diff --git a/README b/README
index 5186e9d6e..e171ee5aa 100644
--- a/README
+++ b/README
@@ -169,9 +169,6 @@ The full requirements are described below.
 +--------------+-------------+---+-----------------------------------------+
 | xz           |             | O | Used by virt-builder for compression    |
 +--------------+-------------+---+-----------------------------------------+
-| nbdkit       |             | O | Used by virt-builder to speed up        |
-|              |             |   | template xz-decompression               |
-+--------------+-------------+---+-----------------------------------------+
 | findlib      |             | O | For the OCaml bindings.                 |
 +--------------+-------------+---+-----------------------------------------+
 | ocaml-gettext|             | O | For localizing OCaml virt-* tools.      |
diff --git a/builder/builder.ml b/builder/builder.ml
index d3dd9c67a..fef82a1ad 100644
--- a/builder/builder.ml
+++ b/builder/builder.ml
@@ -74,7 +74,7 @@ let mode =
   | (`Install|`List|`Notes|`Print_cache|`Cache_all) as mode -> mode
 
 (* Check various programs/dependencies are installed. *)
-let have_nbdkit =
+let () =
   (* Check that gpg is installed.  Optional as long as the user
    * disables all signature checks.
    *)
@@ -100,18 +100,7 @@ let have_nbdkit =
   if Sys.command cmd <> 0 then (
     eprintf (f_"%s: virt-resize is not installed (or does not work)\n") prog;
     exit 1
-  );
-
-  (* Find out if nbdkit + nbdkit-xz-plugin is installed (optional). *)
-  let cmd =
-    sprintf "nbdkit %s/nbdkit/plugins/nbdkit-xz-plugin.so --help >/dev/null 2>&1"
-      Libdir.libdir in
-  let have_nbdkit = Sys.command cmd = 0 in
-  if not have_nbdkit && debug then
-    eprintf (f_"%s: warning: nbdkit or nbdkit-xz-plugin is not available\n")
-      prog;
-
-  have_nbdkit
+  )
 
 (* Create the cache directory. *)
 let cache =
@@ -296,46 +285,19 @@ let output, size, format, delete_output_file, resize_sparse =
     output, Some size, format, delete_output_file, true
 
 let source =
-  (* XXX Disable this for now because libvirt is broken:
-   * https://bugzilla.redhat.com/show_bug.cgi?id=1011063
-   *)
-  if have_nbdkit && false then (
-    (* If we have nbdkit, then we can use NBD to uncompress the xz
-     * file on the fly.
-     *)
-    let socket = Filename.temp_file "vbnbd" ".sock" in
-    let source = sprintf "nbd://?socket=%s" socket in
-    let argv = [| "nbdkit"; "-r"; "-f"; "-U"; socket;
-                  Libdir.libdir // "nbdkit/plugins/nbdkit-xz-plugin.so";
-                  "file=" ^ template |] in
-    let pid =
-      match fork () with
-      | 0 ->                            (* child *)
-        execvp "nbdkit" argv
-      | pid -> pid in
-    (* Clean up when the program exits. *)
-    let clean_up () =
-      (try kill pid Sys.sigterm with _ -> ());
-      (try unlink socket with _ -> ())
-    in
-    at_exit clean_up;
-    source
-  )
-  else (
-    (* Otherwise we have to uncompress it to a temporary file. *)
-    let { Index_parser.file_uri = file_uri } = entry in
-    let tmpfile = Filename.temp_file "vbsrc" ".img" in
-    let cmd = sprintf "xzcat %s > %s" (quote template) (quote tmpfile) in
-    if debug then eprintf "%s\n%!" cmd;
-    msg (f_"Uncompressing: %s") file_uri;
-    let r = Sys.command cmd in
-    if r <> 0 then (
-      eprintf (f_"%s: error: failed to uncompress template\n") prog;
-      exit 1
-    );
-    unlink_on_exit tmpfile;
-    tmpfile
-  )
+  (* Uncompress it to a temporary file. *)
+  let { Index_parser.file_uri = file_uri } = entry in
+  let tmpfile = Filename.temp_file "vbsrc" ".img" in
+  let cmd = sprintf "xzcat %s > %s" (quote template) (quote tmpfile) in
+  if debug then eprintf "%s\n%!" cmd;
+  msg (f_"Uncompressing: %s") file_uri;
+  let r = Sys.command cmd in
+  if r <> 0 then (
+    eprintf (f_"%s: error: failed to uncompress template\n") prog;
+    exit 1
+  );
+  unlink_on_exit tmpfile;
+  tmpfile
 
 (* Resize the source to the output file. *)
 let () =
diff --git a/builder/virt-builder.pod b/builder/virt-builder.pod
index 6fe6a5503..5aa7e4e94 100644
--- a/builder/virt-builder.pod
+++ b/builder/virt-builder.pod
@@ -695,14 +695,7 @@ The template signature is checked.
 
 =item *
 
-If the template image is xz-compressed: If L<nbdkit(1)> and
-L<nbdkit-xz-plugin(1)> are both installed, nbdkit is used to
-transparently uncompress the image on the fly.  Else it is
-uncompressed to a temporary disk which takes more disk space.
-
-[B<Note:> Use of nbdkit is disabled because of a libvirt bug:
-L<https://bugzilla.redhat.com/show_bug.cgi?id=1011063>  It will
-be enabled in a future release.]
+The template is uncompressed to a tmp file.
 
 =item *
 
@@ -1268,8 +1261,6 @@ L<virt-rescue(1)>,
 L<virt-resize(1)>,
 L<virt-sysprep(1)>,
 L<oz-install(1)>,
-L<nbdkit(1)>,
-L<nbdkit-xz-plugin(1)>,
 L<gpg(1)>,
 L<curl(1)>,
 L<http://libguestfs.org/>.
diff --git a/guestfs-release-notes.pod b/guestfs-release-notes.pod
index caaea6930..88af9aa4e 100644
--- a/guestfs-release-notes.pod
+++ b/guestfs-release-notes.pod
@@ -151,8 +151,6 @@ For UML backend.
 
 =item xz
 
-=item nbdkit
-
 For virt-builder.
 
 =item golang E<ge> 1.1.1
diff --git a/guestfs-release-notes.txt b/guestfs-release-notes.txt
index a132eeae9..89d997174 100644
--- a/guestfs-release-notes.txt
+++ b/guestfs-release-notes.txt
@@ -119,8 +119,6 @@ RELEASE NOTES FOR LIBGUESTFS 1.24
 
     xz
 
-    nbdkit
-
       For virt-builder.
 
     golang ≥ 1.1.1