diff --git a/program-tests/compressed-token-test/tests/light_token.rs b/program-tests/compressed-token-test/tests/light_token.rs
index 678ee70d04..8f1579519c 100644
--- a/program-tests/compressed-token-test/tests/light_token.rs
+++ b/program-tests/compressed-token-test/tests/light_token.rs
@@ -49,3 +49,6 @@ mod burn;
 
 #[path = "light_token/extensions_failing.rs"]
 mod extensions_failing;
+
+#[path = "light_token/delegate_compress.rs"]
+mod delegate_compress;
diff --git a/program-tests/compressed-token-test/tests/light_token/delegate_compress.rs b/program-tests/compressed-token-test/tests/light_token/delegate_compress.rs
new file mode 100644
index 0000000000..537bce3a83
--- /dev/null
+++ b/program-tests/compressed-token-test/tests/light_token/delegate_compress.rs
@@ -0,0 +1,229 @@
+use anchor_spl::token_2022::spl_token_2022;
+use light_program_test::utils::assert::assert_rpc_error;
+use solana_sdk::program_pack::Pack;
+
+use super::shared::*;
+
+/// Test delegate compress on CToken accounts.
+///
+/// Scenarios:
+/// 1. Partial compress (300 of 500 delegated) — delegate and delegated_amount updated
+/// 2. Exact remaining compress (200) — delegate cleared
+/// 3. Delegate cannot compress after being cleared — OwnerMismatch error
+/// 4. Owner can still compress normally after delegate is cleared
+#[tokio::test]
+#[serial]
+async fn test_delegate_compress() -> Result<(), RpcError> {
+    // Setup: CToken account with compressible extension
+    let mut context = setup_account_test_with_created_account(Some((0, false))).await?;
+    let payer = context.payer.insecure_clone();
+    let owner = context.owner_keypair.insecure_clone();
+    let token_account_pubkey = context.token_account_keypair.pubkey();
+    let mint_pubkey = context.mint_pubkey;
+
+    // Fund owner for transaction fees and compressible top-up
+    context
+        .rpc
+        .airdrop_lamports(&owner.pubkey(), 1_000_000_000)
+        .await?;
+
+    // Set CToken balance to 1000 via set_account
+    {
+        let mut token_account = context
+            .rpc
+            .get_account(token_account_pubkey)
+            .await?
+            .unwrap();
+
+        let mut spl_account =
+            spl_token_2022::state::Account::unpack_unchecked(&token_account.data[..165]).unwrap();
+        spl_account.amount = 1000;
+        spl_token_2022::state::Account::pack(spl_account, &mut token_account.data[..165]).unwrap();
+        context.rpc.set_account(token_account_pubkey, token_account);
+    }
+
+    // Approve delegate for 500
+    let delegate = Keypair::new();
+    approve_and_assert(&mut context, delegate.pubkey(), 500, "approve_delegate_500").await;
+
+    // Warp slot so compressible top-up assertion works
+    context.rpc.warp_to_slot(4).unwrap();
+
+    let output_queue = context
+        .rpc
+        .get_random_state_tree_info()
+        .unwrap()
+        .get_output_pubkey()
+        .unwrap();
+
+    // =========================================================================
+    // Scenario 1: Partial compress (300 of 500 delegated)
+    // =========================================================================
+    {
+        compress(
+            &mut context.rpc,
+            token_account_pubkey,
+            300,
+            owner.pubkey(),
+            &delegate,
+            &payer,
+            9,
+        )
+        .await
+        .unwrap();
+
+        let compress_input = CompressInput {
+            compressed_token_account: None,
+            solana_token_account: token_account_pubkey,
+            to: owner.pubkey(),
+            mint: mint_pubkey,
+            amount: 300,
+            authority: delegate.pubkey(),
+            output_queue,
+            pool_index: None,
+            decimals: 9,
+            version: None,
+        };
+        assert_transfer2_compress(&mut context.rpc, compress_input).await;
+
+        // Verify: amount == 700, delegated_amount == 200, delegate still set
+        let account_data = context
+            .rpc
+            .get_account(token_account_pubkey)
+            .await?
+            .unwrap();
+        let spl_account =
+            spl_token_2022::state::Account::unpack(&account_data.data[..165]).unwrap();
+        assert_eq!(
+            spl_account.amount, 700,
+            "Balance should be 700 after compressing 300"
+        );
+        assert_eq!(
+            spl_account.delegated_amount, 200,
+            "Delegated amount should be 200 after compressing 300 of 500"
+        );
+        assert_eq!(
+            spl_account.delegate,
+            spl_token_2022::solana_program::program_option::COption::Some(delegate.pubkey()),
+            "Delegate should still be set"
+        );
+    }
+
+    // =========================================================================
+    // Scenario 2: Exact remaining amount (200), delegate cleared
+    // =========================================================================
+    {
+        compress(
+            &mut context.rpc,
+            token_account_pubkey,
+            200,
+            owner.pubkey(),
+            &delegate,
+            &payer,
+            9,
+        )
+        .await
+        .unwrap();
+
+        let compress_input = CompressInput {
+            compressed_token_account: None,
+            solana_token_account: token_account_pubkey,
+            to: owner.pubkey(),
+            mint: mint_pubkey,
+            amount: 200,
+            authority: delegate.pubkey(),
+            output_queue,
+            pool_index: None,
+            decimals: 9,
+            version: None,
+        };
+        assert_transfer2_compress(&mut context.rpc, compress_input).await;
+
+        // Verify: amount == 500, delegated_amount == 0, delegate cleared
+        let account_data = context
+            .rpc
+            .get_account(token_account_pubkey)
+            .await?
+            .unwrap();
+        let spl_account =
+            spl_token_2022::state::Account::unpack(&account_data.data[..165]).unwrap();
+        assert_eq!(
+            spl_account.amount, 500,
+            "Balance should be 500 after compressing 200 more"
+        );
+        assert_eq!(
+            spl_account.delegated_amount, 0,
+            "Delegated amount should be 0 after compressing all delegated tokens"
+        );
+        assert_eq!(
+            spl_account.delegate,
+            spl_token_2022::solana_program::program_option::COption::None,
+            "Delegate should be cleared when delegated_amount reaches 0"
+        );
+    }
+
+    // =========================================================================
+    // Scenario 3: Delegate cannot compress after being cleared
+    // =========================================================================
+    {
+        let result = compress(
+            &mut context.rpc,
+            token_account_pubkey,
+            1,
+            owner.pubkey(),
+            &delegate,
+            &payer,
+            9,
+        )
+        .await;
+
+        // OwnerMismatch = 6075
+        assert_rpc_error(result, 0, 6075).unwrap();
+    }
+
+    // =========================================================================
+    // Scenario 4: Owner can still compress normally
+    // =========================================================================
+    {
+        compress(
+            &mut context.rpc,
+            token_account_pubkey,
+            100,
+            owner.pubkey(),
+            &owner,
+            &payer,
+            9,
+        )
+        .await
+        .unwrap();
+
+        let compress_input = CompressInput {
+            compressed_token_account: None,
+            solana_token_account: token_account_pubkey,
+            to: owner.pubkey(),
+            mint: mint_pubkey,
+            amount: 100,
+            authority: owner.pubkey(),
+            output_queue,
+            pool_index: None,
+            decimals: 9,
+            version: None,
+        };
+        assert_transfer2_compress(&mut context.rpc, compress_input).await;
+
+        // Verify: amount == 400
+        let account_data = context
+            .rpc
+            .get_account(token_account_pubkey)
+            .await?
+            .unwrap();
+        let spl_account =
+            spl_token_2022::state::Account::unpack(&account_data.data[..165]).unwrap();
+        assert_eq!(
+            spl_account.amount, 400,
+            "Balance should be 400 after owner compresses 100"
+        );
+    }
+
+    Ok(())
+}
diff --git a/program-tests/utils/src/assert_transfer2.rs b/program-tests/utils/src/assert_transfer2.rs
index 76c8a8073a..cc3aa57676 100644
--- a/program-tests/utils/src/assert_transfer2.rs
+++ b/program-tests/utils/src/assert_transfer2.rs
@@ -45,6 +45,23 @@ pub async fn assert_transfer2_with_delegate(
 
