diff --git a/changelog.d/14890.bugfix b/changelog.d/14890.bugfix
new file mode 100644
index 0000000000..fe21277a9e
--- /dev/null
+++ b/changelog.d/14890.bugfix
@@ -0,0 +1 @@
+Thumbnail WebP images as WebP instead of JPEG, preserving transparency.
diff --git a/synapse/config/repository.py b/synapse/config/repository.py
index ecb3edbe3a..c728d6948e 100644
--- a/synapse/config/repository.py
+++ b/synapse/config/repository.py
@@ -47,7 +47,7 @@ THUMBNAIL_SIZE_YAML = """\
 THUMBNAIL_SUPPORTED_MEDIA_FORMAT_MAP = {
     "image/jpeg": "jpeg",
     "image/jpg": "jpeg",
-    "image/webp": "jpeg",
+    "image/webp": "webp",
     # Thumbnails can only be jpeg or png. We choose png thumbnails for gif
     # because it can have transparency.
     "image/gif": "png",
@@ -102,6 +102,10 @@ def parse_thumbnail_requirements(
                 requirement.append(
                     ThumbnailRequirement(width, height, method, "image/png")
                 )
+            elif thumbnail_format == "webp":
+                requirement.append(
+                    ThumbnailRequirement(width, height, method, "image/webp")
+                )
             else:
                 raise Exception(
                     "Unknown thumbnail mapping from %s to %s. This is a Synapse problem, please report!"
diff --git a/synapse/media/thumbnailer.py b/synapse/media/thumbnailer.py
index f909a4fb9a..653f3feda4 100644
--- a/synapse/media/thumbnailer.py
+++ b/synapse/media/thumbnailer.py
@@ -1,5 +1,5 @@
-# Copyright 2014-2016 OpenMarket Ltd
-# Copyright 2020-2021 The Matrix.org Foundation C.I.C.
+# Copyright 2014-2016,2023 OpenMarket Ltd
+# Copyright 2020-2021,2023 The Matrix.org Foundation C.I.C.
 #
 # Licensed under the Apache License, Version 2.0 (the "License");
 # you may not use this file except in compliance with the License.
@@ -38,7 +38,7 @@ class ThumbnailError(Exception):
 
 
 class Thumbnailer:
-    FORMATS = {"image/jpeg": "JPEG", "image/png": "PNG"}
+    FORMATS = {"image/jpeg": "JPEG", "image/png": "PNG", "image/webp": "WEBP"}
 
     @staticmethod
     def set_limits(max_image_pixels: int) -> None: