diff --git a/cmd/ctr/commands/images/pull.go b/cmd/ctr/commands/images/pull.go
index 0999b8dc6137..c93c8834db50 100644
--- a/cmd/ctr/commands/images/pull.go
+++ b/cmd/ctr/commands/images/pull.go
@@ -265,9 +265,14 @@ func ProgressHandler(ctx context.Context, out io.Writer) (transfer.ProgressFunc,
 		statuses = map[string]*progressNode{}
 		roots    = []*progressNode{}
 		progress transfer.ProgressFunc
-		pc       = make(chan transfer.Progress, 1)
-		status   string
-		closeC   = make(chan struct{})
+		// Use a buffered channel for progress to allow multiple completed
+		// progress updates to be processed before shutting down the progress
+		// handler. Currently the progress stream does not have an explicit
+		// end, however, done indicates the server has already commpleted
+		// sending all progress.
+		pc     = make(chan transfer.Progress, 5)
+		status string
+		closeC = make(chan struct{})
 	)
 
 	progress = func(p transfer.Progress) {
@@ -409,7 +414,7 @@ func displayNode(w io.Writer, prefix string, nodes []*progressNode) int64 {
 		name := prefix + pf + displayName(status.Name)
 
 		switch status.Event {
-		case "downloading", "uploading":
+		case "downloading", "uploading", "extracting":
 			var bar progress.Bar
 			if status.Total > 0.0 {
 				bar = progress.Bar(float64(status.Progress) / float64(status.Total))
@@ -425,7 +430,7 @@ func displayNode(w io.Writer, prefix string, nodes []*progressNode) int64 {
 				name,
 				status.Event,
 				bar)
-		case "complete":
+		case "complete", "extracted":
 			bar := progress.Bar(1.0)
 			fmt.Fprintf(w, "%-40.40s\t%-11s\t%40r\t\n",
 				name,
diff --git a/core/diff/apply/apply.go b/core/diff/apply/apply.go
index 62e7a3623336..9acecea35cc4 100644
--- a/core/diff/apply/apply.go
+++ b/core/diff/apply/apply.go
@@ -71,10 +71,16 @@ func (s *fsApplier) Apply(ctx context.Context, desc ocispec.Descriptor, mounts [
 	if err != nil {
 		return emptyDesc, fmt.Errorf("failed to get reader from content store: %w", err)
 	}
-	defer ra.Close()
+	var r io.ReadCloser
+	if config.Progress != nil {
+		r = newProgressReader(ra, config.Progress)
+	} else {
+		r = newReadCloser(ra)
+	}
+	defer r.Close()
 
 	var processors []diff.StreamProcessor
-	processor := diff.NewProcessorChain(desc.MediaType, content.NewReader(ra))
+	processor := diff.NewProcessorChain(desc.MediaType, r)
 	processors = append(processors, processor)
 	for {
 		if processor, err = diff.GetProcessor(ctx, processor, config.ProcessorPayloads); err != nil {
@@ -110,6 +116,7 @@ func (s *fsApplier) Apply(ctx context.Context, desc ocispec.Descriptor, mounts [
 			}
 		}
 	}
+
 	return ocispec.Descriptor{
 		MediaType: ocispec.MediaTypeImageLayer,
 		Size:      rc.c,
@@ -129,3 +136,46 @@ func (rc *readCounter) Read(p []byte) (n int, err error) {
 	}
 	return
 }
+
+type progressReader struct {
+	rc *readCounter
+	c  io.Closer
+	p  func(int64)
+}
+
+func newProgressReader(ra content.ReaderAt, p func(int64)) io.ReadCloser {
+	return &progressReader{
+		rc: &readCounter{
+			r: content.NewReader(ra),
+			c: 0,
+		},
+		c: ra,
+		p: p,
+	}
+}
+
+func (pr *progressReader) Read(p []byte) (n int, err error) {
+	// Call the progress function with the current count, indicating
+	// the previously read content has been processed. Initial
+	// progress of 0 indicates start of processing.
+	pr.p(pr.rc.c)
+	n, err = pr.rc.Read(p)
+	return
+}
+
+func (pr *progressReader) Close() error {
+	pr.p(pr.rc.c)
+	return pr.c.Close()
+}
+
+type readCloser struct {
+	io.Reader
+	io.Closer
+}
+
+func newReadCloser(ra content.ReaderAt) io.ReadCloser {
+	return &readCloser{
+		Reader: content.NewReader(ra),
+		Closer: ra,
+	}
+}
diff --git a/core/diff/diff.go b/core/diff/diff.go
index 4838a1c37e25..4d20044ca75d 100644
--- a/core/diff/diff.go
+++ b/core/diff/diff.go
@@ -69,6 +69,8 @@ type ApplyConfig struct {
 	ProcessorPayloads map[string]typeurl.Any
 	// SyncFs is to synchronize the underlying filesystem containing files
 	SyncFs bool
+	// Progress is a function which reports status of processed read data
+	Progress func(int64)
 }
 
