diff --git a/ui/desktop/src/components/BaseChat.tsx b/ui/desktop/src/components/BaseChat.tsx
index 3681eadf..dd85dafc 100644
--- a/ui/desktop/src/components/BaseChat.tsx
+++ b/ui/desktop/src/components/BaseChat.tsx
@@ -127,7 +127,7 @@ function BaseChatContent({
     summaryContent,
     summarizedThread,
     isSummaryModalOpen,
-    isLoadingSummary,
+    isLoadingCompaction,
     resetMessagesWithSummary,
     closeSummaryModal,
     updateSummary,
@@ -513,7 +513,7 @@ function BaseChatContent({
           {chatState !== ChatState.Idle && (
             <div className="absolute bottom-1 left-4 z-20 pointer-events-none">
               <LoadingGoose
-                message={isLoadingSummary ? 'summarizing conversation…' : undefined}
+                message={isLoadingCompaction ? 'summarizing conversation…' : undefined}
                 chatState={chatState}
               />
             </div>
diff --git a/ui/desktop/src/components/ChatInput.tsx b/ui/desktop/src/components/ChatInput.tsx
index 13ab9b9d..145074c7 100644
--- a/ui/desktop/src/components/ChatInput.tsx
+++ b/ui/desktop/src/components/ChatInput.tsx
@@ -12,7 +12,7 @@ import { Message } from '../types/message';
 import { DirSwitcher } from './bottom_menu/DirSwitcher';
 import ModelsBottomBar from './settings/models/bottom_bar/ModelsBottomBar';
 import { BottomMenuModeSelection } from './bottom_menu/BottomMenuModeSelection';
-import { ManualSummarizeButton } from './context_management/ManualSummaryButton';
+import { ManualCompactButton } from './context_management/ManualCompactButton';
 import { AlertType, useAlerts } from './alerts';
 import { useToolCount } from './alerts/useToolCount';
 import { useConfig } from './ConfigContext';
@@ -110,7 +110,7 @@ export default function ChatInput({
   const { alerts, addAlert, clearAlerts } = useAlerts();
   const dropdownRef = useRef<HTMLDivElement>(null);
   const toolCount = useToolCount();
-  const { isLoadingSummary } = useChatContextManager();
+  const { isLoadingCompaction } = useChatContextManager();
   const { getProviders, read } = useConfig();
   const { getCurrentModelAndProvider, currentModel, currentProvider } = useModelAndProvider();
   const [tokenLimit, setTokenLimit] = useState<number>(TOKEN_LIMIT_DEFAULT);
@@ -416,7 +416,7 @@ export default function ChatInput({
         // Only show warning alert when approaching limit
         addAlert({
           type: AlertType.Warning,
-          message: `Approaching token limit (${numTokens.toLocaleString()}/${tokenLimit.toLocaleString()}) \n You're reaching the model's conversation limit. The session will be saved — copy anything important and start a new one to continue.`,
+          message: `Approaching token limit (${numTokens.toLocaleString()}/${tokenLimit.toLocaleString()}) \n You're reaching the model's conversation limit. Consider compacting the conversation to continue.`,
           autoShow: true, // Auto-show token limit warnings
         });
       } else {
@@ -880,7 +880,7 @@ export default function ChatInput({
       evt.preventDefault();
       const canSubmit =
         !isLoading &&
-        !isLoadingSummary &&
+        !isLoadingCompaction &&
         (displayValue.trim() ||
           pastedImages.some((img) => img.filePath && !img.error && !img.isLoading) ||
           allDroppedFiles.some((file) => !file.error && !file.isLoading));
@@ -894,7 +894,7 @@ export default function ChatInput({
     e.preventDefault();
     const canSubmit =
       !isLoading &&
-      !isLoadingSummary &&
+      !isLoadingCompaction &&
       (displayValue.trim() ||
         pastedImages.some((img) => img.filePath && !img.error && !img.isLoading) ||
         allDroppedFiles.some((file) => !file.error && !file.isLoading));
@@ -1073,7 +1073,7 @@ export default function ChatInput({
                 isAnyDroppedFileLoading ||
                 isRecording ||
                 isTranscribing ||
-                isLoadingSummary
+                isLoadingCompaction
               }
               className={`rounded-full px-10 py-2 flex items-center gap-2 ${
                 !hasSubmittableContent ||
@@ -1081,12 +1081,12 @@ export default function ChatInput({
                 isAnyDroppedFileLoading ||
                 isRecording ||
                 isTranscribing ||
-                isLoadingSummary
+                isLoadingCompaction
                   ? 'bg-slate-600 text-white cursor-not-allowed opacity-50 border-slate-600'
                   : 'bg-slate-600 text-white hover:bg-slate-700 border-slate-600 hover:cursor-pointer'
               }`}
               title={
-                isLoadingSummary
+                isLoadingCompaction
                   ? 'Summarizing conversation...'
                   : isAnyImageLoading
                     ? 'Waiting for images to save...'
@@ -1287,7 +1287,7 @@ export default function ChatInput({
           <div className="w-px h-4 bg-border-default mx-2" />
           <BottomMenuModeSelection />
           {messages.length > 0 && (
-            <ManualSummarizeButton
+            <ManualCompactButton
               messages={messages}
               isLoading={isLoading}
               setMessages={setMessages}
diff --git a/ui/desktop/src/components/context_management/ChatContextManager.tsx b/ui/desktop/src/components/context_management/ChatContextManager.tsx
index 9e8e666b..2e18e02b 100644
--- a/ui/desktop/src/components/context_management/ChatContextManager.tsx
+++ b/ui/desktop/src/components/context_management/ChatContextManager.tsx
@@ -11,7 +11,7 @@ interface ChatContextManagerState {
   summaryContent: string;
   summarizedThread: Message[];
   isSummaryModalOpen: boolean;
-  isLoadingSummary: boolean;
+  isLoadingCompaction: boolean;
   errorLoadingSummary: boolean;
   preparingManualSummary: boolean;
 }
@@ -32,10 +32,7 @@ interface ChatContextManagerActions {
   hasSummarizationRequestedContent: (message: Message) => boolean;
   getContextHandlerType: (message: Message) => 'contextLengthExceeded' | 'summarizationRequested';
   handleContextLengthExceeded: (messages: Message[]) => Promise<void>;
-  handleManualSummarization: (
-    messages: Message[],
-    setMessages: (messages: Message[]) => void
-  ) => void;
+  handleManualCompaction: (messages: Message[], setMessages: (messages: Message[]) => void) => void;
 }
 
