diff --git a/api/client/client.go b/api/client/client.go
index e66cd0e23c695..71a8edd00c882 100644
--- a/api/client/client.go
+++ b/api/client/client.go
@@ -2739,11 +2739,22 @@ func (c *Client) UploadEncryptedRecording(ctx context.Context, sessionID string,
 		return trace.Wrap(err)
 	}
 
+	next, stop := iter.Pull2(parts)
+	defer stop()
+
+	part, err, ok := next()
+	if err != nil {
+		return trace.Wrap(err)
+	} else if !ok {
+		return trace.BadParameter("unexpected empty upload")
+	}
+
 	var uploadedParts []*recordingencryptionv1pb.Part
 	// S3 requires that part numbers start at 1, so we do that by default regardless of which uploader is
 	// configured for the auth service
 	var partNumber int64 = 1
-	for part, err := range parts {
+	for {
+		nextPart, err, hasNext := next()
 		if err != nil {
 			return trace.Wrap(err)
 		}
@@ -2752,11 +2763,18 @@ func (c *Client) UploadEncryptedRecording(ctx context.Context, sessionID string,
 			Upload:     createRes.Upload,
 			PartNumber: partNumber,
 			Part:       part,
+			IsLast:     !hasNext,
 		})
 		if err != nil {
 			return trace.Wrap(err)
 		}
 		uploadedParts = append(uploadedParts, uploadRes.Part)
+
+		if !hasNext {
+			break
+		}
+
+		part = nextPart
 		partNumber++
 	}
 
diff --git a/api/gen/proto/go/teleport/recordingencryption/v1/recording_encryption_service.pb.go b/api/gen/proto/go/teleport/recordingencryption/v1/recording_encryption_service.pb.go
index 6a97aff5ac45a..a86889f0002de 100644
--- a/api/gen/proto/go/teleport/recordingencryption/v1/recording_encryption_service.pb.go
+++ b/api/gen/proto/go/teleport/recordingencryption/v1/recording_encryption_service.pb.go
@@ -200,7 +200,9 @@ type UploadPartRequest struct {
 	// The ordered index applied to the part.
 	PartNumber int64 `protobuf:"varint,2,opt,name=part_number,json=partNumber,proto3" json:"part_number,omitempty"`
 	// The encrypted part of session recording data being uploaded.
-	Part          []byte `protobuf:"bytes,3,opt,name=part,proto3" json:"part,omitempty"`
+	Part []byte `protobuf:"bytes,3,opt,name=part,proto3" json:"part,omitempty"`
+	// Whether this is the last upload part in the upload.
+	IsLast        bool `protobuf:"varint,4,opt,name=is_last,json=isLast,proto3" json:"is_last,omitempty"`
 	unknownFields protoimpl.UnknownFields
 	sizeCache     protoimpl.SizeCache
 }
@@ -256,6 +258,13 @@ func (x *UploadPartRequest) GetPart() []byte {
 	return nil
 }
 
+func (x *UploadPartRequest) GetIsLast() bool {
+	if x != nil {
+		return x.IsLast
+	}
+	return false
+}
+
 // The resulting metadata about an uploaded part.
 type Part struct {
 	state protoimpl.MessageState `protogen:"open.v1"`
@@ -848,12 +857,13 @@ const file_teleport_recordingencryption_v1_recording_encryption_service_proto_ra
 	"\n" +
 	"session_id\x18\x01 \x01(\tR\tsessionId\"W\n" +
 	"\x14CreateUploadResponse\x12?\n" +
-	"\x06upload\x18\x01 \x01(\v2'.teleport.recordingencryption.v1.UploadR\x06upload\"\x89\x01\n" +
+	"\x06upload\x18\x01 \x01(\v2'.teleport.recordingencryption.v1.UploadR\x06upload\"\xa2\x01\n" +
 	"\x11UploadPartRequest\x12?\n" +
 	"\x06upload\x18\x01 \x01(\v2'.teleport.recordingencryption.v1.UploadR\x06upload\x12\x1f\n" +
 	"\vpart_number\x18\x02 \x01(\x03R\n" +
 	"partNumber\x12\x12\n" +
-	"\x04part\x18\x03 \x01(\fR\x04part\";\n" +
+	"\x04part\x18\x03 \x01(\fR\x04part\x12\x17\n" +
+	"\ais_last\x18\x04 \x01(\bR\x06isLast\";\n" +
 	"\x04Part\x12\x1f\n" +
 	"\vpart_number\x18\x01 \x01(\x03R\n" +
 	"partNumber\x12\x12\n" +
diff --git a/api/proto/teleport/recordingencryption/v1/recording_encryption_service.proto b/api/proto/teleport/recordingencryption/v1/recording_encryption_service.proto
index 130eb2eba0144..a4590271265f3 100644
--- a/api/proto/teleport/recordingencryption/v1/recording_encryption_service.proto
+++ b/api/proto/teleport/recordingencryption/v1/recording_encryption_service.proto
@@ -71,6 +71,8 @@ message UploadPartRequest {
   int64 part_number = 2;
   // The encrypted part of session recording data being uploaded.
   bytes part = 3;
+  // Whether this is the last upload part in the upload.
+  bool is_last = 4;
 }
 
 // The resulting metadata about an uploaded part.
diff --git a/lib/auth/recordingencryption/recordingencryptionv1/service.go b/lib/auth/recordingencryption/recordingencryptionv1/service.go
index 9cf6fa6235553..695857ae5328e 100644
--- a/lib/auth/recordingencryption/recordingencryptionv1/service.go
+++ b/lib/auth/recordingencryption/recordingencryptionv1/service.go
@@ -156,8 +156,14 @@ func (s *Service) UploadPart(ctx context.Context, req *recordingencryptionv1.Upl
 		return nil, trace.Wrap(err)
 	}
 
-	part := bytes.NewReader(req.Part)
-	streamPart, err := s.uploader.UploadPart(ctx, upload, req.PartNumber, part)
+	// If upload part is not at least the minimum upload part size, append an empty part
+	// to pad up to the minimum upload size.
+	part := req.Part
+	if !req.IsLast && len(part) < events.MinUploadPartSizeBytes {
+		part = events.PadUploadPart(part, events.MinUploadPartSizeBytes)
+	}
+
+	streamPart, err := s.uploader.UploadPart(ctx, upload, req.PartNumber, bytes.NewReader(part))
 	if err != nil {
 		return nil, trace.Wrap(err, "uploading encrypted recording part")
 	}
diff --git a/lib/events/api.go b/lib/events/api.go
index 6779b76de5a42..223fd25850a06 100644
--- a/lib/events/api.go
+++ b/lib/events/api.go
@@ -1087,7 +1087,11 @@ type MultipartUploader interface {
 	// ReserveUploadPart reserves an upload part. Reserve is used to identify
 	// upload errors beforehand.
 	ReserveUploadPart(ctx context.Context, upload StreamUpload, partNumber int64) error
-	// UploadPart uploads part and returns the part
+	// UploadPart uploads part and returns the part.
+	//
+	// The part must be greater than [MinUploadPartSizeBytes]. It is the responsibility
+	// of the caller to add padding if needed, or else the upload may fail depending on
+	// storage provider.
 	UploadPart(ctx context.Context, upload StreamUpload, partNumber int64, partBody io.ReadSeeker) (*StreamPart, error)
 	// ListParts returns all uploaded parts for the completed upload in sorted order
 	ListParts(ctx context.Context, upload StreamUpload) ([]StreamPart, error)
diff --git a/lib/events/auditlog.go b/lib/events/auditlog.go
index 67fdef73ebc00..2f19850ee4953 100644
--- a/lib/events/auditlog.go
+++ b/lib/events/auditlog.go
@@ -631,17 +631,34 @@ func (l *AuditLog) UploadEncryptedRecording(ctx context.Context, sessionID strin
 		return trace.Wrap(err, "creating upload")
 	}
 
+	next, stop := iter.Pull2(parts)
+	defer stop()
+
+	part, err, ok := next()
+	if err != nil {
+		return trace.Wrap(err)
+	} else if !ok {
+		return trace.BadParameter("unexpected empty upload")
+	}
+
 	var streamParts []StreamPart
 	// S3 requires that part numbers start at 1, so we do that by default regardless of which uploader is
 	// configured for the auth service
 	var partNumber int64 = 1
-	for part, err := range parts {
+	for {
+		if err := l.UploadHandler.ReserveUploadPart(ctx, *upload, partNumber); err != nil {
+			return trace.Wrap(err, "reserving upload part")
+		}
+
+		nextPart, err, hasNext := next()
 		if err != nil {
 			return trace.Wrap(err)
 		}
 
-		if err := l.UploadHandler.ReserveUploadPart(ctx, *upload, partNumber); err != nil {
-			return trace.Wrap(err, "reserving upload part")
+		// If the upload part is not at least the minimum upload part size, and this isn't
+		// the last part, add padding to meet the minimum upload size.
+		if hasNext && len(part) < MinUploadPartSizeBytes {
+			part = PadUploadPart(part, MinUploadPartSizeBytes)
 		}
 
 		streamPart, err := l.UploadHandler.UploadPart(ctx, *upload, partNumber, bytes.NewReader(part))
@@ -649,6 +666,12 @@ func (l *AuditLog) UploadEncryptedRecording(ctx context.Context, sessionID strin
 			return trace.Wrap(err, "uploading part")
 		}
 		streamParts = append(streamParts, *streamPart)
+
+		if !hasNext {
+			break
+		}
+
+		part = nextPart
 		partNumber++
 	}
 
