diff --git a/config/openshift/v4_8/translate.go b/config/openshift/v4_8/translate.go
index 8cbd9f28..86d57363 100644
--- a/config/openshift/v4_8/translate.go
+++ b/config/openshift/v4_8/translate.go
@@ -41,6 +41,10 @@ const (
 // can be tracked back to their source in the source config.  No config
 // validation is performed on input or output.
 func (c Config) ToMachineConfig4_8Unvalidated(options common.TranslateOptions) (result.MachineConfig, translate.TranslationSet, report.Report) {
+	// disable inline resource compression since the MCO doesn't support it
+	// https://bugzilla.redhat.com/show_bug.cgi?id=1970218
+	options.NoResourceAutoCompression = true
+
 	cfg, ts, r := c.Config.ToIgn3_2Unvalidated(options)
 	if r.IsFatal() {
 		return result.MachineConfig{}, ts, r
diff --git a/config/openshift/v4_8/translate_test.go b/config/openshift/v4_8/translate_test.go
index ce4b1027..ac7b2ede 100644
--- a/config/openshift/v4_8/translate_test.go
+++ b/config/openshift/v4_8/translate_test.go
@@ -55,6 +55,7 @@ func TestElidedFieldWarning(t *testing.T) {
 }
 
 func TestTranslateConfig(t *testing.T) {
+	zzz := "zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz"
 	tests := []struct {
 		in         Config
 		out        result.MachineConfig
@@ -96,6 +97,76 @@ func TestTranslateConfig(t *testing.T) {
 				{path.New("yaml", "version"), path.New("json", "spec", "config", "ignition", "version")},
 			},
 		},
+		// ensure automatic compression is disabled
+		{
+			Config{
+				Metadata: Metadata{
+					Name: "z",
+					Labels: map[string]string{
+						ROLE_LABEL_KEY: "z",
+					},
+				},
+				Config: fcos.Config{
+					Config: base.Config{
+						Storage: base.Storage{
+							Files: []base.File{
+								{
+									Path: "/z",
+									Contents: base.Resource{
+										Inline: util.StrToPtr(zzz),
+									},
+								},
+							},
+						},
+					},
+				},
+			},
+			result.MachineConfig{
+				ApiVersion: result.MC_API_VERSION,
+				Kind:       result.MC_KIND,
+				Metadata: result.Metadata{
+					Name: "z",
+					Labels: map[string]string{
+						ROLE_LABEL_KEY: "z",
+					},
+				},
+				Spec: result.Spec{
+					Config: types.Config{
+						Ignition: types.Ignition{
+							Version: "3.2.0",
+						},
+						Storage: types.Storage{
+							Files: []types.File{
+								{
+									Node: types.Node{
+										Path: "/z",
+									},
+									FileEmbedded1: types.FileEmbedded1{
+										Contents: types.Resource{
+											Source: util.StrToPtr("data:," + zzz),
+										},
+									},
+								},
+							},
+						},
+					},
+				},
+			},
+			[]translate.Translation{
+				{path.New("yaml", "version"), path.New("json", "apiVersion")},
+				{path.New("yaml", "version"), path.New("json", "kind")},
+				{path.New("yaml", "version"), path.New("json", "spec")},
+				{path.New("yaml"), path.New("json", "spec", "config")},
+				{path.New("yaml", "ignition"), path.New("json", "spec", "config", "ignition")},
+				{path.New("yaml", "version"), path.New("json", "spec", "config", "ignition", "version")},
+				{path.New("yaml", "storage"), path.New("json", "spec", "config", "storage")},
+				{path.New("yaml", "storage", "files"), path.New("json", "spec", "config", "storage", "files")},
+				{path.New("yaml", "storage", "files", 0), path.New("json", "spec", "config", "storage", "files", 0)},
+				{path.New("yaml", "storage", "files", 0, "path"), path.New("json", "spec", "config", "storage", "files", 0, "path")},
+				{path.New("yaml", "storage", "files", 0, "contents"), path.New("json", "spec", "config", "storage", "files", 0, "contents")},
+				{path.New("yaml", "storage", "files", 0, "contents", "inline"), path.New("json", "spec", "config", "storage", "files", 0, "contents", "source")},
+			},
+		},
 		// FIPS
 		{
 			Config{
diff --git a/config/openshift/v4_9_exp/translate.go b/config/openshift/v4_9_exp/translate.go
index 11dcee83..3f2825e4 100644
--- a/config/openshift/v4_9_exp/translate.go
+++ b/config/openshift/v4_9_exp/translate.go
@@ -41,6 +41,10 @@ const (
 // can be tracked back to their source in the source config.  No config
 // validation is performed on input or output.
