diff --git a/builder/vmware/builder.go b/builder/vmware/builder.go
index d8a8f27b6..413619f1e 100644
--- a/builder/vmware/builder.go
+++ b/builder/vmware/builder.go
@@ -239,6 +239,7 @@ func (b *Builder) Run(ui packer.Ui, hook packer.Hook, cache packer.Cache) (packe
 		&stepProvision{},
 		&stepShutdown{},
 		&stepCleanFiles{},
+		&stepCompactDisk{},
 	}
 
 	// Setup the state bag
diff --git a/builder/vmware/driver.go b/builder/vmware/driver.go
index d363aa001..2acf20adf 100644
--- a/builder/vmware/driver.go
+++ b/builder/vmware/driver.go
@@ -12,6 +12,9 @@ import (
 
 // A driver is able to talk to VMware, control virtual machines, etc.
 type Driver interface {
+	// CompactDisk compacts a virtual disk.
+	CompactDisk(string) error
+
 	// CreateDisk creates a virtual disk with the given size.
 	CreateDisk(string, string) error
 
@@ -40,6 +43,20 @@ type Fusion5Driver struct {
 	AppPath string
 }
 
+func (d *Fusion5Driver) CompactDisk(diskPath string) error {
+	defragCmd := exec.Command(d.vdiskManagerPath(), "-d", diskPath)
+	if _, _, err := d.runAndLog(defragCmd); err != nil {
+		return err
+	}
+
+	shrinkCmd := exec.Command(d.vdiskManagerPath(), "-k", diskPath)
+	if _, _, err := d.runAndLog(shrinkCmd); err != nil {
+		return err
+	}
+
+	return nil
+}
+
 func (d *Fusion5Driver) CreateDisk(output string, size string) error {
 	cmd := exec.Command(d.vdiskManagerPath(), "-c", "-s", size, "-a", "lsilogic", "-t", "1", output)
 	if _, _, err := d.runAndLog(cmd); err != nil {
diff --git a/builder/vmware/step_compact_disk.go b/builder/vmware/step_compact_disk.go
new file mode 100644
index 000000000..1f0f49c76
--- /dev/null
+++ b/builder/vmware/step_compact_disk.go
@@ -0,0 +1,35 @@
+package vmware
+
+import (
+	"fmt"
+	"github.com/mitchellh/multistep"
+	"github.com/mitchellh/packer/packer"
+)
+
+// This step compacts the virtual disk for the VM.
+//
+// Uses:
+//   driver Driver
+//   ui     packer.Ui
+//
+// Produces:
+//   <nothing>
+type stepCompactDisk struct{}
+
+func (stepCompactDisk) Run(state map[string]interface{}) multistep.StepAction {
+	driver := state["driver"].(Driver)
+	ui := state["ui"].(packer.Ui)
+	full_disk_path := state["full_disk_path"].(string)
+
+	ui.Say("Compacting the disk image")
+	if err := driver.CompactDisk(full_disk_path); err != nil {
+		err := fmt.Errorf("Error compacting disk: %s", err)
+		state["error"] = err
+		ui.Error(err.Error())
+		return multistep.ActionHalt
+	}
+
+	return multistep.ActionContinue
+}
+
+func (stepCompactDisk) Cleanup(map[string]interface{}) {}
diff --git a/builder/vmware/step_create_disk.go b/builder/vmware/step_create_disk.go
index 7624224d0..e3fdc9272 100644
--- a/builder/vmware/step_create_disk.go
+++ b/builder/vmware/step_create_disk.go
@@ -24,8 +24,9 @@ func (stepCreateDisk) Run(state map[string]interface{}) multistep.StepAction {
 	ui := state["ui"].(packer.Ui)
 
 	ui.Say("Creating virtual machine disk")
-	output := filepath.Join(config.OutputDir, config.DiskName+".vmdk")
-	if err := driver.CreateDisk(output, fmt.Sprintf("%dM", config.DiskSize)); err != nil {
+	full_disk_path := filepath.Join(config.OutputDir, config.DiskName+".vmdk")
+	state["full_disk_path"] = full_disk_path
+	if err := driver.CreateDisk(full_disk_path, fmt.Sprintf("%dM", config.DiskSize)); err != nil {
 		err := fmt.Errorf("Error creating disk: %s", err)
 		state["error"] = err
 		ui.Error(err.Error())