diff --git a/Cargo.lock b/Cargo.lock
index a6305c984a..8b94c8701a 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -1,6 +1,6 @@
 # This file is automatically @generated by Cargo.
 # It is not intended for manual editing.
-version = 3
+version = 4
 
 [[package]]
 name = "Inflector"
@@ -5653,7 +5653,7 @@ version = "1.1.0"
 dependencies = [
  "account-compression",
  "anchor-lang",
- "anchor-spl",
+ "anchor-spl 0.31.1 (registry+https://github.com/rust-lang/crates.io-index)",
  "borsh 0.10.4",
  "forester-utils",
  "light-account-checks",
diff --git a/program-tests/compressed-token-test/tests/transfer2/spl_ctoken.rs b/program-tests/compressed-token-test/tests/transfer2/spl_ctoken.rs
index 3df688aada..bde10a7ec7 100644
--- a/program-tests/compressed-token-test/tests/transfer2/spl_ctoken.rs
+++ b/program-tests/compressed-token-test/tests/transfer2/spl_ctoken.rs
@@ -185,3 +185,163 @@ async fn test_spl_to_ctoken_transfer() {
 
     println!("Successfully completed round-trip transfer: SPL -> CToken -> SPL");
 }
+
+#[tokio::test]
+async fn test_ctoken_to_spl_with_compress_and_close() {
+    use light_compressed_token_sdk::{
+        instructions::create_ctoken_to_spl_transfer_and_close_instruction,
+        token_pool::find_token_pool_pda_with_index,
+    };
+
+    let mut rpc = LightProgramTest::new(ProgramTestConfig::new(true, None))
+        .await
+        .unwrap();
+    let payer = rpc.get_payer().insecure_clone();
+    let sender = Keypair::new();
+    airdrop_lamports(&mut rpc, &sender.pubkey(), 1_000_000_000)
+        .await
+        .unwrap();
+    let mint = create_mint_helper(&mut rpc, &payer).await;
+    let amount = 10000u64;
+    let transfer_amount = 5000u64;
+
+    // Create SPL token account and mint tokens
+    let spl_token_account_keypair = Keypair::new();
+    create_token_2022_account(&mut rpc, &mint, &spl_token_account_keypair, &sender, false)
+        .await
+        .unwrap();
+    mint_spl_tokens(
+        &mut rpc,
+        &mint,
+        &spl_token_account_keypair.pubkey(),
+        &payer.pubkey(),
+        &payer,
+        amount,
+        false,
+    )
+    .await
+    .unwrap();
+
+    // Create recipient for compressed tokens
+    let recipient = Keypair::new();
+    airdrop_lamports(&mut rpc, &recipient.pubkey(), 1_000_000_000)
+        .await
+        .unwrap();
+
+    // Create compressed token ATA for recipient
+    let instruction = light_compressed_token_sdk::instructions::create_associated_token_account(
+        payer.pubkey(),
+        recipient.pubkey(),
+        mint,
+    )
+    .map_err(|e| RpcError::AssertRpcError(format!("Failed to create ATA instruction: {}", e)))
+    .unwrap();
+    rpc.create_and_send_transaction(&[instruction], &payer.pubkey(), &[&payer])
+        .await
+        .unwrap();
+    let associated_token_account = derive_ctoken_ata(&recipient.pubkey(), &mint).0;
+
+    // Transfer SPL to CToken
+    transfer2::spl_to_ctoken_transfer(
+        &mut rpc,
+        spl_token_account_keypair.pubkey(),
+        associated_token_account,
+        transfer_amount,
+        &sender,
+        &payer,
+    )
+    .await
+    .unwrap();
+
+    // Verify compressed token balance after initial transfer
+    {
+        let ctoken_account_data = rpc
+            .get_account(associated_token_account)
+            .await
+            .unwrap()
+            .unwrap();
+        let ctoken_account =
+            spl_pod::bytemuck::pod_from_bytes::<PodAccount>(&ctoken_account_data.data[..165])
+                .map_err(|e| {
+                    RpcError::AssertRpcError(format!("Failed to parse CToken account: {}", e))
+                })
+                .unwrap();
+        assert_eq!(
+            u64::from(ctoken_account.amount),
+            transfer_amount,
+            "Recipient should have {} compressed tokens",
