diff --git a/esphome/components/esp32_camera/__init__.py b/esphome/components/esp32_camera/__init__.py
index db6244fb3f7..3a5d87792b6 100644
--- a/esphome/components/esp32_camera/__init__.py
+++ b/esphome/components/esp32_camera/__init__.py
@@ -22,8 +22,10 @@ from esphome.const import (
     CONF_TRIGGER_ID,
     CONF_VSYNC_PIN,
 )
+from esphome.core import CORE
 from esphome.core.entity_helpers import setup_entity
 import esphome.final_validate as fv
+from esphome.types import ConfigType
 
 _LOGGER = logging.getLogger(__name__)
 
@@ -84,6 +86,18 @@ FRAME_SIZES = {
     "2560X1920": ESP32CameraFrameSize.ESP32_CAMERA_SIZE_2560X1920,
     "QSXGA": ESP32CameraFrameSize.ESP32_CAMERA_SIZE_2560X1920,
 }
+ESP32CameraPixelFormat = esp32_camera_ns.enum("ESP32CameraPixelFormat")
+PIXEL_FORMATS = {
+    "RGB565": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_RGB565,
+    "YUV422": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_YUV422,
+    "YUV420": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_YUV420,
+    "GRAYSCALE": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_GRAYSCALE,
+    "JPEG": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_JPEG,
+    "RGB888": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_RGB888,
+    "RAW": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_RAW,
+    "RGB444": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_RGB444,
+    "RGB555": ESP32CameraPixelFormat.ESP32_PIXEL_FORMAT_RGB555,
+}
 ESP32GainControlMode = esp32_camera_ns.enum("ESP32GainControlMode")
 ENUM_GAIN_CONTROL_MODE = {
     "MANUAL": ESP32GainControlMode.ESP32_GC_MODE_MANU,
@@ -131,6 +145,7 @@ CONF_EXTERNAL_CLOCK = "external_clock"
 CONF_I2C_PINS = "i2c_pins"
 CONF_POWER_DOWN_PIN = "power_down_pin"
 # image
+CONF_PIXEL_FORMAT = "pixel_format"
 CONF_JPEG_QUALITY = "jpeg_quality"
 CONF_VERTICAL_FLIP = "vertical_flip"
 CONF_HORIZONTAL_MIRROR = "horizontal_mirror"
@@ -171,6 +186,21 @@ def validate_fb_location_(value):
     return validator(value)
 
 
+def validate_jpeg_quality(config: ConfigType) -> ConfigType:
+    quality = config.get(CONF_JPEG_QUALITY)
+    pixel_format = config.get(CONF_PIXEL_FORMAT, "JPEG")
+
+    if quality == 0:
+        # Set default JPEG quality if not specified for backwards compatibility
+        if pixel_format == "JPEG":
+            config[CONF_JPEG_QUALITY] = 10
+        # For pixel formats other than JPEG, the valid 0 means no conversion
+    elif quality < 6 or quality > 63:
+        raise cv.Invalid(f"jpeg_quality must be between 6 and 63, got {quality}")
+
+    return config
+
+
 CONFIG_SCHEMA = cv.All(
     cv.ENTITY_BASE_SCHEMA.extend(
         {
@@ -206,7 +236,12 @@ CONFIG_SCHEMA = cv.All(
             cv.Optional(CONF_RESOLUTION, default="640X480"): cv.enum(
                 FRAME_SIZES, upper=True
             ),
-            cv.Optional(CONF_JPEG_QUALITY, default=10): cv.int_range(min=6, max=63),
+            cv.Optional(CONF_PIXEL_FORMAT, default="JPEG"): cv.enum(
+                PIXEL_FORMATS, upper=True
+            ),
+            cv.Optional(CONF_JPEG_QUALITY, default=0): cv.Any(
+                cv.one_of(0), cv.int_range(min=6, max=63)
+            ),
             cv.Optional(CONF_CONTRAST, default=0): camera_range_param,
             cv.Optional(CONF_BRIGHTNESS, default=0): camera_range_param,
             cv.Optional(CONF_SATURATION, default=0): camera_range_param,
@@ -270,11 +305,21 @@ CONFIG_SCHEMA = cv.All(
             ),
         }
     ).extend(cv.COMPONENT_SCHEMA),
+    validate_jpeg_quality,
     cv.has_exactly_one_key(CONF_I2C_PINS, CONF_I2C_ID),
 )
 
