 200);
   ASSERT(cmpheader(buf, "Content-Type", "text/html; charset=utf-8"));
   ASSERT(cmpheader(buf, "Content-Encoding", "gzip"));
 
+  ASSERT(fetch(&mgr, buf, url, "GET /gzip.txt HTTP/1.0\n\n") == 200);
+  ASSERT(cmpbody(buf, "hi\n") == 0);
+  ASSERT(gethm(buf).body.len == 3);
+  ASSERT(cmpheader(buf, "Content-Encoding", "gzip") == false);
+
+  ASSERT(fetch(&mgr, buf, url,
+               "GET /gzip.txt HTTP/1.0\n"
+               "Accept-Encoding: foo,gzip\n\n") == 200);
+  mg_hexdump(buf, strlen(buf));
+  ASSERT(cmpheader(buf, "Content-Encoding", "gzip") == true);
+  ASSERT(gethm(buf).body.len == 23);
+
   ASSERT(fetch(&mgr, buf, url, "GET /..ddot HTTP/1.0\n\n") == 301);
   ASSERT(fetch(&mgr, buf, url, "GET /..ddot/ HTTP/1.0\n\n") == 200);
   ASSERT(cmpbody(buf, "hi\n") == 0);
@@ -937,7 +955,9 @@ static void test_http_server(void) {
   // Pre-compressed files
   {
     struct mg_http_message hm;
-    ASSERT(fetch(&mgr, buf, url, "HEAD /hello.txt HTTP/1.0\n\n") == 200);
+    ASSERT(fetch(&mgr, buf, url,
+                 "HEAD /hello.txt HTTP/1.0\n"
+                 "Accept-Encoding: gzip\n\n") == 200);
     mg_http_parse(buf, strlen(buf), &hm);
     ASSERT(mg_http_get_header(&hm, "Content-Encoding") != NULL);
     ASSERT(mg_strcmp(*mg_http_get_header(&hm, "Content-Encoding"),
@@ -1381,9 +1401,7 @@ static void test_http_range(void) {
   ASSERT(mgr.conns == NULL);
 }
 
-static void f1(void *arg) {
-  (*(int *) arg)++;
-}
+static void f1(void *arg) { (*(int *) arg)++; }
 
 static void test_timer(void) {
   int v1 = 0, v2 = 0, v3 = 0;
@@ -2841,9 +2859,7 @@ static void start_thread(void (*f)(void *), void *p) {
   pthread_attr_destroy(&attr);
 }
 #else
-static void start_thread(void (*f)(void *), void *p) {
-  (void) f, (void) p;
-}
+static void start_thread(void (*f)(void *), void *p) { (void) f, (void) p; }
 #endif
 
 static void test_queue(void) {