diff --git a/.chloggen/snappy-done-right.yaml b/.chloggen/snappy-done-right.yaml
new file mode 100644
index 00000000000..08598f40703
--- /dev/null
+++ b/.chloggen/snappy-done-right.yaml
@@ -0,0 +1,37 @@
+# Use this changelog template to create an entry for release notes.
+
+# One of 'breaking', 'deprecation', 'new_component', 'enhancement', 'bug_fix'
+change_type: enhancement
+
+# The name of the component, or a single word describing the area of concern, (e.g. otlpreceiver)
+component: confighttp
+
+# A brief description of the change.  Surround your text with quotes ("") if it needs to start with a backtick (`).
+note: "Fix handling of `snappy` content-encoding in a backwards-compatible way"
+
+# One or more tracking issues or pull requests related to the change
+issues: [10584, 12825]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext: |
+  The collector used the Snappy compression type of "framed" to handle the HTTP
+  content-encoding "snappy".  However, this encoding is typically used to indicate
+  the "block" compression variant of "snappy".  This change allows the collector to:
+  - The server endpoints will now accept "x-snappy-framed" as a valid
+    content-encoding.
+  - Client compression type "snappy" will now compress to the "block" variant of snappy
+    instead of "framed".  If you want the old behavior, you can set the
+    compression type to "x-snappy-framed".
+  - When a server endpoint receives a content-encoding of "snappy", it will
+    look at the first bytes of the payload to determine if it is "framed" or "block" snappy,
+    and will decompress accordingly.  This is a backwards-compatible change.
+  - In a future release, this checking behavior may be removed.
+
+# Optional: The change log or logs in which this entry should be included.
+# e.g. '[user]' or '[user, api]'
+# Include 'user' if the change is relevant to end users.
+# Include 'api' if there is a change to a library API.
+# Default: '[user]'
+change_logs: [user]
diff --git a/config/configcompression/compressiontype.go b/config/configcompression/compressiontype.go
index d2bc4b16d5b..a6588dca720 100644
--- a/config/configcompression/compressiontype.go
+++ b/config/configcompression/compressiontype.go
@@ -22,6 +22,7 @@ const (
 	TypeZlib                Type = "zlib"
 	TypeDeflate             Type = "deflate"
 	TypeSnappy              Type = "snappy"
+	TypeSnappyFramed        Type = "x-snappy-framed"
 	TypeZstd                Type = "zstd"
 	TypeLz4                 Type = "lz4"
 	typeNone                Type = "none"
@@ -41,6 +42,7 @@ func (ct *Type) UnmarshalText(in []byte) error {
 		typ == TypeZlib ||
 		typ == TypeDeflate ||
 		typ == TypeSnappy ||
+		typ == TypeSnappyFramed ||
 		typ == TypeZstd ||
 		typ == TypeLz4 ||
 		typ == typeNone ||
diff --git a/config/configcompression/compressiontype_test.go b/config/configcompression/compressiontype_test.go
index 2fb9976eb4e..8225c880639 100644
--- a/config/configcompression/compressiontype_test.go
+++ b/config/configcompression/compressiontype_test.go
@@ -42,6 +42,12 @@ func TestUnmarshalText(t *testing.T) {
 			shouldError:     false,
 			isCompressed:    true,
 		},
+		{
+			name:            "ValidSnappyFramed",
+			compressionName: []byte("x-snappy-framed"),
+			shouldError:     false,
+			isCompressed:    true,
+		},
 		{
 			name:            "ValidZstd",
 			compressionName: []byte("zstd"),
@@ -128,6 +134,17 @@ func TestValidateParams(t *testing.T) {
 			compressionLevel: 1,
 			shouldError:      true,
 		},
+		{
+			name:            "ValidSnappyFramed",
+			compressionName: []byte("x-snappy-framed"),
+			shouldError:     false,
+		},
+		{
+			name:             "InvalidSnappyFramed",
+			compressionName:  []byte("x-snappy-framed"),
+			compressionLevel: 1,
+			shouldError:      true,
+		},
 		{
 			name:             "ValidZstd",
 			compressionName:  []byte("zstd"),
diff --git a/config/confighttp/compression.go b/config/confighttp/compression.go
index 62638e0c7be..e6de8e1b0c9 100644
--- a/config/confighttp/compression.go
+++ b/config/confighttp/compression.go
@@ -6,9 +6,11 @@
 package confighttp // import "go.opentelemetry.io/collector/config/confighttp"
 