 // Create the context
@@ -50,12 +47,12 @@ export const ChatContextManagerProvider: React.FC<{ children: React.ReactNode }>
   const [summaryContent, setSummaryContent] = useState<string>('');
   const [summarizedThread, setSummarizedThread] = useState<Message[]>([]);
   const [isSummaryModalOpen, setIsSummaryModalOpen] = useState<boolean>(false);
-  const [isLoadingSummary, setIsLoadingSummary] = useState<boolean>(false);
+  const [isLoadingCompaction, setIsLoadingCompaction] = useState<boolean>(false);
   const [errorLoadingSummary, setErrorLoadingSummary] = useState<boolean>(false);
   const [preparingManualSummary, setPreparingManualSummary] = useState<boolean>(false);
 
   const handleContextLengthExceeded = async (messages: Message[]): Promise<void> => {
-    setIsLoadingSummary(true);
+    setIsLoadingCompaction(true);
     setErrorLoadingSummary(false);
     setPreparingManualSummary(true);
 
@@ -79,17 +76,17 @@ export const ChatContextManagerProvider: React.FC<{ children: React.ReactNode }>
         setSummarizedThread(convertedMessages);
       }
 
-      setIsLoadingSummary(false);
+      setIsLoadingCompaction(false);
     } catch (err) {
       console.error('Error handling context length exceeded:', err);
       setErrorLoadingSummary(true);
-      setIsLoadingSummary(false);
+      setIsLoadingCompaction(false);
     } finally {
       setPreparingManualSummary(false);
     }
   };
 
-  const handleManualSummarization = (
+  const handleManualCompaction = (
     messages: Message[],
     setMessages: (messages: Message[]) => void
   ): void => {
@@ -242,7 +239,7 @@ export const ChatContextManagerProvider: React.FC<{ children: React.ReactNode }>
     summaryContent,
     summarizedThread,
     isSummaryModalOpen,
-    isLoadingSummary,
+    isLoadingCompaction,
     errorLoadingSummary,
     preparingManualSummary,
 
