diff --git a/README.md b/README.md
index 39bbced9..04f7982c 100644
--- a/README.md
+++ b/README.md
@@ -30,7 +30,8 @@ is hosted. `version` is the version of the API the client will use and
 
 ```python
 c.build(path=None, tag=None, quiet=False, fileobj=None, nocache=False,
-        rm=False, stream=False)
+        rm=False, stream=False, timeout=None,
+        custom_context=False, encoding=None):
 ```
 
 Similar to the `docker build` command. Either `path` or `fileobj` needs
@@ -38,6 +39,11 @@ to be set. `path` can be a local path (to a directory containing a
 Dockerfile) or a remote URL. `fileobj` must be a readable file-like
 object to a Dockerfile.
 
+If you have a tar file for the docker build context (including a dockerfile)
+already, pass a readable file-like object to `fileobj` and also pass
+`custom_context=True`. If the stream is compressed also, set `encoding` to
+the correct value (e.g `gzip`).
+
 ```python
 c.commit(container, repository=None, tag=None, message=None, author=None,
          conf=None)
diff --git a/docker/client.py b/docker/client.py
index ff490712..9678b0d2 100644
--- a/docker/client.py
+++ b/docker/client.py
@@ -304,17 +304,23 @@ class Client(requests.Session):
             u, None, params=self._attach_params(params), stream=True))
 
     def build(self, path=None, tag=None, quiet=False, fileobj=None,
-              nocache=False, rm=False, stream=False, timeout=None):
+              nocache=False, rm=False, stream=False, timeout=None,
+              custom_context=False, encoding=None):
         remote = context = headers = None
         if path is None and fileobj is None:
             raise TypeError("Either path or fileobj needs to be provided.")
+        if custom_context and not fileobj:
+            raise TypeError("You must specify fileobj for a custom context")
 
-        if fileobj is not None:
-            context = utils.mkbuildcontext(fileobj)
-        elif path.startswith(('http://', 'https://', 'git://', 'github.com/')):
-            remote = path
+        if custom_context:
+            context = fileobj
         else:
-            context = utils.tar(path)
+            if fileobj is not None:
+                context = utils.mkbuildcontext(fileobj)
+            elif path.startswith(('http://', 'https://', 'git://', 'github.com/')):
+                remote = path
+            else:
+                context = utils.tar(path)
 
         if utils.compare_version('1.8', self._version) >= 0:
             stream = True
@@ -327,8 +333,11 @@ class Client(requests.Session):
             'nocache': nocache,
             'rm': rm
         }
+
         if context is not None:
-            headers = {'Content-Type': 'application/tar'}
+            headers['Content-Type'] = 'application/tar'
+            if encoding:
+                headers['Content-Encoding'] = encoding
 
         if utils.compare_version('1.9', self._version) >= 0:
             # If we don't have any auth data so far, try reloading the config
diff --git a/tests/test.py b/tests/test.py
index b70823c3..a7f410af 100644
--- a/tests/test.py
+++ b/tests/test.py
@@ -1230,6 +1230,22 @@ class DockerClientTest(unittest.TestCase):
         except Exception as e:
             self.fail('Command should not raise exception: {0}'.format(e))
 
+    def test_build_container_custom_context(self):
+        script = io.BytesIO('\n'.join([
+            'FROM busybox',
+            'MAINTAINER docker-py',
+            'RUN mkdir -p /tmp/test',
+            'EXPOSE 8080',
+            'ADD https://dl.dropboxusercontent.com/u/20637798/silence.tar.gz'
+            ' /tmp/silence.tar.gz'
+        ]).encode('ascii'))
+        context = docker.utils.mkbuildcontext(script)
+        try:
+            self.client.build(fileobj=context, custom_context=True)
+        except Exception as e:
+            self.fail('Command should not raise exception: {0}'.format(e))
+
+
     #######################
     #  PY SPECIFIC TESTS  #
     #######################