 
 def _final_validate(config):
+    # Check psram requirement for non-JPEG formats
+    if (
+        config.get(CONF_PIXEL_FORMAT, "JPEG") != "JPEG"
+        and psram_domain not in CORE.loaded_integrations
+    ):
+        raise cv.Invalid(
+            f"Non-JPEG pixel formats require the '{psram_domain}' component for JPEG conversion"
+        )
+
     if CONF_I2C_PINS not in config:
         return
     fconf = fv.full_config.get()
@@ -298,6 +343,7 @@ SETTERS = {
     CONF_RESET_PIN: "set_reset_pin",
     CONF_POWER_DOWN_PIN: "set_power_down_pin",
     # image
+    CONF_PIXEL_FORMAT: "set_pixel_format",
     CONF_JPEG_QUALITY: "set_jpeg_quality",
     CONF_VERTICAL_FLIP: "set_vertical_flip",
     CONF_HORIZONTAL_MIRROR: "set_horizontal_mirror",
@@ -351,6 +397,8 @@ async def to_code(config):
     cg.add(var.set_frame_size(config[CONF_RESOLUTION]))
 
     cg.add_define("USE_CAMERA")
+    if config[CONF_JPEG_QUALITY] != 0 and config[CONF_PIXEL_FORMAT] != "JPEG":
+        cg.add_define("USE_ESP32_CAMERA_JPEG_CONVERSION")
 
     add_idf_component(name="espressif/esp32-camera", ref="2.1.1")
     add_idf_sdkconfig_option("CONFIG_SCCB_HARDWARE_I2C_DRIVER_NEW", True)
diff --git a/esphome/components/esp32_camera/esp32_camera.cpp b/esphome/components/esp32_camera/esp32_camera.cpp
index cfe06b16732..655ae54f0a6 100644
--- a/esphome/components/esp32_camera/esp32_camera.cpp
+++ b/esphome/components/esp32_camera/esp32_camera.cpp
@@ -16,6 +16,74 @@ static constexpr size_t FRAMEBUFFER_TASK_STACK_SIZE = 1792;
 static constexpr uint32_t FRAME_LOG_INTERVAL_MS = 60000;
 #endif
 
