diff --git a/src/graphics/skybox.cpp b/src/graphics/skybox.cpp
index c4e64fbfc..87d7a9671 100644
--- a/src/graphics/skybox.cpp
+++ b/src/graphics/skybox.cpp
@@ -18,15 +18,26 @@
 #ifndef SERVER_ONLY
 
 #include "graphics/skybox.hpp"
+#include "config/stk_config.hpp"
 #include "graphics/central_settings.hpp"
 #include "graphics/irr_driver.hpp"
+#include "graphics/sp/sp_base.hpp"
 #include "graphics/texture_shader.hpp"
 
+#include <ge_main.hpp>
+
 #include <algorithm>
 #include <cassert>
 
 #include <IImage.h>
 
+#include <squish.h>
+extern "C"
+{
+    #include <mipmap/img.h>
+    #include <mipmap/imgresize.h>
+}
+
 using namespace irr;
 
 
@@ -137,6 +148,9 @@ namespace {
 
 }  //namespace
 
+// ============================================================================
+extern "C" void squishCompressImage(uint8_t* rgba, int width, int height,
+                                    int pitch, void* blocks, unsigned flags);
 // ----------------------------------------------------------------------------
 /** Generate an opengl cubemap texture from 6 2d textures */
 void Skybox::generateCubeMapFromTextures()
@@ -160,16 +174,22 @@ void Skybox::generateCubeMapFromTextures()
     {
         unsigned idx = texture_permutation[i];
         video::IImage* img = m_skybox_textures[idx];
-#if defined(USE_GLES2)
-        uint8_t* data = (uint8_t*)img->lock();
-        for (unsigned int j = 0; j <
-            img->getDimension().Width * img->getDimension().Height; j++)
-        {
-            uint8_t tmp_val = data[j * 4];
-            data[j * 4] = data[j * 4 + 2];
-            data[j * 4 + 2] = tmp_val;
-        }
+
+        bool is_gles = false;
+#ifdef USE_GLES2
+        is_gles = true;
 #endif
+        if (CVS->isTextureCompressionEnabled() || is_gles)
+        {
+            uint8_t* data = (uint8_t*)img->lock();
+            for (unsigned int j = 0; j <
+                img->getDimension().Width * img->getDimension().Height; j++)
+            {
+                uint8_t tmp_val = data[j * 4];
+                data[j * 4] = data[j * 4 + 2];
+                data[j * 4 + 2] = tmp_val;
+            }
+        }
 
         img->copyToScaling(rgba[i], size, size);
 
@@ -188,24 +208,80 @@ void Skybox::generateCubeMapFromTextures()
         }
         img->drop();
 
+        bool needs_srgb_format = CVS->isDeferredEnabled();
         glBindTexture(GL_TEXTURE_CUBE_MAP, m_cube_map);
 
-        bool needs_srgb_format = CVS->isDeferredEnabled();
-
-        GLint format = GL_RGBA;
-        GLint internal_format = needs_srgb_format ? GL_SRGB8_ALPHA8 : GL_RGBA8;
-#if !defined(USE_GLES2)
+        const unsigned tc_flag = squish::kDxt5 | stk_config->m_tc_quality;
         if (CVS->isTextureCompressionEnabled())
-            internal_format = needs_srgb_format ? GL_COMPRESSED_SRGB_ALPHA
-                                                : GL_COMPRESSED_RGBA;
-        format = GL_BGRA;
-#endif
+        {
+            unsigned tex_size = GE::get4x4CompressedTextureSize(size, size);
+            uint8_t* compressed = new uint8_t[tex_size];
+            squishCompressImage((uint8_t*)rgba[i], size, size, size * 4,
+                compressed, tc_flag);
+            GLint internal_format = needs_srgb_format ?
+                GL_COMPRESSED_SRGB_ALPHA_S3TC_DXT5_EXT :
+                GL_COMPRESSED_RGBA_S3TC_DXT5_EXT;
+            glCompressedTexImage2D(GL_TEXTURE_CUBE_MAP_POSITIVE_X + i, 0,
+                internal_format, size, size, 0, tex_size, compressed);
+            delete[] compressed;
+        }
+        else
+        {
+            GLint format = GL_BGRA;
+            if (is_gles)
+                format = GL_RGBA;
+            GLint internal_format = needs_srgb_format ? GL_SRGB8_ALPHA8 : GL_RGBA8;
+            glTexImage2D(GL_TEXTURE_CUBE_MAP_POSITIVE_X + i, 0,
+                internal_format, size, size, 0, format,
+                GL_UNSIGNED_BYTE, (GLvoid*)rgba[i]);
+        }
 
-        glTexImage2D(GL_TEXTURE_CUBE_MAP_POSITIVE_X + i, 0,
-                     internal_format, size, size, 0, format,
-                     GL_UNSIGNED_BYTE, (GLvoid*)rgba[i]);
+        if (CVS->isTextureCompressionEnabled())
+        {
+            imMipmapCascade cascade;
+            imReduceOptions options;
+            imReduceSetOptions(&options, IM_REDUCE_FILTER_LINEAR/*filter*/,
+                2/*hopcount*/, 2.0f/*alpha*/, 1.0f/*amplifynormal*/,
+                0.0f/*normalsustainfactor*/);
+#ifdef DEBUG
+            int ret = imBuildMipmapCascade(&cascade, rgba[i], size, size,
+                1/*layercount*/, 4, size * 4, &options, 0);
+            assert(ret == 1);
+#else
+            imBuildMipmapCascade(&cascade, rgba[i], size, size,
+                1/*layercount*/, 4, size * 4, &options, 0);
+#endif
+            std::vector<unsigned> mipmap_sizes;
+            unsigned width = size;
+            while (true)
+            {
+                width = width < 2 ? 1 : width >> 1;
+                mipmap_sizes.push_back(width);
+                if (width == 1)
+                    break;
+            }
+            for (unsigned mip = 0; mip < mipmap_sizes.size(); mip++)
+            {
+                unsigned cur_size = mipmap_sizes[mip];
+                unsigned tex_size = GE::get4x4CompressedTextureSize(cur_size,
+                    cur_size);
+                uint8_t* compressed = new uint8_t[tex_size];
+                squishCompressImage((uint8_t*)cascade.mipmap[mip + 1],
+                    cur_size, cur_size, cur_size * 4, compressed, tc_flag);
+                GLint internal_format = needs_srgb_format ?
+                    GL_COMPRESSED_SRGB_ALPHA_S3TC_DXT5_EXT :
+                    GL_COMPRESSED_RGBA_S3TC_DXT5_EXT;
+                glCompressedTexImage2D(GL_TEXTURE_CUBE_MAP_POSITIVE_X + i,
+                    mip + 1, internal_format, cur_size, cur_size, 0, tex_size,
+                    compressed);
+                delete[] compressed;
+            }
+            imFreeMipmapCascade(&cascade);
+        }
     }
-    glGenerateMipmap(GL_TEXTURE_CUBE_MAP);
+
+    if (!CVS->isTextureCompressionEnabled())
+        glGenerateMipmap(GL_TEXTURE_CUBE_MAP);
     for (unsigned i = 0; i < 6; i++)
         delete[] rgba[i];
 }   // generateCubeMapFromTextures