diff --git a/core/src/main/scala/spark/Aggregator.scala b/core/src/main/scala/spark/Aggregator.scala
index df8ce9c054..5ade06de9c 100644
--- a/core/src/main/scala/spark/Aggregator.scala
+++ b/core/src/main/scala/spark/Aggregator.scala
@@ -4,6 +4,15 @@ import java.util.{HashMap => JHashMap}
 
 import scala.collection.JavaConversions._
 
+import serializer.{SerializerInstance, DeserializationStream, SerializationStream}
+
+import scala.collection.mutable.{LinkedList, ArrayBuffer}
+import spark.Logging
+import org.xerial.snappy.{SnappyInputStream, SnappyOutputStream}
+import org.xerial.snappy.Snappy
+import java.io.ByteArrayOutputStream
+import java.io.ByteArrayInputStream
+
 /** A set of functions used to aggregate data.
   * 
   * @param createCombiner function to create the initial value of the aggregation.
@@ -13,7 +22,8 @@ import scala.collection.JavaConversions._
 case class Aggregator[K, V, C] (
     val createCombiner: V => C,
     val mergeValue: (C, V) => C,
-    val mergeCombiners: (C, C) => C) {
+    val mergeCombiners: (C, C) => C)
+  extends Logging {
 
   def combineValuesByKey(iter: Iterator[(K, V)]) : Iterator[(K, C)] = {
     val combiners = new JHashMap[K, C]
@@ -40,5 +50,79 @@ case class Aggregator[K, V, C] (
     }
     combiners.iterator
   }
+
+  abstract class CompressionStreamsIterator[+A] extends Iterator[A]
+
+  def combineValuesByKeyInCompression(iter: Iterator[(K, V)]) : Iterator[(K, C)] = {
+    val partitionCount = System.getProperty("spark.reduce.side.combine.compression.partition", "11").toInt
+    logDebug("combine compression enabled, partition count:"+partitionCount)
+    val indexArray = Array.fill(partitionCount){new JHashMap[K,LinkedList[Int]]()}
+    val byteArrayStreams = Array.fill(partitionCount){new ByteArrayOutputStream()}
+    val serializeStreams = Array.tabulate(partitionCount)(i => SparkEnv.get.serializer.
+      newInstance().serializeStream(new SnappyOutputStream(byteArrayStreams(i))))
+    var data: Array[Object] = null
+    var counts = Array.fill(partitionCount){-1}
+
+    for ((k, v) <- iter) {
+      var keyHash = k.hashCode % partitionCount
+      if (keyHash < 0) {
+        keyHash = keyHash + partitionCount
+      }
+      serializeStreams(keyHash).writeObject(v)
+
+      val list = indexArray(keyHash).get(k)
+      counts(keyHash) = counts(keyHash) + 1
+
+      if (list == null) {
+        indexArray(keyHash).put(k, LinkedList(counts(keyHash)))
+      } else {
+        list.append(LinkedList(counts(keyHash)))
+      }
+    }
+
+    serializeStreams.foreach(_.close())
+
+    for (i <- 0 to partitionCount - 1)
+    {
+      logDebug("Compression partition [" + i + "], size:" + 
+        byteArrayStreams(i).size() + ", objects count:" + 
+        counts(i))
+    }
+
+    new CompressionStreamsIterator[(K,C)] {
+      private var uncompressedData: ArrayBuffer[Any] = null
+      private var cur: Iterator[(K,LinkedList[Int])] = Iterator.empty
+      private var curIdx: Int = -1
+      def hasNext: Boolean =
+        cur.hasNext || curIdx < partitionCount - 1 && {
+          curIdx = curIdx + 1
+          if (counts(curIdx) == -1) {
+            hasNext
+          } else {
+            uncompressedData = new ArrayBuffer[Any](counts(curIdx) + 1)
+            SparkEnv.get.serializer.newInstance().deserializeStream(new SnappyInputStream(
+              new ByteArrayInputStream(byteArrayStreams(curIdx).toByteArray()))).asIterator.
+              foreach(uncompressedData += _)
+            cur = indexArray(curIdx).toIterator
+            hasNext 
+          }
+        }
+      def next(): (K,C) = 
+        if (hasNext) {
+          val (curKey, curValue) = cur.next()
+          indexArray(curIdx).put(curKey, null)
+
+          val combiner = createCombiner(uncompressedData(curValue(0)).asInstanceOf[V])
+          curValue.slice(1, curValue.length).foreach(
+            (i: Int) => {
+              mergeValue(combiner, uncompressedData(i).asInstanceOf[V])
+              uncompressedData(i) = null
+            })
+          (curKey, combiner)
+        } else {
+          Iterator.empty.next()
+        }
+    }
+  }
 }
 
diff --git a/core/src/main/scala/spark/PairRDDFunctions.scala b/core/src/main/scala/spark/PairRDDFunctions.scala
index 7630fe7803..bffa5e7c46 100644
--- a/core/src/main/scala/spark/PairRDDFunctions.scala
+++ b/core/src/main/scala/spark/PairRDDFunctions.scala
@@ -77,7 +77,11 @@ class PairRDDFunctions[K: ClassManifest, V: ClassManifest](
       // A sanity check to make sure mergeCombiners is not defined.
       assert(mergeCombiners == null)
       val values = new ShuffledRDD[K, V](self, partitioner, serializerClass)
-      values.mapPartitions(aggregator.combineValuesByKey(_), true)
+      val reduceSideCompression = 
+        System.getProperty("spark.reduce.side.combine.compression","false") == "true"
+      values.mapPartitions(
+        if (reduceSideCompression) aggregator.combineValuesByKeyInCompression(_)
+        else aggregator.combineValuesByKey(_), true)
     }
   }
 
diff --git a/project/SparkBuild.scala b/project/SparkBuild.scala
index 07572201de..37bcf24c6e 100644
--- a/project/SparkBuild.scala
+++ b/project/SparkBuild.scala
@@ -162,6 +162,7 @@ object SparkBuild extends Build {
       "cc.spray" % "spray-json_2.9.2" % "1.1.1" excludeAll(excludeNetty),
       "org.apache.mesos" % "mesos" % "0.9.0-incubating",
       "io.netty" % "netty-all" % "4.0.0.Beta2",
+      "org.xerial.snappy" % "snappy-java" % "1.0.5",
       "org.apache.derby" % "derby" % "10.4.2.0" % "test"
     ) ++ (
       if (HADOOP_MAJOR_VERSION == "2") {