+static const char *frame_size_to_str(framesize_t size) {
+  switch (size) {
+    case FRAMESIZE_QQVGA:
+      return "160x120 (QQVGA)";
+    case FRAMESIZE_QCIF:
+      return "176x155 (QCIF)";
+    case FRAMESIZE_HQVGA:
+      return "240x176 (HQVGA)";
+    case FRAMESIZE_QVGA:
+      return "320x240 (QVGA)";
+    case FRAMESIZE_CIF:
+      return "400x296 (CIF)";
+    case FRAMESIZE_VGA:
+      return "640x480 (VGA)";
+    case FRAMESIZE_SVGA:
+      return "800x600 (SVGA)";
+    case FRAMESIZE_XGA:
+      return "1024x768 (XGA)";
+    case FRAMESIZE_SXGA:
+      return "1280x1024 (SXGA)";
+    case FRAMESIZE_UXGA:
+      return "1600x1200 (UXGA)";
+    case FRAMESIZE_FHD:
+      return "1920x1080 (FHD)";
+    case FRAMESIZE_P_HD:
+      return "720x1280 (P_HD)";
+    case FRAMESIZE_P_3MP:
+      return "864x1536 (P_3MP)";
+    case FRAMESIZE_QXGA:
+      return "2048x1536 (QXGA)";
+    case FRAMESIZE_QHD:
+      return "2560x1440 (QHD)";
+    case FRAMESIZE_WQXGA:
+      return "2560x1600 (WQXGA)";
+    case FRAMESIZE_P_FHD:
+      return "1080x1920 (P_FHD)";
+    case FRAMESIZE_QSXGA:
+      return "2560x1920 (QSXGA)";
+    default:
+      return "UNKNOWN";
+  }
+}
+
+static const char *pixel_format_to_str(pixformat_t format) {
+  switch (format) {
+    case PIXFORMAT_RGB565:
+      return "RGB565";
+    case PIXFORMAT_YUV422:
+      return "YUV422";
+    case PIXFORMAT_YUV420:
+      return "YUV420";
+    case PIXFORMAT_GRAYSCALE:
+      return "GRAYSCALE";
+    case PIXFORMAT_JPEG:
+      return "JPEG";
+    case PIXFORMAT_RGB888:
+      return "RGB888";
+    case PIXFORMAT_RAW:
+      return "RAW";
+    case PIXFORMAT_RGB444:
+      return "RGB444";
+    case PIXFORMAT_RGB555:
+      return "RGB555";
+    default:
+      return "UNKNOWN";
+  }
+}
+
 /* ---------------- public API (derivated) ---------------- */
 void ESP32Camera::setup() {
 #ifdef USE_I2C
@@ -68,64 +136,9 @@ void ESP32Camera::dump_config() {
                 this->name_.c_str(), YESNO(this->is_internal()), conf.pin_d0, conf.pin_d1, conf.pin_d2, conf.pin_d3,
                 conf.pin_d4, conf.pin_d5, conf.pin_d6, conf.pin_d7, conf.pin_vsync, conf.pin_href, conf.pin_pclk,
                 conf.pin_xclk, conf.xclk_freq_hz, conf.pin_sccb_sda, conf.pin_sccb_scl, conf.pin_reset);
-  switch (this->config_.frame_size) {
-    case FRAMESIZE_QQVGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 160x120 (QQVGA)");
-      break;
-    case FRAMESIZE_QCIF:
-      ESP_LOGCONFIG(TAG, "  Resolution: 176x155 (QCIF)");
-      break;
-    case FRAMESIZE_HQVGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 240x176 (HQVGA)");
-      break;
-    case FRAMESIZE_QVGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 320x240 (QVGA)");
-      break;
-    case FRAMESIZE_CIF:
-      ESP_LOGCONFIG(TAG, "  Resolution: 400x296 (CIF)");
-      break;
-    case FRAMESIZE_VGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 640x480 (VGA)");
-      break;
-    case FRAMESIZE_SVGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 800x600 (SVGA)");
-      break;
-    case FRAMESIZE_XGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 1024x768 (XGA)");
-      break;
-    case FRAMESIZE_SXGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 1280x1024 (SXGA)");
-      break;
-    case FRAMESIZE_UXGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 1600x1200 (UXGA)");
-      break;
-    case FRAMESIZE_FHD:
-      ESP_LOGCONFIG(TAG, "  Resolution: 1920x1080 (FHD)");
-      break;
-    case FRAMESIZE_P_HD:
-      ESP_LOGCONFIG(TAG, "  Resolution: 720x1280 (P_HD)");
-      break;
-    case FRAMESIZE_P_3MP:
-      ESP_LOGCONFIG(TAG, "  Resolution: 864x1536 (P_3MP)");
-      break;
-    case FRAMESIZE_QXGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 2048x1536 (QXGA)");
-      break;
-    case FRAMESIZE_QHD:
-      ESP_LOGCONFIG(TAG, "  Resolution: 2560x1440 (QHD)");
-      break;
-    case FRAMESIZE_WQXGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 2560x1600 (WQXGA)");
-      break;
-    case FRAMESIZE_P_FHD:
-      ESP_LOGCONFIG(TAG, "  Resolution: 1080x1920 (P_FHD)");
-      break;
-    case FRAMESIZE_QSXGA:
-      ESP_LOGCONFIG(TAG, "  Resolution: 2560x1920 (QSXGA)");
-      break;
-    default:
-      break;
-  }
+
+  ESP_LOGCONFIG(TAG, "  Resolution: %s", frame_size_to_str(this->config_.frame_size));
+  ESP_LOGCONFIG(TAG, "  Pixel Format: %s", pixel_format_to_str(this->config_.pixel_format));
 