@@ -771,3 +794,20 @@ func sessionStartCallbackFromContext(ctx context.Context) (SessionStartCallback,
 
 	return cb, nil
 }
+
+// PadUploadPart adds padding to the given upload part to reach the minimum size.
+func PadUploadPart(uploadPart []byte, minSize int) []byte {
+	// Create padding to reach the target size. Note that the padding cannot
+	// be shorter than the header size.
+	paddingBytes := max(minSize-len(uploadPart), ProtoStreamV2PartHeaderSize)
+	paddedPart := make([]byte, paddingBytes)
+
+	paddedPartHeader := PartHeader{
+		ProtoVersion: ProtoStreamV2,
+		PaddingSize:  uint64(paddingBytes - ProtoStreamV2PartHeaderSize),
+		PartSize:     0,
+	}
+	copy(paddedPart, paddedPartHeader.Bytes())
+
+	return append(uploadPart, paddedPart...)
+}
diff --git a/lib/events/auditlog_test.go b/lib/events/auditlog_test.go
index a9a60933a4fd6..a1e2d4c65daa7 100644
--- a/lib/events/auditlog_test.go
+++ b/lib/events/auditlog_test.go
@@ -19,6 +19,7 @@
 package events_test
 
 import (
+	"bytes"
 	"context"
 	"encoding/json"
 	"errors"
@@ -372,3 +373,51 @@ func makeLog(t *testing.T, clock clockwork.Clock) *events.AuditLog {
 
 	return alog
 }
+
+func TestPadUploadPart(t *testing.T) {
+	partData := bytes.Repeat([]byte{1, 2, 3}, 10)
+	partHeader := events.PartHeader{
+		ProtoVersion: events.V2,
+		PartSize:     uint64(len(partData)),
+		PaddingSize:  0,
+	}
+	headerBytes := partHeader.Bytes()
+	part := append(headerBytes, partData...)
+
+	// Pad the upload part to double the size.
+	minSize := len(part) * 2
+	paddedPart := events.PadUploadPart(part, minSize)
+	require.Len(t, paddedPart, minSize)
+
+	// Padding the upload part again with the same minimum should add a single header in size.
+	paddedPart = events.PadUploadPart(paddedPart, minSize)
+	require.Len(t, paddedPart, minSize+events.ProtoStreamV2PartHeaderSize)
+
+	// Ensure we can read out each part.
+	r := bytes.NewReader(paddedPart)
+	h1, err := events.ParsePartHeader(r)
+	require.NoError(t, err)
+	require.Equal(t, partHeader, h1)
+	gotData, err := io.ReadAll(io.LimitReader(r, int64(h1.PartSize)))
+	require.NoError(t, err)
+	require.Equal(t, partData, gotData)
+	io.Copy(io.Discard, io.LimitReader(r, int64(h1.PaddingSize)))
+
+	h2, err := events.ParsePartHeader(r)
+	require.NoError(t, err)
+	require.Equal(t, events.PartHeader{
+		ProtoVersion: events.V2,
+		PaddingSize:  uint64(len(part) - events.ProtoStreamV2PartHeaderSize),
+	}, h2)
+	io.Copy(io.Discard, io.LimitReader(r, int64(h2.PaddingSize)))
+
+	h3, err := events.ParsePartHeader(r)
+	require.NoError(t, err)
+	require.Equal(t, events.PartHeader{
+		ProtoVersion: events.V2,
+		PaddingSize:  0,
+	}, h3)
+
+	_, err = r.Read(nil)
+	require.ErrorIs(t, err, io.EOF)
+}
diff --git a/lib/events/azsessions/azsessions.go b/lib/events/azsessions/azsessions.go
index f7b2a206664a4..d8d65a5975245 100644
--- a/lib/events/azsessions/azsessions.go
+++ b/lib/events/azsessions/azsessions.go
@@ -523,7 +523,7 @@ func (*Handler) ReserveUploadPart(ctx context.Context, upload events.StreamUploa
 func (h *Handler) UploadPart(ctx context.Context, upload events.StreamUpload, partNumber int64, partBody io.ReadSeeker) (*events.StreamPart, error) {
 	partBlob := h.partBlob(upload, partNumber)
 
-	// our parts are just over 5 MiB (events.MinUploadPartSizeBytes) so we can
+	// our parts are just over 5 MiB [events.MinUploadPartSizeBytes] so we can
 	// upload them in one shot
 	response, err := cErr(partBlob.Upload(ctx, streaming.NopCloser(partBody), nil))
 	if err != nil {
diff --git a/lib/events/eventstest/generate.go b/lib/events/eventstest/generate.go
index 60058a8b3a32b..abafb943174c1 100644
--- a/lib/events/eventstest/generate.go
+++ b/lib/events/eventstest/generate.go
@@ -37,6 +37,8 @@ import (
 // for generated session
 type SessionParams struct {
 	// PrintEvents sets up print events count. Ignored if PrintData is set.
+	// The size of the resulting event stream varies due to compression, but with
+	// a sufficiently large number of events results in approximately 64 bytes per event.
 	PrintEvents int64
 	// PrintData is optional data to use for print events. Each element of the
 	// slice represents data for one print event.
diff --git a/lib/events/eventstest/uploader.go b/lib/events/eventstest/uploader.go
index 5164d9601f7b0..ead8d42087b0b 100644
--- a/lib/events/eventstest/uploader.go
+++ b/lib/events/eventstest/uploader.go
@@ -22,6 +22,7 @@ import (
 	"bytes"
 	"context"
 	"io"
+	"iter"
 	"sort"
 	"sync"
 	"time"
@@ -34,9 +35,18 @@ import (
 	"github.com/gravitational/teleport/lib/session"
 )
 
+// MemoryUploaderConfig optional configuration for MemoryUploader.
+type MemoryUploaderConfig struct {
+	// EventsC is used by some tests to receive signal for completed uploads.
+	EventsC chan events.UploadEvent
+	// MinimumUploadBytes sets the minimum upload part size. The uploader will
+	// add padding to smaller uploads to reach this minimum size.
+	MinimumUploadBytes int
+}
+
 // NewMemoryUploader returns a new memory uploader implementing multipart
 // upload
-func NewMemoryUploader(eventsC ...chan events.UploadEvent) *MemoryUploader {
+func NewMemoryUploader(cfg ...MemoryUploaderConfig) *MemoryUploader {
 	up := &MemoryUploader{
 		mtx:        &sync.RWMutex{},
 		uploads:    make(map[string]*MemoryUpload),
@@ -45,21 +55,22 @@ func NewMemoryUploader(eventsC ...chan events.UploadEvent) *MemoryUploader {
 		metadata:   make(map[session.ID][]byte),
 		thumbnails: make(map[session.ID][]byte),
 	}
-	if len(eventsC) != 0 {
-		up.eventsC = eventsC[0]
+	if len(cfg) != 0 {
+		up.cfg = cfg[0]
 	}
 	return up
 }
 
 // MemoryUploader uploads all bytes to memory, used in tests
 type MemoryUploader struct {
+	cfg MemoryUploaderConfig
+
 	mtx        *sync.RWMutex
 	uploads    map[string]*MemoryUpload
 	sessions   map[session.ID][]byte
 	summaries  map[session.ID][]byte
 	metadata   map[session.ID][]byte
 	thumbnails map[session.ID][]byte
-	eventsC    chan events.UploadEvent
 
 	// Clock is an optional [clockwork.Clock] to determine the time to associate
 	// with uploads and parts.
@@ -87,11 +98,11 @@ type part struct {
 }
 
 func (m *MemoryUploader) trySendEvent(event events.UploadEvent) {
-	if m.eventsC == nil {
+	if m.cfg.EventsC == nil {
 		return
 	}
 	select {
-	case m.eventsC <- event:
+	case m.cfg.EventsC <- event:
 	default:
 	}
 }
@@ -404,6 +415,64 @@ func (m *MemoryUploader) ReserveUploadPart(ctx context.Context, upload events.St
 	return nil
 }
 
