diff --git a/codex-rs/codex-api/src/endpoint/compact.rs b/codex-rs/codex-api/src/endpoint/compact.rs
index 44a56a11a7..e5eda0de3e 100644
--- a/codex-rs/codex-api/src/endpoint/compact.rs
+++ b/codex-rs/codex-api/src/endpoint/compact.rs
@@ -5,12 +5,18 @@ use crate::error::ApiError;
 use crate::provider::Provider;
 use codex_client::HttpTransport;
 use codex_client::RequestTelemetry;
+use codex_client::TransportError;
 use codex_protocol::models::ResponseItem;
+use eventsource_stream::Eventsource;
+use futures::StreamExt;
 use http::HeaderMap;
+use http::HeaderValue;
 use http::Method;
+use http::StatusCode;
 use serde::Deserialize;
 use serde_json::to_value;
 use std::sync::Arc;
+use tokio::time::timeout;
 
 pub struct CompactClient<T: HttpTransport, A: AuthProvider> {
     session: EndpointSession<T, A>,
@@ -33,6 +39,10 @@ impl<T: HttpTransport, A: AuthProvider> CompactClient<T, A> {
         "responses/compact"
     }
 
+    fn stream_path() -> &'static str {
+        "responses/compact/stream"
+    }
+
     pub async fn compact(
         &self,
         body: serde_json::Value,
@@ -47,6 +57,93 @@ impl<T: HttpTransport, A: AuthProvider> CompactClient<T, A> {
         Ok(parsed.output)
     }
 
+    pub async fn compact_stream(
+        &self,
+        body: serde_json::Value,
+        extra_headers: HeaderMap,
+    ) -> Result<Vec<ResponseItem>, ApiError> {
+        let stream_response = self
+            .session
+            .stream_with(
+                Method::POST,
+                Self::stream_path(),
+                extra_headers,
+                Some(body),
+                |req| {
+                    req.headers.insert(
+                        http::header::ACCEPT,
+                        HeaderValue::from_static("text/event-stream"),
+                    );
+                },
+            )
+            .await?;
+
+        let mut stream = stream_response.bytes.eventsource();
+        loop {
+            let sse =
+                match timeout(self.session.provider().stream_idle_timeout, stream.next()).await {
+                    Ok(Some(Ok(sse))) => sse,
+                    Ok(Some(Err(error))) => return Err(ApiError::Stream(error.to_string())),
+                    Ok(None) => {
+                        return Err(ApiError::Stream(
+                            "stream closed before compact.completed".to_string(),
+                        ));
+                    }
+                    Err(_) => {
+                        return Err(ApiError::Stream(
+                            "idle timeout waiting for compact stream".to_string(),
+                        ));
+                    }
+                };
+
+            let event: CompactStreamEvent = match serde_json::from_str(&sse.data) {
+                Ok(event) => event,
+                Err(_) => continue,
+            };
+
+            match event.kind.as_str() {
+                "compact.keepalive" => continue,
+                "compact.completed" => {
+                    if let Some(response) = event.response {
+                        return Ok(response.output);
+                    }
+                    return Err(ApiError::Stream(
+                        "compact.completed missing response payload".to_string(),
+                    ));
+                }
+                "compact.failed" => {
+                    let status = event
+                        .status
+                        .and_then(|status| StatusCode::from_u16(status).ok())
+                        .unwrap_or(StatusCode::INTERNAL_SERVER_ERROR);
+                    let message = event
+                        .message
+                        .unwrap_or_else(|| "compact stream failed".to_string());
+                    let mut response_headers = HeaderMap::new();
+                    if let Some(model_cap_model) = event.model_cap_model
+                        && let Ok(model_cap_header) = HeaderValue::from_str(&model_cap_model)
+                    {
+                        response_headers.insert(MODEL_CAP_MODEL_HEADER, model_cap_header);
+                    }
+                    if let Some(model_cap_reset_after_seconds) = event.model_cap_reset_after_seconds
+                        && let Ok(reset_after_header) =
+                            HeaderValue::from_str(&model_cap_reset_after_seconds.to_string())
+                    {
+                        response_headers.insert(MODEL_CAP_RESET_AFTER_HEADER, reset_after_header);
+                    }
+                    let headers = (!response_headers.is_empty()).then_some(response_headers);
+                    return Err(ApiError::Transport(TransportError::Http {
+                        status,
+                        url: None,
+                        headers,
+                        body: Some(message),
+                    }));
+                }
+                _ => continue,
+            }
+        }
+    }
+
     pub async fn compact_input(
         &self,
         input: &CompactionInput<'_>,
@@ -56,6 +153,16 @@ impl<T: HttpTransport, A: AuthProvider> CompactClient<T, A> {
             .map_err(|e| ApiError::Stream(format!("failed to encode compaction input: {e}")))?;
         self.compact(body, extra_headers).await
     }
+
+    pub async fn compact_stream_input(
+        &self,
+        input: &CompactionInput<'_>,
+        extra_headers: HeaderMap,
+    ) -> Result<Vec<ResponseItem>, ApiError> {
+        let body = to_value(input)
+            .map_err(|e| ApiError::Stream(format!("failed to encode compaction input: {e}")))?;
+        self.compact_stream(body, extra_headers).await
+    }
 }
 