 // ApplyOpt is used to configure an Apply operation
@@ -135,6 +137,18 @@ func WithSyncFs(sync bool) ApplyOpt {
 	}
 }
 
+// WithProgress is used to indicate process of the apply operation, should
+// atleast expect a progress of 0 and of the final size. It is up to the applier
+// how much progress it reports in between.
+func WithProgress(f func(ocispec.Descriptor, int64)) ApplyOpt {
+	return func(_ context.Context, desc ocispec.Descriptor, c *ApplyConfig) error {
+		c.Progress = func(state int64) {
+			f(desc, state)
+		}
+		return nil
+	}
+}
+
 // WithSourceDateEpoch specifies the timestamp used to provide control for reproducibility.
 // See also https://reproducible-builds.org/docs/source-date-epoch/ .
 //
diff --git a/core/diff/proxy/differ.go b/core/diff/proxy/differ.go
index 8a5a4abd1ee9..f34e0d65d9ed 100644
--- a/core/diff/proxy/differ.go
+++ b/core/diff/proxy/differ.go
@@ -56,7 +56,9 @@ func (r *diffRemote) Apply(ctx context.Context, desc ocispec.Descriptor, mounts
 	for k, v := range config.ProcessorPayloads {
 		payloads[k] = typeurl.MarshalProto(v)
 	}
-
+	if config.Progress != nil {
+		config.Progress(0)
+	}
 	req := &diffapi.ApplyRequest{
 		Diff:     oci.DescriptorToProto(desc),
 		Mounts:   mount.ToProto(mounts),
@@ -67,6 +69,9 @@ func (r *diffRemote) Apply(ctx context.Context, desc ocispec.Descriptor, mounts
 	if err != nil {
 		return ocispec.Descriptor{}, errgrpc.ToNative(err)
 	}
+	if config.Progress != nil {
+		config.Progress(desc.Size)
+	}
 	return oci.DescriptorFromProto(resp.Applied), nil
 }
 
diff --git a/core/transfer/local/progress.go b/core/transfer/local/progress.go
index e75c448da7a3..60f0cd359bf0 100644
--- a/core/transfer/local/progress.go
+++ b/core/transfer/local/progress.go
@@ -35,6 +35,7 @@ type ProgressTracker struct {
 	root          string
 	transferState string
 	added         chan jobUpdate
+	extraction    chan extractionUpdate
 	waitC         chan struct{}
 
 	parents map[digest.Digest][]ocispec.Descriptor
@@ -47,6 +48,8 @@ const (
 	jobAdded jobState = iota
 	jobInProgress
 	jobComplete
+	jobExtracting
+	jobExtracted
 )
 
 type jobStatus struct {
@@ -72,12 +75,18 @@ type StatusTracker interface {
 	Check(context.Context, digest.Digest) (bool, error)
 }
 
