# ACON: Optimizing Context Compression for Long-horizon LLM Agents

arXiv: https://arxiv.org/abs/2510.00615 · HTML: https://mlsanity.com/paper/2510.00615/

## Key facts

- Cited by 136 papers in the map (data through 14 Oct 2026).
- Placed in Agent memory systems, one of 16 directions in LLM agents and tool use.
- Builds on 20 of its 61 references that are in the map.
- First posted on arXiv 1 Oct 2025.

## Placed in

- LLM agents and tool use / [Agent memory systems](https://mlsanity.com/agents/agent-memory-systems/)
- Efficient LLM inference and serving / [Efficient reasoning and agent inference](https://mlsanity.com/inference/efficient-reasoning-and-agent-inference/)

## Builds on (most cited first, 20 of 20)

- [DeepSeekMath: Pushing the Limits of Mathematical Reasoning in Open Language Models](https://mlsanity.com/paper/2402.03300/) (2024)
- [Qwen3 Technical Report](https://mlsanity.com/paper/2505.09388/) (2025)
- [DeepSeek-R1: Incentivizing Reasoning Capability in LLMs via Reinforcement Learning](https://mlsanity.com/paper/2501.12948/) (2025)
- [Gemini 2.5: Pushing the Frontier with Advanced Reasoning, Multimodality, Long Context, and Next Generation Agentic Capabilities](https://mlsanity.com/paper/2507.06261/) (2025)
- [Search-R1: Training LLMs to Reason and Leverage Search Engines with Reinforcement Learning](https://mlsanity.com/paper/2503.09516/) (2025)
- [A-MEM: Agentic Memory for LLM Agents](https://mlsanity.com/paper/2502.12110/) (2025)
- [Evaluating Very Long-Term Conversational Memory of LLM Agents](https://mlsanity.com/paper/2402.17753/) (2024)
- [Phi-4 Technical Report](https://mlsanity.com/paper/2412.08905/) (2024)
- [BrowseComp: A Simple Yet Challenging Benchmark for Browsing Agents](https://mlsanity.com/paper/2504.12516/) (2025)
- [Kimi K2: Open Agentic Intelligence](https://mlsanity.com/paper/2507.20534/) (2025)
- [MemAgent: Reshaping Long-Context LLM with Multi-Conv RL-based Memory Agent](https://mlsanity.com/paper/2507.02259/) (2025)
- [MEM1: Learning to Synergize Memory and Reasoning for Efficient Long-Horizon Agents](https://mlsanity.com/paper/2506.15841/) (2025)
- [Windows Agent Arena: Evaluating Multi-Modal OS Agents at Scale](https://mlsanity.com/paper/2409.08264/) (2024)
- [Measuring AI Ability to Complete Long Software Tasks](https://mlsanity.com/paper/2503.14499/) (2025)
- [ReSum: Unlocking Long-Horizon Search Intelligence via Context Summarization](https://mlsanity.com/paper/2509.13313/) (2025)
- [LightThinker: Thinking Step-by-Step Compression](https://mlsanity.com/paper/2502.15589/) (2025)
- [OfficeBench: Benchmarking Language Agents across Multiple Applications for Office Automation](https://mlsanity.com/paper/2407.19056/) (2024)
- [OdysseyBench: Evaluating LLM Agents on Long-Horizon Complex Office Application Workflows](https://mlsanity.com/paper/2508.09124/) (2025)
- [EpiCache: Episodic KV Cache Management for Long-Term Conversation on Resource-Constrained Environments](https://mlsanity.com/paper/2509.17396/) (2025)
- [Enhancing Reasoning Capabilities of Small Language Models with Blueprints and Prompt Template Search](https://mlsanity.com/paper/2506.08669/) (2025)