   if (this->is_failed()) {
     ESP_LOGE(TAG, "  Setup Failed: %s", esp_err_to_name(this->init_error_));
@@ -184,8 +197,19 @@ void ESP32Camera::loop() {
   // check if we can return the image
   if (this->can_return_image_()) {
     // return image
-    auto *fb = this->current_image_->get_raw_buffer();
-    xQueueSend(this->framebuffer_return_queue_, &fb, portMAX_DELAY);
+#ifdef USE_ESP32_CAMERA_JPEG_CONVERSION
+    if (this->config_.pixel_format != PIXFORMAT_JPEG && this->config_.jpeg_quality > 0) {
+      // for non-JPEG format, we need to free the data and raw buffer
+      auto *jpg_buf = this->current_image_->get_data_buffer();
+      free(jpg_buf);  // NOLINT(cppcoreguidelines-no-malloc)
+      auto *fb = this->current_image_->get_raw_buffer();
+      this->fb_allocator_.deallocate(fb, 1);
+    } else
+#endif
+    {
+      auto *fb = this->current_image_->get_raw_buffer();
+      xQueueSend(this->framebuffer_return_queue_, &fb, portMAX_DELAY);
+    }
     this->current_image_.reset();
   }
 
@@ -212,6 +236,38 @@ void ESP32Camera::loop() {
     xQueueSend(this->framebuffer_return_queue_, &fb, portMAX_DELAY);
     return;
   }
+
+#ifdef USE_ESP32_CAMERA_JPEG_CONVERSION
+  if (this->config_.pixel_format != PIXFORMAT_JPEG && this->config_.jpeg_quality > 0) {
+    // for non-JPEG format, we need to convert the frame to JPEG
+    uint8_t *jpg_buf;
+    size_t jpg_buf_len;
+    size_t width = fb->width;
+    size_t height = fb->height;
+    struct timeval timestamp = fb->timestamp;
+    bool ok = frame2jpg(fb, 100 - this->config_.jpeg_quality, &jpg_buf, &jpg_buf_len);
+    // return the original frame buffer to the queue
+    xQueueSend(this->framebuffer_return_queue_, &fb, portMAX_DELAY);
+    if (!ok) {
+      ESP_LOGE(TAG, "Failed to convert frame to JPEG!");
+      return;
+    }
+    // create a new camera_fb_t for the JPEG data
+    fb = this->fb_allocator_.allocate(1);
+    if (fb == nullptr) {
+      ESP_LOGE(TAG, "Failed to allocate memory for camera frame buffer!");
+      free(jpg_buf);  // NOLINT(cppcoreguidelines-no-malloc)
+      return;
+    }
+    memset(fb, 0, sizeof(camera_fb_t));
+    fb->buf = jpg_buf;
+    fb->len = jpg_buf_len;
+    fb->width = width;
+    fb->height = height;
+    fb->format = PIXFORMAT_JPEG;
+    fb->timestamp = timestamp;
+  }
+#endif
   this->current_image_ = std::make_shared<ESP32CameraImage>(fb, this->single_requesters_ | this->stream_requesters_);
 
 #if ESPHOME_LOG_LEVEL >= ESPHOME_LOG_LEVEL_VERBOSE
@@ -342,6 +398,37 @@ void ESP32Camera::set_frame_size(ESP32CameraFrameSize size) {
       break;
   }
 }
+void ESP32Camera::set_pixel_format(ESP32CameraPixelFormat format) {
+  switch (format) {
+    case ESP32_PIXEL_FORMAT_RGB565:
+      this->config_.pixel_format = PIXFORMAT_RGB565;
+      break;
+    case ESP32_PIXEL_FORMAT_YUV422:
+      this->config_.pixel_format = PIXFORMAT_YUV422;
+      break;
+    case ESP32_PIXEL_FORMAT_YUV420:
+      this->config_.pixel_format = PIXFORMAT_YUV420;
+      break;
+    case ESP32_PIXEL_FORMAT_GRAYSCALE:
+      this->config_.pixel_format = PIXFORMAT_GRAYSCALE;
+      break;
+    case ESP32_PIXEL_FORMAT_JPEG:
+      this->config_.pixel_format = PIXFORMAT_JPEG;
+      break;
+    case ESP32_PIXEL_FORMAT_RGB888:
+      this->config_.pixel_format = PIXFORMAT_RGB888;
+      break;
+    case ESP32_PIXEL_FORMAT_RAW:
+      this->config_.pixel_format = PIXFORMAT_RAW;
+      break;
+    case ESP32_PIXEL_FORMAT_RGB444:
+      this->config_.pixel_format = PIXFORMAT_RGB444;
+      break;
+    case ESP32_PIXEL_FORMAT_RGB555:
+      this->config_.pixel_format = PIXFORMAT_RGB555;
+      break;
+  }
+}
 void ESP32Camera::set_jpeg_quality(uint8_t quality) { this->config_.jpeg_quality = quality; }
 void ESP32Camera::set_vertical_flip(bool vertical_flip) { this->vertical_flip_ = vertical_flip; }
 void ESP32Camera::set_horizontal_mirror(bool horizontal_mirror) { this->horizontal_mirror_ = horizontal_mirror; }
diff --git a/esphome/components/esp32_camera/esp32_camera.h b/esphome/components/esp32_camera/esp32_camera.h
index eea93b7e015..9fbd3848f28 100644
--- a/esphome/components/esp32_camera/esp32_camera.h
+++ b/esphome/components/esp32_camera/esp32_camera.h
@@ -41,6 +41,18 @@ enum ESP32CameraFrameSize {
   ESP32_CAMERA_SIZE_2560X1920,  // QSXGA
 };
 