+// UploadEncryptedRecording uploads encrypted recordings.
+func (m *MemoryUploader) UploadEncryptedRecording(ctx context.Context, sessionID string, parts iter.Seq2[[]byte, error]) error {
+	sessID, err := session.ParseID(sessionID)
+	if err != nil {
+		return trace.Wrap(err)
+	}
+	upload, err := m.CreateUpload(ctx, *sessID)
+	if err != nil {
+		return trace.Wrap(err, "creating upload")
+	}
+
+	next, stop := iter.Pull2(parts)
+	defer stop()
+
+	part, err, ok := next()
+	if err != nil {
+		return trace.Wrap(err)
+	} else if !ok {
+		return trace.BadParameter("unexpected empty upload")
+	}
+
+	var streamParts []events.StreamPart
+	// S3 requires that part numbers start at 1, so we do that by default regardless of which uploader is
+	// configured for the auth service
+	var partNumber int64 = 1
+	for {
+		if err := m.ReserveUploadPart(ctx, *upload, partNumber); err != nil {
+			return trace.Wrap(err, "reserving upload part")
+		}
+
+		nextPart, err, hasNext := next()
+		if err != nil {
+			return trace.Wrap(err)
+		}
+
+		// If the upload part is not at least the minimum upload part size, and this isn't
+		// the last part, append an empty part to pad up to the minimum upload size.
+		if hasNext && len(part) < m.cfg.MinimumUploadBytes {
+			part = events.PadUploadPart(part, m.cfg.MinimumUploadBytes)
+		}
+
+		streamPart, err := m.UploadPart(ctx, *upload, partNumber, bytes.NewReader(part))
+		if err != nil {
+			return trace.Wrap(err, "uploading part")
+		}
+		streamParts = append(streamParts, *streamPart)
+
+		if !hasNext {
+			break
+		}
+
+		part = nextPart
+		partNumber++
+	}
+
+	return trace.Wrap(m.CompleteUpload(ctx, *upload, streamParts), "completing upload")
+}
+
 // MockUploader is a limited implementation of [events.MultipartUploader] that
 // allows injecting errors for testing purposes. [MemoryUploader] is a more
 // complete implementation and should be preferred for testing the happy path.
diff --git a/lib/events/filesessions/fileasync.go b/lib/events/filesessions/fileasync.go
index e67d03a59fe14..091e2dca739a1 100644
--- a/lib/events/filesessions/fileasync.go
+++ b/lib/events/filesessions/fileasync.go
@@ -24,6 +24,7 @@ import (
 	"errors"
 	"fmt"
 	"io"
+	"iter"
 	"log/slog"
 	"os"
 	"path/filepath"
@@ -66,6 +67,14 @@ type UploaderConfig struct {
 	Component string
 	// EncryptedRecordingUploader uploads encrypted session recordings
 	EncryptedRecordingUploader events.EncryptedRecordingUploader
+	// EncryptedRecordingUploadTargetSize is the target size used when aggregating
+	// encrypted recording parts before sending them to EncryptedRecordingUploader.
+	// Encrypted uploads should slightly exceed this target size unless limited by the maximum.
+	EncryptedRecordingUploadTargetSize int
+	// EncryptedRecordingUploadTargetSize is the maximum size used when aggregating
+	// encrypted recording parts before sending them to EncryptedRecordingUploader.
+	// If set to 0, then no maximum is enforced.
+	EncryptedRecordingUploadMaxSize int
 }
 
 // CheckAndSetDefaults checks and sets default values of UploaderConfig
@@ -91,6 +100,9 @@ func (cfg *UploaderConfig) CheckAndSetDefaults() error {
 	if cfg.Component == "" {
 		cfg.Component = teleport.ComponentUpload
 	}
+	if cfg.EncryptedRecordingUploadTargetSize == 0 {
+		cfg.EncryptedRecordingUploadTargetSize = events.MinUploadPartSizeBytes
+	}
 	return nil
 }
 
@@ -385,55 +397,126 @@ func (u *Uploader) uploadEncryptedRecording(ctx context.Context, sessionID strin
 		return trace.Wrap(errSkipEncryptedUpload, "no encrypted uploader configured")
 	}
 
-	partIter := func(yield func([]byte, error) bool) {
-		var buf bytes.Buffer
-		for {
+	// The upload parts in the given reader are each ~128KB. Usually these parts are consumed and reconstructed
+	// by Auth in 5MB chunks to meet the minimum upload size of upload providers like S3. Since these uploads
+	// are proxied directly to the uploader from the agent here (see link below), this agent needs to combine
+	// these upload parts into larger, aggregated upload parts.
+	//
+	// https://github.com/gravitational/teleport/blob/master/rfd/0127-encrypted-session-recordings.md#session-recording-modes
+	partIter := encryptedUploadAggregateIter(in, u.cfg.EncryptedRecordingUploadTargetSize, u.cfg.EncryptedRecordingUploadMaxSize)
+
+	u.log.DebugContext(ctx, "uploading encrypted recording", "session_id", sessionID)
+	if err := u.cfg.EncryptedRecordingUploader.UploadEncryptedRecording(ctx, sessionID, partIter); err != nil {
+		return trace.Wrap(err)
+	}
+
+	return nil
+}
+
+// encryptedUploadAggregateIter returns an iterator that aggregates upload parts from the given reader
+// into larger upload with size greater than targetSize, or as near targetSize as possible without exceeding
+// the maxSize.
+func encryptedUploadAggregateIter(in io.Reader, targetSize int, maxSize int) iter.Seq2[[]byte, error] {
+	// buf holds aggregated upload parts that will be uploaded as a single upload part.
+	var buf bytes.Buffer
+
+	readNextPartHeader := func() (events.PartHeader, error) {
+		header, err := events.ParsePartHeader(in)
+		if err != nil {
+			return events.PartHeader{}, trace.Wrap(err)
+		}
+
+		if header.Flags&events.ProtoStreamFlagEncrypted == 0 {
+			return events.PartHeader{}, trace.Wrap(errSkipEncryptedUpload, "recording not encrypted")
+		}
+
+		// Ensure that the individual file upload parts are not larger than the max size allowed here (e.g. 4MB gRPC max message size).
+		// This error case should never be hit outside of tests, but we want to ensure we fail fast in case a bug ever arises here.
+		totalPartSize := len(header.Bytes()) + int(header.PartSize)
+		if maxSize != 0 && totalPartSize > maxSize {
+			return events.PartHeader{}, trace.BadParameter("encrypted upload part is larger than the maximum size, so it cannot be uploaded. This is a bug.")
+		}
+
+		return header, nil
+	}
+
+	writePartToBuffer := func(header events.PartHeader) error {
+		// We are going to discard any padding as it isn't necessary within the individual parts.
+		originalPaddingSize := header.PaddingSize
+		header.PaddingSize = 0
+
+		if _, err := buf.Write(header.Bytes()); err != nil {
+			return trace.Wrap(err)
+		}
+
+		// Copy the part into the buffer.
+		reader := io.LimitReader(in, int64(header.PartSize))
+		copied, err := io.Copy(&buf, reader)
+		if err != nil && !errors.Is(err, io.EOF) {
+			return trace.Wrap(err)
+		}
+
+		if copied != int64(header.PartSize) {
+			return trace.Errorf("copied %d bytes from recording part instead of expected %d", copied, int64(header.PartSize))
+		}
+
+		// Discard the padding.
+		discarded, err := io.Copy(io.Discard, io.LimitReader(in, int64(originalPaddingSize)))
+		if err != nil && !errors.Is(err, io.EOF) {
+			return trace.Wrap(err)
+		}
+
+		if discarded != int64(originalPaddingSize) {
+			return trace.Errorf("discarded %d padding bytes from recording part instead of expected %d", copied, int64(originalPaddingSize))
+		}
+
+		return nil
+	}
+
+	return func(yield func([]byte, error) bool) {
+		// yield the current aggregated upload part and reset the buffer.
+		yieldCurrent := func() bool {
+			// Copy the buffer to a new []byte so that the next
+			// iteration doesn't wipe the previous yielded bytes.
+			bytes := make([]byte, buf.Len())
+			copy(bytes, buf.Bytes())
 			buf.Reset()
-			header, err := events.ParsePartHeader(in)
+			return yield(bytes, nil)
+		}
+
+		for {
+			partHeader, err := readNextPartHeader()
 			if err != nil {
 				if errors.Is(err, io.EOF) {
-					break
+					// No parts remaining, yield the current part and return.
+					yieldCurrent()
+					return
 				}
 
 				yield(nil, trace.Wrap(err))
 				return
 			}
 
-			if header.Flags&events.ProtoStreamFlagEncrypted == 0 {
-				yield(nil, trace.Wrap(errSkipEncryptedUpload, "recording not encrypted"))
-				return
-			}
-
-			if _, err := buf.Write(header.Bytes()); err != nil {
-				yield(nil, trace.Wrap(err))
-				return
-			}
-
-			totalPartSize := int64(header.PartSize + header.PaddingSize)
-			reader := io.LimitReader(in, totalPartSize)
-			copied, err := io.Copy(&buf, reader)
-			if err != nil && !errors.Is(err, io.EOF) {
-				yield(nil, trace.Wrap(err))
-				return
+			// If a max size is configured and the aggregate buffer is not empty, check if there is
+			// room to add this upload part. If not, yield the current aggregate before continuing.
+			totalPartSize := len(partHeader.Bytes()) + int(partHeader.PartSize)
+			if maxSize != 0 && buf.Len() > 0 && buf.Len()+totalPartSize > maxSize {
+				if !yieldCurrent() {
+					return
+				}
 			}
 
-			if copied != totalPartSize {
-				yield(nil, trace.Errorf("copied %d bytes of recording part instead of expected %d", copied, totalPartSize))
-				return
-			}
+			writePartToBuffer(partHeader)
 
