diff --git a/functions/defaults.sh b/functions/defaults.sh
index 33621da77..eaaf822de 100755
--- a/functions/defaults.sh
+++ b/functions/defaults.sh
@@ -941,7 +941,15 @@ Set_defaults ()
 			;;
 
 		*)
-			LB_COMPRESSION="${LB_COMPRESSION:-gzip}"
+			case "${LB_DISTRIBUTION}" in
+				squeeze)
+					LB_COMPRESSION="${LB_COMPRESSION:-gzip}"
+					;;
+
+				*)
+					LB_COMPRESSION="${LB_COMPRESSION:-xz}"
+					;;
+			esac
 			;;
 	esac