diff --git a/src/repart/repart.c b/src/repart/repart.c
index dbf261bb26..456aed41bd 100644
--- a/src/repart/repart.c
+++ b/src/repart/repart.c
@@ -6785,7 +6785,8 @@ static int context_mkfs(Context *context) {
                  * have to populate using the filesystem's mkfs's --root= (or equivalent) option. To do that,
                  * we need to set up the final directory tree beforehand. */
 
-                if (partition_needs_populate(p) && (!t->loop || fstype_is_ro(p->format))) {
+                if (partition_needs_populate(p) &&
+                    (!t->loop || fstype_is_ro(p->format) || (streq_ptr(p->format, "btrfs") && p->compression))) {
                         if (!mkfs_supports_root_option(p->format))
                                 return log_error_errno(SYNTHETIC_ERRNO(ENODEV),
                                                         "Loop device access is required to populate %s filesystems.",
@@ -8533,7 +8534,7 @@ static int context_minimize(Context *context) {
                                 return r;
                 }
 
-                if (!d || fstype_is_ro(p->format)) {
+                if (!d || fstype_is_ro(p->format) || (streq_ptr(p->format, "btrfs") && p->compression)) {
                         if (!mkfs_supports_root_option(p->format))
                                 return log_error_errno(SYNTHETIC_ERRNO(ENODEV),
                                                        "Loop device access is required to populate %s filesystems.",
diff --git a/src/shared/mkfs-util.c b/src/shared/mkfs-util.c
index 629d02207c..455c627ff6 100644
--- a/src/shared/mkfs-util.c
+++ b/src/shared/mkfs-util.c
@@ -466,17 +466,22 @@ int make_filesystem(
                         return log_oom();
 
                 if (compression) {
-                        _cleanup_free_ char *c = NULL;
+                        if (!root)
+                                log_warning("Btrfs compression setting ignored because no files are being copied. "
+                                            "Compression= can only be applied when CopyFiles= is also specified.");
+                        else {
+                                _cleanup_free_ char *c = NULL;
 
-                        c = strdup(compression);
-                        if (!c)
-                                return log_oom();
+                                c = strdup(compression);
+                                if (!c)
+                                        return log_oom();
 
-                        if (compression_level && !strextend(&c, ":", compression_level))
-                                return log_oom();
+                                if (compression_level && !strextend(&c, ":", compression_level))
+                                        return log_oom();
 
-                        if (strv_extend_many(&argv, "--compress", c) < 0)
-                                return log_oom();
+                                if (strv_extend_many(&argv, "--compress", c) < 0)
+                                        return log_oom();
+                        }
                 }
 
                 /* mkfs.btrfs unconditionally warns about several settings changing from v5.15 onwards which
diff --git a/test/units/TEST-58-REPART.sh b/test/units/TEST-58-REPART.sh
index b752af3f4d..251c337425 100755
--- a/test/units/TEST-58-REPART.sh
+++ b/test/units/TEST-58-REPART.sh
@@ -1685,6 +1685,76 @@ EOF
     grep -q 'UUID=[0-9a-f-]* /home btrfs discard,rw,nodev,suid,exec,subvol=@home,zstd:1,noatime,lazytime 0 1' "$root"/etc/fstab
 }
 
+testcase_btrfs_compression() {
+    local defs imgs loop output
+
+    if ! systemd-analyze compare-versions "$(btrfs --version | head -n 1 | awk '{ print $2 }')" ge v6.13; then
+        echo "btrfs-progs is not installed or older than v6.13, skipping test."
+        return 0
+    fi
+
+    defs="$(mktemp -d)"
+    imgs="$(mktemp -d)"
+    # shellcheck disable=SC2064
+    trap "rm -rf '$defs' '$imgs'" RETURN
+    chmod 0755 "$defs"
+
+    echo "*** testcase for btrfs compression with CopyFiles (OFFLINE=$OFFLINE) ***"
+
+    # Must not be in tmpfs due to exclusions. It also must be large and
+    # compressible so that the compression check succeeds later.
+    src=/etc/test-source-file
+    dd if=/dev/zero of="$src" bs=1M count=1 2>/dev/null
+
+    tee "$defs/btrfs-compressed.conf" <<EOF
+[Partition]
+Type=linux-generic
+Format=btrfs
+Compression=zstd
+CopyFiles=$src:/test-file
+SizeMinBytes=100M
+SizeMaxBytes=100M
+EOF
+
+    systemd-repart --offline="$OFFLINE" \
+                   --definitions="$defs" \
+                   --empty=create \
+                   --size=auto \
+                   --dry-run=no \
+                   --seed="$seed" \
+                   "$imgs/btrfs-compressed.img" 2>&1 | tee "$imgs/repart-output.txt"
+    rm "$src"
+
+    output=$(cat "$imgs/repart-output.txt")
+
+    assert_in "Rootdir from:" "$output"
+    assert_in "Compress:" "$output"
+
+    if [[ "$OFFLINE" == "yes" ]] || systemd-detect-virt --quiet --container; then
+        echo "Skipping mount verification (requires loop devices)"
+        return 0
+    fi
+    loop="$(losetup -P --show --find "$imgs/btrfs-compressed.img")"
+    # shellcheck disable=SC2064
+    trap "umount '$imgs/mount' 2>/dev/null || true; losetup -d '$loop' 2>/dev/null || true; rm -rf '$defs' '$imgs'" RETURN
+    echo "Loop device: $loop"
+    udevadm wait --timeout=60 --settle "${loop:?}p1"
+
+    mkdir -p "$imgs/mount"
+    mount -t btrfs "${loop:?}p1" "$imgs/mount"
+
+    [[ -f "$imgs/mount/test-file" ]]
+    [[ "$(stat -c%s "$imgs/mount/test-file")" == "1048576" ]]
+
+    if command -v compsize &>/dev/null; then
+        output=$(compsize "$imgs/mount/test-file" 2>&1)
+        assert_in "zstd" "$output"
+    fi
+
+    umount "$imgs/mount"
+    losetup -d "$loop"
+}
+
 testcase_varlink_list_devices() {
     REPART="$(which systemd-repart)"
     varlinkctl introspect "$REPART"