diff --git a/virtio-devices/src/balloon.rs b/virtio-devices/src/balloon.rs
index f68909554..b1dd272de 100644
--- a/virtio-devices/src/balloon.rs
+++ b/virtio-devices/src/balloon.rs
@@ -51,6 +51,9 @@ const DEFLATE_QUEUE_EVENT: u16 = EPOLL_HELPER_EVENT_LAST + 3;
 // Size of a PFN in the balloon interface.
 const VIRTIO_BALLOON_PFN_SHIFT: u64 = 12;
 
+// Deflate balloon on OOM
+const VIRTIO_BALLOON_F_DEFLATE_ON_OOM: u64 = 2;
+
 #[derive(Debug)]
 pub enum Error {
     // Guest gave us bad memory addresses.
@@ -319,8 +322,16 @@ pub struct Balloon {
 
 impl Balloon {
     // Create a new virtio-balloon.
-    pub fn new(id: String, size: u64, seccomp_action: SeccompAction) -> io::Result<Self> {
-        let avail_features = 1u64 << VIRTIO_F_VERSION_1;
+    pub fn new(
+        id: String,
+        size: u64,
+        deflate_on_oom: bool,
+        seccomp_action: SeccompAction,
+    ) -> io::Result<Self> {
+        let mut avail_features = 1u64 << VIRTIO_F_VERSION_1;
+        if deflate_on_oom {
+            avail_features |= 1u64 << VIRTIO_BALLOON_F_DEFLATE_ON_OOM;
+        }
 
         let config = VirtioBalloonConfig {
             num_pages: (size >> VIRTIO_BALLOON_PFN_SHIFT) as u32,
diff --git a/vmm/src/api/openapi/cloud-hypervisor.yaml b/vmm/src/api/openapi/cloud-hypervisor.yaml
index 49ddf3fbf..cf43d3713 100644
--- a/vmm/src/api/openapi/cloud-hypervisor.yaml
+++ b/vmm/src/api/openapi/cloud-hypervisor.yaml
@@ -745,6 +745,10 @@ components:
         size:
           type: integer
           format: int64
+        deflate_on_oom:
+          type: boolean
+          default: false
+          description: Whether the balloon should deflate when the guest is under memory pressure.
 
     FsConfig:
       required:
diff --git a/vmm/src/config.rs b/vmm/src/config.rs
index 6e6390e33..2c712f4c3 100644
--- a/vmm/src/config.rs
+++ b/vmm/src/config.rs
@@ -1201,14 +1201,19 @@ impl Default for RngConfig {
 #[derive(Clone, Debug, PartialEq, Deserialize, Serialize)]
 pub struct BalloonConfig {
     pub size: u64,
+    /// Option to deflate the balloon in case the guest is out of memory.
+    #[serde(default)]
+    pub deflate_on_oom: bool,
 }
 
 impl BalloonConfig {
-    pub const SYNTAX: &'static str = "Balloon parameters \"size=<balloon_size>\"";
+    pub const SYNTAX: &'static str =
+        "Balloon parameters \"size=<balloon_size>,deflate_on_oom=on|off\"";
 
     pub fn parse(balloon: &str) -> Result<Self> {
         let mut parser = OptionParser::new();
         parser.add("size");
+        parser.add("deflate_on_oom");
         parser.parse(balloon).map_err(Error::ParseBalloon)?;
 
         let size = parser
@@ -1217,7 +1222,16 @@ impl BalloonConfig {
             .map(|v| v.0)
             .unwrap_or(0);
 
-        Ok(BalloonConfig { size })
+        let deflate_on_oom = parser
+            .convert::<Toggle>("deflate_on_oom")
+            .map_err(Error::ParseBalloon)?
+            .unwrap_or(Toggle(false))
+            .0;
+
+        Ok(BalloonConfig {
+            size,
+            deflate_on_oom,
+        })
     }
 }
 
diff --git a/vmm/src/device_manager.rs b/vmm/src/device_manager.rs
index a1196f986..cde9673c7 100644
--- a/vmm/src/device_manager.rs
+++ b/vmm/src/device_manager.rs
@@ -2610,6 +2610,7 @@ impl DeviceManager {
                 virtio_devices::Balloon::new(
                     id.clone(),
                     balloon_config.size,
+                    balloon_config.deflate_on_oom,
                     self.seccomp_action.clone(),
                 )
                 .map_err(DeviceManagerError::CreateVirtioBalloon)?,