diff --git a/x/wasm/client/cli/tx.go b/x/wasm/client/cli/tx.go
index 9d025e1715..a51890d244 100644
--- a/x/wasm/client/cli/tx.go
+++ b/x/wasm/client/cli/tx.go
@@ -2,6 +2,7 @@ package cli
 
 import (
 	"bufio"
+	"fmt"
 	"io/ioutil"
 	"strconv"
 
@@ -15,6 +16,7 @@ import (
 	"github.com/cosmos/cosmos-sdk/x/auth"
 	"github.com/cosmos/cosmos-sdk/x/auth/client/utils"
 
+	wasmUtils "github.com/cosmwasm/wasmd/x/wasm/client/utils"
 	"github.com/cosmwasm/wasmd/x/wasm/internal/types"
 )
 
@@ -23,6 +25,9 @@ const (
 	flagAmount = "amount"
 )
 
+// limit max bytes read to prevent gzip bombs
+const maxSize = 400 * 1024
+
 // GetTxCmd returns the transaction commands for this module
 func GetTxCmd(cdc *codec.Codec) *cobra.Command {
 	txCmd := &cobra.Command{
@@ -57,6 +62,23 @@ func StoreCodeCmd(cdc *codec.Codec) *cobra.Command {
 				return err
 			}
 
+			// limit the input size
+			if len(wasm) > maxSize {
+				return fmt.Errorf("input size exceeds the max size allowed (allowed:%d, actual: %d)",
+					maxSize, len(wasm))
+			}
+
+			// gzip the wasm file
+			if wasmUtils.IsWasm(wasm) {
+				wasm, err = wasmUtils.GzipIt(wasm)
+
+				if err != nil {
+					return err
+				}
+			} else if !wasmUtils.IsGzip(wasm) {
+				return fmt.Errorf("invalid input file. Use wasm binary or gzip")
+			}
+
 			// build and sign the transaction, then broadcast to Tendermint
 			msg := types.MsgStoreCode{
 				Sender:       cliCtx.GetFromAddress(),
diff --git a/x/wasm/client/utils/utils.go b/x/wasm/client/utils/utils.go
new file mode 100644
index 0000000000..bbe9adc7f9
--- /dev/null
+++ b/x/wasm/client/utils/utils.go
@@ -0,0 +1,38 @@
+package utils
+
+import (
+	"bytes"
+	"compress/gzip"
+)
+
+var (
+	gzipIdent = []byte("\x1F\x8B\x08")
+	wasmIdent = []byte("\x00\x61\x73\x6D")
+)
+
+// IsGzip returns checks if the file contents are gzip compressed
+func IsGzip(input []byte) bool {
+	return bytes.Equal(input[:3], gzipIdent)
+}
+
+// IsWasm checks if the file contents are of wasm binary
+func IsWasm(input []byte) bool {
+	return bytes.Equal(input[:4], wasmIdent)
+}
+
+// GzipIt compresses the input ([]byte)
+func GzipIt(input []byte) ([]byte, error) {
+	// Create gzip writer.
+	var b bytes.Buffer
+	w := gzip.NewWriter(&b)
+	_, err := w.Write(input)
+	if err != nil {
+		return nil, err
+	}
+	err = w.Close() // You must close this first to flush the bytes to the buffer.
+	if err != nil {
+		return nil, err
+	}
+
+	return b.Bytes(), nil
+}
diff --git a/x/wasm/client/utils/utils_test.go b/x/wasm/client/utils/utils_test.go
new file mode 100644
index 0000000000..f389043840
--- /dev/null
+++ b/x/wasm/client/utils/utils_test.go
@@ -0,0 +1,64 @@
+package utils
+
+import (
+	"github.com/stretchr/testify/require"
+	"io/ioutil"
+	"testing"
+)
+
+func GetTestData() ([]byte, []byte, []byte, error){
+	wasmCode, err := ioutil.ReadFile("../../internal/keeper/testdata/contract.wasm")
+
+	if err != nil {
+		return nil, nil, nil, err
+	}
+
+	gzipData, err := GzipIt(wasmCode)
+	if err != nil {
+		return nil, nil, nil, err
+	}
+
+	someRandomStr := []byte("hello world")
+
+	return wasmCode, someRandomStr, gzipData, nil
+}
+
+func TestIsWasm (t *testing.T) {
+	wasmCode, someRandomStr, gzipData, err := GetTestData()
+	require.NoError(t, err)
+
+	t.Log("should return false for some random string data")
+	require.False(t, IsWasm(someRandomStr))
+	t.Log("should return false for gzip data")
+	require.False(t, IsWasm(gzipData))
+	t.Log("should return true for exact wasm")
+	require.True(t, IsWasm(wasmCode))
+}
+
+func TestIsGzip (t *testing.T) {
+	wasmCode, someRandomStr, gzipData, err := GetTestData()
+	require.NoError(t, err)
+
+	require.False(t, IsGzip(wasmCode))
+	require.False(t, IsGzip(someRandomStr))
+	require.True(t, IsGzip(gzipData))
+}
+
+func TestGzipIt (t *testing.T) {
+	wasmCode, someRandomStr, _, err := GetTestData()
+	originalGzipData := []byte{31, 139, 8, 0, 0, 0, 0, 0, 0, 255, 202, 72, 205, 201, 201, 87, 40, 207, 47, 202, 73, 1,
+		4, 0, 0, 255, 255, 133, 17, 74, 13, 11, 0, 0, 0}
+
+	require.NoError(t, err)
+
+	t.Log("gzip wasm with no error")
+	_, err = GzipIt(wasmCode)
+	require.NoError(t, err)
+
+	t.Log("gzip of a string should return exact gzip data")
+	strToGzip, err := GzipIt(someRandomStr)
+
+	require.True(t, IsGzip(strToGzip))
+	require.NoError(t, err)
+	require.Equal(t, originalGzipData, strToGzip)
+}
\ No newline at end of file