                 // Decrement balance for compress
                 expected_spl_accounts.get_mut(&pubkey).unwrap().amount -= compress_input.amount;
+
+                // Handle delegate amount decrement when delegate is compressing
+                let expected = expected_spl_accounts.get_mut(&pubkey).unwrap();
+                if expected.delegate
+                    == spl_token_2022::solana_program::program_option::COption::Some(
+                        compress_input.authority,
+                    )
+                {
+                    expected.delegated_amount = expected
+                        .delegated_amount
+                        .checked_sub(compress_input.amount)
+                        .expect("Delegate compress amount exceeds delegated_amount");
+                    if expected.delegated_amount == 0 {
+                        expected.delegate =
+                            spl_token_2022::solana_program::program_option::COption::None;
+                    }
+                }
             }
             Transfer2InstructionType::Decompress(decompress_input) => {
                 let pubkey = decompress_input.solana_token_account;
diff --git a/programs/compressed-token/program/src/compressed_token/transfer2/compression/ctoken/compress_or_decompress_ctokens.rs b/programs/compressed-token/program/src/compressed_token/transfer2/compression/ctoken/compress_or_decompress_ctokens.rs
index 81503fccfb..1e06388ca7 100644
--- a/programs/compressed-token/program/src/compressed_token/transfer2/compression/ctoken/compress_or_decompress_ctokens.rs
+++ b/programs/compressed-token/program/src/compressed_token/transfer2/compression/ctoken/compress_or_decompress_ctokens.rs
@@ -57,13 +57,27 @@ pub fn compress_or_decompress_ctokens(
         ZCompressionMode::Compress => {
             // Verify authority for compression operations
             let authority_account = authority.ok_or(ErrorCode::InvalidCompressAuthority)?;
-            check_ctoken_owner(&mut ctoken, authority_account, mint_checks.as_ref())?;
+            let is_delegate =
+                check_ctoken_owner(&mut ctoken, authority_account, mint_checks.as_ref())?;
             if !ctoken.is_initialized() {
                 return Err(TokenError::InvalidAccountState.into());
             }
 