## Built on by (most cited first, 30 of 136)

- [DeepAgent: A General Reasoning Agent with Scalable Toolsets](https://mlsanity.com/paper/2510.21618/) (2025)
- [Meta Context Engineering via Agentic Skill Evolution](https://mlsanity.com/paper/2601.21557/) (2026)
- [SWE-Pruner: Self-Adaptive Context Pruning for Coding Agents](https://mlsanity.com/paper/2601.16746/) (2026)
- [A Survey of Agent Memory in the Second Half: Towards Self-Evolving and Long-Horizon Agents](https://mlsanity.com/paper/2602.06052/) (2026)
- [Context as a Tool: Context Management for Long-Horizon SWE-Agents](https://mlsanity.com/paper/2512.22087/) (2025)
- [The Long-Horizon Task Mirage? Diagnosing Where and Why Agentic Systems Break](https://mlsanity.com/paper/2604.11978/) (2026)
- [AgentOCR: Reimagining Agent History via Optical Self-Compression](https://mlsanity.com/paper/2601.04786/) (2026)
- [Anatomy of Agentic Memory: Taxonomy and Empirical Analysis of Evaluation and System Limitations](https://mlsanity.com/paper/2602.19320/) (2026)
- [Building Effective AI Coding Agents for the Terminal: Scaffolding, Harness, Context Engineering, and Lessons Learned](https://mlsanity.com/paper/2603.05344/) (2026)
- [A Self-Evolving Framework for Efficient Terminal Agents via Observational Context Compression](https://mlsanity.com/paper/2604.19572/) (2026)
- [The Evolution of Tool Use in LLM Agents: From Single-Tool Call to Multi-Tool Orchestration](https://mlsanity.com/paper/2603.22862/) (2026)
- [VitaBench 2.0: Evaluating Personalized and Proactive Agents in Long-Term User Interactions](https://mlsanity.com/paper/2605.27141/) (2026)
- [From Question Answering to Task Completion: A Survey on Agent System and Harness Design](https://mlsanity.com/paper/2606.20683/) (2026)
- [Group of Skills: Group-Structured Skill Retrieval for Agent Skill Libraries](https://mlsanity.com/paper/2605.06978/) (2026)
- [Self-GC: Self-Governing Context for Long-Horizon LLM Agents](https://mlsanity.com/paper/2607.00692/) (2026)
- [Agent-BRACE: Decoupling Beliefs from Actions in Long-Horizon Tasks via Verbalized State Uncertainty](https://mlsanity.com/paper/2605.11436/) (2026)
- [SAM: State-Adaptive Memory for Long-Horizon Reasoning Agent](https://mlsanity.com/paper/2605.24468/) (2026)
- [ACM: Agentic Context Management for Long Horizon Tasks](https://mlsanity.com/paper/2607.23809/) (2026)
- [Toward Reliable Context Compression for Long-Horizon Agents: An Empirical Study of Execution Instability](https://mlsanity.com/paper/2608.06503/) (2026)
- [Do Not Waste Your Rollouts: Recycling Search Experience for Efficient Test-Time Scaling](https://mlsanity.com/paper/2601.21684/) (2026)
- [ContextPilot: Fast Long-Context Inference via Context Reuse](https://mlsanity.com/paper/2511.03475/) (2025)
- [The Missing Memory Hierarchy: Demand Paging for LLM Context Windows](https://mlsanity.com/paper/2603.09023/) (2026)
- [Governance Decay: How Context Compaction Silently Erases Safety Constraints in Long-Horizon LLM Agents](https://mlsanity.com/paper/2606.22528/) (2026)
- [MemCollab: Cross-Model Memory Collaboration via Contrastive Trajectory Distillation](https://mlsanity.com/paper/2603.23234/) (2026)
- [OCR-Memory: Optical Context Retrieval for Long-Horizon Agent Memory](https://mlsanity.com/paper/2604.26622/) (2026)
- [Better Harnesses, Smaller Models: Building 90% Cheaper Agents via Automated Harness Adaptation](https://mlsanity.com/paper/2607.08938/) (2026)
- [FoldAct: Efficient and Stable Context Folding for Long-Horizon Search Agents](https://mlsanity.com/paper/2512.22733/) (2025)
- [An Empirical Study of Harness Design for Coding Agents](https://mlsanity.com/paper/2609.20804/) (2026)
- [PRInTS: Reward Modeling for Long-Horizon Information Seeking](https://mlsanity.com/paper/2511.19314/) (2025)
- [Optimizing Agentic Workflows using Meta-tools](https://mlsanity.com/paper/2601.22037/) (2026)

## Abstract (arXiv)

Large language models (LLMs) are increasingly deployed as agents in dynamic real-world environments, where success depends on maintaining precise records of actions and observations. However, the resulting unbounded context growth in long-horizon agentic tasks makes two critical bottlenecks: prohibitive inference memory costs and reasoning degradation due to irrelevant information. Existing compression methods fail to fully address this, often relying on brittle heuristics or requiring parameter updates impractical for proprietary or large-scale LLMs. We introduce Agent Context Optimization (ACON), a unified framework that optimally compresses both observations and history into concise, informative representations. Distinct from prior works, ACON employs an optimization in natural language space: it iteratively refines compression guidelines based on failure analysis of the agent, ensuring critical state information is preserved without model fine-tuning. To further minimize computational overhead, we distill the optimized compressor into smaller models. Experiments on AppWorld, OfficeBench, and Multi-objective QA demonstrate that ACON reduces peak token usage by 26-54% while improving task success over existing compression baselines. Notably, it enables smaller LMs to function effectively as long-horizon agents, achieving up to 46% performance improvement by mitigating context distraction. Our code is available at https://github.com/microsoft/acon.