diff --git a/Source/Engine/Networking/NetworkStream.cpp b/Source/Engine/Networking/NetworkStream.cpp
index a5de34232..8c197602c 100644
--- a/Source/Engine/Networking/NetworkStream.cpp
+++ b/Source/Engine/Networking/NetworkStream.cpp
@@ -2,6 +2,94 @@
 
 #include "NetworkStream.h"
 #include "INetworkSerializable.h"
+#include "Engine/Core/Math/Quaternion.h"
+
+// Quaternion quantized for optimized network data size.
+struct NetworkQuaternion
+{
+    enum Flag : uint8
+    {
+        None = 0,
+        HasX = 1,
+        HasY = 2,
+        HasZ = 4,
+        NegativeX = 8,
+        NegativeY = 16,
+        NegativeZ = 32,
+        NegativeW = 64,
+    };
+
+    FORCE_INLINE static void Read(NetworkStream* stream, Quaternion& data)
+    {
+        uint8 flags;
+        stream->Read(flags);
+        if (flags == None)
+        {
+            // Early out on default value
+            data = Quaternion::Identity;
+            return;
+        }
+
+        Quaternion raw = Quaternion::Identity;
+#define READ_COMPONENT(comp, hasFlag, negativeFlag) \
+    if (flags & hasFlag) \
+    { \
+        uint16 packed; \
+        stream->Read(packed); \
+        const float norm = (float)packed / (float)MAX_uint16; \
+        raw.comp = norm; \
+        if (flags & negativeFlag) \
+            raw.comp = -raw.comp; \
+    }
+        READ_COMPONENT(X, HasX, NegativeX);
+        READ_COMPONENT(Y, HasY, NegativeY);
+        READ_COMPONENT(Z, HasZ, NegativeZ);
+#define READ_COMPONENT
+
+        // Calculate W
+        raw.W = Math::Sqrt(Math::Max(1.0f - raw.X * raw.X - raw.Y * raw.Y - raw.Z * raw.Z, 0.0f));
+        if (flags & NegativeW)
+            raw.W = -raw.W;
+
+        raw.Normalize();
+        data = raw;
+    }
+
+    FORCE_INLINE static void Write(NetworkStream* stream, const Quaternion& data)
+    {
+        // Assumes rotation is normalized so W can be recalculated
+        Quaternion raw = data;
+        raw.Normalize();
+
+        // Compose flags that describe the data
+        uint8 flags = HasX | HasY | HasZ;
+#define QUANTIZE_COMPONENT(comp, hasFlag, negativeFlag) \
+    if (Math::IsZero(raw.comp)) \
+        flags &= ~hasFlag; \
+    else if (raw.comp < 0.0f) \
+        flags |= negativeFlag
+        QUANTIZE_COMPONENT(X, HasX, NegativeX);
+        QUANTIZE_COMPONENT(Y, HasY, NegativeY);
+        QUANTIZE_COMPONENT(Z, HasZ, NegativeZ);
+        if (raw.W < 0.0f)
+            flags |= NegativeW;
+#undef QUANTIZE_COMPONENT
+
+        // Write data
+        stream->Write(flags);
+#define WRITE_COMPONENT(comp, hasFlag)  \
+    if (flags & hasFlag) \
+    { \
+        const float norm = Math::Abs(raw.comp); \
+        const uint16 packed = (uint16)(norm * MAX_uint16); \
+        stream->Write(packed); \
+    }
+        WRITE_COMPONENT(X, HasX);
+        WRITE_COMPONENT(Y, HasY);
+        WRITE_COMPONENT(Z, HasZ);
+#undef WRITE_COMPONENT
+    }
+};
 
 NetworkStream::NetworkStream(const SpawnParams& params)
     : ScriptingObject(params)
@@ -58,6 +146,11 @@ void NetworkStream::Read(INetworkSerializable* obj)
     obj->Deserialize(this);
 }
 
