diff --git a/.chloggen/codeboten_add-option-for-decompressor.yaml b/.chloggen/codeboten_add-option-for-decompressor.yaml
new file mode 100755
index 00000000000..f4fca100888
--- /dev/null
+++ b/.chloggen/codeboten_add-option-for-decompressor.yaml
@@ -0,0 +1,16 @@
+# One of 'breaking', 'deprecation', 'new_component', 'enhancement', 'bug_fix'
+change_type: enhancement
+
+# The name of the component, or a single word describing the area of concern, (e.g. otlpreceiver)
+component: confighttp
+
+# A brief description of the change.  Surround your text with quotes ("") if it needs to start with a backtick (`).
+note:  "Add support for additional content decoders via `WithDecoder` server option"
+
+# One or more tracking issues or pull requests related to the change
+issues: [7977]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext: 
diff --git a/config/confighttp/compression.go b/config/confighttp/compression.go
index 962b6b461f5..faa716c4414 100644
--- a/config/confighttp/compression.go
+++ b/config/confighttp/compression.go
@@ -68,25 +68,68 @@ func (r *compressRoundTripper) RoundTrip(req *http.Request) (*http.Response, err
 type decompressor struct {
 	errHandler func(w http.ResponseWriter, r *http.Request, errorMsg string, statusCode int)
 	base       http.Handler
+	decoders   map[string]func(body io.ReadCloser) (io.ReadCloser, error)
 }
 
 // httpContentDecompressor offloads the task of handling compressed HTTP requests
 // by identifying the compression format in the "Content-Encoding" header and re-writing
 // request body so that the handlers further in the chain can work on decompressed data.
 // It supports gzip and deflate/zlib compression.
-func httpContentDecompressor(h http.Handler, eh func(w http.ResponseWriter, r *http.Request, errorMsg string, statusCode int)) http.Handler {
+func httpContentDecompressor(h http.Handler, eh func(w http.ResponseWriter, r *http.Request, errorMsg string, statusCode int), decoders map[string]func(body io.ReadCloser) (io.ReadCloser, error)) http.Handler {
 	errHandler := defaultErrorHandler
 	if eh != nil {
 		errHandler = eh
 	}
-	return &decompressor{
+
+	d := &decompressor{
 		errHandler: errHandler,
 		base:       h,
+		decoders: map[string]func(body io.ReadCloser) (io.ReadCloser, error){
+			"": func(body io.ReadCloser) (io.ReadCloser, error) {
+				// Not a compressed payload. Nothing to do.
+				return nil, nil
+			},
+			"gzip": func(body io.ReadCloser) (io.ReadCloser, error) {
+				gr, err := gzip.NewReader(body)
+				if err != nil {
+					return nil, err
+				}
+				return gr, nil
+			},
+			"zstd": func(body io.ReadCloser) (io.ReadCloser, error) {
+				zr, err := zstd.NewReader(
+					body,
+					// Concurrency 1 disables async decoding. We don't need async decoding, it is pointless
+					// for our use-case (a server accepting decoding http requests).
+					// Disabling async improves performance (I benchmarked it previously when working
+					// on https://github.com/open-telemetry/opentelemetry-collector-contrib/pull/23257).
+					zstd.WithDecoderConcurrency(1),
+				)
+				if err != nil {
+					return nil, err
+				}
+				return zr.IOReadCloser(), nil
+			},
+			"zlib": func(body io.ReadCloser) (io.ReadCloser, error) {
+				zr, err := zlib.NewReader(body)
+				if err != nil {
+					return nil, err
+				}
+				return zr, nil
+			},
+		},
+	}
+	d.decoders["deflate"] = d.decoders["zlib"]
+
+	for key, dec := range decoders {
+		d.decoders[key] = dec
 	}
+
+	return d
 }
 
 func (d *decompressor) ServeHTTP(w http.ResponseWriter, r *http.Request) {
-	newBody, err := newBodyReader(r)
+	newBody, err := d.newBodyReader(r)
 	if err != nil {
 		d.errHandler(w, r, err.Error(), http.StatusBadRequest)
 		return
@@ -104,39 +147,13 @@ func (d *decompressor) ServeHTTP(w http.ResponseWriter, r *http.Request) {
 	d.base.ServeHTTP(w, r)
 }
 
