diff --git a/Packages/ContainerizationEngine/Sources/DoryHV/LZFSE.swift b/Packages/ContainerizationEngine/Sources/DoryHV/LZFSE.swift
new file mode 100644
index 00000000..933ae5c3
--- /dev/null
+++ b/Packages/ContainerizationEngine/Sources/DoryHV/LZFSE.swift
@@ -0,0 +1,130 @@
+import Compression
+import Foundation
+
+public enum LZFSEError: Error, CustomStringConvertible {
+    case openInput(String)
+    case openOutput(String)
+    case streamInit
+    case read
+    case write
+    case process
+
+    public var description: String {
+        switch self {
+        case .openInput(let path): "cannot open input \(path)"
+        case .openOutput(let path): "cannot open output \(path)"
+        case .streamInit: "compression_stream_init failed"
+        case .read: "read failed"
+        case .write: "write failed"
+        case .process: "compression_stream_process failed"
+        }
+    }
+}
+
+/// Streaming LZFSE codec over Apple's Compression framework. Release assembly uses this exact
+/// implementation to compress guest payloads, while the installed app uses the same format when it
+/// expands those payloads on first launch. Keeping the codec in the signed runner avoids an ambient
+/// Homebrew or system-tool dependency in the public release path.
+public enum LZFSE {
+    private static let chunk = 1 << 20
+
+    public static func compress(source: String, destination: String) throws {
+        try transform(source: source, destination: destination, operation: COMPRESSION_STREAM_ENCODE)
+    }
+
+    public static func decompress(source: String, destination: String) throws {
+        try transform(source: source, destination: destination, operation: COMPRESSION_STREAM_DECODE)
+    }
+
+    private static func transform(
+        source: String,
+        destination: String,
+        operation: compression_stream_operation
+    ) throws {
+        guard FileManager.default.isReadableFile(atPath: source),
+              let input = InputStream(fileAtPath: source) else {
+            throw LZFSEError.openInput(source)
+        }
+        guard let output = OutputStream(toFileAtPath: destination, append: false) else {
+            throw LZFSEError.openOutput(destination)
+        }
+        input.open()
+        output.open()
+        defer {
+            input.close()
+            output.close()
+        }
+
+        let sourceBuffer = UnsafeMutablePointer<UInt8>.allocate(capacity: chunk)
+        let destinationBuffer = UnsafeMutablePointer<UInt8>.allocate(capacity: chunk)
+        defer {
+            sourceBuffer.deallocate()
+            destinationBuffer.deallocate()
+        }
+
+        var stream = compression_stream(
+            dst_ptr: destinationBuffer,
+            dst_size: chunk,
+            src_ptr: UnsafePointer(sourceBuffer),
+            src_size: 0,
+            state: nil
+        )
+        guard compression_stream_init(&stream, operation, COMPRESSION_LZFSE)
+            == COMPRESSION_STATUS_OK else {
+            throw LZFSEError.streamInit
+        }
+        defer { compression_stream_destroy(&stream) }
+
+        // compression_stream_init resets the caller-owned source/destination fields.
+        stream.src_ptr = UnsafePointer(sourceBuffer)
+        stream.src_size = 0
+        stream.dst_ptr = destinationBuffer
+        stream.dst_size = chunk
+
+        var inputExhausted = false
+        while true {
+            if stream.src_size == 0, !inputExhausted {
+                let read = input.read(sourceBuffer, maxLength: chunk)
+                if read < 0 { throw LZFSEError.read }
+                if read == 0 { inputExhausted = true }
+                stream.src_ptr = UnsafePointer(sourceBuffer)
+                stream.src_size = read
+            }
+
+            let flags = inputExhausted ? Int32(COMPRESSION_STREAM_FINALIZE.rawValue) : 0
+            let status = compression_stream_process(&stream, flags)
+            guard status == COMPRESSION_STATUS_OK || status == COMPRESSION_STATUS_END else {
+                throw LZFSEError.process
+            }
+
+            // Compression.framework owns the partially filled destination buffer while it returns
+            // OK. Publish and reset that buffer only once it is full, or publish the final partial
+            // buffer when the stream ends. Resetting a partially filled buffer between OK calls
+            // produces a malformed stream once a payload crosses the input chunk boundary.
