diff --git a/go.mod b/go.mod
index 5dec159a32..350f4a58e4 100644
--- a/go.mod
+++ b/go.mod
@@ -92,7 +92,7 @@ require (
 	github.com/jeromer/syslogparser v1.1.0
 	github.com/jsimonetti/rtnetlink v1.4.2
 	github.com/jxskiss/base62 v1.1.0
-	github.com/klauspost/compress v1.17.7
+	github.com/klauspost/compress v1.17.8
 	github.com/klauspost/cpuid/v2 v2.2.7
 	github.com/linode/go-metadata v0.2.0
 	github.com/martinlindhe/base36 v1.1.1
@@ -127,7 +127,7 @@ require (
 	github.com/siderolabs/go-api-signature v0.3.2
 	github.com/siderolabs/go-blockdevice v0.4.7
 	github.com/siderolabs/go-blockdevice/v2 v2.0.0-20240405165836-3265299b0192
-	github.com/siderolabs/go-circular v0.1.0
+	github.com/siderolabs/go-circular v0.2.0
 	github.com/siderolabs/go-cmd v0.1.1
 	github.com/siderolabs/go-copy v0.1.0
 	github.com/siderolabs/go-debug v0.3.0
diff --git a/go.sum b/go.sum
index 964dc4cecc..0000c1386a 100644
--- a/go.sum
+++ b/go.sum
@@ -454,8 +454,8 @@ github.com/jxskiss/base62 v1.1.0 h1:A5zbF8v8WXx2xixnAKD2w+abC+sIzYJX+nxmhA6HWFw=
 github.com/jxskiss/base62 v1.1.0/go.mod h1:HhWAlUXvxKThfOlZbcuFzsqwtF5TcqS9ru3y5GfjWAc=
 github.com/kisielk/errcheck v1.5.0/go.mod h1:pFxgyoBC7bSaBwPgfKdkLd5X25qrDl4LWUI2bnpBCr8=
 github.com/kisielk/gotool v1.0.0/go.mod h1:XhKaO+MFFWcvkIS/tQcRk01m1F5IRFswLeQ+oQHNcck=
-github.com/klauspost/compress v1.17.7 h1:ehO88t2UGzQK66LMdE8tibEd1ErmzZjNEqWkjLAKQQg=
-github.com/klauspost/compress v1.17.7/go.mod h1:Di0epgTjJY877eYKx5yC51cX2A2Vl2ibi7bDH9ttBbw=
+github.com/klauspost/compress v1.17.8 h1:YcnTYrq7MikUT7k0Yb5eceMmALQPYBW/Xltxn0NAMnU=
+github.com/klauspost/compress v1.17.8/go.mod h1:Di0epgTjJY877eYKx5yC51cX2A2Vl2ibi7bDH9ttBbw=
 github.com/klauspost/cpuid/v2 v2.2.7 h1:ZWSB3igEs+d0qvnxR/ZBzXVmxkgt8DdzP6m9pfuVLDM=
 github.com/klauspost/cpuid/v2 v2.2.7/go.mod h1:Lcz8mBdAVJIBVzewtcLocK12l3Y+JytZYpaMropDUws=
 github.com/kr/fs v0.1.0/go.mod h1:FFnZGqtBN9Gxj7eW1uZ42v5BccTP0vu6NEaFoC2HwRg=
@@ -656,8 +656,8 @@ github.com/siderolabs/go-blockdevice v0.4.7 h1:2bk4WpEEflGxjrNwp57ye24Pr+cYgAiAe
 github.com/siderolabs/go-blockdevice v0.4.7/go.mod h1:4PeOuk71pReJj1JQEXDE7kIIQJPVe8a+HZQa+qjxSEA=
 github.com/siderolabs/go-blockdevice/v2 v2.0.0-20240405165836-3265299b0192 h1:16/cHDGhTUDBtfIftOkuHWhJcQdpa/FwwWPcTq4aOxc=
 github.com/siderolabs/go-blockdevice/v2 v2.0.0-20240405165836-3265299b0192/go.mod h1:UBbbc+L7hU0UggOQeKCA+Qp3ImGkSeaLfVOiCbxRxEI=
-github.com/siderolabs/go-circular v0.1.0 h1:zpBJNUbCZSh0odZxA4Dcj0d3ShLLR2WxKW6hTdAtoiE=
-github.com/siderolabs/go-circular v0.1.0/go.mod h1:14XnLf/I3J0VjzTgmwWNGjp58/bdIi4zXppAEx8plfw=
+github.com/siderolabs/go-circular v0.2.0 h1:Xca8zrjF/YsujLbwDSojkKzJe7ngetnpuIJn8N78DJI=
+github.com/siderolabs/go-circular v0.2.0/go.mod h1:rrYCwHLYWmxqrmZP+LjYtwB2a55lxzQi0Ztu1VpWZSc=
 github.com/siderolabs/go-cmd v0.1.1 h1:nTouZUSxLeiiEe7hFexSVvaTsY/3O8k1s08BxPRrsps=
 github.com/siderolabs/go-cmd v0.1.1/go.mod h1:6hY0JG34LxEEwYE8aH2iIHkHX/ir12VRLqfwAf2yJIY=
 github.com/siderolabs/go-copy v0.1.0 h1:OIWCtSg+rhOtnIZTpT31Gfpn17rv5kwJqQHG+QUEgC8=
diff --git a/internal/app/machined/pkg/runtime/logging/circular.go b/internal/app/machined/pkg/runtime/logging/circular.go
index 1ee64e34b2..c63ac8cc21 100644
--- a/internal/app/machined/pkg/runtime/logging/circular.go
+++ b/internal/app/machined/pkg/runtime/logging/circular.go
@@ -15,7 +15,9 @@ import (
 	"sync"
 	"time"
 
