diff --git a/packages/upload-media/src/store/private-actions.ts b/packages/upload-media/src/store/private-actions.ts
index 3befa57f685e27..66994fc99e16c9 100644
--- a/packages/upload-media/src/store/private-actions.ts
+++ b/packages/upload-media/src/store/private-actions.ts
@@ -6,6 +6,34 @@ import { v4 as uuidv4 } from 'uuid';
 /**
  * WordPress dependencies
  */
+
+// XMP namespace used by ISO 21496-1 / UltraHDR gain maps.
+const GAIN_MAP_XMP_NAMESPACE = 'http://ns.adobe.com/hdr-gain-map/1.0/';
+
+// Latin1 decoder reused across calls — decodes bytes 1:1 to code points.
+const latin1Decoder = new TextDecoder( 'latin1' );
+
+/**
+ * Detects whether a file contains an HDR gain map by scanning for
+ * the Adobe HDR gain map XMP namespace in the file's binary data.
+ * XMP metadata is located near the start of JPEG files, so we only
+ * need to scan the first 256 KB.
+ *
+ * @param file The image file to check.
+ * @return Whether the file contains a gain map.
+ */
+export async function hasGainMap( file: File ): Promise< boolean > {
+	try {
+		// XMP metadata is in early JPEG markers; 256 KB is more than enough.
+		const slice = file.slice( 0, 256 * 1024 );
+		const buffer = await slice.arrayBuffer();
+		return latin1Decoder
+			.decode( buffer )
+			.includes( GAIN_MAP_XMP_NAMESPACE );
+	} catch {
+		return false;
+	}
+}
 import { createBlobURL, isBlobURL, revokeBlobURL } from '@wordpress/blob';
 import type { createRegistry } from '@wordpress/data';
 type WPDataRegistry = ReturnType< typeof createRegistry >;
@@ -1175,6 +1203,37 @@ export function generateThumbnails( id: QueueItemId ) {
 				);
 			}
 
+			const sourceType = thumbnailSource.type;
+
+			// When the output format differs from the source, convert to a
+			// lossless PNG intermediate before resizing. This avoids
+			// expensive encoding in the source format (e.g. AVIF ~2s per
+			// encode) for each sub-size, since those buffers are
+			// immediately transcoded to the output format anyway.
+			// PNG is lossless, so there is no generational quality loss.
+			// Skip for images with HDR gain maps — PNG cannot carry gain
+			// map data, so the intermediate would destroy it.
+			let thumbnailFile = file;
+			if (
+				thumbnailTranscodeOperation &&
+				sourceType !== 'image/png' &&
+				sourceType !== 'image/gif' &&
+				! ( await hasGainMap( file ) )
+			) {
+				try {
+					thumbnailFile = await vipsConvertImageFormat(
+						item.id,
+						file,
+						'image/png',
+						1,
+						false
+					);
+				} catch {
+					// If conversion fails, fall back to the original file.
+					thumbnailFile = file;
+				}
+			}
+
 			// Group sizes by dimensions to avoid creating duplicate files.
 			// When multiple size names have the same width/height/crop,
 			// only one physical file is generated and registered under
@@ -1219,7 +1278,7 @@ export function generateThumbnails( id: QueueItemId ) {
 				const imageSizeParam = names.length === 1 ? names[ 0 ] : names;
 
 				dispatch.addSideloadItem( {
-					file,
+					file: thumbnailFile,
 					batchId,
 					parentId: item.id,
 					additionalData: {
@@ -1248,10 +1307,32 @@ export function generateThumbnails( id: QueueItemId ) {
 
 					if ( needsScaling ) {
 						// Rename sourceFile to match the server attachment filename.
-						const sourceForScaled = attachment.filename
+						let sourceForScaled = attachment.filename
 							? renameFile( thumbnailSource, attachment.filename )
 							: thumbnailSource;
 
+						// Use PNG intermediate for scaled version too when
+						// format conversion is configured (same rationale as
+						// thumbnails above). Skip for gain map images.
+						if (
+							thumbnailTranscodeOperation &&
+							sourceType !== 'image/png' &&
+							sourceType !== 'image/gif' &&
+							! ( await hasGainMap( sourceForScaled ) )
+						) {
+							try {
+								sourceForScaled = await vipsConvertImageFormat(
+									item.id,
+									sourceForScaled,
+									'image/png',
+									1,
+									false
+								);
+							} catch {
+								// Fall back to original file on failure.
+							}
+						}
+
 						// Add scaling to queue.
 						const scaledOperations: Operation[] = [
 							[
diff --git a/packages/upload-media/src/store/test/private-actions.js b/packages/upload-media/src/store/test/private-actions.js
index 0928751b317463..91b80e6562bb67 100644
--- a/packages/upload-media/src/store/test/private-actions.js
+++ b/packages/upload-media/src/store/test/private-actions.js
@@ -6,9 +6,14 @@ import { createBlobURL, revokeBlobURL } from '@wordpress/blob';
 /**
  * Internal dependencies
  */
-import { getTranscodeImageOperation, finalizeItem } from '../private-actions';
+import {
+	getTranscodeImageOperation,
+	finalizeItem,
+	generateThumbnails,
+	hasGainMap,
+} from '../private-actions';
 import { OperationType } from '../types';
-import { vipsHasTransparency } from '../utils';
+import { vipsHasTransparency, vipsConvertImageFormat } from '../utils';
 
