diff --git a/nixos/lib/make-squashfs.nix b/nixos/lib/make-squashfs.nix
index 4b6b56739948..f28e2c671580 100644
--- a/nixos/lib/make-squashfs.nix
+++ b/nixos/lib/make-squashfs.nix
@@ -14,6 +14,7 @@
 
 let
   pseudoFilesArgs = lib.concatMapStrings (f: ''-p "${f}" '') pseudoFiles;
+  compFlag = if comp == null then "-no-compression" else "-comp ${comp}";
 in
 stdenv.mkDerivation {
   name = "${fileName}.img";
@@ -39,7 +40,7 @@ stdenv.mkDerivation {
 
       # Generate the squashfs image.
       mksquashfs nix-path-registration $(cat $closureInfo/store-paths) $out ${pseudoFilesArgs} \
-        -no-hardlinks ${lib.optionalString noStrip "-no-strip"} -keep-as-directory -all-root -b 1048576 -comp ${comp} \
+        -no-hardlinks ${lib.optionalString noStrip "-no-strip"} -keep-as-directory -all-root -b 1048576 ${compFlag} \
         -processors $NIX_BUILD_CORES
     '';
 }
diff --git a/nixos/modules/installer/cd-dvd/iso-image.nix b/nixos/modules/installer/cd-dvd/iso-image.nix
index 0b5135c088ea..6adb94e09aff 100644
--- a/nixos/modules/installer/cd-dvd/iso-image.nix
+++ b/nixos/modules/installer/cd-dvd/iso-image.nix
@@ -512,9 +512,10 @@ in
                 + lib.optionalString isAarch "-Xbcj arm"
                 + lib.optionalString (isPower && is32bit && isBigEndian) "-Xbcj powerpc"
                 + lib.optionalString (isSparc) "-Xbcj sparc";
-      type = lib.types.str;
+      type = lib.types.nullOr lib.types.str;
       description = lib.mdDoc ''
         Compression settings to use for the squashfs nix store.
+        `null` disables compression.
       '';
       example = "zstd -Xcompression-level 6";
     };