diff --git a/module/zfs/zio.c b/module/zfs/zio.c
index 9058c1908..45174ae6c 100644
--- a/module/zfs/zio.c
+++ b/module/zfs/zio.c
@@ -2005,8 +2005,7 @@ zio_write_compress(zio_t *zio)
 			compress = ZIO_COMPRESS_OFF;
 			if (cabd != NULL)
 				abd_free(cabd);
-		} else if (!zp->zp_dedup && !zp->zp_encrypt &&
-		    psize <= BPE_PAYLOAD_SIZE &&
+		} else if (psize <= BPE_PAYLOAD_SIZE && !zp->zp_encrypt &&
 		    zp->zp_level == 0 && !DMU_OT_HAS_FILL(zp->zp_type) &&
 		    spa_feature_is_enabled(spa, SPA_FEATURE_EMBEDDED_DATA)) {
 			void *cbuf = abd_borrow_buf_copy(cabd, lsize);
diff --git a/tests/zfs-tests/tests/functional/cli_root/zpool_prefetch/zpool_prefetch_001_pos.ksh b/tests/zfs-tests/tests/functional/cli_root/zpool_prefetch/zpool_prefetch_001_pos.ksh
index 474f41eae..9e76b524c 100755
--- a/tests/zfs-tests/tests/functional/cli_root/zpool_prefetch/zpool_prefetch_001_pos.ksh
+++ b/tests/zfs-tests/tests/functional/cli_root/zpool_prefetch/zpool_prefetch_001_pos.ksh
@@ -75,7 +75,7 @@ log_must zpool prefetch -t ddt $TESTPOOL
 # to generate a reasonable size DDT for testing purposes.
 
 DATASET=$TESTPOOL/ddt
-log_must zfs create -o dedup=on $DATASET
+log_must zfs create -o compression=off -o dedup=on $DATASET
 MNTPOINT=$(get_prop mountpoint $TESTPOOL/ddt)
 
 log_note "Generating dataset ..."
diff --git a/tests/zfs-tests/tests/functional/dedup/dedup_quota.ksh b/tests/zfs-tests/tests/functional/dedup/dedup_quota.ksh
index b1657648b..aa7a7338f 100755
--- a/tests/zfs-tests/tests/functional/dedup/dedup_quota.ksh
+++ b/tests/zfs-tests/tests/functional/dedup/dedup_quota.ksh
@@ -79,7 +79,7 @@ function do_setup
 	log_must truncate -s 5G $VDEV_GENERAL
 	# Use 'xattr=sa' to prevent selinux xattrs influencing our accounting
 	log_must zpool create -o ashift=12 -f -O xattr=sa -m $MOUNTDIR $POOL $VDEV_GENERAL
-	log_must zfs set dedup=on $POOL
+	log_must zfs set compression=off dedup=on $POOL
 	log_must set_tunable32 TXG_TIMEOUT 600
 }