 // Mock @wordpress/blob
 jest.mock( '@wordpress/blob', () => ( {
@@ -19,6 +24,7 @@ jest.mock( '@wordpress/blob', () => ( {
 // Mock vips utilities
 jest.mock( '../utils', () => ( {
 	vipsHasTransparency: jest.fn(),
+	vipsConvertImageFormat: jest.fn(),
 } ) );
 
 describe( 'private actions', () => {
@@ -379,4 +385,232 @@ describe( 'private actions', () => {
 			expect( finishOperation ).not.toHaveBeenCalled();
 		} );
 	} );
+
+	describe( 'generateThumbnails - PNG intermediate conversion', () => {
+		let addSideloadItem;
+		let finishOperation;
+		let dispatch;
+
+		const pngFile = new File( [ 'png-data' ], 'converted.png', {
+			type: 'image/png',
+		} );
+
+		function makeSelect( {
+			sourceType = 'image/avif',
+			outputMimeType = 'image/jpeg',
+			filename = 'photo.avif',
+		} = {} ) {
+			const sourceFile = new File( [ 'test' ], filename, {
+				type: sourceType,
+			} );
+			return {
+				getItem: () => ( {
+					id: 'item-1',
+					file: sourceFile,
+					sourceFile,
+					attachment: {
+						id: 42,
+						filename,
+						missing_image_sizes: [ 'thumbnail', 'medium' ],
+					},
+				} ),
+				getSettings: () => ( {
+					allImageSizes: {
+						thumbnail: { width: 150, height: 150, crop: true },
+						medium: { width: 300, height: 300, crop: false },
+					},
+					imageOutputFormats: outputMimeType
+						? { [ sourceType ]: outputMimeType }
+						: {},
+					jpegInterlaced: false,
+					pngInterlaced: false,
+					gifInterlaced: false,
+				} ),
+			};
+		}
+
+		beforeEach( () => {
+			jest.clearAllMocks();
+			addSideloadItem = jest.fn();
+			finishOperation = jest.fn();
+			dispatch = { addSideloadItem, finishOperation };
+			vipsConvertImageFormat.mockResolvedValue( pngFile );
+		} );
+
+		it( 'should convert AVIF to PNG intermediate when output format differs', async () => {
+			const select = makeSelect( {
+				sourceType: 'image/avif',
+				outputMimeType: 'image/jpeg',
+			} );
+
+			const thunk = generateThumbnails( 'item-1' );
+			await thunk( { select, dispatch } );
+
+			expect( vipsConvertImageFormat ).toHaveBeenCalledWith(
+				'item-1',
+				expect.any( File ),
+				'image/png',
+				1,
+				false
+			);
+			// Each thumbnail sideload item should use the PNG file.
+			const thumbnailCall = addSideloadItem.mock.calls.find(
+				( call ) => call[ 0 ].additionalData?.image_size === 'thumbnail'
+			);
+			expect( thumbnailCall ).toBeDefined();
+			expect( thumbnailCall[ 0 ].file ).toBe( pngFile );
+		} );
+
+		it( 'should skip PNG conversion when source is already PNG', async () => {
+			vipsHasTransparency.mockResolvedValue( false );
+			const select = makeSelect( {
+				sourceType: 'image/png',
+				outputMimeType: 'image/jpeg',
+				filename: 'photo.png',
+			} );
+
+			const thunk = generateThumbnails( 'item-1' );
+			await thunk( { select, dispatch } );
+
+			expect( vipsConvertImageFormat ).not.toHaveBeenCalled();
+		} );
+
+		it( 'should skip PNG conversion when source and output formats match', async () => {
+			const select = makeSelect( {
+				sourceType: 'image/jpeg',
+				outputMimeType: undefined,
+				filename: 'photo.jpg',
+			} );
+
+			const thunk = generateThumbnails( 'item-1' );
+			await thunk( { select, dispatch } );
+
+			expect( vipsConvertImageFormat ).not.toHaveBeenCalled();
+		} );
+
+		it( 'should skip PNG conversion for GIF source (animated format)', async () => {
+			const select = makeSelect( {
+				sourceType: 'image/gif',
+				outputMimeType: 'image/jpeg',
+				filename: 'animation.gif',
+			} );
+
+			const thunk = generateThumbnails( 'item-1' );
+			await thunk( { select, dispatch } );