 import (
+	"bufio"
 	"bytes"
 	"compress/gzip"
 	"compress/zlib"
+	"errors"
 	"fmt"
 	"io"
 	"net/http"
@@ -27,6 +29,45 @@ type compressRoundTripper struct {
 	compressor        *compressor
 }
 
+// snappyFramingHeader is always the first 10 bytes of a snappy framed stream.
+var snappyFramingHeader = []byte{
+	0xff, 0x06, 0x00, 0x00,
+	0x73, 0x4e, 0x61, 0x50, 0x70, 0x59, // "sNaPpY"
+}
+
+// snappyHandler returns an io.ReadCloser that auto-detects the snappy format.
+// This is necessary because the collector previously used "content-encoding: snappy"
+// but decompressed and compressed the payloads using the snappy framing format.
+// However, "content-encoding: snappy" is uses the block format, and "x-snappy-framed"
+// is the framing format.  This handler is a (hopefully temporary) hack to
+// make this work in a backwards-compatible way.
+func snappyHandler(body io.ReadCloser) (io.ReadCloser, error) {
+	br := bufio.NewReader(body)
+
+	peekBytes, err := br.Peek(len(snappyFramingHeader))
+	if err != nil && !errors.Is(err, io.EOF) {
+		return nil, err
+	}
+
+	isFramed := len(peekBytes) >= len(snappyFramingHeader) && bytes.Equal(peekBytes[:len(snappyFramingHeader)], snappyFramingHeader)
+
+	if isFramed {
+		return &compressReadCloser{
+			Reader: snappy.NewReader(br),
+			orig:   body,
+		}, nil
+	}
+	compressed, err := io.ReadAll(br)
+	if err != nil {
+		return nil, err
+	}
+	decoded, err := snappy.Decode(nil, compressed)
+	if err != nil {
+		return nil, err
+	}
+	return io.NopCloser(bytes.NewReader(decoded)), nil
+}
+
 var availableDecoders = map[string]func(body io.ReadCloser) (io.ReadCloser, error){
 	"": func(io.ReadCloser) (io.ReadCloser, error) {
 		// Not a compressed payload. Nothing to do.
@@ -60,8 +101,9 @@ var availableDecoders = map[string]func(body io.ReadCloser) (io.ReadCloser, erro
 		}
 		return zr, nil
 	},
+	"snappy": snappyHandler,
 	//nolint:unparam // Ignoring the linter request to remove error return since it needs to match the method signature
-	"snappy": func(body io.ReadCloser) (io.ReadCloser, error) {
+	"x-snappy-framed": func(body io.ReadCloser) (io.ReadCloser, error) {
 		// Lazy Reading content to improve memory efficiency
 		return &compressReadCloser{
 			Reader: snappy.NewReader(body),
diff --git a/config/confighttp/compression_test.go b/config/confighttp/compression_test.go
index 4c41e8085ff..b3e7f950b7b 100644
--- a/config/confighttp/compression_test.go
+++ b/config/confighttp/compression_test.go