+            transfer_amount
+        );
+    }
+
+    // Now transfer back using CompressAndClose instead of regular transfer
+    println!("Testing reverse transfer with CompressAndClose: ctoken to SPL");
+
+    // Get token pool PDA
+    let (token_pool_pda, token_pool_pda_bump) = find_token_pool_pda_with_index(&mint, 0);
+
+    // Create instruction using compress_and_close variant
+    // Note: Using spl_token::ID because create_mint_helper creates Token (not Token-2022) mints
+    let transfer_ix = create_ctoken_to_spl_transfer_and_close_instruction(
+        associated_token_account,
+        spl_token_account_keypair.pubkey(),
+        transfer_amount,
+        recipient.pubkey(),
+        mint,
+        payer.pubkey(),
+        token_pool_pda,
+        token_pool_pda_bump,
+        anchor_spl::token::ID,
+    )
+    .unwrap();
+
+    // Execute transaction
+    rpc.create_and_send_transaction(&[transfer_ix], &payer.pubkey(), &[&payer, &recipient])
+        .await
+        .unwrap();
+
+    // Verify final balances
+    {
+        // Verify SPL token balance is restored
+        let spl_account_data = rpc
+            .get_account(spl_token_account_keypair.pubkey())
+            .await
+            .unwrap()
+            .unwrap();
+        let spl_account = spl_pod::bytemuck::pod_from_bytes::<PodAccount>(&spl_account_data.data)
+            .map_err(|e| {
+                RpcError::AssertRpcError(format!("Failed to parse SPL token account: {}", e))
+            })
+            .unwrap();
+        let restored_spl_balance: u64 = spl_account.amount.into();
+        assert_eq!(
+            restored_spl_balance, amount,
+            "SPL token balance should be restored to original amount"
+        );
+    }
+
+    {
+        // Verify CToken account is CLOSED (not just balance = 0)
+        let ctoken_account_result = rpc.get_account(associated_token_account).await.unwrap();
+        match ctoken_account_result {
+            None => {
+                println!("✓ CToken account successfully closed (account does not exist)");
+            }
+            Some(account_data) => {
+                assert_eq!(
+                    account_data.data.len(),
+                    0,
+                    "CToken account data should be empty after CompressAndClose"
+                );
+                assert_eq!(
+                    account_data.lamports, 0,
+                    "CToken account lamports should be 0 after CompressAndClose"
+                );
+                println!("✓ CToken account successfully closed (zeroed out)");
+            }
+        }
+    }
+
+    println!("✓ Successfully completed CToken -> SPL transfer with CompressAndClose");
+    println!("  This validates owner can use CompressAndClose without explicit compressed_token_account validation");
+}
diff --git a/program-tests/registry-test/tests/compressible.rs b/program-tests/registry-test/tests/compressible.rs
index 327aba5d4d..cf3b18842d 100644
--- a/program-tests/registry-test/tests/compressible.rs
+++ b/program-tests/registry-test/tests/compressible.rs
@@ -20,7 +20,7 @@ use light_test_utils::{
     airdrop_lamports, assert_claim::assert_claim, spl::create_mint_helper, Rpc, RpcError,
 };
 use light_token_client::actions::{
-    create_compressible_token_account, CreateCompressibleTokenAccountInputs,
+    create_compressible_token_account, transfer_ctoken, CreateCompressibleTokenAccountInputs,
 };
 use solana_sdk::{
     instruction::Instruction,
@@ -1140,7 +1140,6 @@ async fn assert_not_compressible<R: Rpc>(
 #[tokio::test]
 async fn test_compressible_account_infinite_funding() -> Result<(), RpcError> {
     use light_test_utils::assert_ctoken_transfer::assert_ctoken_transfer;
-    use light_token_client::actions::ctoken_transfer;
 