+            let produced: Int
+            switch status {
+            case COMPRESSION_STATUS_OK where stream.dst_size == 0:
+                produced = chunk
+            case COMPRESSION_STATUS_END:
+                produced = chunk - stream.dst_size
+            default:
+                produced = 0
+            }
+            var offset = 0
+            while offset < produced {
+                let written = output.write(
+                    destinationBuffer + offset,
+                    maxLength: produced - offset
+                )
+                if written <= 0 { throw LZFSEError.write }
+                offset += written
+            }
+            if status == COMPRESSION_STATUS_OK, stream.dst_size == 0 {
+                stream.dst_ptr = destinationBuffer
+                stream.dst_size = chunk
+            }
+
+            if status == COMPRESSION_STATUS_END { return }
+        }
+    }
+}
diff --git a/Packages/ContainerizationEngine/Sources/dory-hv/main.swift b/Packages/ContainerizationEngine/Sources/dory-hv/main.swift
index 2deb95c7..dea163af 100644
--- a/Packages/ContainerizationEngine/Sources/dory-hv/main.swift
+++ b/Packages/ContainerizationEngine/Sources/dory-hv/main.swift
@@ -223,10 +223,28 @@ do {
     fail("application launch authority handoff failed: \(error)")
 }
 guard let command = arguments.first else {
-    fail("usage: dory-hv <smoke|madvtest|desktop|agent-ping|data-drive|engine|usb|renderer-qualify> [options]")
+    fail("usage: dory-hv <desktop|agent-ping|data-drive|engine|usb|renderer-qualify|lzfse> [options]")
 }
 
 switch command {
+case "lzfse":
+    let operation = arguments.dropFirst().first
+    let paths = Array(arguments.dropFirst(2))
+    guard let operation, paths.count == 2 else {
+        fail("usage: dory-hv lzfse <compress|decompress> <input> <output>")
+    }
+    do {
+        switch operation {
+        case "compress":
+            try LZFSE.compress(source: paths[0], destination: paths[1])
+        case "decompress":
+            try LZFSE.decompress(source: paths[0], destination: paths[1])
+        default:
+            fail("usage: dory-hv lzfse <compress|decompress> <input> <output>")
+        }
+    } catch {
+        fail("lzfse \(operation) failed: \(error)")
+    }
 case "data-drive":
     guard arguments.count >= 2 else {
         fail("usage: dory-hv data-drive <resolve|prepare|id|selected-path|select|bind-existing|recover-existing|capacity|grow|backup|verify-backup|restore> [paths]")
diff --git a/Packages/ContainerizationEngine/Tests/DoryHVTests/LZFSETests.swift b/Packages/ContainerizationEngine/Tests/DoryHVTests/LZFSETests.swift
new file mode 100644
index 00000000..a6118372
--- /dev/null
+++ b/Packages/ContainerizationEngine/Tests/DoryHVTests/LZFSETests.swift
@@ -0,0 +1,38 @@
+import Foundation
+import XCTest
+@testable import DoryHV
+
+final class LZFSETests: XCTestCase {
+    func testRoundTripAcrossMultipleStreamChunks() throws {
+        let directory = FileManager.default.temporaryDirectory
+            .appendingPathComponent(UUID().uuidString, isDirectory: true)
+        try FileManager.default.createDirectory(
+            at: directory,
+            withIntermediateDirectories: true
+        )
+        defer { try? FileManager.default.removeItem(at: directory) }
+
+        let input = directory.appendingPathComponent("input.bin")
+        let compressed = directory.appendingPathComponent("input.bin.lzfse")
+        let restored = directory.appendingPathComponent("restored.bin")
+        let bytes = Data((0..<(3 * 1_048_576 + 257)).map { UInt8(truncatingIfNeeded: $0) })
+        try bytes.write(to: input)
+
+        try LZFSE.compress(source: input.path, destination: compressed.path)
+        try LZFSE.decompress(source: compressed.path, destination: restored.path)
+
+        XCTAssertEqual(try Data(contentsOf: restored), bytes)
+    }
+
+    func testMissingInputReportsItsPath() {
+        let missing = "/tmp/dory-lzfse-missing-\(UUID().uuidString)"
+        XCTAssertThrowsError(
+            try LZFSE.compress(source: missing, destination: "\(missing).lzfse")
+        ) { error in
+            guard case .openInput(let path) = error as? LZFSEError else {
+                return XCTFail("unexpected error: \(error)")
+            }
+            XCTAssertEqual(path, missing)
+        }
+    }
+}