-			if !yield(buf.Bytes(), nil) {
-				return
+			// If we've reached the target upload size, yield the current
+			// aggregated upload part before continuing.
+			if buf.Len() > targetSize {
+				if !yieldCurrent() {
+					return
+				}
 			}
 		}
 	}
-
-	u.log.DebugContext(ctx, "uploading encrypted recording", "session_id", sessionID)
-	if err := u.cfg.EncryptedRecordingUploader.UploadEncryptedRecording(ctx, sessionID, partIter); err != nil {
-		return trace.Wrap(err)
-	}
-
-	return nil
 }
 
 func (u *Uploader) startUpload(ctx context.Context, fileName string) (err error) {
@@ -502,6 +585,13 @@ func (u *Uploader) startUpload(ctx context.Context, fileName string) (err error)
 
 	if err := u.uploadEncryptedRecording(ctx, sessionID.String(), sessionFile); !errors.Is(err, errSkipEncryptedUpload) {
 		if err != nil {
+			log.WarnContext(ctx, "Encrypted upload failed.", "error", err)
+			u.emitEvent(events.UploadEvent{
+				SessionID: sessionID.String(),
+				Error:     sessionError{err},
+				Created:   u.cfg.Clock.Now().UTC(),
+			})
+
 			return trace.Wrap(err)
 		}
 
diff --git a/lib/events/filesessions/fileasync_chaos_test.go b/lib/events/filesessions/fileasync_chaos_test.go
index 17afa3609ce94..a9a7ef18890b8 100644
--- a/lib/events/filesessions/fileasync_chaos_test.go
+++ b/lib/events/filesessions/fileasync_chaos_test.go
@@ -54,7 +54,9 @@ func TestChaosUpload(t *testing.T) {
 	defer cancel()
 
 	eventsC := make(chan events.UploadEvent, 100)
-	memUploader := eventstest.NewMemoryUploader(eventsC)
+	memUploader := eventstest.NewMemoryUploader(eventstest.MemoryUploaderConfig{
+		EventsC: eventsC,
+	})
 	streamer, err := events.NewProtoStreamer(events.ProtoStreamerConfig{
 		Uploader:       memUploader,
 		MinUploadBytes: 1024,
@@ -122,7 +124,9 @@ func TestChaosUpload(t *testing.T) {
 	go uploader.Serve(ctx)
 	defer uploader.Close()
 
-	fileStreamer, err := NewStreamer(scanDir, nil)
+	fileStreamer, err := NewStreamer(StreamerConfig{
+		Dir: scanDir,
+	})
 	require.NoError(t, err)
 
 	parallelStreams := 20
diff --git a/lib/events/filesessions/fileasync_test.go b/lib/events/filesessions/fileasync_test.go
index f26e585fc33c8..4d95abbe729ed 100644
--- a/lib/events/filesessions/fileasync_test.go
+++ b/lib/events/filesessions/fileasync_test.go
@@ -22,9 +22,17 @@ import (
 	"bytes"
 	"context"
 	"crypto/rand"
+	"encoding/hex"
 	"errors"
+	"io"
+	"io/fs"
+	"iter"
+	mathrand "math/rand/v2"
 	"os"
 	"path/filepath"
+	"slices"
+	"strconv"
+	"strings"
 	"sync/atomic"
 	"testing"
 	"time"
@@ -41,19 +49,18 @@ import (
 
 // TestUploadOK tests async file uploads scenarios
 func TestUploadOK(t *testing.T) {
-	p := newUploaderPack(t, nil)
-	defer p.Close(t)
+	ctx, cancel := context.WithTimeout(t.Context(), 10*time.Second)
+	defer cancel()
 
-	// wait until uploader blocks on the clock
-	p.clock.BlockUntil(1)
+	p := newUploaderPack(ctx, t, uploaderPackConfig{})
 
-	fileStreamer, err := NewStreamer(p.scanDir, nil)
-	require.NoError(t, err)
+	// wait until uploader blocks on the clock
+	p.clock.BlockUntilContext(ctx, 1)
 
 	inEvents := eventstest.GenerateTestSession(eventstest.SessionParams{PrintEvents: 1024})
 	sid := inEvents[0].(events.SessionMetadataGetter).GetSessionID()
 
-	emitStream(p.ctx, t, fileStreamer, inEvents)
+	p.emitEvents(ctx, t, inEvents)
 
 	// initiate the scan by advancing clock past
 	// block period
@@ -64,34 +71,33 @@ func TestUploadOK(t *testing.T) {
 	case event = <-p.memEventsC:
 		require.Equal(t, event.SessionID, sid)
 		require.NoError(t, event.Error)
-	case <-p.ctx.Done():
+	case <-ctx.Done():
 		t.Fatalf("Timeout waiting for async upload, try `go test -v` to get more logs for details")
 	}
 
 	// read the upload and make sure the data is equal
-	outEvents := readStream(p.ctx, t, event.UploadID, p.memUploader)
+	outEvents := p.readEvents(ctx, t, event.UploadID)
 	require.Equal(t, inEvents, outEvents)
 }
 
 // TestUploadParallel verifies several parallel uploads that have to wait
 // for semaphore
 func TestUploadParallel(t *testing.T) {
-	p := newUploaderPack(t, nil)
-	defer p.Close(t)
+	ctx, cancel := context.WithTimeout(t.Context(), 10*time.Second)
+	defer cancel()
+
+	p := newUploaderPack(ctx, t, uploaderPackConfig{})
 
 	// wait until uploader blocks on the clock
-	p.clock.BlockUntil(1)
+	p.clock.BlockUntilContext(ctx, 1)
 
 	sessions := make(map[string][]apievents.AuditEvent)
 
 	for range 5 {
-		fileStreamer, err := NewStreamer(p.scanDir, nil)
-		require.NoError(t, err)
-
 		sessionEvents := eventstest.GenerateTestSession(eventstest.SessionParams{PrintEvents: 1024})
 		sid := sessionEvents[0].(events.SessionMetadataGetter).GetSessionID()
 
-		emitStream(p.ctx, t, fileStreamer, sessionEvents)
+		p.emitEvents(ctx, t, sessionEvents)
 		sessions[sid] = sessionEvents
 	}
 
@@ -108,12 +114,12 @@ func TestUploadParallel(t *testing.T) {
 			require.NoError(t, event.Error)
 			sessionEvents, found = sessions[event.SessionID]
 			require.True(t, found, "session %q is not expected, possible duplicate event", event.SessionID)
-		case <-p.ctx.Done():
+		case <-ctx.Done():
 			t.Fatalf("Timeout waiting for async upload, try `go test -v` to get more logs for details")
 		}
 
 		// read the upload and make sure the data is equal
-		outEvents := readStream(p.ctx, t, event.UploadID, p.memUploader)
+		outEvents := p.readEvents(ctx, t, event.UploadID)
 
 		require.Equal(t, sessionEvents, outEvents)
 
@@ -150,7 +156,7 @@ func TestMovesCorruptedUploads(t *testing.T) {
 	require.NoError(t, err)
 	require.NoError(t, badFile.Close())
 
-	stats, err := uploader.Scan(context.Background())
+	stats, err := uploader.Scan(t.Context())
 	require.NoError(t, err)
 	require.Equal(t, 2, stats.Scanned)
 	require.Equal(t, 2, stats.Corrupted)
@@ -165,7 +171,7 @@ func TestMovesCorruptedUploads(t *testing.T) {
 	// run a second scan to verify that:
 	// 1. the corrupted file is no longer processed
 	// 2. the file with the bad name was still flagged as corrupted
-	stats, err = uploader.Scan(context.Background())
+	stats, err = uploader.Scan(t.Context())
 	require.NoError(t, err)
 	require.Equal(t, 1, stats.Scanned)
 	require.Equal(t, 1, stats.Corrupted)
@@ -363,39 +369,40 @@ func TestUploadBackoff(t *testing.T) {
 	var terminateConnectionAt atomic.Int64
 	terminateConnectionAt.Store(700)
 
-	p := newUploaderPack(t, func(streamer events.Streamer) (events.Streamer, error) {
-		return events.NewCallbackStreamer(events.CallbackStreamerConfig{
-			Inner: streamer,
-			OnRecordEvent: func(ctx context.Context, sid session.ID, pe apievents.PreparedSessionEvent) error {
-				event := pe.GetAuditEvent()
-				terminateAt := terminateConnectionAt.Load()
-				if terminateAt > 0 && event.GetIndex() >= terminateAt {
-					t.Logf("Terminating connection at event %v", event.GetIndex())
-					return trace.ConnectionProblem(nil, "connection terminated at event index %v", terminateAt)
-				}
-				return nil
-			},
-		})
+	ctx, cancel := context.WithTimeout(t.Context(), 10*time.Second)
+	defer cancel()
+
+	p := newUploaderPack(ctx, t, uploaderPackConfig{
+		wrapProtoStreamer: func(streamer events.Streamer) (events.Streamer, error) {
+			return events.NewCallbackStreamer(events.CallbackStreamerConfig{
+				Inner: streamer,
+				OnRecordEvent: func(ctx context.Context, sid session.ID, pe apievents.PreparedSessionEvent) error {
+					event := pe.GetAuditEvent()
+					terminateAt := terminateConnectionAt.Load()
+					if terminateAt > 0 && event.GetIndex() >= terminateAt {
+						t.Logf("Terminating connection at event %v", event.GetIndex())
+						return trace.ConnectionProblem(nil, "connection terminated at event index %v", terminateAt)
+					}
+					return nil
+				},
+			})
+		},
 	})
-	defer p.Close(t)
 
 	// wait until uploader blocks on the clock before creating the stream
-	p.clock.BlockUntil(1)
-
-	fileStreamer, err := NewStreamer(p.scanDir, nil)
-	require.NoError(t, err)
+	p.clock.BlockUntilContext(ctx, 1)
 
 	inEvents := eventstest.GenerateTestSession(eventstest.SessionParams{PrintEvents: 4096})
 	sid := inEvents[0].(events.SessionMetadataGetter).GetSessionID()
 