+type extractionUpdate struct {
+	desc     ocispec.Descriptor
+	progress int64
+}
+
 // NewProgressTracker tracks content download progress
 func NewProgressTracker(root, transferState string) *ProgressTracker {
 	return &ProgressTracker{
 		root:          root,
 		transferState: transferState,
 		added:         make(chan jobUpdate, 1),
+		extraction:    make(chan extractionUpdate, 1),
 		waitC:         make(chan struct{}),
 		parents:       map[digest.Digest][]ocispec.Descriptor{},
 	}
@@ -97,7 +106,8 @@ func (j *ProgressTracker) HandleProgress(ctx context.Context, pf transfer.Progre
 			log.G(ctx).WithError(err).Error("failed to get statuses for progress")
 		}
 		for dgst, job := range jobs {
-			if job.state != jobComplete {
+			switch job.state {
+			case jobAdded, jobInProgress:
 				status, ok := active.Status(job.name)
 				if ok {
 					if status.Offset > job.progress {
@@ -130,6 +140,30 @@ func (j *ProgressTracker) HandleProgress(ctx context.Context, pf transfer.Progre
 						jobs[dgst] = job
 					}
 				}
+			case jobExtracting:
+				if job.progress == job.desc.Size {
+					pf(transfer.Progress{
+						Event:    "extracted",
+						Name:     job.name,
+						Parents:  job.parents,
+						Progress: job.desc.Size,
+						Total:    job.desc.Size,
+						Desc:     &job.desc,
+					})
+					job.state = jobExtracted
+					jobs[dgst] = job
+				} else {
+					pf(transfer.Progress{
+						Event:    "extracting",
+						Name:     job.name,
+						Parents:  job.parents,
+						Progress: job.progress,
+						Total:    job.desc.Size,
+						Desc:     &job.desc,
+					})
+				}
+			case jobComplete, jobExtracted:
+				// No progress to send
 			}
 		}
 	}
@@ -161,10 +195,9 @@ func (j *ProgressTracker) HandleProgress(ctx context.Context, pf transfer.Progre
 				}
 				jobs[update.desc.Digest] = job
 				pf(transfer.Progress{
-					Event:   "waiting",
-					Name:    name,
-					Parents: parents,
-					//Digest:   desc.Digest.String(),
+					Event:    "waiting",
+					Name:     name,
+					Parents:  parents,
 					Progress: 0,
 					Total:    update.desc.Size,
 					Desc:     &job.desc,
@@ -181,7 +214,37 @@ func (j *ProgressTracker) HandleProgress(ctx context.Context, pf transfer.Progre
 				job.state = jobComplete
 				job.progress = job.desc.Size
 			}
+		case extraction := <-j.extraction:
+			job, ok := jobs[extraction.desc.Digest]
+			if !ok {
+				// Only captures the parents defined before,
+				// could handle parent updates in same thread
+				// if there is a synchronization issue
+				var parents []string
+				j.parentL.Lock()
+				for _, parent := range j.parents[extraction.desc.Digest] {
+					parents = append(parents, remotes.MakeRefKey(ctx, parent))
+				}
+				j.parentL.Unlock()
+				if len(parents) == 0 {
+					parents = []string{j.root}
+				}
+				name := remotes.MakeRefKey(ctx, extraction.desc)
 
+				job = &jobStatus{
+					state:    jobExtracting,
+					name:     name,
+					parents:  parents,
+					progress: extraction.progress,
+					desc:     extraction.desc,
+				}
+				jobs[extraction.desc.Digest] = job
+			} else {
+				if job.state != jobExtracting {
+					job.state = jobExtracting
+				}
+				job.progress = extraction.progress
+			}
 		case <-tc.C:
 			update()
 			// Next timer?
@@ -226,6 +289,16 @@ func (j *ProgressTracker) AddChildren(desc ocispec.Descriptor, children []ocispe
 
 }
 
+func (j *ProgressTracker) ExtractProgress(desc ocispec.Descriptor, progress int64) {
+	if j == nil {
+		return
+	}
+	j.extraction <- extractionUpdate{
+		desc:     desc,
+		progress: progress,
+	}
+}
+
 func (j *ProgressTracker) Wait() {
 	// timeout rather than rely on cancel
 	timeout := time.After(10 * time.Second)
diff --git a/core/transfer/local/pull.go b/core/transfer/local/pull.go
index 766075206992..92085c67b588 100644
--- a/core/transfer/local/pull.go
+++ b/core/transfer/local/pull.go
@@ -26,6 +26,7 @@ import (
 	ocispec "github.com/opencontainers/image-spec/specs-go/v1"
 
 	"github.com/containerd/containerd/v2/core/content"
+	"github.com/containerd/containerd/v2/core/diff"
 	"github.com/containerd/containerd/v2/core/images"
 	"github.com/containerd/containerd/v2/core/remotes"
 	"github.com/containerd/containerd/v2/core/remotes/docker"
@@ -200,6 +201,9 @@ func (ts *localTransferService) pull(ctx context.Context, ir transfer.ImageFetch
 					if v, ok := mu.SnapshotterExports["enable_remote_snapshot_annotations"]; ok && v == "true" {
 						enableRemoteSnapshotAnnotations = true
 					}
+					if progressTracker != nil {
+						mu.ApplyOpts = append(mu.ApplyOpts, diff.WithProgress(progressTracker.ExtractProgress))
+					}
 					uopts = append(uopts, unpack.WithUnpackPlatform(mu))
 				} else {
 					log.G(ctx).WithFields(log.Fields{