 func (c Config) ToMachineConfig4_9Unvalidated(options common.TranslateOptions) (result.MachineConfig, translate.TranslationSet, report.Report) {
+	// disable inline resource compression since the MCO doesn't support it
+	// https://bugzilla.redhat.com/show_bug.cgi?id=1970218
+	options.NoResourceAutoCompression = true
+
 	cfg, ts, r := c.Config.ToIgn3_3Unvalidated(options)
 	if r.IsFatal() {
 		return result.MachineConfig{}, ts, r
diff --git a/config/openshift/v4_9_exp/translate_test.go b/config/openshift/v4_9_exp/translate_test.go
index 3e732ff7..57e992b9 100644
--- a/config/openshift/v4_9_exp/translate_test.go
+++ b/config/openshift/v4_9_exp/translate_test.go
@@ -55,6 +55,7 @@ func TestElidedFieldWarning(t *testing.T) {
 }
 
 func TestTranslateConfig(t *testing.T) {
+	zzz := "zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz"
 	tests := []struct {
 		in         Config
 		out        result.MachineConfig
@@ -96,6 +97,76 @@ func TestTranslateConfig(t *testing.T) {
 				{path.New("yaml", "version"), path.New("json", "spec", "config", "ignition", "version")},
 			},
 		},
+		// ensure automatic compression is disabled
+		{
+			Config{
+				Metadata: Metadata{
+					Name: "z",
+					Labels: map[string]string{
+						ROLE_LABEL_KEY: "z",
+					},
+				},
+				Config: fcos.Config{
+					Config: base.Config{
+						Storage: base.Storage{
+							Files: []base.File{
+								{
+									Path: "/z",
+									Contents: base.Resource{
+										Inline: util.StrToPtr(zzz),
+									},
+								},
+							},
+						},
+					},
+				},
+			},
+			result.MachineConfig{
+				ApiVersion: result.MC_API_VERSION,
+				Kind:       result.MC_KIND,
+				Metadata: result.Metadata{
+					Name: "z",
+					Labels: map[string]string{
+						ROLE_LABEL_KEY: "z",
+					},
+				},
+				Spec: result.Spec{
+					Config: types.Config{
+						Ignition: types.Ignition{
+							Version: "3.3.0-experimental",
+						},
+						Storage: types.Storage{
+							Files: []types.File{
+								{
+									Node: types.Node{
+										Path: "/z",
+									},
+									FileEmbedded1: types.FileEmbedded1{
+										Contents: types.Resource{
+											Source: util.StrToPtr("data:," + zzz),
+										},
+									},
+								},
+							},
+						},
+					},
+				},
+			},
+			[]translate.Translation{
+				{path.New("yaml", "version"), path.New("json", "apiVersion")},
+				{path.New("yaml", "version"), path.New("json", "kind")},
+				{path.New("yaml", "version"), path.New("json", "spec")},
+				{path.New("yaml"), path.New("json", "spec", "config")},
+				{path.New("yaml", "ignition"), path.New("json", "spec", "config", "ignition")},
+				{path.New("yaml", "version"), path.New("json", "spec", "config", "ignition", "version")},
+				{path.New("yaml", "storage"), path.New("json", "spec", "config", "storage")},
+				{path.New("yaml", "storage", "files"), path.New("json", "spec", "config", "storage", "files")},
+				{path.New("yaml", "storage", "files", 0), path.New("json", "spec", "config", "storage", "files", 0)},
+				{path.New("yaml", "storage", "files", 0, "path"), path.New("json", "spec", "config", "storage", "files", 0, "path")},
+				{path.New("yaml", "storage", "files", 0, "contents"), path.New("json", "spec", "config", "storage", "files", 0, "contents")},
+				{path.New("yaml", "storage", "files", 0, "contents", "inline"), path.New("json", "spec", "config", "storage", "files", 0, "contents", "source")},
+			},
+		},
 		// FIPS
 		{
 			Config{