-	stream, err := fileStreamer.CreateAuditStream(p.ctx, session.ID(sid))
+	stream, err := p.fileStreamer.CreateAuditStream(ctx, session.ID(sid))
 	require.NoError(t, err)
 
 	for _, event := range inEvents {
-		err := stream.RecordEvent(p.ctx, eventstest.PrepareEvent(event))
+		err := stream.RecordEvent(ctx, eventstest.PrepareEvent(event))
 		require.NoError(t, err)
 	}
-	err = stream.Complete(p.ctx)
+	err = stream.Complete(ctx)
 	require.NoError(t, err)
 
 	// initiate the scan by advancing clock past
@@ -418,14 +425,14 @@ func TestUploadBackoff(t *testing.T) {
 				diffs = append(diffs, event.Created.Sub(prev))
 				prev = event.Created
 			}
-		case <-p.ctx.Done():
+		case <-ctx.Done():
 			t.Fatalf("Timeout waiting for async upload %v, try `go test -v` to get more logs for details", i)
 		}
 
 		// Block until Scan has been called two times,
 		// first time after doing the scan, and second
 		// on receiving the event to <- eventsCh
-		p.clock.BlockUntil(2)
+		p.clock.BlockUntilContext(ctx, 2)
 		p.clock.Advance(p.scanPeriod*time.Duration(i+2) + time.Second)
 	}
 
@@ -438,12 +445,12 @@ func TestUploadBackoff(t *testing.T) {
 
 	// Fix the streamer, make sure the upload succeeds
 	terminateConnectionAt.Store(0)
-	p.clock.BlockUntil(2)
+	p.clock.BlockUntilContext(ctx, 2)
 	p.clock.Advance(time.Hour)
 	select {
 	case event := <-p.eventsC:
 		require.NoError(t, event.Error)
-	case <-p.ctx.Done():
+	case <-ctx.Done():
 		t.Fatalf("Timeout waiting for async upload, try `go test -v` to get more logs for details")
 	}
 }
@@ -451,13 +458,13 @@ func TestUploadBackoff(t *testing.T) {
 // TestUploadBadSession creates a corrupted session file
 // and makes sure the uploader marks it as faulty
 func TestUploadBadSession(t *testing.T) {
-	ctx := context.Background()
+	ctx, cancel := context.WithTimeout(t.Context(), 10*time.Second)
+	defer cancel()
 
-	p := newUploaderPack(t, nil)
-	defer p.Close(t)
+	p := newUploaderPack(ctx, t, uploaderPackConfig{})
 
 	// wait until uploader blocks on the clock
-	p.clock.BlockUntil(1)
+	p.clock.BlockUntilContext(ctx, 1)
 
 	sessionID := session.NewID()
 	fileName := filepath.Join(p.scanDir, string(sessionID)+tarExt)
@@ -476,7 +483,7 @@ func TestUploadBadSession(t *testing.T) {
 	case event = <-p.eventsC:
 		require.Error(t, event.Error)
 		require.True(t, isSessionError(event.Error))
-	case <-p.ctx.Done():
+	case <-ctx.Done():
 		t.Fatalf("Timeout waiting for async upload, try `go test -v` to get more logs for details")
 	}
 
@@ -487,80 +494,417 @@ func TestUploadBadSession(t *testing.T) {
 	require.Equal(t, 0, stats.Started)
 }
 
