diff --git a/packages/cli/src/ui/components/messages/CompressionMessage.test.tsx b/packages/cli/src/ui/components/messages/CompressionMessage.test.tsx
new file mode 100644
index 0000000000..1c56a7326a
--- /dev/null
+++ b/packages/cli/src/ui/components/messages/CompressionMessage.test.tsx
@@ -0,0 +1,198 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { render } from 'ink-testing-library';
+import type { CompressionDisplayProps } from './CompressionMessage.js';
+import { CompressionMessage } from './CompressionMessage.js';
+import { CompressionStatus } from '@google/gemini-cli-core';
+import type { CompressionProps } from '../../types.js';
+import { describe, it, expect } from 'vitest';
+
+describe('<CompressionMessage />', () => {
+  const createCompressionProps = (
+    overrides: Partial<CompressionProps> = {},
+  ): CompressionDisplayProps => ({
+    compression: {
+      isPending: false,
+      originalTokenCount: null,
+      newTokenCount: null,
+      compressionStatus: CompressionStatus.COMPRESSED,
+      ...overrides,
+    },
+  });
+
+  describe('pending state', () => {
+    it('renders pending message when compression is in progress', () => {
+      const props = createCompressionProps({ isPending: true });
+      const { lastFrame } = render(<CompressionMessage {...props} />);
+      const output = lastFrame();
+
+      expect(output).toContain('Compressing chat history');
+    });
+  });
+
+  describe('normal compression (successful token reduction)', () => {
+    it('renders success message when tokens are reduced', () => {
+      const props = createCompressionProps({
+        isPending: false,
+        originalTokenCount: 100,
+        newTokenCount: 50,
+        compressionStatus: CompressionStatus.COMPRESSED,
+      });
+      const { lastFrame } = render(<CompressionMessage {...props} />);
+      const output = lastFrame();
+
+      expect(output).toContain('✦');
+      expect(output).toContain(
+        'Chat history compressed from 100 to 50 tokens.',
+      );
+    });
+
+    it('renders success message for large successful compressions', () => {
+      const testCases = [
+        { original: 50000, new: 25000 }, // Large compression
+        { original: 700000, new: 350000 }, // Very large compression
+      ];
+
+      testCases.forEach(({ original, new: newTokens }) => {
+        const props = createCompressionProps({
+          isPending: false,
+          originalTokenCount: original,
+          newTokenCount: newTokens,
+          compressionStatus: CompressionStatus.COMPRESSED,
+        });
+        const { lastFrame } = render(<CompressionMessage {...props} />);
+        const output = lastFrame();
+
+        expect(output).toContain('✦');
+        expect(output).toContain(
+          `compressed from ${original} to ${newTokens} tokens`,
+        );
+        expect(output).not.toContain('Skipping compression');
+        expect(output).not.toContain('did not reduce size');
+      });
+    });
+  });
+
+  describe('skipped compression (tokens increased or same)', () => {
+    it('renders skip message when compression would increase token count', () => {
+      const props = createCompressionProps({
+        isPending: false,
+        originalTokenCount: 50,
+        newTokenCount: 75,
+        compressionStatus:
+          CompressionStatus.COMPRESSION_FAILED_INFLATED_TOKEN_COUNT,
+      });
+      const { lastFrame } = render(<CompressionMessage {...props} />);
+      const output = lastFrame();
+
+      expect(output).toContain('✦');
+      expect(output).toContain(
+        'Compression was not beneficial for this history size.',
+      );
+    });
+
+    it('renders skip message when token counts are equal', () => {
+      const props = createCompressionProps({
+        isPending: false,
+        originalTokenCount: 50,
+        newTokenCount: 50,
+        compressionStatus:
+          CompressionStatus.COMPRESSION_FAILED_INFLATED_TOKEN_COUNT,
+      });
+      const { lastFrame } = render(<CompressionMessage {...props} />);
+      const output = lastFrame();
+
+      expect(output).toContain(
+        'Compression was not beneficial for this history size.',
+      );
+    });
+  });
+
+  describe('message content validation', () => {
+    it('displays correct compression statistics', () => {
+      const testCases = [
+        {
+          original: 200,
+          new: 80,
+          expected: 'compressed from 200 to 80 tokens',
+        },
+        {
+          original: 500,
+          new: 150,
+          expected: 'compressed from 500 to 150 tokens',
+        },
+        {
+          original: 1500,
+          new: 400,
+          expected: 'compressed from 1500 to 400 tokens',
+        },
+      ];
+
+      testCases.forEach(({ original, new: newTokens, expected }) => {
+        const props = createCompressionProps({
+          isPending: false,
+          originalTokenCount: original,
+          newTokenCount: newTokens,
+          compressionStatus: CompressionStatus.COMPRESSED,
+        });
+        const { lastFrame } = render(<CompressionMessage {...props} />);
+        const output = lastFrame();
+
+        expect(output).toContain(expected);
