by Amit Shekhar · 21 July 2026
How does context compaction work?
How context compaction works in Large Language Models. We will also see why long conversations overflow the context window, how summarization shrinks the older messages without losing the important points, and where compaction is used in real AI agents.
Read on Outcome School ↗then come back to lock it in
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What this article covers
- What is a Large Language Model
- What is the context window
- What is context
- The problem of long conversations
- The naive fix and why it fails
- What is context compaction
- How summarization powers compaction
- A step-by-step walkthrough
- Context compaction in code
- Compaction in real AI agents
- Why context compaction is important
The article lives on outcomeschool.com. Read it there, then come back: the tutor in the margin has read it and will answer questions, and the questions below check what stayed.