diff --git a/MatFileHandler/DataElementReader.cs b/MatFileHandler/DataElementReader.cs
index c5e2679..9da8ab6 100755
--- a/MatFileHandler/DataElementReader.cs
+++ b/MatFileHandler/DataElementReader.cs
@@ -343,30 +343,33 @@ namespace MatFileHandler
             return new MatStructureArray(flags, dimensions, name, fields);
         }
 
-        private DataElement Read(Stream stream)
-        {
-            using (var reader = new BinaryReader(stream))
-            {
-                return Read(reader);
-            }
-        }
-
         private DataElement ReadCompressed(Tag tag, BinaryReader reader)
         {
             reader.ReadBytes(2);
-            var compressedData = reader.ReadBytes(tag.Length - 6);
-            reader.ReadBytes(4);
-            var resultStream = new MemoryStream();
-            using (var compressedStream = new MemoryStream(compressedData))
+
+            DataElement element;
+
+            using (var substream = new Substream(reader.BaseStream, tag.Length - 6))
             {
-                using (var stream = new DeflateStream(compressedStream, CompressionMode.Decompress, leaveOpen: true))
+                using (var deflateStream = new DeflateStream(substream, CompressionMode.Decompress))
+                using (var bufferedStream = new BufferedStream(deflateStream))
+                using (var positionTrackingStream = new PositionTrackingStream(bufferedStream))
+                using (var innerReader = new BinaryReader(positionTrackingStream))
                 {
-                    stream.CopyTo(resultStream);
+                    element = Read(innerReader);
+                }
+
+                if (substream.Position != substream.Length)
+                {
+                    // In the pathological case that the deflate stream did not read the full
+                    // length, then read out the rest manually (normally 1 byte).
+                    reader.ReadBytes((int)(substream.Length - substream.Position));
                 }
             }
 
-            resultStream.Position = 0;
-            return Read(resultStream);
+            reader.ReadBytes(4);
+
+            return element;
         }
 
         private DataElement ReadMatrix(Tag tag, BinaryReader reader)
diff --git a/MatFileHandler/Substream.cs b/MatFileHandler/Substream.cs
new file mode 100644
index 0000000..df32ef0
--- /dev/null
+++ b/MatFileHandler/Substream.cs
@@ -0,0 +1,68 @@
+// Copyright 2017-2018 Alexander Luzgarev
+
+using System;
+using System.IO;
+
+namespace MatFileHandler
+{
+    /// <summary>
+    /// A stream which reads a finite section of another stream.
+    /// </summary>
+    internal sealed class Substream : Stream
+    {
+        private readonly Stream _baseStream;
+        private long _bytesRead;
+
+        /// <summary>
+        /// Initializes a new instance of the <see cref="Substream"/> class.
+        /// </summary>
+        /// <param name="baseStream">The <see cref="Stream"/> to wrap.</param>
+        /// <param name="length">The number of bytes readable from this <see cref="Substream"/>.</param>
+        public Substream(Stream baseStream, long length)
+        {
+            _baseStream = baseStream;
+            Length = length;
+        }
+
+        /// <inheritdoc/>
+        public override bool CanRead => _baseStream.CanRead;
+
+        /// <inheritdoc/>
+        public override bool CanSeek => false;
+
+        /// <inheritdoc/>
+        public override bool CanWrite => false;
+
+        /// <inheritdoc/>
+        public override long Length { get; }
+
+        /// <inheritdoc/>
+        public override long Position
+        {
+            get => _bytesRead;
+            set => throw new NotSupportedException();
+        }
+
+        /// <inheritdoc/>
+        public override void Flush() => _baseStream.Flush();
+
+        /// <inheritdoc/>
+        public override int Read(byte[] buffer, int offset, int count)
+        {
+            int bytesRead = _baseStream.Read(buffer, offset, (int)Math.Min(count, Length - _bytesRead));
+
+            _bytesRead += bytesRead;
+
+            return bytesRead;
+        }
+
+        /// <inheritdoc/>
+        public override long Seek(long offset, SeekOrigin origin) => throw new NotSupportedException();
+
+        /// <inheritdoc/>
+        public override void Write(byte[] buffer, int offset, int count) => throw new NotSupportedException();
+
+        /// <inheritdoc/>
+        public override void SetLength(long value) => throw new NotSupportedException();
+    }
+}