+// TestMinimumUpload tests that the minimum upload values for files and final uploads are respected.
+func TestMinimumUpload(t *testing.T) {
+	ctx, cancel := context.WithTimeout(t.Context(), 10*time.Second)
+	defer cancel()
+
+	// The gzip writer ensures that upload parts exceed the minimum upload size, and imprecisely
+	// constrains the maximum size to 133% of the minimum. At small values, this is especially
+	// imprecise, so we give a full 200% of the minimum as overhead.
+	//
+	// Usually, we use 128KB for file parts and 5KB for final upload parts.
+	minFileBytes := 8192
+	maxFileBytes := 2 * minFileBytes
+	minUploadBytes := 33768
+	maxUploadBytes := 2 * minUploadBytes
+
+	p := newUploaderPack(ctx, t, uploaderPackConfig{
+		minimumFileUploadBytes: int64(minFileBytes),
+		minimumUploadBytes:     int64(minUploadBytes),
+	})
+
+	// wait until uploader blocks on the clock
+	p.clock.BlockUntilContext(ctx, 1)
+
+	inEvents := eventstest.GenerateTestSession(eventstest.SessionParams{PrintEvents: int64(mathrand.IntN(5000) + 5000)})
+	sid := inEvents[0].(events.SessionMetadataGetter).GetSessionID()
+	stream, err := p.fileStreamer.CreateAuditStream(ctx, session.ID(sid))
+	require.NoError(t, err)
+	for _, event := range inEvents {
+		err := stream.RecordEvent(ctx, eventstest.PrepareEvent(event))
+		require.NoError(t, err)
+	}
+
+	// Before completing the file stream, which writes upload part files into a .tar, check that
+	// each file part was within specific size expectations.
+	var partFiles []fs.FileInfo
+	err = filepath.Walk(p.scanDir, func(path string, info fs.FileInfo, err error) error {
+		// skip non-part files.
+		if ext := filepath.Ext(info.Name()); ext == ".part" {
+			partFiles = append(partFiles, info)
+		}
+		return nil
+	})
+	require.NoError(t, err)
+
+	slices.SortFunc(partFiles, func(a fs.FileInfo, b fs.FileInfo) int {
+		aPartNumberStr, _ := strings.CutSuffix(a.Name(), ".part")
+		aPartNumber, err := strconv.Atoi(aPartNumberStr)
+		require.NoError(t, err)
+		bPartNumberStr, _ := strings.CutSuffix(b.Name(), ".part")
+		bPartNumber, err := strconv.Atoi(bPartNumberStr)
+		require.NoError(t, err)
+		return aPartNumber - bPartNumber
+	})
+
+	for i, partFile := range partFiles {
+		partSize := int(partFile.Size())
+		require.GreaterOrEqual(t, partSize, minFileBytes, "expected upload part %v to be between %v and %v bytes, but was %v bytes", i, minFileBytes, maxFileBytes, partSize)
+		require.LessOrEqual(t, partSize, maxFileBytes, "expected upload part %v to be between %v and %v bytes, but was %v bytes", i, minFileBytes, maxFileBytes, partSize)
+	}
+
+	// Complete the file stream and advance the clock to unblock the uploader scanner.
+	err = stream.Complete(ctx)
+	require.NoError(t, err)
+	p.clock.Advance(p.scanPeriod + time.Second)
+
+	var event events.UploadEvent
+	select {
+	case event = <-p.memEventsC:
+		require.Equal(t, event.SessionID, sid)
+		require.NoError(t, event.Error)
+	case <-ctx.Done():
+		t.Fatalf("Timeout waiting for async upload, try `go test -v` to get more logs for details")
+	}
+
+	// read the upload and make sure the data is equal
+	outEvents := p.readEvents(ctx, t, event.UploadID)
+	require.Equal(t, inEvents, outEvents)
+
+	uploadParts, err := p.memUploader.GetParts(event.UploadID)
+	require.NoError(t, err)
+
+	// minimumProtoUploadBytes should ensure each upload part is within specific size expectations.
+	for i, part := range uploadParts {
+		if i == len(uploadParts)-1 {
+			// The last part is not required to meet the minimum size.
+			require.LessOrEqual(t, len(part), maxUploadBytes, "expected last upload part to be smaller than %v bytes, but was %v bytes", maxUploadBytes, len(part))
+		} else {
+			require.GreaterOrEqual(t, len(part), minUploadBytes, "expected upload part %v to be between %v and %v bytes, but was %v bytes", i, minUploadBytes, maxUploadBytes, len(part))
+			require.LessOrEqual(t, len(part), maxUploadBytes, "expected upload part %v to be between %v and %v bytes, but was %v bytes", i, minUploadBytes, maxUploadBytes, len(part))
+		}
+	}
+
+	// There should be at least 1 final upload part for every 4 file upload parts.
+	minFactor := minUploadBytes / minFileBytes
+	require.LessOrEqual(t, len(partFiles)/minFactor, len(uploadParts), "expected there to be 1 final upload part for every 4 transient file parts, but got %v and %v respectively", len(uploadParts), len(partFiles))
+}
+
+func TestUploadEncryptedRecording(t *testing.T) {
+	for _, tc := range []struct {
+		name        string
+		minFileSize int
+		// encrypted upload files should be aggregated by the encrypted uploader to reach the target size.
+		encryptedTargetSize      int
+		encryptedMaxSize         int
+		expectEncryptedUploadErr bool
+		// uploads from the encrypted uploader should be padded further by the final uploader to
+		// reach the minimum upload size. e.g. pad encrypted uploads of 4MB (max from GRPC) to reach
+		// S3 minimum upload of 5MB.
+		minUploadBytes int
+	}{
+		{
+			name:                "target size larger than max encrypted upload size",
+			minFileSize:         8192,
+			encryptedTargetSize: 8192 * 4 * 2,
+			encryptedMaxSize:    8192 * 4,
+		}, {
+			name:                "target size equals max encrypted upload size",
+			minFileSize:         8192,
+			encryptedTargetSize: 8192 * 4,
+			encryptedMaxSize:    8192 * 4,
+		}, {
+			name:                "target size smaller than max encrypted upload size",
+			minFileSize:         8192,
+			encryptedTargetSize: 8192 * 4,
+			encryptedMaxSize:    8192 * 4 * 2,
+		}, {
+			name:                "target size larger than min upload size",
+			minFileSize:         8192,
+			encryptedTargetSize: 8192 * 4 * 2,
+			minUploadBytes:      8192 * 4,
+		}, {
+			name:                "target size equals min upload size",
+			minFileSize:         8192,
+			encryptedTargetSize: 8192 * 4,
+			minUploadBytes:      8192 * 4,
+		}, {
+			name:                "target size smaller than min upload size",
+			minFileSize:         8192,
+			encryptedTargetSize: 8192 * 4,
+			minUploadBytes:      8192 * 4 * 2,
+		}, {
+			name:                     "min file size larger than max encrypted size",
+			minFileSize:              8192 * 4,
+			encryptedMaxSize:         8192,
+			expectEncryptedUploadErr: true,
+		},
+	} {
+		t.Run(tc.name, func(t *testing.T) {
+			ctx, cancel := context.WithTimeout(t.Context(), 10*time.Second)
+			defer cancel()
+
+			// First we calculate some expected size values for different steps in the event stream.
+			// It is easier to calculate them here rather than in the test case's parameters.
+
+			// the gzip writer is imprecise and may exceed the min file size. With a min of 8192,
+			// an extra 8192 bytes should be plenty of overhead. If this test becomes flaky, consider
+			// raising the minimum in the test cases above.
+			maxFileSize := tc.minFileSize * 2
+
+			// We expect encrypted uploads to exceed the target size, unless the maximum prevents it,
+			// in which case we will be short one file part.
+			expectEncryptedSizeFloor := tc.encryptedTargetSize
+			if tc.encryptedMaxSize != 0 && tc.encryptedTargetSize+maxFileSize > tc.encryptedMaxSize {
+				expectEncryptedSizeFloor = tc.encryptedMaxSize - maxFileSize
+			}
+
+			// We expect encrypted uploads to be below the max size if set. Otherwise, we expect it to
+			// be the target size + one additional file part.
+			expectEncryptedSizeCeil := tc.encryptedMaxSize
+			if tc.encryptedMaxSize == 0 {
+				expectEncryptedSizeCeil = tc.encryptedTargetSize + maxFileSize
+			}
+
+			// the final upload is never smaller than the encrypted size, but always above the minimum.
+			expectFinalSizeFloor := max(tc.minUploadBytes, expectEncryptedSizeFloor)
+
+			// the final upload is only larger than the minimum (+header_size) if the encrypted size is larger.
+			expectFinalSizeCeil := max(expectEncryptedSizeCeil, tc.minUploadBytes+events.ProtoStreamV2PartHeaderSize)
+
+			// Create a wrapper around the encrypted uploader to ensure the caller is yielding
+			// correctly sized uploads.
+			var recollectParts [][]byte
+			encryptedUploadWrapper := wrapEncryptedUploaderFn(func(u events.EncryptedRecordingUploader) events.EncryptedRecordingUploader {
+				return encryptedUploaderFn(func(ctx context.Context, sessionID string, parts iter.Seq2[[]byte, error]) error {
+					next, stop := iter.Pull2(parts)
+					defer stop()
+
+					part, err, ok := next()
+					if err != nil {
+						return trace.Wrap(err)
+					} else if !ok {
+						return trace.BadParameter("unexpected empty upload")
+					}
+
+					for {
+						recollectParts = append(recollectParts, part)
+
+						nextPart, err, hasNext := next()
+						if err != nil {
+							return trace.Wrap(err)
+						}
+
+						if !hasNext {
+							break
+						}
+
+						if hasNext {
+							require.GreaterOrEqual(t, len(part), expectEncryptedSizeFloor, "expected encrypted upload to be between %v and %v bytes, but was %v bytes", expectEncryptedSizeFloor, expectEncryptedSizeCeil, len(part))
+							require.LessOrEqual(t, len(part), expectEncryptedSizeCeil, "expected encrypted upload to be between %v and %v bytes, but was %v bytes", expectEncryptedSizeFloor, expectEncryptedSizeCeil, len(part))
+						} else {
+							// The last part is not expected to meet the target size.
+							require.LessOrEqual(t, len(part), expectEncryptedSizeCeil, "expected last encrypted upload to be smaller than %v bytes, but was %v bytes", expectEncryptedSizeCeil, len(part))
+						}
+
+						part = nextPart
+					}
+
+					partReIter := func(yield func([]byte, error) bool) {
+						for _, part := range recollectParts {
+							if !yield(part, nil) {
+								return
+							}
+						}
+					}
+
+					return u.UploadEncryptedRecording(ctx, sessionID, partReIter)
+				})
+			})
+
+			p := newUploaderPack(ctx, t, uploaderPackConfig{
+				minimumFileUploadBytes:             int64(tc.minFileSize),
+				minimumUploadBytes:                 int64(tc.minUploadBytes),
+				encrypter:                          &fakeEncryptedIO{},
+				wrapEncryptedUploader:              encryptedUploadWrapper,
+				encryptedRecordingUploadTargetSize: tc.encryptedTargetSize,
+				encryptedRecordingUploadMaxSize:    tc.encryptedMaxSize,
+			})
+
+			// wait until uploader blocks on the clock
+			err := p.clock.BlockUntilContext(ctx, 1)
+			require.NoError(t, err)
+
+			// Here we ensure at least 5 final upload parts so that we amply test the test case values, + some variance.
+			eventsCount := expectFinalSizeCeil*5/64 + mathrand.IntN(1000)
+			inEvents := eventstest.GenerateTestSession(eventstest.SessionParams{PrintEvents: int64(eventsCount)})
+			sid := inEvents[0].(events.SessionMetadataGetter).GetSessionID()
+			p.emitEvents(ctx, t, inEvents)
+
+			// initiate the scan by advancing clock past
+			// block period
+			p.clock.Advance(p.scanPeriod + time.Second)
+
+			var event events.UploadEvent
+			select {
+			case event = <-p.memEventsC:
+				if tc.expectEncryptedUploadErr {
+					t.Fatalf("Unexpected upload event")
+				}
+				require.Equal(t, event.SessionID, sid)
+				require.NoError(t, event.Error)
+			case event = <-p.eventsC:
+				if !tc.expectEncryptedUploadErr {
+					t.Fatalf("Unexpected upload event")
+				}
+				require.Error(t, event.Error)
+				require.True(t, isSessionError(event.Error))
+				return
+			case <-ctx.Done():
+				t.Fatalf("Timeout waiting for async upload, try `go test -v` to get more logs for details")
+			}
+
+			// read the upload and make sure the data is equal
+			outEvents := p.readEvents(ctx, t, event.UploadID)
+			require.Equal(t, inEvents, outEvents)
+
+			uploadParts, err := p.memUploader.GetParts(event.UploadID)
+			require.NoError(t, err)
+
+			// final uploads should be above the minimum upload size.
+			for i, part := range uploadParts {
+				if i == len(uploadParts)-1 {
+					// The last part is not required to meet the minimum size, so it shouldn't exceed the original encrypted recording size.
+					require.LessOrEqual(t, len(part), expectEncryptedSizeCeil, "expected last upload to be smaller than %v bytes, but was %v bytes", expectEncryptedSizeCeil, len(part))
+				} else {
+					require.GreaterOrEqual(t, len(part), expectFinalSizeFloor, "expected upload to be between %v and %v bytes, but was %v bytes", expectFinalSizeFloor, expectFinalSizeCeil, len(part))
+					require.LessOrEqual(t, len(part), expectFinalSizeCeil, "expected upload to be between %v and %v bytes, but was %v bytes", expectFinalSizeFloor, expectFinalSizeCeil, len(part))
+				}
+			}
+
+			// There should be one final upload for each upload part from the encrypted uploader.
+			require.Len(t, recollectParts, len(uploadParts), "expected there to be an equal amount of final upload parts and transient upload parts, but got %v and %v respectively", len(uploadParts), len(recollectParts))
+		})
+	}
+}
+
+type uploaderPackConfig struct {
+	minimumFileUploadBytes             int64
+	minimumUploadBytes                 int64
+	wrapProtoStreamer                  wrapStreamerFn
+	encrypter                          events.EncryptionWrapper
+	wrapEncryptedUploader              wrapEncryptedUploaderFn
+	encryptedRecordingUploadTargetSize int
+	encryptedRecordingUploadMaxSize    int
+}
+
 // uploaderPack reduces boilerplate required
 // to create a test
 type uploaderPack struct {
 	scanPeriod       time.Duration
 	initialScanDelay time.Duration
 	clock            *clockwork.FakeClock
-	eventsC          chan events.UploadEvent
-	memEventsC       chan events.UploadEvent
-	memUploader      *eventstest.MemoryUploader
-	streamer         events.Streamer
-	scanDir          string
-	uploader         *Uploader
-	ctx              context.Context
-	cancel           context.CancelFunc
-}
-
-func (u *uploaderPack) Close(t *testing.T) {
-	u.cancel()
+	// fileStreamer streams events to upload parts on disk.
+	scanDir      string
+	fileStreamer events.Streamer
+	// uploader scans upload parts from disk and streams them through the protoStreamer.
+	eventsC  chan events.UploadEvent
+	uploader *Uploader
+	// protoStreamer streams events to upload parts in-memory (represents final audit log storage).
+	protoStreamer events.Streamer
+	memEventsC    chan events.UploadEvent
+	memUploader   *eventstest.MemoryUploader
 }
 
