diff --git a/sdk/src/main/java/com/google/cloud/dataflow/sdk/io/CompressedSource.java b/sdk/src/main/java/com/google/cloud/dataflow/sdk/io/CompressedSource.java
index 2f2d82e823..caaaf4f0d4 100644
--- a/sdk/src/main/java/com/google/cloud/dataflow/sdk/io/CompressedSource.java
+++ b/sdk/src/main/java/com/google/cloud/dataflow/sdk/io/CompressedSource.java
@@ -144,7 +144,7 @@ public boolean matches(String fileName) {
       public ReadableByteChannel createDecompressingChannel(ReadableByteChannel channel)
           throws IOException {
         return Channels.newChannel(
-            new BZip2CompressorInputStream(Channels.newInputStream(channel)));
+            new BZip2CompressorInputStream(Channels.newInputStream(channel), true));
       }
     };
 
diff --git a/sdk/src/test/java/com/google/cloud/dataflow/sdk/io/CompressedSourceTest.java b/sdk/src/test/java/com/google/cloud/dataflow/sdk/io/CompressedSourceTest.java
index 9f4f3cf246..5350a28ec4 100644
--- a/sdk/src/test/java/com/google/cloud/dataflow/sdk/io/CompressedSourceTest.java
+++ b/sdk/src/test/java/com/google/cloud/dataflow/sdk/io/CompressedSourceTest.java
@@ -18,7 +18,6 @@
 
 import static com.google.cloud.dataflow.sdk.transforms.display.DisplayDataMatchers.hasDisplayItem;
 import static com.google.cloud.dataflow.sdk.transforms.display.DisplayDataMatchers.includesDisplayDataFrom;
-
 import static org.hamcrest.Matchers.containsString;
 import static org.hamcrest.Matchers.instanceOf;
 import static org.hamcrest.Matchers.not;
@@ -203,6 +202,38 @@ public void testReadConcatenatedGzip() throws IOException {
     p.run();
   }
 
+  /**
+   * Test a bzip2 file containing multiple streams is correctly decompressed.
+   *
+   * <p>A bzip2 file may contain multiple streams and should decompress as the concatenation of
+   * those streams.
+   */
+  @Test
+  public void testReadMultiStreamBzip2() throws IOException {
+    CompressionMode mode = CompressionMode.BZIP2;
+    byte[] input1 = generateInput(5, 587973);
+    byte[] input2 = generateInput(5, 387374);
+
+    ByteArrayOutputStream stream1 = new ByteArrayOutputStream();
+    try (OutputStream os = getOutputStreamForMode(mode, stream1)) {
+      os.write(input1);
+    }
+
+    ByteArrayOutputStream stream2 = new ByteArrayOutputStream();
+    try (OutputStream os = getOutputStreamForMode(mode, stream2)) {
+      os.write(input2);
+    }
+
+    File tmpFile = tmpFolder.newFile();
+    try (OutputStream os = new FileOutputStream(tmpFile)) {
+      os.write(stream1.toByteArray());
+      os.write(stream2.toByteArray());
+    }
+
+    byte[] output = Bytes.concat(input1, input2);
+    verifyReadContents(output, tmpFile, mode);
+  }
+
   /**
    * Test reading empty input with bzip2.
    */
@@ -416,7 +447,14 @@ public void populateDisplayData(DisplayData.Builder builder) {
    */
   private byte[] generateInput(int size) {
     // Arbitrary but fixed seed
-    Random random = new Random(285930);
+    return generateInput(size, 285930);
+  }
+
+  /**
+   * Generate byte array of given size.
+   */
+  private byte[] generateInput(int size, int seed) {
+    Random random = new Random(seed);
     byte[] buff = new byte[size];
     random.nextBytes(buff);
     return buff;