+void NetworkStream::Read(Quaternion& data)
+{
+    NetworkQuaternion::Read(this, data);
+}
+
 void NetworkStream::Write(INetworkSerializable& obj)
 {
     obj.Serialize(this);
@@ -68,6 +161,11 @@ void NetworkStream::Write(INetworkSerializable* obj)
     obj->Serialize(this);
 }
 
+void NetworkStream::Write(const Quaternion& data)
+{
+    NetworkQuaternion::Write(this, data);
+}
+
 void NetworkStream::Flush()
 {
     // Nothing to do
diff --git a/Source/Engine/Networking/NetworkStream.h b/Source/Engine/Networking/NetworkStream.h
index 37b8c6f17..a79a6ec6b 100644
--- a/Source/Engine/Networking/NetworkStream.h
+++ b/Source/Engine/Networking/NetworkStream.h
@@ -72,10 +72,12 @@ public:
     using ReadStream::Read;
     void Read(INetworkSerializable& obj);
     void Read(INetworkSerializable* obj);
+    void Read(Quaternion& data);
 
     using WriteStream::Write;
     void Write(INetworkSerializable& obj);
     void Write(INetworkSerializable* obj);
+    void Write(const Quaternion& data);
 
 public:
     // [Stream]
diff --git a/Source/Engine/Tests/TestNetworking.cpp b/Source/Engine/Tests/TestNetworking.cpp
new file mode 100644
index 000000000..c249d7fc8
--- /dev/null
+++ b/Source/Engine/Tests/TestNetworking.cpp
@@ -0,0 +1,70 @@
+// Copyright (c) 2012-2024 Wojciech Figat. All rights reserved.
+
+#include "Engine/Core/Formatting.h"
+#include "Engine/Core/Math/Quaternion.h"
+#include "Engine/Networking/NetworkStream.h"
+#include <ThirdParty/catch2/catch.hpp>
+
+TEST_CASE("Networking")
+{
+    SECTION("Test Network Stream")
+    {
+        auto writeStream = New<NetworkStream>();
+        auto readStream = New<NetworkStream>();
+
+        // Quaternions
+        {
+#define TEST_RAW 0
+            writeStream->Initialize();
+            constexpr int32 QuatRes = 64;
+            constexpr float ResToDeg = 360.0f / (float)QuatRes;
+            for (int32 x = 0; x <= QuatRes; x++)
+            {
+                const float qx = (float)x * ResToDeg;
+                for (int32 y = 0; y <= QuatRes; y++)
+                {
+                    const float qy = (float)y * ResToDeg;
+                    for (int32 z = 0; z <= QuatRes; z++)
+                    {
+                        const float qz = (float)z * ResToDeg;
+                        auto quat = Quaternion::Euler(qx, qy, qz);
+                        quat.Normalize();
+#if TEST_RAW
+                        writeStream->WriteBytes(&quat, sizeof(quat));
+#else
+                        writeStream->Write(quat);
+#endif
+                    }
+                }
+            }
+            int dataSizeInkB = writeStream->GetPosition() / 1024; // 4291 -> 1869
+            readStream->Initialize(writeStream->GetBuffer(), writeStream->GetPosition());
+            for (int32 x = 0; x <= QuatRes; x++)
+            {
+                const float qx = (float)x * ResToDeg;
+                for (int32 y = 0; y <= QuatRes; y++)
+                {
+                    const float qy = (float)y * ResToDeg;
+                    for (int32 z = 0; z <= QuatRes; z++)
+                    {
+                        const float qz = (float)z * ResToDeg;
+                        auto expected = Quaternion::Euler(qx, qy, qz);
+                        expected.Normalize();
+                        Quaternion quat;
+#if TEST_RAW
+                        readStream->ReadBytes(&quat, sizeof(quat));
+#else
+                        readStream->Read(quat);
+#endif
+                        const bool equal = Quaternion::Dot(expected, quat) > 0.9999f;
+                        CHECK(equal);
+                    }
+                }
+            }
+#undef TEST_RAW
+        }
+
+        Delete(readStream);
+        Delete(writeStream);
+    }
+}