diff --git a/pungi/phases/image_build.py b/pungi/phases/image_build.py
index e0dcb02b..fecaba67 100644
--- a/pungi/phases/image_build.py
+++ b/pungi/phases/image_build.py
@@ -39,6 +39,7 @@ EXTENSIONS = {
     "vdi": ["vdi"],
     "vmdk": ["vmdk"],
     "vpc": ["vhd"],
+    "vhd-compressed": ["vhd.xz"],
     "vsphere-ova": ["vsphere.ova"],
 }