+            // Delegate: enforce and decrement delegated_amount
+            if is_delegate {
+                let new_delegated = ctoken
+                    .base
+                    .delegated_amount
+                    .get()
+                    .checked_sub(amount)
+                    .ok_or(ProgramError::InsufficientFunds)?;
+                ctoken.base.delegated_amount.set(new_delegated);
+                if new_delegated == 0 {
+                    ctoken.base.set_delegate(None)?;
+                }
+            }
+
             // Compress: subtract from solana account
-            // Update the balance in the ctoken solana account
             ctoken.base.amount.set(
                 current_balance
                     .checked_sub(amount)
diff --git a/programs/compressed-token/program/src/shared/owner_validation.rs b/programs/compressed-token/program/src/shared/owner_validation.rs
index e5c307367f..5f0518bacc 100644
--- a/programs/compressed-token/program/src/shared/owner_validation.rs
+++ b/programs/compressed-token/program/src/shared/owner_validation.rs
@@ -79,12 +79,13 @@ pub fn verify_owner_or_delegate_signer<'a>(
 
 /// Verify and update token account authority using zero-copy compressed token format.
 /// Allows owner, account delegate, or permanent delegate (from mint) to authorize compression operations.
+/// Returns `is_delegate`: true if the signer is the account-level delegate.
 #[profile]
 pub fn check_ctoken_owner(
     compressed_token: &mut ZTokenMut,
     authority_account: &AccountInfo,
     mint_checks: Option<&MintExtensionChecks>,
-) -> Result<(), ProgramError> {
+) -> Result<bool, ProgramError> {
     // Verify authority is signer
     check_signer(authority_account).map_err(|e| {
         anchor_lang::solana_program::msg!("Authority signer check failed: {:?}", e);
@@ -96,18 +97,25 @@ pub fn check_ctoken_owner(
 
     // Check if authority is the owner
     if pubkey_eq(authority_key, owner_key) {
-        return Ok(()); // Owner can always compress
+        return Ok(false);
     }
 
     // Check if authority is the permanent delegate from the mint
     if let Some(checks) = mint_checks {
         if let Some(permanent_delegate) = &checks.permanent_delegate {
             if pubkey_eq(authority_key, permanent_delegate) {
-                return Ok(()); // Permanent delegate can (de)compress any account of this mint
+                return Ok(false);
             }
         }
     }
 
-    // Authority is neither owner nor permanent delegate
+    // Check if authority is the account-level delegate (approved via CTokenApprove)
+    if let Some(delegate) = compressed_token.delegate() {
+        if pubkey_eq(authority_key, &delegate.to_bytes()) {
+            return Ok(true);
+        }
+    }
+
+    // Authority is neither owner, permanent delegate, nor account delegate
     Err(ErrorCode::OwnerMismatch.into())
 }