diff --git a/src/deflate/deflate.rs b/src/deflate/deflate.rs
index 14ddf550..312b3a33 100644
--- a/src/deflate/deflate.rs
+++ b/src/deflate/deflate.rs
@@ -1,5 +1,6 @@
 use libz_sys;
 use libc::c_int;
+use std::cmp::max;
 
 /// Decompress a data stream using the DEFLATE algorithm
 pub fn inflate(data: &[u8]) -> Result<Vec<u8>, String> {
@@ -25,10 +26,12 @@ pub fn deflate(data: &[u8], zc: u8, zm: u8, zs: u8, zw: u8) -> Result<Vec<u8>, S
                                                          zw as c_int,
                                                          zm as c_int,
                                                          zs as c_int);
-    let mut output = Vec::with_capacity(data.len() / 20);
+    // Compressed input should be smaller than decompressed, so allocate less than data.len()
+    // However, it needs a minimum capacity in order to handle very small images
+    let mut output = Vec::with_capacity(max(1024, data.len() / 20));
     loop {
         match stream.compress_vec(input.as_mut(), output.as_mut()) {
-            libz_sys::Z_OK => output.reserve(data.len() / 20),
+            libz_sys::Z_OK => output.reserve(max(1024, data.len() / 20)),
             libz_sys::Z_STREAM_END => break,
             c => return Err(format!("Error code on compress: {}", c)),
         }
diff --git a/tests/files/small_files.png b/tests/files/small_files.png
new file mode 100644
index 00000000..576b88c9
Binary files /dev/null and b/tests/files/small_files.png differ
diff --git a/tests/interlaced.rs b/tests/interlaced.rs
index 5c24cad6..57df44e6 100644
--- a/tests/interlaced.rs
+++ b/tests/interlaced.rs
@@ -1272,5 +1272,5 @@ fn interlaced_small_files() {
                      png::ColorType::Indexed,
                      png::BitDepth::Eight,
                      png::ColorType::Indexed,
-                     png::BitDepth::Two);
+                     png::BitDepth::One);
 }
diff --git a/tests/reduction.rs b/tests/reduction.rs
index d7a35033..68704325 100644
--- a/tests/reduction.rs
+++ b/tests/reduction.rs
@@ -1259,3 +1259,18 @@ fn grayscale_8_should_be_palette_1() {
                      png::ColorType::Indexed,
                      png::BitDepth::One);
 }
+
+#[test]
+fn small_files() {
+    let input = PathBuf::from("tests/files/small_files.png");
+    let opts = get_opts(&input);
+    let output = opts.out_file.clone();
+
+    test_it_converts(&input,
+                     &output,
+                     &opts,
+                     png::ColorType::Indexed,
+                     png::BitDepth::Eight,
+                     png::ColorType::Indexed,
+                     png::BitDepth::One);
+}