diff --git a/python/llm/src/ipex_llm/transformers/kv.py b/python/llm/src/ipex_llm/transformers/kv.py
index 97b345cd..b0e52282 100644
--- a/python/llm/src/ipex_llm/transformers/kv.py
+++ b/python/llm/src/ipex_llm/transformers/kv.py
@@ -356,6 +356,22 @@ class DynamicCompressCache(DynamicCache):
             return 0
         return self.real_kv_len
 
+    @classmethod
+    def from_legacy_cache(
+        cls, past_key_values: Optional[Tuple[Tuple[torch.FloatTensor]]] = None,
+        num_hidden_layers: int = None
+    ) -> "DynamicCache":
+        """Converts a cache in the legacy cache format into an equivalent `DynamicCache`. Used for
+        backward compatibility."""
+        cache = cls(num_hidden_layers)
+        if past_key_values is not None:
+            for layer_idx in range(len(past_key_values)):
+                key_states, value_states = past_key_values[layer_idx]
+                invalidInputError(
+                    len(key_states) == 0 and len(value_states) == 0,
+                    "from_legacy_cache should be called with an empty kv cache.")
+        return cache
+
 
 class DynamicCompressFp8Cache(DynamicCompressCache, DynamicFp8Cache):
     def update(
diff --git a/python/llm/src/ipex_llm/transformers/models/llama32.py b/python/llm/src/ipex_llm/transformers/models/llama32.py
index cad33744..e6a9c53b 100644
--- a/python/llm/src/ipex_llm/transformers/models/llama32.py
+++ b/python/llm/src/ipex_llm/transformers/models/llama32.py
@@ -50,7 +50,10 @@ from ipex_llm.transformers.models.common import attention_softmax
 from ipex_llm.transformers.models.utils import use_sdp, use_sdp_causal
 from ipex_llm.transformers.models.utils import should_use_fuse_rope
 from ipex_llm.transformers.models.utils import use_quantize_kv_cache, restore_fp8_kv_cache
-from ipex_llm.transformers.kv import DynamicNormalCache, DynamicFp8Cache
+from ipex_llm.transformers.models.utils import should_use_compresskv, \
+    is_enough_kv_cache_room_4_36
+from ipex_llm.transformers.kv import DynamicNormalCache, DynamicFp8Cache, DynamicCompressCache, \
+    DynamicCompressFp8Cache
 
 
 def llama_model_forward(
@@ -83,11 +86,25 @@ def llama_model_forward(
         self.layers[0].mlp.down_proj, inputs,
         self.config.num_attention_heads // self.config.num_key_value_heads
     )
+    use_compresskv = should_use_compresskv(inputs, inputs.shape[1]) or \
+        isinstance(past_key_values, DynamicCompressCache)
+    # disable llama3.2 1b for prefill performance and output quality
+    use_compresskv = use_compresskv and self.config.hidden_size != 2048
     if use_cache:
-        if use_quantize_kv and not isinstance(past_key_values, DynamicFp8Cache):
+        if use_compresskv and not isinstance(past_key_values, DynamicCompressCache):
+            if use_quantize_kv:
+                past_key_values = DynamicCompressFp8Cache.from_legacy_cache(past_key_values)
+            else:
+                past_key_values = DynamicCompressCache.from_legacy_cache(past_key_values)
+        elif use_quantize_kv and not isinstance(past_key_values, DynamicFp8Cache):
             past_key_values = DynamicFp8Cache.from_legacy_cache(past_key_values)
-        elif not use_quantize_kv and not isinstance(past_key_values, DynamicNormalCache):
+        elif (
+            not use_quantize_kv
+            and not use_compresskv
+            and not isinstance(past_key_values, DynamicNormalCache)
+        ):
             past_key_values = DynamicNormalCache.from_legacy_cache(past_key_values)
+
     # IPEX-LLM OPT end
 
     return_dict = return_dict if return_dict is not None else self.config.use_return_dict
@@ -182,6 +199,9 @@ def llama_attention_forward(
 ) -> Tuple[torch.Tensor, Optional[torch.Tensor], Optional[Tuple[torch.Tensor]]]:
     bsz, q_len, _ = hidden_states.size()
 
+    # [CompressKV]
+    use_compresskv = isinstance(past_key_value, DynamicCompressCache)
+
     qkv = self.qkv_proj(hidden_states)
     qkv = qkv.view(bsz, q_len, self.num_heads + 2 * self.num_key_value_heads, self.head_dim)
     qkv = qkv.transpose(1, 2)
@@ -201,8 +221,17 @@ def llama_attention_forward(
         query_states, key_states = apply_rotary_pos_emb(query_states, key_states, cos, sin)
 
     if past_key_value is not None:
-        key_states, value_states = past_key_value.update(key_states, value_states,
-                                                         self.layer_idx, None)
+        # [CompressKV]
+        if use_compresskv:
+            enough_kv_room = is_enough_kv_cache_room_4_36(past_key_value, self.layer_idx,
+                                                          q_len)
+            key_states, value_states = past_key_value.update(
+                key_states, value_states, self.layer_idx,
+                query_states, attention_mask, self.num_key_value_groups,
+                self.config, enough_kv_room, 256)
+        else:
+            key_states, value_states = past_key_value.update(key_states, value_states,
+                                                             self.layer_idx, None)
 
     kv_seq_len = key_states.size(2)
     if attention_mask is not None:  # no matter the length, we just slice it