diff --git a/cmd/osbuild-worker/jobimpl-osbuild.go b/cmd/osbuild-worker/jobimpl-osbuild.go
index 3aea6e0cd..6db4b4f18 100644
--- a/cmd/osbuild-worker/jobimpl-osbuild.go
+++ b/cmd/osbuild-worker/jobimpl-osbuild.go
@@ -315,7 +315,35 @@ func (impl *OSBuildJobImpl) Run(job worker.Job) error {
 			if impl.AWSBucket != "" {
 				bucket = impl.AWSBucket
 			}
-			_, err = a.Upload(path.Join(outputDirectory, exportPath, options.Filename), bucket, key)
+
+			imagePath := path.Join(outputDirectory, exportPath, options.Filename)
+
+			// *** SPECIAL VMDK HANDLING START ***
+			// Upload the VMDK image as stream-optimized.
+			// The VMDK conversion is applied only when the job was submitted by Weldr API,
+			// therefore we need to do the conversion here explicitly if it was not done.
+			if args.StreamOptimized {
+				// If the streamOptimizedPath is empty, the conversion was not done
+				if streamOptimizedPath == "" {
+					var f *os.File
+					f, err = vmware.OpenAsStreamOptimizedVmdk(imagePath)
+					if err != nil {
+						osbuildJobResult.JobError = clienterrors.WorkerClientError(clienterrors.ErrorInvalidConfig, err.Error())
+						return nil
+					}
+					streamOptimizedPath = f.Name()
+					f.Close()
+				}
+				// Replace the original file by the stream-optimized one
+				err = os.Rename(streamOptimizedPath, imagePath)
+				if err != nil {
+					osbuildJobResult.JobError = clienterrors.WorkerClientError(clienterrors.ErrorInvalidConfig, err.Error())
+					return nil
+				}
+			}
+			// *** SPECIAL VMDK HANDLING END ***
+
+			_, err = a.Upload(imagePath, bucket, key)
 			if err != nil {
 				osbuildJobResult.JobError = clienterrors.WorkerClientError(clienterrors.ErrorUploadingImage, err.Error())
 				return nil
diff --git a/internal/cloudapi/v2/v2.go b/internal/cloudapi/v2/v2.go
index 70ab6da5a..fa5913a21 100644
--- a/internal/cloudapi/v2/v2.go
+++ b/internal/cloudapi/v2/v2.go
@@ -532,8 +532,9 @@ func enqueueCompose(workers *worker.Server, distribution distro.Distro, bp bluep
 	}
 
 	id, err = workers.EnqueueOSBuildAsDependency(ir.arch.Name(), &worker.OSBuildJob{
-		Targets: []*target.Target{ir.target},
-		Exports: ir.imageType.Exports(),
+		Targets:         []*target.Target{ir.target},
+		Exports:         ir.imageType.Exports(),
+		StreamOptimized: ir.imageType.Name() == "vmdk", // https://github.com/osbuild/osbuild/issues/528,
 		PipelineNames: &worker.PipelineNames{
 			Build:   ir.imageType.BuildPipelines(),
 			Payload: ir.imageType.PayloadPipelines(),
diff --git a/test/cases/api.sh b/test/cases/api.sh
index f6c55596a..bf67764e7 100755
--- a/test/cases/api.sh
+++ b/test/cases/api.sh
@@ -1231,12 +1231,11 @@ function verifyInVSphere() {
     _ci_iso_path="$(_createCIUserdataISO "${_ci_userdata_path}" "${_ci_metadata_path}")"
 
     VSPHERE_IMAGE_NAME="${VSPHERE_VM_NAME}.vmdk"
+    mv "${_filename}" "${WORKDIR}/${VSPHERE_IMAGE_NAME}"
 
     # import the built VMDK image to VSphere
     # import.vmdk seems to be creating the provided directory and
     # if one with this name exists, it appends "_<number>" to the name
-    greenprint "🚧 Converting the downloaded VMDK image to be streamOptimized"
-    qemu-img convert -O vmdk -o subformat=streamOptimized "${_filename}" "${WORKDIR}/${VSPHERE_IMAGE_NAME}"
     greenprint "💿 ⬆️ Importing the converted VMDK image to VSphere"
     $GOVC_CMD import.vmdk \
         -u "${GOVMOMI_USERNAME}:${GOVMOMI_PASSWORD}@${GOVMOMI_URL}" \