 #[derive(Debug, Deserialize)]
@@ -63,28 +170,35 @@ struct CompactHistoryResponse {
     output: Vec<ResponseItem>,
 }
 
+#[derive(Debug, Deserialize)]
+struct CompactStreamEvent {
+    #[serde(rename = "type")]
+    kind: String,
+    response: Option<CompactHistoryResponse>,
+    status: Option<u16>,
+    message: Option<String>,
+    model_cap_model: Option<String>,
+    model_cap_reset_after_seconds: Option<u64>,
+}
+
+const MODEL_CAP_MODEL_HEADER: &str = "x-codex-model-cap-model";
+const MODEL_CAP_RESET_AFTER_HEADER: &str = "x-codex-model-cap-reset-after-seconds";
+
 #[cfg(test)]
 mod tests {
     use super::*;
+    use crate::auth::AuthProvider;
+    use crate::provider::RetryConfig;
     use async_trait::async_trait;
+    use bytes::Bytes;
     use codex_client::Request;
+    use codex_client::RequestCompression;
     use codex_client::Response;
     use codex_client::StreamResponse;
-    use codex_client::TransportError;
-
-    #[derive(Clone, Default)]
-    struct DummyTransport;
-
-    #[async_trait]
-    impl HttpTransport for DummyTransport {
-        async fn execute(&self, _req: Request) -> Result<Response, TransportError> {
-            Err(TransportError::Build("execute should not run".to_string()))
-        }
-
-        async fn stream(&self, _req: Request) -> Result<StreamResponse, TransportError> {
-            Err(TransportError::Build("stream should not run".to_string()))
-        }
-    }
+    use futures::stream;
+    use http::HeaderMap;
+    use pretty_assertions::assert_eq;
+    use std::time::Duration;
 
     #[derive(Clone, Default)]
     struct DummyAuth;
@@ -95,10 +209,176 @@ mod tests {
         }
     }
 