     let mut rpc = LightProgramTest::new(ProgramTestConfig::new_v2(false, None))
         .await
@@ -1281,7 +1280,7 @@ async fn test_compressible_account_infinite_funding() -> Result<(), RpcError> {
         };
 
         // Transfer all tokens from source to dest
-        ctoken_transfer(
+        transfer_ctoken(
             &mut rpc,
             source,
             dest,
diff --git a/programs/compressed-token/anchor/src/lib.rs b/programs/compressed-token/anchor/src/lib.rs
index 8faf5ff123..b442ca4b55 100644
--- a/programs/compressed-token/anchor/src/lib.rs
+++ b/programs/compressed-token/anchor/src/lib.rs
@@ -424,6 +424,10 @@ pub enum ErrorCode {
     MintActionInvalidCpiContextAddressTreePubkey,
     #[msg("CompressAndClose: Cannot use the same compressed output account for multiple closures")]
     CompressAndCloseDuplicateOutput,
+    #[msg(
+        "CompressAndClose by compression authority requires compressed token account in outputs"
+    )]
+    CompressAndCloseOutputMissing,
 }
 
 impl From<ErrorCode> for ProgramError {
diff --git a/programs/compressed-token/program/src/transfer2/compression/ctoken/compress_and_close.rs b/programs/compressed-token/program/src/transfer2/compression/ctoken/compress_and_close.rs
index 78abf4ff8b..6ecafe4a13 100644
--- a/programs/compressed-token/program/src/transfer2/compression/ctoken/compress_and_close.rs
+++ b/programs/compressed-token/program/src/transfer2/compression/ctoken/compress_and_close.rs
@@ -50,10 +50,13 @@ pub fn process_compress_and_close(
 
     if compression_authority_is_signer {
         // Compress the complete balance to this compressed token account.
+        let compressed_account = close_inputs
+            .compressed_token_account
+            .ok_or(ErrorCode::CompressAndCloseOutputMissing)?;
         validate_compressed_token_account(
             packed_accounts,
             amount,
-            close_inputs.compressed_token_account,
+            compressed_account,
             ctoken,
             compress_to_pubkey,
             token_account_info.key(),
diff --git a/programs/compressed-token/program/src/transfer2/compression/ctoken/inputs.rs b/programs/compressed-token/program/src/transfer2/compression/ctoken/inputs.rs
index 7dd3863dfe..4d54b9e062 100644
--- a/programs/compressed-token/program/src/transfer2/compression/ctoken/inputs.rs
+++ b/programs/compressed-token/program/src/transfer2/compression/ctoken/inputs.rs
@@ -1,10 +1,7 @@
 use light_account_checks::packed_accounts::ProgramPackedAccounts;
-use light_ctoken_types::{
-    instructions::transfer2::{
-        ZCompressedTokenInstructionDataTransfer2, ZCompression, ZCompressionMode,
-        ZMultiTokenTransferOutputData,
-    },
-    CTokenError,
+use light_ctoken_types::instructions::transfer2::{
+    ZCompressedTokenInstructionDataTransfer2, ZCompression, ZCompressionMode,
+    ZMultiTokenTransferOutputData,
 };
 use pinocchio::{account_info::AccountInfo, pubkey::Pubkey};
 
@@ -12,7 +9,7 @@ use pinocchio::{account_info::AccountInfo, pubkey::Pubkey};
 pub struct CompressAndCloseInputs<'a> {
     pub destination: &'a AccountInfo,
     pub rent_sponsor: &'a AccountInfo,
-    pub compressed_token_account: &'a ZMultiTokenTransferOutputData<'a>,
+    pub compressed_token_account: Option<&'a ZMultiTokenTransferOutputData<'a>>,
 }
 
 /// Input struct for ctoken compression/decompression operations
@@ -60,8 +57,7 @@ impl<'a> CTokenCompressionInputs<'a> {
                 )?,
                 compressed_token_account: inputs
                     .out_token_data
-                    .get(compression.get_compressed_token_account_index()? as usize)
-                    .ok_or(CTokenError::AccountFrozen)?,
+                    .get(compression.get_compressed_token_account_index()? as usize),
             })
         } else {
             None
diff --git a/programs/compressed-token/program/src/transfer2/compression/spl.rs b/programs/compressed-token/program/src/transfer2/compression/spl.rs
index 781fa92ebf..425d1e20b5 100644
--- a/programs/compressed-token/program/src/transfer2/compression/spl.rs
+++ b/programs/compressed-token/program/src/transfer2/compression/spl.rs
@@ -77,13 +77,6 @@ fn spl_token_transfer_invoke_cpi(
     cpi_authority: &AccountInfo,
     amount: u64,
 ) -> Result<(), ProgramError> {
-    msg!("spl_token_transfer_invoke_cpi");
-    msg!(
-        "from {:?}",
-        solana_pubkey::Pubkey::new_from_array(*from.key())
-    );
-    msg!("to {:?}", solana_pubkey::Pubkey::new_from_array(*to.key()));
-    msg!("amount {:?}", amount);
     let bump_seed = [BUMP_CPI_AUTHORITY];
     let seed_array = [
         Seed::from(CPI_AUTHORITY_PDA_SEED),
@@ -110,13 +103,6 @@ fn spl_token_transfer_invoke(
     authority: &AccountInfo,
     amount: u64,
 ) -> Result<(), ProgramError> {
-    msg!("spl_token_transfer_invoke");
-    msg!(
-        "from {:?}",
-        solana_pubkey::Pubkey::new_from_array(*from.key())
-    );
-    msg!("to {:?}", solana_pubkey::Pubkey::new_from_array(*to.key()));
-    msg!("amount {:?}", amount);
     spl_token_transfer_common(program_id, from, to, authority, amount, None)
 }
 