+
+			expect( vipsConvertImageFormat ).not.toHaveBeenCalled();
+		} );
+
+		it( 'should convert WebP to PNG intermediate when output format differs', async () => {
+			const select = makeSelect( {
+				sourceType: 'image/webp',
+				outputMimeType: 'image/jpeg',
+				filename: 'image.webp',
+			} );
+
+			const thunk = generateThumbnails( 'item-1' );
+			await thunk( { select, dispatch } );
+
+			expect( vipsConvertImageFormat ).toHaveBeenCalledWith(
+				'item-1',
+				expect.any( File ),
+				'image/png',
+				1,
+				false
+			);
+		} );
+
+		it( 'should fall back to original file when PNG conversion fails', async () => {
+			vipsConvertImageFormat.mockRejectedValue(
+				new Error( 'Conversion failed' )
+			);
+			const select = makeSelect( {
+				sourceType: 'image/avif',
+				outputMimeType: 'image/jpeg',
+			} );
+
+			const thunk = generateThumbnails( 'item-1' );
+			await thunk( { select, dispatch } );
+
+			// Should still create sideload items with original file.
+			const thumbnailCall = addSideloadItem.mock.calls.find(
+				( call ) => call[ 0 ].additionalData?.image_size === 'thumbnail'
+			);
+			expect( thumbnailCall ).toBeDefined();
+			expect( thumbnailCall[ 0 ].file.type ).toBe( 'image/avif' );
+		} );
+
+		it( 'should skip PNG conversion for images with HDR gain maps', async () => {
+			// Build a JPEG file that contains the gain map XMP namespace.
+			const gainMapXmp =
+				'<x:xmpmeta>' +
+				'<rdf:Description xmlns:hdrgm="http://ns.adobe.com/hdr-gain-map/1.0/">' +
+				'<hdrgm:Version>1.0</hdrgm:Version>' +
+				'</rdf:Description>' +
+				'</x:xmpmeta>';
+			const sourceFile = new File( [ gainMapXmp ], 'photo.jpg', {
+				type: 'image/jpeg',
+			} );
+
+			const select = {
+				getItem: () => ( {
+					id: 'item-1',
+					file: sourceFile,
+					sourceFile,
+					attachment: {
+						id: 42,
+						filename: 'photo.jpg',
+						missing_image_sizes: [ 'thumbnail' ],
+					},
+				} ),
+				getSettings: () => ( {
+					allImageSizes: {
+						thumbnail: { width: 150, height: 150, crop: true },
+					},
+					imageOutputFormats: { 'image/jpeg': 'image/avif' },
+					jpegInterlaced: false,
+					pngInterlaced: false,
+					gifInterlaced: false,
+				} ),
+			};
+
+			const thunk = generateThumbnails( 'item-1' );
+			await thunk( { select, dispatch } );
+
+			// PNG conversion should NOT be called because the file has a gain map.
+			expect( vipsConvertImageFormat ).not.toHaveBeenCalled();
+
+			// Thumbnail should use the original source file.
+			const thumbnailCall = addSideloadItem.mock.calls.find(
+				( call ) => call[ 0 ].additionalData?.image_size === 'thumbnail'
+			);
+			expect( thumbnailCall ).toBeDefined();
+			expect( thumbnailCall[ 0 ].file.type ).toBe( 'image/jpeg' );
+		} );
+	} );
+
+	describe( 'hasGainMap', () => {
+		it( 'should return true for files containing gain map XMP namespace', async () => {
+			const xmpData =
+				'<rdf:Description xmlns:hdrgm="http://ns.adobe.com/hdr-gain-map/1.0/">';
+			const file = new File( [ xmpData ], 'hdr.jpg', {
+				type: 'image/jpeg',
+			} );
+			expect( await hasGainMap( file ) ).toBe( true );
+		} );
+
+		it( 'should return false for files without gain map data', async () => {
+			const file = new File( [ 'regular jpeg data' ], 'photo.jpg', {
+				type: 'image/jpeg',
+			} );
+			expect( await hasGainMap( file ) ).toBe( false );
+		} );
+
+		it( 'should return false for empty files', async () => {
+			const file = new File( [], 'empty.jpg', {
+				type: 'image/jpeg',
+			} );
+			expect( await hasGainMap( file ) ).toBe( false );
+		} );
+	} );
 } );