--- a/toolkit/mozapps/installer/packager.mk
+++ b/toolkit/mozapps/installer/packager.mk
@@ -199,16 +199,16 @@ upload: checksum
 		$(UPLOAD_FILES) \
 		$(CHECKSUM_FILES)
 
 # source-package creates a source tarball from the files in MOZ_PKG_SRCDIR,
 # which is either set to a clean checkout or defaults to $topsrcdir
 source-package:
 	@echo 'Packaging source tarball...'
 	$(MKDIR) -p $(DIST)/$(PKG_SRCPACK_PATH)
-	(cd $(MOZ_PKG_SRCDIR) && $(CREATE_SOURCE_TAR) - $(DIR_TO_BE_PACKAGED)) | bzip2 -vf > $(SOURCE_TAR)
+	(cd $(MOZ_PKG_SRCDIR) && $(CREATE_SOURCE_TAR) - $(DIR_TO_BE_PACKAGED)) | xz -9e > $(SOURCE_TAR)
 
 hg-bundle:
 	$(MKDIR) -p $(DIST)/$(PKG_SRCPACK_PATH)
 	$(CREATE_HG_BUNDLE_CMD)
 
 source-upload:
 	$(MAKE) upload UPLOAD_FILES='$(SOURCE_UPLOAD_FILES)' CHECKSUM_FILE='$(SOURCE_CHECKSUM_FILE)'

--- a/toolkit/mozapps/installer/upload-files.mk
+++ b/toolkit/mozapps/installer/upload-files.mk
@@ -772,17 +772,17 @@ SRC_TAR_EXCLUDE_PATHS += \
   --exclude='$(MOZILLA_DIR)/Makefile' \
   --exclude='$(MOZILLA_DIR)/dist'
 ifdef MOZ_OBJDIR
 SRC_TAR_EXCLUDE_PATHS += --exclude='$(MOZ_OBJDIR)'
 endif
 CREATE_SOURCE_TAR = $(TAR) -c --owner=0 --group=0 --numeric-owner \
   --mode=go-w $(SRC_TAR_EXCLUDE_PATHS) -f
 
-SOURCE_TAR = $(DIST)/$(PKG_SRCPACK_PATH)$(PKG_SRCPACK_BASENAME).tar.bz2
+SOURCE_TAR = $(DIST)/$(PKG_SRCPACK_PATH)$(PKG_SRCPACK_BASENAME).tar.xz
 HG_BUNDLE_FILE = $(DIST)/$(PKG_SRCPACK_PATH)$(PKG_BUNDLE_BASENAME).bundle
 SOURCE_CHECKSUM_FILE = $(DIST)/$(PKG_SRCPACK_PATH)$(PKG_SRCPACK_BASENAME).checksums
 SOURCE_UPLOAD_FILES = $(SOURCE_TAR)
 
 HG ?= hg
 CREATE_HG_BUNDLE_CMD  = $(HG) -v -R $(topsrcdir) bundle --base null
 ifdef HG_BUNDLE_REVISION
 CREATE_HG_BUNDLE_CMD += -r $(HG_BUNDLE_REVISION)