diff --git a/drivers/disk/Kconfig.ram b/drivers/disk/Kconfig.ram
index b662c41fa3aff..e068a3d88dc00 100644
--- a/drivers/disk/Kconfig.ram
+++ b/drivers/disk/Kconfig.ram
@@ -14,7 +14,8 @@ config DISK_RAM_VOLUME_SIZE
 	int "RAM Disk size in kilobytes"
 	default 96
 	help
-	  Size of the RAM Disk.
+	  Size of the RAM Disk. If compression is supported, this
+	  is the maximum size of the uncompressed RAM Disk.
 
 config DISK_RAM_VOLUME_NAME
 	string "RAM Disk mount point or drive name"
@@ -22,6 +23,24 @@ config DISK_RAM_VOLUME_NAME
 	help
 	  Disk name as per file system naming guidelines.
 
+config DISK_RAM_EXTERNAL
+	bool "Use initrd provided by the bootloader"
+	help
+	  Use the initrd provided by the bootloader as the RAM Disk.
+
+config DISK_RAM_START
+	hex "Start address of the preloaded RAM Disk"
+	depends on DISK_RAM_EXTERNAL
+	default 0
+	help
+	  Start the RAM Disk at a specific address.
+
+config DISK_RAM_DECOMPRESS
+	bool "Decompress the initrd"
+	depends on DISK_RAM_EXTERNAL && LZ4
+	help
+	  Decompress the initrd before using it as the RAM Disk.
+
 module = RAMDISK
 module-str = ramdisk
 source "subsys/logging/Kconfig.template.log_config"
diff --git a/drivers/disk/ramdisk.c b/drivers/disk/ramdisk.c
index 0cd1432c80ba7..0bc59491302d7 100644
--- a/drivers/disk/ramdisk.c
+++ b/drivers/disk/ramdisk.c
@@ -19,7 +19,74 @@ LOG_MODULE_REGISTER(ramdisk, CONFIG_RAMDISK_LOG_LEVEL);
 #define RAMDISK_VOLUME_SIZE (CONFIG_DISK_RAM_VOLUME_SIZE * 1024)
 #define RAMDISK_SECTOR_COUNT (RAMDISK_VOLUME_SIZE / RAMDISK_SECTOR_SIZE)
 
+#if IS_ENABLED(CONFIG_DISK_RAM_DECOMPRESS)
+#include <lz4frame.h>
+#define LZ4_MAGIC 0x184D2204
+static uint8_t unpacked_buf[RAMDISK_VOLUME_SIZE];
+#endif
+
+#if IS_ENABLED(CONFIG_DISK_RAM_EXTERNAL)
+static uint8_t *ramdisk_buf;
+#else
 static uint8_t ramdisk_buf[RAMDISK_VOLUME_SIZE];
+#endif
+
+#if IS_ENABLED(CONFIG_DISK_RAM_EXTERNAL)
+static uint8_t *disk_ram_external_map(void)
+{
+#if defined(CONFIG_MMU)
+	uint8_t *virt_start;
+
+	z_phys_map(&virt_start, CONFIG_DISK_RAM_START,
+				RAMDISK_VOLUME_SIZE, K_MEM_CACHE_WB | K_MEM_PERM_RW);
+	return virt_start;
+#else
+	return (uint8_t *)CONFIG_DISK_RAM_START;
+#endif
+}
+#endif
+
+#if IS_ENABLED(CONFIG_DISK_RAM_DECOMPRESS)
+static void disk_ram_external_unmap(char *virt_start)
+{
+#if defined(CONFIG_MMU)
+	z_phys_unmap(virt_start, RAMDISK_VOLUME_SIZE);
+#endif
+}
+
+static int disk_ram_is_compressed(char *virt_start)
+{
+	uint32_t magic = *(uint32_t *)virt_start;
+
+	return magic == LZ4_MAGIC;
+}
+
+static int disk_ram_decompress(char *compressed_buf, size_t compressed_size,
+				char *decompressed_buf, size_t decompressed_size)
+{
+	size_t src_size = compressed_size;
+	size_t dst_size = decompressed_size;
+	LZ4F_decompressionContext_t lz4_ctx;
+	int ret;
+
+	ret = LZ4F_createDecompressionContext(&lz4_ctx, LZ4F_VERSION);
+	if (ret < 0) {
+		LOG_ERR("Can't create decompression context, error: %s\n",
+			LZ4F_getErrorName(ret));
+		return ret;
+	}
+
+	ret = LZ4F_decompress(lz4_ctx, decompressed_buf, &dst_size,
+			compressed_buf, &src_size, NULL);
+	if (ret < 0) {
+		LOG_ERR("Decompression failed: %s\n", LZ4F_getErrorName(ret));
+		return ret;
+	}
+	LZ4F_freeDecompressionContext(lz4_ctx);
+
+	return ret;
+}
+#endif
 
 static void *lba_to_address(uint32_t lba)
 {
@@ -105,7 +172,21 @@ static struct disk_info ram_disk = {
 static int disk_ram_init(const struct device *dev)
 {
 	ARG_UNUSED(dev);
-
+#if IS_ENABLED(CONFIG_DISK_RAM_EXTERNAL)
+	ramdisk_buf = disk_ram_external_map();
+#if IS_ENABLED(CONFIG_DISK_RAM_DECOMPRESS)
+	if (disk_ram_is_compressed((char *)ramdisk_buf)) {
+		if (disk_ram_decompress((char *)ramdisk_buf, RAMDISK_VOLUME_SIZE,
+					(char *)unpacked_buf, RAMDISK_VOLUME_SIZE) < 0) {
+			return -EINVAL;
+		}
+
+		LOG_INF("Freeing compressed initrd");
+		disk_ram_external_unmap(ramdisk_buf);
+		ramdisk_buf = unpacked_buf;
+	}
+#endif
+#endif
 	return disk_access_register(&ram_disk);
 }
 
diff --git a/modules/lz4/CMakeLists.txt b/modules/lz4/CMakeLists.txt
index 9b9a56976ebd1..a14a40b79982f 100644
--- a/modules/lz4/CMakeLists.txt
+++ b/modules/lz4/CMakeLists.txt
@@ -11,6 +11,8 @@ if(CONFIG_LZ4)
 
   zephyr_library_sources(
     ${LZ4_DIR}/lib/lz4.c
+    ${LZ4_DIR}/lib/lz4frame.c
+    ${LZ4_DIR}/lib/xxhash.c
   )
 
 endif()