-func newBodyReader(r *http.Request) (io.ReadCloser, error) {
+func (d *decompressor) newBodyReader(r *http.Request) (io.ReadCloser, error) {
 	encoding := r.Header.Get(headerContentEncoding)
-	switch encoding {
-	case string(configcompression.Gzip):
-		gr, err := gzip.NewReader(r.Body)
-		if err != nil {
-			return nil, err
-		}
-		return gr, nil
-	case string(configcompression.Deflate), string(configcompression.Zlib):
-		zr, err := zlib.NewReader(r.Body)
-		if err != nil {
-			return nil, err
-		}
-		return zr, nil
-	case "zstd":
-		zr, err := zstd.NewReader(
-			r.Body,
-			// Concurrency 1 disables async decoding. We don't need async decoding, it is pointless
-			// for our use-case (a server accepting decoding http requests).
-			// Disabling async improves performance (I benchmarked it previously when working
-			// on https://github.com/open-telemetry/opentelemetry-collector-contrib/pull/23257).
-			zstd.WithDecoderConcurrency(1),
-		)
-		if err != nil {
-			return nil, err
-		}
-		return zr.IOReadCloser(), nil
-	case "":
-		// Not a compressed payload. Nothing to do.
-		return nil, nil
+	decoder, ok := d.decoders[encoding]
+	if !ok {
+		return nil, fmt.Errorf("unsupported %s: %s", headerContentEncoding, encoding)
 	}
-	return nil, fmt.Errorf("unsupported %s: %s", headerContentEncoding, encoding)
+	return decoder(r.Body)
 }
 
 // defaultErrorHandler writes the error message in plain text.
diff --git a/config/confighttp/compression_test.go b/config/confighttp/compression_test.go
index 0b5e8141f7a..091d9faff12 100644
--- a/config/confighttp/compression_test.go
+++ b/config/confighttp/compression_test.go
@@ -11,6 +11,7 @@ import (
 	"io"
 	"net/http"
 	"net/http/httptest"
+	"strings"
 	"testing"
 
 	"github.com/golang/snappy"
@@ -114,8 +115,44 @@ func TestHTTPClientCompression(t *testing.T) {
 	}
 }
 
+func TestHTTPCustomDecompression(t *testing.T) {
+	handler := http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
+		body, err := io.ReadAll(r.Body)
+		if err != nil {
+			w.WriteHeader(http.StatusBadRequest)
+			_, _ = w.Write([]byte(err.Error()))
+			return
+		}
+
+		require.NoError(t, err, "failed to read request body: %v", err)
+		assert.EqualValues(t, "decompressed body", string(body))
+		w.WriteHeader(http.StatusOK)
+	})
+	decoders := map[string]func(io.ReadCloser) (io.ReadCloser, error){
+		"custom-encoding": func(io.ReadCloser) (io.ReadCloser, error) { // nolint: unparam
+			return io.NopCloser(strings.NewReader("decompressed body")), nil
+		},
+	}
+	srv := httptest.NewServer(httpContentDecompressor(handler, defaultErrorHandler, decoders))
+
+	t.Cleanup(srv.Close)
+
+	req, err := http.NewRequest(http.MethodGet, srv.URL, bytes.NewBuffer([]byte("123decompressed body")))
+	require.NoError(t, err, "failed to create request to test handler")
+	req.Header.Set("Content-Encoding", "custom-encoding")
+
+	client := http.Client{}
+	res, err := client.Do(req)
+	require.NoError(t, err)
+
+	assert.Equal(t, http.StatusOK, res.StatusCode, "test handler returned unexpected status code ")
+	_, err = io.ReadAll(res.Body)
+	require.NoError(t, res.Body.Close(), "failed to close request body: %v", err)
+}
+
 func TestHTTPContentDecompressionHandler(t *testing.T) {
 	testBody := []byte("uncompressed_text")
+	noDecoders := map[string]func(io.ReadCloser) (io.ReadCloser, error){}
 	tests := []struct {
 		name     string
 		encoding string
@@ -202,7 +239,7 @@ func TestHTTPContentDecompressionHandler(t *testing.T) {
 				require.NoError(t, err, "failed to read request body: %v", err)
 				assert.EqualValues(t, testBody, string(body))
 				w.WriteHeader(http.StatusOK)
-			}), defaultErrorHandler))
+			}), defaultErrorHandler, noDecoders))
 			t.Cleanup(srv.Close)
 
 			req, err := http.NewRequest(http.MethodGet, srv.URL, tt.reqBody)
diff --git a/config/confighttp/confighttp.go b/config/confighttp/confighttp.go
index 991d1822424..984ada15c47 100644
--- a/config/confighttp/confighttp.go
+++ b/config/confighttp/confighttp.go
@@ -6,6 +6,7 @@ package confighttp // import "go.opentelemetry.io/collector/config/confighttp"
 import (
 	"crypto/tls"
 	"errors"
+	"io"
 	"net"
 	"net/http"
 	"time"
@@ -248,6 +249,7 @@ func (hss *HTTPServerSettings) ToListener() (net.Listener, error) {
 // returned by HTTPServerSettings.ToServer().
 type toServerOptions struct {
 	errHandler func(w http.ResponseWriter, r *http.Request, errorMsg string, statusCode int)
+	decoders   map[string]func(body io.ReadCloser) (io.ReadCloser, error)
 }
 