+    fn provider(base_url: &str) -> Provider {
+        Provider {
+            name: "test".to_string(),
+            base_url: base_url.to_string(),
+            query_params: None,
+            headers: HeaderMap::new(),
+            retry: RetryConfig {
+                max_attempts: 1,
+                base_delay: Duration::from_millis(1),
+                retry_429: false,
+                retry_5xx: true,
+                retry_transport: true,
+            },
+            stream_idle_timeout: Duration::from_secs(1),
+        }
+    }
+
+    #[derive(Clone)]
+    struct StaticResponseTransport {
+        response: Response,
+    }
+
+    #[async_trait]
+    impl HttpTransport for StaticResponseTransport {
+        async fn execute(&self, _req: Request) -> Result<Response, TransportError> {
+            Ok(self.response.clone())
+        }
+
+        async fn stream(&self, _req: Request) -> Result<StreamResponse, TransportError> {
+            Err(TransportError::Build("stream should not run".to_string()))
+        }
+    }
+
+    #[derive(Clone)]
+    struct StaticStreamTransport {
+        stream_body: Bytes,
+    }
+
+    #[async_trait]
+    impl HttpTransport for StaticStreamTransport {
+        async fn execute(&self, _req: Request) -> Result<Response, TransportError> {
+            Err(TransportError::Build("execute should not run".to_string()))
+        }
+
+        async fn stream(&self, req: Request) -> Result<StreamResponse, TransportError> {
+            assert_eq!(req.compression, RequestCompression::None);
+            let bytes = self.stream_body.clone();
+            let stream = stream::iter(vec![Ok(bytes)]);
+            Ok(StreamResponse {
+                status: StatusCode::OK,
+                headers: HeaderMap::new(),
+                bytes: Box::pin(stream),
+            })
+        }
+    }
+
+    #[tokio::test]
+    async fn compact_stream_returns_output_from_completed_event() {
+        let stream_body = concat!(
+            "event: compact.keepalive\n",
+            "data: {\"type\":\"compact.keepalive\"}\n\n",
+            "event: compact.completed\n",
+            "data: {\"type\":\"compact.completed\",\"response\":{\"output\":[{\"type\":\"compaction_summary\",\"encrypted_content\":\"abc\"}]}}\n\n"
+        )
+        .to_string();
+        let client = CompactClient::new(
+            StaticStreamTransport {
+                stream_body: Bytes::from(stream_body),
+            },
+            provider("https://example.com/api/codex"),
+            DummyAuth,
+        );
+
+        let output = client
+            .compact_stream(serde_json::json!({}), HeaderMap::new())
+            .await
+            .expect("stream compact should succeed");
+
+        assert_eq!(
+            output,
+            vec![ResponseItem::Compaction {
+                encrypted_content: "abc".to_string()
+            }]
+        );
+    }
+
+    #[tokio::test]
+    async fn compact_stream_returns_api_error_from_failed_event() {
+        let stream_body = concat!(
+            "event: compact.failed\n",
+            "data: {\"type\":\"compact.failed\",\"status\":429,\"message\":\"slow down\"}\n\n"
+        );
+        let client = CompactClient::new(
+            StaticStreamTransport {
+                stream_body: Bytes::from(stream_body),
+            },
+            provider("https://example.com/api/codex"),
+            DummyAuth,
+        );
+
+        let error = client
+            .compact_stream(serde_json::json!({}), HeaderMap::new())
+            .await
+            .expect_err("stream compact should fail");
+
+        match error {
+            ApiError::Transport(TransportError::Http {
+                status,
+                headers,
+                body,
+                ..
+            }) => {
+                assert_eq!(status, StatusCode::TOO_MANY_REQUESTS);
+                assert_eq!(body, Some("slow down".to_string()));
+                assert_eq!(headers, None);
+            }
+            other => panic!("expected ApiError::Transport(Http), got {other:?}"),
+        }
+    }
+
+    #[tokio::test]
+    async fn compact_stream_failed_event_carries_model_cap_headers() {
+        let stream_body = concat!(
+            "event: compact.failed\n",
+            "data: {\"type\":\"compact.failed\",\"status\":429,\"message\":\"slow down\",\"model_cap_model\":\"gpt-5-codex\",\"model_cap_reset_after_seconds\":30}\n\n"
+        );
+        let client = CompactClient::new(
+            StaticStreamTransport {
+                stream_body: Bytes::from(stream_body),
+            },
+            provider("https://example.com/api/codex"),
+            DummyAuth,
+        );
+
+        let error = client
+            .compact_stream(serde_json::json!({}), HeaderMap::new())
+            .await
+            .expect_err("stream compact should fail");
+
+        match error {
+            ApiError::Transport(TransportError::Http {
+                status,
+                headers,
+                body,
+                ..
+            }) => {
+                assert_eq!(status, StatusCode::TOO_MANY_REQUESTS);
+                assert_eq!(body, Some("slow down".to_string()));
+                let headers = headers.expect("headers should be present");
+                assert_eq!(
+                    headers
+                        .get(MODEL_CAP_MODEL_HEADER)
+                        .expect("model cap header should be present"),
+                    "gpt-5-codex"
+                );
+                assert_eq!(
+                    headers
+                        .get(MODEL_CAP_RESET_AFTER_HEADER)
+                        .expect("reset-after header should be present"),
+                    "30"
+                );
+            }
+            other => panic!("expected ApiError::Transport(Http), got {other:?}"),
+        }
+    }
+
     #[test]
     fn path_is_responses_compact() {
         assert_eq!(
-            CompactClient::<DummyTransport, DummyAuth>::path(),
+            CompactClient::<StaticResponseTransport, DummyAuth>::path(),
             "responses/compact"
         );
     }
diff --git a/codex-rs/core/src/client.rs b/codex-rs/core/src/client.rs
index c3f56d5f86..3c46071ad0 100644
--- a/codex-rs/core/src/client.rs
+++ b/codex-rs/core/src/client.rs
@@ -269,10 +269,23 @@ impl ModelClient {
         };
 
         let extra_headers = self.build_subagent_headers();
-        client
-            .compact_input(&payload, extra_headers)
+        // Use the stream compact endpoint if available, otherwise fallback to the unary endpoint.
+        match client
+            .compact_stream_input(&payload, extra_headers.clone())
             .await
-            .map_err(map_api_error)
+        {
+            Ok(output) => Ok(output),
+            Err(ApiError::Transport(TransportError::Http { status, .. }))
+                if status == HttpStatusCode::NOT_FOUND
+                    || status == HttpStatusCode::METHOD_NOT_ALLOWED =>
+            {
+                client
+                    .compact_input(&payload, extra_headers)
+                    .await
+                    .map_err(map_api_error)
+            }
+            Err(err) => Err(map_api_error(err)),
+        }
     }
 
