diff --git a/config/config.go b/config/config.go
index 4f4ea4bb4..d7821a9c2 100644
--- a/config/config.go
+++ b/config/config.go
@@ -22,7 +22,7 @@ import (
 var l = logger.DefaultLogger
 
 type Configuration struct {
-	Version      int                       `xml:"version,attr" default:"2"`
+	Version      int                       `xml:"version,attr" default:"3"`
 	Repositories []RepositoryConfiguration `xml:"repository"`
 	Nodes        []NodeConfiguration       `xml:"node"`
 	GUI          GUIConfiguration          `xml:"gui"`
@@ -296,6 +296,11 @@ func Load(rd io.Reader, myID protocol.NodeID) (Configuration, error) {
 		convertV1V2(&cfg)
 	}
 
+	// Upgrade to v3 configuration if appropriate
+	if cfg.Version == 2 {
+		convertV2V3(&cfg)
+	}
+
 	// Hash old cleartext passwords
 	if len(cfg.GUI.Password) > 0 && cfg.GUI.Password[0] != '$' {
 		hash, err := bcrypt.GenerateFromPassword([]byte(cfg.GUI.Password), 0)
@@ -342,6 +347,16 @@ func Load(rd io.Reader, myID protocol.NodeID) (Configuration, error) {
 	return cfg, err
 }
 
+func convertV2V3(cfg *Configuration) {
+	// In previous versions, compression was always on. When upgrading, enable
+	// compression on all existing new. New nodes will get compression on by
+	// default by the GUI.
+	for i := range cfg.Nodes {
+		cfg.Nodes[i].Compression = true
+	}
+	cfg.Version = 3
+}
+
 func convertV1V2(cfg *Configuration) {
 	// Collect the list of nodes.
 	// Replace node configs inside repositories with only a reference to the nide ID.
diff --git a/config/config_test.go b/config/config_test.go
index f274b680b..aa65e47c0 100644
--- a/config/config_test.go
+++ b/config/config_test.go
@@ -91,7 +91,21 @@ func TestNodeConfig(t *testing.T) {
 </configuration>
 `)
 
-	for i, data := range [][]byte{v1data, v2data} {
+	v3data := []byte(`
+<configuration version="3">
+    <repository id="test" directory="~/Sync" ro="true" ignorePerms="false">
+        <node id="AIR6LPZ-7K4PTTV-UXQSMUU-CPQ5YWH-OEDFIIQ-JUG777G-2YQXXR5-YD6AWQR" compression="false"></node>
+        <node id="P56IOI7-MZJNU2Y-IQGDREY-DM2MGTI-MGL3BXN-PQ6W5BM-TBBZ4TJ-XZWICQ2" compression="false"></node>
+    </repository>
+    <node id="AIR6LPZ-7K4PTTV-UXQSMUU-CPQ5YWH-OEDFIIQ-JUG777G-2YQXXR5-YD6AWQR" name="node one" compression="true">
+        <address>a</address>
+    </node>
+    <node id="P56IOI7-MZJNU2Y-IQGDREY-DM2MGTI-MGL3BXN-PQ6W5BM-TBBZ4TJ-XZWICQ2" name="node two" compression="true">
+        <address>b</address>
+    </node>
+</configuration>`)
+
+	for i, data := range [][]byte{v1data, v2data, v3data} {
 		cfg, err := Load(bytes.NewReader(data), node1)
 		if err != nil {
 			t.Error(err)
@@ -107,20 +121,22 @@ func TestNodeConfig(t *testing.T) {
 		}
 		expectedNodes := []NodeConfiguration{
 			{
-				NodeID:    node1,
-				Name:      "node one",
-				Addresses: []string{"a"},
+				NodeID:      node1,
+				Name:        "node one",
+				Addresses:   []string{"a"},
+				Compression: true,
 			},
 			{
-				NodeID:    node4,
-				Name:      "node two",
-				Addresses: []string{"b"},
+				NodeID:      node4,
+				Name:        "node two",
+				Addresses:   []string{"b"},
+				Compression: true,
 			},
 		}
 		expectedNodeIDs := []protocol.NodeID{node1, node4}
 
-		if cfg.Version != 2 {
-			t.Errorf("%d: Incorrect version %d != 2", i, cfg.Version)
+		if cfg.Version != 3 {
+			t.Errorf("%d: Incorrect version %d != 3", i, cfg.Version)
 		}
 		if !reflect.DeepEqual(cfg.Repositories, expectedRepos) {
 			t.Errorf("%d: Incorrect Repositories\n  A: %#v\n  E: %#v", i, cfg.Repositories, expectedRepos)
@@ -222,16 +238,19 @@ func TestNodeAddressesDynamic(t *testing.T) {
 	name, _ := os.Hostname()
 	expected := []NodeConfiguration{
 		{
-			NodeID:    node1,
-			Addresses: []string{"dynamic"},
+			NodeID:      node1,
+			Addresses:   []string{"dynamic"},
+			Compression: true,
 		},
 		{
-			NodeID:    node2,
-			Addresses: []string{"dynamic"},
+			NodeID:      node2,
+			Addresses:   []string{"dynamic"},
+			Compression: true,
 		},
 		{
-			NodeID:    node3,
-			Addresses: []string{"dynamic"},
+			NodeID:      node3,
+			Addresses:   []string{"dynamic"},
+			Compression: true,
 		},
 		{
 			NodeID:    node4,
@@ -252,7 +271,7 @@ func TestNodeAddressesDynamic(t *testing.T) {
 
 func TestNodeAddressesStatic(t *testing.T) {
 	data := []byte(`
-<configuration version="2">
+<configuration version="3">
     <node id="AIR6LPZ7K4PTTUXQSMUUCPQ5YWOEDFIIQJUG7772YQXXR5YD6AWQ">
         <address>192.0.2.1</address>
         <address>192.0.2.2</address>