 // ToServerOption is an option to change the behavior of the HTTP server
@@ -262,6 +264,17 @@ func WithErrorHandler(e func(w http.ResponseWriter, r *http.Request, errorMsg st
 	}
 }
 
+// WithDecoder provides support for additional decoders to be configured
+// by the caller.
+func WithDecoder(key string, dec func(body io.ReadCloser) (io.ReadCloser, error)) ToServerOption {
+	return func(opts *toServerOptions) {
+		if opts.decoders == nil {
+			opts.decoders = map[string]func(body io.ReadCloser) (io.ReadCloser, error){}
+		}
+		opts.decoders[key] = dec
+	}
+}
+
 // ToServer creates an http.Server from settings object.
 func (hss *HTTPServerSettings) ToServer(host component.Host, settings component.TelemetrySettings, handler http.Handler, opts ...ToServerOption) (*http.Server, error) {
 	internal.WarnOnUnspecifiedHost(settings.Logger, hss.Endpoint)
@@ -271,7 +284,7 @@ func (hss *HTTPServerSettings) ToServer(host component.Host, settings component.
 		o(serverOpts)
 	}
 
-	handler = httpContentDecompressor(handler, serverOpts.errHandler)
+	handler = httpContentDecompressor(handler, serverOpts.errHandler, serverOpts.decoders)
 
 	if hss.MaxRequestBodySize > 0 {
 		handler = maxRequestBodySizeInterceptor(handler, hss.MaxRequestBodySize)
diff --git a/config/confighttp/confighttp_test.go b/config/confighttp/confighttp_test.go
index a1cfa4f2478..a5460fe6b56 100644
--- a/config/confighttp/confighttp_test.go
+++ b/config/confighttp/confighttp_test.go
@@ -1116,6 +1116,66 @@ func TestFailedServerAuth(t *testing.T) {
 	assert.Equal(t, response.Result().Status, fmt.Sprintf("%v %s", http.StatusUnauthorized, http.StatusText(http.StatusUnauthorized)))
 }
 
+func TestServerWithErrorHandler(t *testing.T) {
+	// prepare
+	hss := HTTPServerSettings{
+		Endpoint: "localhost:0",
+	}
+	eh := func(w http.ResponseWriter, r *http.Request, errorMsg string, statusCode int) {
+		assert.Equal(t, statusCode, http.StatusBadRequest)
+		// custom error handler changes returned status code
+		http.Error(w, "invalid request", http.StatusInternalServerError)
+
+	}
+
+	srv, err := hss.ToServer(
+		componenttest.NewNopHost(),
+		componenttest.NewNopTelemetrySettings(),
+		http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {}),
+		WithErrorHandler(eh),
+	)
+	require.NoError(t, err)
+	// test
+	response := &httptest.ResponseRecorder{}
+
+	req, err := http.NewRequest(http.MethodGet, srv.Addr, nil)
+	require.NoError(t, err, "Error creating request: %v", err)
+	req.Header.Set("Content-Encoding", "something-invalid")
+
+	srv.Handler.ServeHTTP(response, req)
+	// verify
+	assert.Equal(t, response.Result().StatusCode, http.StatusInternalServerError)
+}
+
+func TestServerWithDecoder(t *testing.T) {
+	// prepare
+	hss := HTTPServerSettings{
+		Endpoint: "localhost:0",
+	}
+	decoder := func(body io.ReadCloser) (io.ReadCloser, error) {
+		return body, nil
+	}
+
+	srv, err := hss.ToServer(
+		componenttest.NewNopHost(),
+		componenttest.NewNopTelemetrySettings(),
+		http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {}),
+		WithDecoder("something-else", decoder),
+	)
+	require.NoError(t, err)
+	// test
+	response := &httptest.ResponseRecorder{}
+
+	req, err := http.NewRequest(http.MethodGet, srv.Addr, nil)
+	require.NoError(t, err, "Error creating request: %v", err)
+	req.Header.Set("Content-Encoding", "something-else")
+
+	srv.Handler.ServeHTTP(response, req)
+	// verify
+	assert.Equal(t, response.Result().StatusCode, http.StatusOK)
+
+}
+
 type mockHost struct {
 	component.Host
 	ext map[component.ID]component.Component