     /// Builds memory summaries for each provided normalized trace.
diff --git a/codex-rs/core/tests/common/responses.rs b/codex-rs/core/tests/common/responses.rs
index 379e852407..4b2498e444 100644
--- a/codex-rs/core/tests/common/responses.rs
+++ b/codex-rs/core/tests/common/responses.rs
@@ -756,6 +756,14 @@ fn compact_mock() -> (MockBuilder, ResponseMock) {
     (mock, response_mock)
 }
 
+fn compact_stream_mock() -> (MockBuilder, ResponseMock) {
+    let response_mock = ResponseMock::new();
+    let mock = Mock::given(method("POST"))
+        .and(path_regex(".*/responses/compact/stream$"))
+        .and(response_mock.clone());
+    (mock, response_mock)
+}
+
 fn models_mock() -> (MockBuilder, ModelsMock) {
     let models_mock = ModelsMock::new();
     let mock = Mock::given(method("GET"))
@@ -820,6 +828,27 @@ pub async fn mount_compact_json_once(server: &MockServer, body: serde_json::Valu
     response_mock
 }
 
+pub async fn mount_compact_stream_json_once(
+    server: &MockServer,
+    body: serde_json::Value,
+) -> ResponseMock {
+    let (mock, response_mock) = compact_stream_mock();
+    let event = serde_json::json!({
+        "type": "compact.completed",
+        "response": body,
+    });
+    let response_body = format!("event: compact.completed\ndata: {event}\n\n");
+    mock.respond_with(
+        ResponseTemplate::new(200)
+            .insert_header("content-type", "text/event-stream")
+            .set_body_string(response_body),
+    )
+    .up_to_n_times(1)
+    .mount(server)
+    .await;
+    response_mock
+}
+
 pub async fn mount_models_once(server: &MockServer, body: ModelsResponse) -> ModelsMock {
     let (mock, models_mock) = models_mock();
     mock.respond_with(
diff --git a/codex-rs/core/tests/suite/compact_remote.rs b/codex-rs/core/tests/suite/compact_remote.rs
index 47a9a0a111..3a50cae0ae 100644
--- a/codex-rs/core/tests/suite/compact_remote.rs
+++ b/codex-rs/core/tests/suite/compact_remote.rs
@@ -156,6 +156,58 @@ async fn remote_compact_replaces_history_for_followups() -> Result<()> {
     Ok(())
 }
 
+#[tokio::test(flavor = "multi_thread", worker_threads = 2)]
+async fn remote_compact_uses_stream_endpoint_when_available() -> Result<()> {
+    skip_if_no_network!(Ok(()));
+
+    let harness = TestCodexHarness::with_builder(
+        test_codex().with_auth(CodexAuth::create_dummy_chatgpt_auth_for_testing()),
+    )
+    .await?;
+    let codex = harness.test().codex.clone();
+
+    mount_sse_once(
+        harness.server(),
+        sse(vec![
+            responses::ev_assistant_message("m1", "FIRST_REMOTE_REPLY"),
+            responses::ev_completed("resp-1"),
+        ]),
+    )
+    .await;
+
+    let compact_stream_mock = responses::mount_compact_stream_json_once(
+        harness.server(),
+        serde_json::json!({
+            "output": [
+                {
+                    "type": "compaction_summary",
+                    "encrypted_content": "ENCRYPTED_STREAM_COMPACTION_SUMMARY",
+                }
+            ],
+        }),
+    )
+    .await;
+
+    codex
+        .submit(Op::UserInput {
+            items: vec![UserInput::Text {
+                text: "hello remote compact".into(),
+                text_elements: Vec::new(),
+            }],
+            final_output_json_schema: None,
+        })
+        .await?;
+    wait_for_event(&codex, |ev| matches!(ev, EventMsg::TurnComplete(_))).await;
+
+    codex.submit(Op::Compact).await?;
+    wait_for_event(&codex, |ev| matches!(ev, EventMsg::TurnComplete(_))).await;
+
+    let compact_request = compact_stream_mock.single_request();
+    assert_eq!(compact_request.path(), "/v1/responses/compact/stream");
+
+    Ok(())
+}
+
 #[tokio::test(flavor = "multi_thread", worker_threads = 2)]
 async fn remote_compact_runs_automatically() -> Result<()> {
     skip_if_no_network!(Ok(()));