+enum ESP32CameraPixelFormat {
+  ESP32_PIXEL_FORMAT_RGB565,
+  ESP32_PIXEL_FORMAT_YUV422,
+  ESP32_PIXEL_FORMAT_YUV420,
+  ESP32_PIXEL_FORMAT_GRAYSCALE,
+  ESP32_PIXEL_FORMAT_JPEG,
+  ESP32_PIXEL_FORMAT_RGB888,
+  ESP32_PIXEL_FORMAT_RAW,
+  ESP32_PIXEL_FORMAT_RGB444,
+  ESP32_PIXEL_FORMAT_RGB555,
+};
+
 enum ESP32AgcGainCeiling {
   ESP32_GAINCEILING_2X = GAINCEILING_2X,
   ESP32_GAINCEILING_4X = GAINCEILING_4X,
@@ -126,6 +138,7 @@ class ESP32Camera : public camera::Camera {
   void set_reset_pin(uint8_t pin);
   void set_power_down_pin(uint8_t pin);
   /* -- image */
+  void set_pixel_format(ESP32CameraPixelFormat format);
   void set_frame_size(ESP32CameraFrameSize size);
   void set_jpeg_quality(uint8_t quality);
   void set_vertical_flip(bool vertical_flip);
@@ -220,6 +233,7 @@ class ESP32Camera : public camera::Camera {
 #ifdef USE_I2C
   i2c::InternalI2CBus *i2c_bus_{nullptr};
 #endif  // USE_I2C
+  RAMAllocator<camera_fb_t> fb_allocator_{RAMAllocator<camera_fb_t>::ALLOC_INTERNAL};
 };
 
 class ESP32CameraImageTrigger : public Trigger<CameraImageData>, public camera::CameraListener {
diff --git a/esphome/core/defines.h b/esphome/core/defines.h
index 5559ec88d00..a7fb9f197c2 100644
--- a/esphome/core/defines.h
+++ b/esphome/core/defines.h
@@ -43,6 +43,7 @@
 #define USE_DEVICES
 #define USE_DISPLAY
 #define USE_ENTITY_ICON
+#define USE_ESP32_CAMERA_JPEG_CONVERSION
 #define USE_ESP32_HOSTED
 #define USE_ESP32_IMPROV_STATE_CALLBACK
 #define USE_EVENT
diff --git a/tests/test_build_components/common/i2c_camera/esp32-idf.yaml b/tests/test_build_components/common/i2c_camera/esp32-idf.yaml
index 443ebbebd9f..07ab6cdc8da 100644
--- a/tests/test_build_components/common/i2c_camera/esp32-idf.yaml
+++ b/tests/test_build_components/common/i2c_camera/esp32-idf.yaml
@@ -30,6 +30,7 @@ esp32_camera:
   resolution: 640x480
   jpeg_quality: 10
   frame_buffer_location: PSRAM
+  pixel_format: JPEG
   on_image:
     then:
       - lambda: |-