@@ -32,6 +32,7 @@ func TestHTTPClientCompression(t *testing.T) {
 	compressedGzipBody := compressGzip(t, testBody)
 	compressedZlibBody := compressZlib(t, testBody)
 	compressedDeflateBody := compressZlib(t, testBody)
+	compressedSnappyFramedBody := compressSnappyFramed(t, testBody)
 	compressedSnappyBody := compressSnappy(t, testBody)
 	compressedZstdBody := compressZstd(t, testBody)
 	compressedLz4Body := compressLz4(t, testBody)
@@ -111,6 +112,19 @@ func TestHTTPClientCompression(t *testing.T) {
 			reqBody:     compressedSnappyBody.Bytes(),
 			shouldError: true,
 		},
+		{
+			name:        "ValidSnappyFramed",
+			encoding:    configcompression.TypeSnappyFramed,
+			reqBody:     compressedSnappyFramedBody.Bytes(),
+			shouldError: false,
+		},
+		{
+			name:        "InvalidSnappyFramed",
+			encoding:    configcompression.TypeSnappyFramed,
+			level:       gzip.DefaultCompression,
+			reqBody:     compressedSnappyFramedBody.Bytes(),
+			shouldError: true,
+		},
 		{
 			name:        "ValidZstd",
 			encoding:    configcompression.TypeZstd,
@@ -250,12 +264,24 @@ func TestHTTPContentDecompressionHandler(t *testing.T) {
 			reqBody:  compressZstd(t, testBody),
 			respCode: http.StatusOK,
 		},
+		{
+			name:     "ValidSnappyFramed",
+			encoding: "x-snappy-framed",
+			reqBody:  compressSnappyFramed(t, testBody),
+			respCode: http.StatusOK,
+		},
 		{
 			name:     "ValidSnappy",
 			encoding: "snappy",
 			reqBody:  compressSnappy(t, testBody),
 			respCode: http.StatusOK,
 		},
+		{
+			name:     "ValidSnappyFramedAsSnappy",
+			encoding: "snappy",
+			reqBody:  compressSnappyFramed(t, testBody),
+			respCode: http.StatusOK,
+		},
 		{
 			name:     "ValidLz4",
 			encoding: "lz4",
@@ -290,12 +316,19 @@ func TestHTTPContentDecompressionHandler(t *testing.T) {
 			respCode: http.StatusBadRequest,
 			respBody: "invalid input: magic number mismatch",
 		},
+		{
+			name:     "InvalidSnappyFramed",
+			encoding: "x-snappy-framed",
+			reqBody:  bytes.NewBuffer(testBody),
+			respCode: http.StatusBadRequest,
+			respBody: "snappy: corrupt input",
+		},
 		{
 			name:     "InvalidSnappy",
 			encoding: "snappy",
 			reqBody:  bytes.NewBuffer(testBody),
 			respCode: http.StatusBadRequest,
-			respBody: "snappy: corrupt input",
+			respBody: "snappy: corrupt input\n",
 		},
 		{
 			name:     "UnsupportedCompression",
@@ -415,7 +448,7 @@ func TestOverrideCompressionList(t *testing.T) {
 	}), defaultMaxRequestBodySize, defaultErrorHandler, configuredDecoders, nil))
 	t.Cleanup(srv.Close)
 
-	req, err := http.NewRequest(http.MethodGet, srv.URL, compressSnappy(t, []byte("123decompressed body")))
+	req, err := http.NewRequest(http.MethodGet, srv.URL, compressSnappyFramed(t, []byte("123decompressed body")))
 	require.NoError(t, err, "failed to create request to test handler")
 	req.Header.Set("Content-Encoding", "snappy")
 
@@ -456,6 +489,11 @@ func TestDecompressorAvoidDecompressionBomb(t *testing.T) {
 			encoding: "zlib",
 			compress: compressZlib,
 		},
+		{
+			name:     "x-snappy-framed",
+			encoding: "x-snappy-framed",
+			compress: compressSnappyFramed,
+		},
 		{
 			name:     "snappy",
 			encoding: "snappy",
@@ -517,7 +555,7 @@ func compressZlib(tb testing.TB, body []byte) *bytes.Buffer {
 	return &buf
 }
 
-func compressSnappy(tb testing.TB, body []byte) *bytes.Buffer {
+func compressSnappyFramed(tb testing.TB, body []byte) *bytes.Buffer {
 	var buf bytes.Buffer
 	sw := snappy.NewBufferedWriter(&buf)
 	_, err := sw.Write(body)
@@ -526,6 +564,14 @@ func compressSnappy(tb testing.TB, body []byte) *bytes.Buffer {
 	return &buf
 }
 
+func compressSnappy(tb testing.TB, body []byte) *bytes.Buffer {
+	var buf bytes.Buffer
+	compressed := snappy.Encode(nil, body)
+	_, err := buf.Write(compressed)
+	require.NoError(tb, err)
+	return &buf
+}
+
 func compressZstd(tb testing.TB, body []byte) *bytes.Buffer {
 	var buf bytes.Buffer
 	compression := zstd.SpeedFastest
diff --git a/config/confighttp/compressor.go b/config/confighttp/compressor.go
index 750bda5795d..5cc9e6f681f 100644
--- a/config/confighttp/compressor.go
+++ b/config/confighttp/compressor.go
@@ -66,10 +66,14 @@ func newWriteCloserResetFunc(compressionType configcompression.Type, compression
 			w, _ := gzip.NewWriterLevel(nil, int(compressionParams.Level))
 			return w
 		}, nil
-	case configcompression.TypeSnappy:
+	case configcompression.TypeSnappyFramed:
 		return func() writeCloserReset {
 			return snappy.NewBufferedWriter(nil)
 		}, nil
+	case configcompression.TypeSnappy:
+		return func() writeCloserReset {
+			return &rawSnappyWriter{}
+		}, nil
 	case configcompression.TypeZstd:
 		level := zstd.WithEncoderLevel(zstd.EncoderLevelFromZstd(int(compressionParams.Level)))
 		return func() writeCloserReset {
@@ -111,3 +115,37 @@ func (p *compressor) compress(buf *bytes.Buffer, body io.ReadCloser) error {
 
 	return writer.Close()
 }
+
+// rawSnappyWriter buffers all writes and, on Close,
+// compresses the data as a raw snappy block (non-framed)
+// and writes the compressed bytes to the underlying writer.
+type rawSnappyWriter struct {
+	buffer bytes.Buffer
+	w      io.Writer
+	closed bool
+}
+
+// Write buffers the data.
+func (w *rawSnappyWriter) Write(p []byte) (int, error) {
+	return w.buffer.Write(p)
+}
+
+// Close compresses the buffered data in one shot using snappy.Encode,
+// writes the compressed block to the underlying writer, and marks the writer as closed.
+func (w *rawSnappyWriter) Close() error {
+	if w.closed {
+		return nil
+	}
+	w.closed = true
+	// Compress the buffered uncompressed bytes.
+	compressed := snappy.Encode(nil, w.buffer.Bytes())
+	_, err := w.w.Write(compressed)
+	return err
+}
+
+// Reset sets a new underlying writer, resets the buffer and the closed flag.
+func (w *rawSnappyWriter) Reset(newWriter io.Writer) {
+	w.buffer.Reset()
+	w.w = newWriter
+	w.closed = false
+}
diff --git a/config/confighttp/confighttp.go b/config/confighttp/confighttp.go
index 43193c957ee..ea926c6495a 100644
--- a/config/confighttp/confighttp.go
+++ b/config/confighttp/confighttp.go
@@ -37,7 +37,7 @@ const (
 	defaultMaxRequestBodySize = 20 * 1024 * 1024 // 20MiB
 )
 
-var defaultCompressionAlgorithms = []string{"", "gzip", "zstd", "zlib", "snappy", "deflate", "lz4"}
+var defaultCompressionAlgorithms = []string{"", "gzip", "zstd", "zlib", "snappy", "deflate", "lz4", "x-snappy-framed"}
 
 // ClientConfig defines settings for creating an HTTP client.
 type ClientConfig struct {