+      });
+    });
+
+    it('shows skip message for small histories when new tokens >= original tokens', () => {
+      const testCases = [
+        { original: 50, new: 60 }, // Increased
+        { original: 100, new: 100 }, // Same
+        { original: 49999, new: 50000 }, // Just under 50k threshold
+      ];
+
+      testCases.forEach(({ original, new: newTokens }) => {
+        const props = createCompressionProps({
+          isPending: false,
+          originalTokenCount: original,
+          newTokenCount: newTokens,
+          compressionStatus:
+            CompressionStatus.COMPRESSION_FAILED_INFLATED_TOKEN_COUNT,
+        });
+        const { lastFrame } = render(<CompressionMessage {...props} />);
+        const output = lastFrame();
+
+        expect(output).toContain(
+          'Compression was not beneficial for this history size.',
+        );
+        expect(output).not.toContain('compressed from');
+      });
+    });
+
+    it('shows compression failure message for large histories when new tokens >= original tokens', () => {
+      const testCases = [
+        { original: 50000, new: 50100 }, // At 50k threshold
+        { original: 700000, new: 710000 }, // Large history case
+        { original: 100000, new: 100000 }, // Large history, same count
+      ];
+
+      testCases.forEach(({ original, new: newTokens }) => {
+        const props = createCompressionProps({
+          isPending: false,
+          originalTokenCount: original,
+          newTokenCount: newTokens,
+          compressionStatus:
+            CompressionStatus.COMPRESSION_FAILED_INFLATED_TOKEN_COUNT,
+        });
+        const { lastFrame } = render(<CompressionMessage {...props} />);
+        const output = lastFrame();
+
+        expect(output).toContain('compression did not reduce size');
+        expect(output).not.toContain('compressed from');
+        expect(output).not.toContain('Compression was not beneficial');
+      });
+    });
+  });
+});
diff --git a/packages/cli/src/ui/components/messages/CompressionMessage.tsx b/packages/cli/src/ui/components/messages/CompressionMessage.tsx
index 929150b5bf..8bbe1ef175 100644
--- a/packages/cli/src/ui/components/messages/CompressionMessage.tsx
+++ b/packages/cli/src/ui/components/messages/CompressionMessage.tsx
@@ -4,12 +4,12 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import type React from 'react';
 import { Box, Text } from 'ink';
 import type { CompressionProps } from '../../types.js';
 import Spinner from 'ink-spinner';
 import { theme } from '../../semantic-colors.js';
 import { SCREEN_READER_MODEL_PREFIX } from '../../textConstants.js';
+import { CompressionStatus } from '@google/gemini-cli-core';
 
 export interface CompressionDisplayProps {
   compression: CompressionProps;
@@ -19,18 +19,46 @@ export interface CompressionDisplayProps {
  * Compression messages appear when the /compress command is run, and show a loading spinner
  * while compression is in progress, followed up by some compression stats.
  */
-export const CompressionMessage: React.FC<CompressionDisplayProps> = ({
+export function CompressionMessage({
   compression,
-}) => {
-  const text = compression.isPending
-    ? 'Compressing chat history'
-    : `Chat history compressed from ${compression.originalTokenCount ?? 'unknown'}` +
-      ` to ${compression.newTokenCount ?? 'unknown'} tokens.`;
+}: CompressionDisplayProps): React.JSX.Element {
+  const { isPending, originalTokenCount, newTokenCount, compressionStatus } =
+    compression;
+
+  const originalTokens = originalTokenCount ?? 0;
+  const newTokens = newTokenCount ?? 0;
+
+  const getCompressionText = () => {
+    if (isPending) {
+      return 'Compressing chat history';
+    }
+
+    switch (compressionStatus) {
+      case CompressionStatus.COMPRESSED:
+        return `Chat history compressed from ${originalTokens} to ${newTokens} tokens.`;
+      case CompressionStatus.COMPRESSION_FAILED_INFLATED_TOKEN_COUNT:
+        // For smaller histories (< 50k tokens), compression overhead likely exceeds benefits
+        if (originalTokens < 50000) {
+          return 'Compression was not beneficial for this history size.';
+        }
+        // For larger histories where compression should work but didn't,
+        // this suggests an issue with the compression process itself
+        return 'Chat history compression did not reduce size. This may indicate issues with the compression prompt.';
+      case CompressionStatus.COMPRESSION_FAILED_TOKEN_COUNT_ERROR:
+        return 'Could not compress chat history due to a token counting error.';
+      case CompressionStatus.NOOP:
+        return 'Chat history is already compressed.';
+      default:
+        return '';
+    }
+  };
+
+  const text = getCompressionText();
 
   return (
     <Box flexDirection="row">
       <Box marginRight={1}>
-        {compression.isPending ? (
+        {isPending ? (
           <Spinner type="dots" />
         ) : (
           <Text color={theme.text.accent}>✦</Text>
@@ -48,4 +76,4 @@ export const CompressionMessage: React.FC<CompressionDisplayProps> = ({
       </Box>
     </Box>
   );
-};
+}