Does Java HTTP Client handle compression

No, gzip/deflate compression are not handled by default. You would have to implement that in your application code if you need it - e.g. by providing a customized BodySubscriber to handle it. Alternatively - you may want to have a look at whether some of the reactive stream libraries out there offer such a feature, in which case you might be able to pipe that in by using one of the BodyHandlers.fromSubscriber​(Flow.Subscriber<? super List<ByteBuffer>> subscriber) or BodyHandlers.ofPublisher() methods.

I was also surprised that the new java.net.http framework doesn't handle this automatically, but the following works for me to handle HTTP responses which are received as an InputStream and are either uncompressed or compressed with gzip:

public static InputStream getDecodedInputStream(
        HttpResponse<InputStream> httpResponse) {
    String encoding = determineContentEncoding(httpResponse);
    try {
        switch (encoding) {
            case "":
                return httpResponse.body();
            case "gzip":
                return new GZIPInputStream(httpResponse.body());
            default:
                throw new UnsupportedOperationException(
                        "Unexpected Content-Encoding: " + encoding);
        }
    } catch (IOException ioe) {
        throw new UncheckedIOException(ioe);
    }
}

public static String determineContentEncoding(
        HttpResponse<?> httpResponse) {
    return httpResponse.headers().firstValue("Content-Encoding").orElse("");
}

Note that I've not added support for the "deflate" type (because I don't currently need it, and the more I read about "deflate" the more of a mess it sounded). But I believe you can easily support "deflate" by adding a check to the above switch block and wrapping the httpResponse.body() in an InflaterInputStream.

You can use Methanol. It has decompressing BodyHandler implementations, with out-of-the-box support for gzip & deflate. There's also a module for brotli.

var response = client.send(request, MoreBodyHandlers.decoding(BodyHandlers.ofString()));

Note that you can use any BodyHandler you want. MoreBodyHandlers::decoding makes it seem to your handler like the response was never compressed! It takes care of the Content-Encoding header and all.

Better yet, you can use Methanol's own HttpClient, which does transparent decompression after adding the appropriate Accept-Encoding to your requests.

var client = Methanol.create();
var request = MutableRequest.GET("https://example.com");
var response = client.send(request, BodyHandlers.ofString()); // The response is transparently decompressed