diff --git a/sdk-libs/compressed-token-sdk/src/instructions/mod.rs b/sdk-libs/compressed-token-sdk/src/instructions/mod.rs
index ade4b9ee1c..a1f016526d 100644
--- a/sdk-libs/compressed-token-sdk/src/instructions/mod.rs
+++ b/sdk-libs/compressed-token-sdk/src/instructions/mod.rs
@@ -54,8 +54,8 @@ pub use mint_to_compressed::{
 };
 pub use transfer_ctoken::{transfer_ctoken, transfer_ctoken_signed};
 pub use transfer_interface::{
-    create_transfer_ctoken_to_spl_instruction, create_transfer_spl_to_ctoken_instruction,
-    transfer_interface, transfer_interface_signed,
+    create_ctoken_to_spl_transfer_and_close_instruction, create_transfer_ctoken_to_spl_instruction,
+    create_transfer_spl_to_ctoken_instruction, transfer_interface, transfer_interface_signed,
 };
 pub use update_compressed_mint::{
     update_compressed_mint, update_compressed_mint_cpi, UpdateCompressedMintInputs,
diff --git a/sdk-libs/compressed-token-sdk/src/instructions/transfer_interface.rs b/sdk-libs/compressed-token-sdk/src/instructions/transfer_interface.rs
index 414d5012ff..1a0cbe2175 100644
--- a/sdk-libs/compressed-token-sdk/src/instructions/transfer_interface.rs
+++ b/sdk-libs/compressed-token-sdk/src/instructions/transfer_interface.rs
@@ -159,6 +159,82 @@ pub fn create_transfer_ctoken_to_spl_instruction(
     create_transfer2_instruction(inputs)
 }
 
+#[allow(clippy::too_many_arguments)]
+#[profile]
+pub fn create_ctoken_to_spl_transfer_and_close_instruction(
+    source_ctoken_account: Pubkey,
+    destination_spl_token_account: Pubkey,
+    amount: u64,
+    authority: Pubkey,
+    mint: Pubkey,
+    payer: Pubkey,
+    token_pool_pda: Pubkey,
+    token_pool_pda_bump: u8,
+    spl_token_program: Pubkey,
+) -> Result<Instruction, TokenSdkError> {
+    let packed_accounts = vec![
+        // Mint (index 0)
+        AccountMeta::new_readonly(mint, false),
+        // Source ctoken account (index 1) - writable
+        AccountMeta::new(source_ctoken_account, false),
+        // Destination SPL token account (index 2) - writable
+        AccountMeta::new(destination_spl_token_account, false),
+        // Authority (index 3) - signer
+        AccountMeta::new(authority, true),
+        // Token pool PDA (index 4) - writable
+        AccountMeta::new(token_pool_pda, false),
+        // SPL Token program (index 5) - needed for CPI
+        AccountMeta::new_readonly(spl_token_program, false),
+    ];
+
+    // First operation: compress from ctoken account to pool using compress_and_close
+    let compress_to_pool = CTokenAccount2 {
+        inputs: vec![],
+        output: MultiTokenTransferOutputData::default(),
+        compression: Some(Compression::compress_and_close_ctoken(
+            amount, 0, // mint index
+            1, // source ctoken account index
+            3, // authority index
+            0, // no rent sponsor
+            0, // no compressed account
+            3, // destination is authority
+        )),
+        delegate_is_set: false,
+        method_used: true,
+    };
+
+    // Second operation: decompress from pool to SPL token account using decompress_spl
+    let decompress_to_spl = CTokenAccount2 {
+        inputs: vec![],
+        output: MultiTokenTransferOutputData::default(),
+        compression: Some(Compression::decompress_spl(
+            amount,
+            0, // mint index
+            2, // destination SPL token account index
+            4, // pool_account_index
+            0, // pool_index (TODO: make dynamic)
+            token_pool_pda_bump,
+        )),
+        delegate_is_set: false,
+        method_used: true,
+    };
+
+    let inputs = Transfer2Inputs {
+        validity_proof: ValidityProof::new(None),
+        transfer_config: Transfer2Config::default().filter_zero_amount_outputs(),
+        meta_config: Transfer2AccountsMetaConfig::new_decompressed_accounts_only(
+            payer,
+            packed_accounts,
+        ),
+        in_lamports: None,
+        out_lamports: None,
+        token_accounts: vec![compress_to_pool, decompress_to_spl],
+        output_queue: 0, // Decompressed accounts only, no output queue needed
+    };
+
+    create_transfer2_instruction(inputs)
+}
+
 /// Transfer SPL tokens to compressed tokens
 #[allow(clippy::too_many_arguments)]
 pub fn transfer_spl_to_ctoken<'info>(