diff --git a/stages/org.osbuild.squashfs b/stages/org.osbuild.squashfs
new file mode 100755
index 00000000..d3554e1b
--- /dev/null
+++ b/stages/org.osbuild.squashfs
@@ -0,0 +1,90 @@
+#!/usr/bin/python3
+"""
+Create a squashfs named `filename`.
+
+Buildhost commands used: `mksquashfs` and any needed compression program.
+"""
+
+import os
+import subprocess
+import sys
+
+import osbuild.api
+
+
+SCHEMA_2 = """
+"options": {
+  "additionalProperties": false,
+  "required": ["filename"],
+  "properties": {
+    "filename": {
+      "description": "Filename for tar archive",
+      "type": "string"
+    },
+    "compression": {
+      "type": "object",
+      "additionalProperties": false,
+      "required": ["method"],
+      "properties": {
+        "method": {
+          "enum": ["gzip", "xz"]
+        },
+        "options": {
+          "type": "object",
+          "additionalProperties": false,
+          "properties": {
+            "bcj": {
+              "enum": [
+                "x86",
+                "arm",
+                "armthumb",
+                "powerpc",
+                "sparc",
+                "ia64"
+              ]
+            }
+          }
+        }
+      }
+    }
+  }
+},
+"inputs": {
+  "type": "object",
+  "additionalProperties": false,
+  "required": ["tree"],
+  "properties": {
+    "tree": {
+      "type": "object",
+      "additionalProperties": true
+    }
+  }
+}
+"""
+
+
+def main(inputs, output_dir, options):
+    source = inputs["tree"]["path"]
+    filename = options["filename"].lstrip("/")
+    compression = options.get("compression")
+
+    target = os.path.join(output_dir, filename)
+
+    cmd = ["mksquashfs", source, target]
+
+    if compression:
+        method = compression["method"]
+        opts = compression.get("options", {})
+        cmd += ["-comp", method]
+        for opt, val in opts.items():
+            cmd += [f"-X{opt}", val]
+
+    subprocess.run(cmd, check=True)
+
+    return 0
+
+
+if __name__ == '__main__':
+    args = osbuild.api.arguments()
+    r = main(args["inputs"], args["tree"], args["options"])
+    sys.exit(r)