diff --git a/nixos/lib/make-squashfs.nix b/nixos/lib/make-squashfs.nix
index 2baa4f667607..4100af27becb 100644
--- a/nixos/lib/make-squashfs.nix
+++ b/nixos/lib/make-squashfs.nix
@@ -25,6 +25,6 @@ stdenv.mkDerivation {
 
       # Generate the squashfs image.
       mksquashfs nix-path-registration $storePaths $out \
-        -keep-as-directory -all-root -comp xz
+        -keep-as-directory -all-root -b 1048576 -comp xz -Xdict-size 100%
     '';
 }