-func newUploaderPack(t *testing.T, wrapStreamer wrapStreamerFn) uploaderPack {
+func newUploaderPack(ctx context.Context, t *testing.T, cfg uploaderPackConfig) uploaderPack {
 	scanDir := t.TempDir()
 	corruptedDir := t.TempDir()
 
-	ctx, cancel := context.WithTimeout(context.Background(), 10*time.Second)
+	ctx, cancel := context.WithCancel(ctx)
+	t.Cleanup(cancel)
+
 	pack := uploaderPack{
 		clock:            clockwork.NewFakeClock(),
 		eventsC:          make(chan events.UploadEvent, 100),
 		memEventsC:       make(chan events.UploadEvent, 100),
-		ctx:              ctx,
-		cancel:           cancel,
 		scanDir:          scanDir,
 		scanPeriod:       10 * time.Second,
 		initialScanDelay: 10 * time.Millisecond,
 	}
-	pack.memUploader = eventstest.NewMemoryUploader(pack.memEventsC)
 
-	streamer, err := events.NewProtoStreamer(events.ProtoStreamerConfig{
+	pack.memUploader = eventstest.NewMemoryUploader(eventstest.MemoryUploaderConfig{
+		EventsC:            pack.memEventsC,
+		MinimumUploadBytes: int(cfg.minimumUploadBytes),
+	})
+
+	var err error
+	pack.fileStreamer, err = NewStreamer(StreamerConfig{
+		Dir:            scanDir,
+		MinUploadBytes: cfg.minimumFileUploadBytes,
+		Encrypter:      cfg.encrypter,
+	})
+	require.NoError(t, err)
+
+	pack.protoStreamer, err = events.NewProtoStreamer(events.ProtoStreamerConfig{
 		Uploader:       pack.memUploader,
-		MinUploadBytes: 1024,
+		MinUploadBytes: cfg.minimumUploadBytes,
+		// Skip encrypter in proto streamer, encryption skips the proto stream flow.
 	})
 	require.NoError(t, err)
-	pack.streamer = streamer
-	if wrapStreamer != nil {
-		pack.streamer, err = wrapStreamer(pack.streamer)
+
+	if cfg.wrapProtoStreamer != nil {
+		pack.protoStreamer, err = cfg.wrapProtoStreamer(pack.protoStreamer)
 		require.NoError(t, err)
 	}
 
-	uploader, err := NewUploader(UploaderConfig{
-		ScanDir:          pack.scanDir,
-		CorruptedDir:     corruptedDir,
-		InitialScanDelay: pack.initialScanDelay,
-		ScanPeriod:       pack.scanPeriod,
-		Streamer:         pack.streamer,
-		Clock:            pack.clock,
-		EventsC:          pack.eventsC,
-	})
+	uploaderCfg := UploaderConfig{
+		ScanDir:                            pack.scanDir,
+		CorruptedDir:                       corruptedDir,
+		InitialScanDelay:                   pack.initialScanDelay,
+		ScanPeriod:                         pack.scanPeriod,
+		Streamer:                           pack.protoStreamer,
+		Clock:                              pack.clock,
+		EventsC:                            pack.eventsC,
+		EncryptedRecordingUploader:         pack.memUploader,
+		EncryptedRecordingUploadTargetSize: cfg.encryptedRecordingUploadTargetSize,
+		EncryptedRecordingUploadMaxSize:    cfg.encryptedRecordingUploadMaxSize,
+	}
+	if cfg.wrapEncryptedUploader != nil {
+		uploaderCfg.EncryptedRecordingUploader = cfg.wrapEncryptedUploader(pack.memUploader)
+	}
+
+	pack.uploader, err = NewUploader(uploaderCfg)
 	require.NoError(t, err)
-	pack.uploader = uploader
-	go pack.uploader.Serve(pack.ctx)
+
+	go pack.uploader.Serve(ctx)
+
 	return pack
 }
 
+func (p *uploaderPack) emitEvents(ctx context.Context, t *testing.T, inEvents []apievents.AuditEvent) {
+	emitStream(ctx, t, p.fileStreamer, inEvents)
+}
+
+func (p *uploaderPack) readEvents(ctx context.Context, t *testing.T, uploadID string) []apievents.AuditEvent {
+	return readStream(ctx, t, uploadID, p.memUploader)
+}
+
 type wrapStreamerFn func(streamer events.Streamer) (events.Streamer, error)
 
+type wrapEncryptedUploaderFn func(u events.EncryptedRecordingUploader) events.EncryptedRecordingUploader
+
 // runResume runs resume scenario based on the test case specification
 func runResume(t *testing.T, testCase resumeTestCase) {
 	t.Logf("Running test %q.", testCase.name)
-	ctx, cancel := context.WithTimeout(context.Background(), 10*time.Second)
+	ctx, cancel := context.WithTimeout(t.Context(), 10*time.Second)
 	defer cancel()
 
 	clock := clockwork.NewFakeClock()
 	eventsC := make(chan events.UploadEvent, 100)
-	memUploader := eventstest.NewMemoryUploader(eventsC)
+	memUploader := eventstest.NewMemoryUploader(eventstest.MemoryUploaderConfig{
+		EventsC: eventsC,
+	})
 	streamer, err := events.NewProtoStreamer(events.ProtoStreamerConfig{
 		Uploader:       memUploader,
 		MinUploadBytes: 1024,
@@ -585,11 +929,13 @@ func runResume(t *testing.T, testCase resumeTestCase) {
 	require.NoError(t, err)
 	go uploader.Serve(ctx)
 	// wait until uploader blocks on the clock
-	clock.BlockUntil(1)
+	clock.BlockUntilContext(ctx, 1)
 
 	defer uploader.Close()
 
-	fileStreamer, err := NewStreamer(scanDir, nil)
+	fileStreamer, err := NewStreamer(StreamerConfig{
+		Dir: scanDir,
+	})
 	require.NoError(t, err)
 
 	inEvents := eventstest.GenerateTestSession(eventstest.SessionParams{PrintEvents: 1024})
@@ -618,7 +964,7 @@ func runResume(t *testing.T, testCase resumeTestCase) {
 		// Block until Scan has been called two times,
 		// first time after doing the scan, and second
 		// on receiving the event to <- eventsCh
-		clock.BlockUntil(2)
+		clock.BlockUntilContext(ctx, 2)
 		clock.Advance(scanPeriod*time.Duration(i+2) + time.Second)
 
 		// wait for upload success
@@ -646,6 +992,8 @@ func runResume(t *testing.T, testCase resumeTestCase) {
 
 // emitStream creates and sends the session stream
 func emitStream(ctx context.Context, t *testing.T, streamer events.Streamer, inEvents []apievents.AuditEvent) {
+	t.Helper()
+
 	sid := inEvents[0].(events.SessionMetadataGetter).GetSessionID()
 
 	stream, err := streamer.CreateAuditStream(ctx, session.ID(sid))
@@ -669,7 +1017,7 @@ func readStream(ctx context.Context, t *testing.T, uploadID string, uploader *ev
 	var reader *events.ProtoReader
 	for i, part := range parts {
 		if i == 0 {
-			reader = events.NewProtoReader(bytes.NewReader(part), nil)
+			reader = events.NewProtoReader(bytes.NewReader(part), &fakeEncryptedIO{})
 		} else {
 			err := reader.Reset(bytes.NewReader(part))
 			require.NoError(t, err)
@@ -681,3 +1029,41 @@ func readStream(ctx context.Context, t *testing.T, uploadID string, uploader *ev
 	}
 	return outEvents
 }
+
+// encryptedIO is really just a reversible transform, so we fake encryption by encoding/decoding as hex
+type fakeEncryptedIO struct {
+	err error
+}
+
+type fakeEncrypter struct {
+	inner  io.WriteCloser
+	writer io.Writer
+}
+
+func (f *fakeEncrypter) Write(out []byte) (int, error) {
+	return f.writer.Write(out)
+}
+
+func (f *fakeEncrypter) Close() error {
+	return f.inner.Close()
+}
+
+func (f *fakeEncryptedIO) WithEncryption(ctx context.Context, writer io.WriteCloser) (io.WriteCloser, error) {
+	hexWriter := hex.NewEncoder(writer)
+	encrypter := &fakeEncrypter{
+		inner:  writer,
+		writer: hexWriter,
+	}
+
+	return encrypter, f.err
+}
+
+func (f *fakeEncryptedIO) WithDecryption(ctx context.Context, reader io.Reader) (io.Reader, error) {
+	return hex.NewDecoder(reader), f.err
+}
+
+type encryptedUploaderFn func(ctx context.Context, sessionID string, parts iter.Seq2[[]byte, error]) error
+
+func (e encryptedUploaderFn) UploadEncryptedRecording(ctx context.Context, sessionID string, parts iter.Seq2[[]byte, error]) error {
+	return e(ctx, sessionID, parts)
+}
diff --git a/lib/events/filesessions/filestream.go b/lib/events/filesessions/filestream.go
index 49ce1b64113fc..2983b21f677ca 100644
--- a/lib/events/filesessions/filestream.go
+++ b/lib/events/filesessions/filestream.go
@@ -77,16 +77,43 @@ const (
 	reservationSize = minUploadBytes + events.MaxProtoMessageSizeBytes
 )
 