+	corezstd "github.com/klauspost/compress/zstd"
 	"github.com/siderolabs/go-circular"
+	"github.com/siderolabs/go-circular/zstd"
 	"github.com/siderolabs/go-debug"
 	"github.com/siderolabs/go-tail"
 
@@ -24,19 +26,25 @@ import (
 
 // These constants should some day move to config.
 const (
+	// Overall capacity of the log buffer (in raw bytes, memory size will be smaller due to compression).
+	DesiredCapacity = 1048576
 	// Some logs are tiny, no need to reserve too much memory.
 	InitialCapacity = 16384
-	// Cap each log at 1M.
-	MaxCapacity = 1048576
-	// Safety gap to avoid buffer overruns.
-	SafetyGap = 2048
+	// Chunk capacity is the length of each chunk, it should be
+	// big enough for the compression to be efficient.
+	ChunkCapacity = 65536
+	// Number of zstd-compressed chunks to keep.
+	NumCompressedChunks = (DesiredCapacity / ChunkCapacity) - 1
+	// Safety gap to avoid buffer overruns, can be lowered as with compression we don't need much.
+	SafetyGap = 1
 )
 
 // CircularBufferLoggingManager implements logging to circular fixed size buffer.
 type CircularBufferLoggingManager struct {
 	fallbackLogger *log.Logger
 
-	buffers sync.Map
+	buffers    sync.Map
+	compressor circular.Compressor
 
 	sendersRW      sync.RWMutex
 	senders        []runtime.LogSender
@@ -45,9 +53,19 @@ type CircularBufferLoggingManager struct {
 
 // NewCircularBufferLoggingManager initializes new CircularBufferLoggingManager.
 func NewCircularBufferLoggingManager(fallbackLogger *log.Logger) *CircularBufferLoggingManager {
+	compressor, err := zstd.NewCompressor(
+		corezstd.WithEncoderConcurrency(1),
+		corezstd.WithWindowSize(2*corezstd.MinWindowSize),
+	)
+	if err != nil {
+		// should not happen
+		panic(fmt.Sprintf("failed to create zstd compressor: %s", err))
+	}
+
 	return &CircularBufferLoggingManager{
 		fallbackLogger: fallbackLogger,
 		sendersChanged: make(chan struct{}),
+		compressor:     compressor,
 	}
 }
 
@@ -106,7 +124,8 @@ func (manager *CircularBufferLoggingManager) getBuffer(id string, create bool) (
 
 		b, err := circular.NewBuffer(
 			circular.WithInitialCapacity(InitialCapacity),
-			circular.WithMaxCapacity(MaxCapacity),
+			circular.WithMaxCapacity(ChunkCapacity),
+			circular.WithNumCompressedChunks(NumCompressedChunks, manager.compressor),
 			circular.WithSafetyGap(SafetyGap))
 		if err != nil {
 			return nil, err // only configuration issue might raise error