+type StreamerConfig struct {
+	// Dir is the dir to stream session events to.
+	Dir string
+	// MinUploadBytes is the minimum size at which upload parts are submitted.
+	// Due to the nature of the gzip writer, each upload part maybe be marginally
+	// larger, but not smaller, than the minimum size. Defaults to 128KB.
+	MinUploadBytes int64
+	// Encrypter wraps the final gzip writer with encryption.
+	Encrypter events.EncryptionWrapper
+}
+
+// CheckAndSetDefaults checks and sets streamer defaults
+func (cfg *StreamerConfig) CheckAndSetDefaults() error {
+	if cfg.Dir == "" {
+		return trace.BadParameter("missing parameter Dir")
+	}
+	if cfg.MinUploadBytes == 0 {
+		cfg.MinUploadBytes = minUploadBytes
+	}
+	return nil
+}
+
 // NewStreamer creates a streamer sending uploads to disk
-func NewStreamer(dir string, encrypter events.EncryptionWrapper) (*events.ProtoStreamer, error) {
-	handler, err := NewHandler(Config{Directory: dir, OpenFile: GetOpenFileFunc()})
+func NewStreamer(cfg StreamerConfig) (*events.ProtoStreamer, error) {
+	if err := cfg.CheckAndSetDefaults(); err != nil {
+		return nil, trace.Wrap(err)
+	}
+
+	handler, err := NewHandler(Config{Directory: cfg.Dir, OpenFile: GetOpenFileFunc()})
 	if err != nil {
 		return nil, trace.Wrap(err)
 	}
+
 	return events.NewProtoStreamer(events.ProtoStreamerConfig{
 		Uploader:       handler,
-		MinUploadBytes: minUploadBytes,
-		Encrypter:      encrypter,
+		MinUploadBytes: cfg.MinUploadBytes,
+		Encrypter:      cfg.Encrypter,
 	})
 }
 
diff --git a/lib/events/recorder/recorder.go b/lib/events/recorder/recorder.go
index 916704dae5a38..4d8a221958c21 100644
--- a/lib/events/recorder/recorder.go
+++ b/lib/events/recorder/recorder.go
@@ -139,7 +139,10 @@ func New(cfg Config) (events.SessionPreparerRecorder, error) {
 		if cfg.Encrypter == nil {
 			cfg.Encrypter = recordingencryption.NewEncryptionWrapper(cfg.RecordingCfg)
 		}
-		fileStreamer, err := filesessions.NewStreamer(uploadDir, cfg.Encrypter)
+		fileStreamer, err := filesessions.NewStreamer(filesessions.StreamerConfig{
+			Dir:       uploadDir,
+			Encrypter: cfg.Encrypter,
+		})
 		if err != nil {
 			return nil, trace.Wrap(err)
 		}
diff --git a/lib/events/session_writer_test.go b/lib/events/session_writer_test.go
index 6ad4b7464ffcf..bf06dad808206 100644
--- a/lib/events/session_writer_test.go
+++ b/lib/events/session_writer_test.go
@@ -352,7 +352,9 @@ func withBackoff(timeout, dur time.Duration) sessionWriterOption {
 
 func newSessionWriterTest(t *testing.T, newStreamer newStreamerFn, opts ...sessionWriterOption) *sessionWriterTest {
 	eventsCh := make(chan events.UploadEvent, 1)
-	uploader := eventstest.NewMemoryUploader(eventsCh)
+	uploader := eventstest.NewMemoryUploader(eventstest.MemoryUploaderConfig{
+		EventsC: eventsCh,
+	})
 	protoStreamer, err := events.NewProtoStreamer(events.ProtoStreamerConfig{
 		Uploader: uploader,
 	})
diff --git a/lib/events/stream.go b/lib/events/stream.go
index 38e85af6c8baa..dd96617848432 100644
--- a/lib/events/stream.go
+++ b/lib/events/stream.go
@@ -68,8 +68,14 @@ const (
 	// MaxProtoMessageSizeBytes is maximum protobuf marshaled message size
 	MaxProtoMessageSizeBytes = 64 * 1024
 
-	// MinUploadPartSizeBytes is the minimum allowed part size when uploading a part to
-	// Amazon S3.
+	// MinUploadPartSizeBytes is the minimum upload part size when uploading session recordings
+	// through a [MultipartUploader]. All uploaded parts are expected to meet this minimum size.
+	// The actual minimum enforced by th external audit storage depends on the provider:
+	// - S3 (AWS):    5MiB
+	// - GCloud:      5MiB
+	// - Azure:       None
+	// - File:        None
+	// - Mem (tests): Configurable
 	MinUploadPartSizeBytes = 1024 * 1024 * 5
 
 	// ProtoStreamV1 is a version of the binary protocol
@@ -1302,6 +1308,21 @@ func (r *ProtoReader) Read(ctx context.Context) (apievents.AuditEvent, error) {
 				return nil, r.setError(trace.ConvertSystemError(err))
 			}
 
+			// Empty parts may be created for padding. Just skip them and discard any padding.
+			if header.PartSize == 0 {
+				if header.PaddingSize != 0 {
+					skipped, err := io.CopyBuffer(io.Discard, io.LimitReader(r.reader, int64(header.PaddingSize)), r.messageBytes[:])
+					if err != nil {
+						return nil, r.setError(trace.ConvertSystemError(err))
+					}
+					if skipped != int64(header.PaddingSize) {
+						return nil, r.setError(trace.BadParameter(
+							"data truncated, expected to read %v bytes, but got %v", r.padding, skipped))
+					}
+				}
+				continue
+			}
+
 			r.padding = int64(header.PaddingSize)
 			reader := io.LimitReader(r.reader, int64(header.PartSize))
 			if header.Flags&ProtoStreamFlagEncrypted != 0 {
diff --git a/lib/events/stream_test.go b/lib/events/stream_test.go
index 048b8aafdfbf0..06c1d7c8e60dd 100644
--- a/lib/events/stream_test.go
+++ b/lib/events/stream_test.go
@@ -197,7 +197,7 @@ func TestProtoStreamLargeEvent(t *testing.T) {
 	ctx := context.Background()
 
 	streamer, err := events.NewProtoStreamer(events.ProtoStreamerConfig{
-		Uploader: eventstest.NewMemoryUploader(nil),
+		Uploader: eventstest.NewMemoryUploader(),
 	})
 	require.NoError(t, err)
 
diff --git a/lib/service/service.go b/lib/service/service.go
index ed1a12dc63064..7363d899524e8 100644
--- a/lib/service/service.go
+++ b/lib/service/service.go
@@ -3655,6 +3655,7 @@ func (process *TeleportProcess) initUploaderService() error {
 	// use the local auth server for uploads if auth happens to be
 	// running in this process, otherwise wait for the instance client
 	var uploaderClient procUploader
+	var encryptedRecordingMaxUploadSize int
 	if la := process.getLocalAuth(); la != nil {
 		// The auth service's upload completer is initialized separately,
 		// so as a special case we can stop early if auth happens to be
@@ -3670,6 +3671,7 @@ func (process *TeleportProcess) initUploaderService() error {
 			return trace.Wrap(err, "cannot get cluster name")
 		}
 		clusterName = cn.GetClusterName()
+
 	} else {
 		logger.DebugContext(process.ExitContext(), "auth is not running in-process, waiting for instance connector")
 		conn, err := waitForInstanceConnector(process, logger)
@@ -3681,6 +3683,10 @@ func (process *TeleportProcess) initUploaderService() error {
 		}
 		uploaderClient = conn.Client
 		clusterName = conn.ClusterName()
+
+		// encrypted uploads are aggregated and uploaded directly rather than with an event stream.
+		// Since we are using the gRPC client, we must set this maximum for the aggregation step.
+		encryptedRecordingMaxUploadSize = 4 * 1024 * 1024 // 4MiB, default gRPC max msg recv size.
 	}
 
 	logger.InfoContext(process.ExitContext(), "starting upload completer service")
@@ -3719,12 +3725,13 @@ func (process *TeleportProcess) initUploaderService() error {
 	corruptedDir := filepath.Join(paths[1]...)
 
 	fileUploader, err := filesessions.NewUploader(filesessions.UploaderConfig{
-		Streamer:                   uploaderClient,
-		ScanDir:                    uploadsDir,
-		CorruptedDir:               corruptedDir,
-		EventsC:                    process.Config.Testing.UploadEventsC,
-		InitialScanDelay:           15 * time.Second,
-		EncryptedRecordingUploader: uploaderClient,
+		Streamer:                        uploaderClient,
+		ScanDir:                         uploadsDir,
+		CorruptedDir:                    corruptedDir,
+		EventsC:                         process.Config.Testing.UploadEventsC,
+		InitialScanDelay:                15 * time.Second,
+		EncryptedRecordingUploader:      uploaderClient,
+		EncryptedRecordingUploadMaxSize: encryptedRecordingMaxUploadSize,
 	})
 	if err != nil {
 		return trace.Wrap(err)