@@ -256,7 +253,7 @@ export const ChatContextManagerProvider: React.FC<{ children: React.ReactNode }>
     hasSummarizationRequestedContent,
     getContextHandlerType,
     handleContextLengthExceeded,
-    handleManualSummarization,
+    handleManualCompaction,
   };
 
   return (
diff --git a/ui/desktop/src/components/context_management/ContextHandler.tsx b/ui/desktop/src/components/context_management/ContextHandler.tsx
index 0610e591..6685ada7 100644
--- a/ui/desktop/src/components/context_management/ContextHandler.tsx
+++ b/ui/desktop/src/components/context_management/ContextHandler.tsx
@@ -22,7 +22,7 @@ export const ContextHandler: React.FC<ContextHandlerProps> = ({
 }) => {
   const {
     summaryContent,
-    isLoadingSummary,
+    isLoadingCompaction,
     errorLoadingSummary,
     openSummaryModal,
     handleContextLengthExceeded,
@@ -62,13 +62,13 @@ export const ContextHandler: React.FC<ContextHandlerProps> = ({
 
   // Scroll when summarization starts (loading state)
   useEffect(() => {
-    if (isLoadingSummary && shouldAllowSummaryInteraction) {
+    if (isLoadingCompaction && shouldAllowSummaryInteraction) {
       // Delay the scroll slightly to ensure the loading content is rendered
       setTimeout(() => {
         onSummaryComplete?.();
       }, 100);
     }
-  }, [isLoadingSummary, shouldAllowSummaryInteraction, onSummaryComplete]);
+  }, [isLoadingCompaction, shouldAllowSummaryInteraction, onSummaryComplete]);
 
   // Function to trigger the async operation properly
   const triggerContextLengthExceeded = () => {
@@ -234,7 +234,7 @@ export const ContextHandler: React.FC<ContextHandlerProps> = ({
         <div className="flex-grow border-t border-gray-300"></div>
       </div>
 
-      {isLoadingSummary && shouldAllowSummaryInteraction
+      {isLoadingCompaction && shouldAllowSummaryInteraction
         ? renderLoadingState()
         : renderContentState()}
     </div>
diff --git a/ui/desktop/src/components/context_management/ManualSummaryButton.tsx b/ui/desktop/src/components/context_management/ManualCompactButton.tsx
similarity index 76%
rename from ui/desktop/src/components/context_management/ManualSummaryButton.tsx
rename to ui/desktop/src/components/context_management/ManualCompactButton.tsx
index 867b9c59..daf1b52d 100644
--- a/ui/desktop/src/components/context_management/ManualSummaryButton.tsx
+++ b/ui/desktop/src/components/context_management/ManualCompactButton.tsx
@@ -14,18 +14,18 @@ import { Tooltip, TooltipContent, TooltipTrigger } from '../ui/Tooltip';
 import { useChatContextManager } from './ChatContextManager';
 import { Message } from '../../types/message';
 
-interface ManualSummarizeButtonProps {
+interface ManualCompactButtonProps {
   messages: Message[];
   isLoading?: boolean; // need this prop to know if Goose is responding
   setMessages: (messages: Message[]) => void; // context management is triggered via special message content types
 }
 
-export const ManualSummarizeButton: React.FC<ManualSummarizeButtonProps> = ({
+export const ManualCompactButton: React.FC<ManualCompactButtonProps> = ({
   messages,
   isLoading = false,
   setMessages,
 }) => {
-  const { handleManualSummarization, isLoadingSummary } = useChatContextManager();
+  const { handleManualCompaction, isLoadingCompaction } = useChatContextManager();
 
   const [isConfirmationOpen, setIsConfirmationOpen] = useState(false);
 
@@ -33,13 +33,13 @@ export const ManualSummarizeButton: React.FC<ManualSummarizeButtonProps> = ({
     setIsConfirmationOpen(true);
   };
 
-  const handleSummarize = async () => {
+  const handleCompaction = async () => {
     setIsConfirmationOpen(false);
 
     try {
-      handleManualSummarization(messages, setMessages);
+      handleManualCompaction(messages, setMessages);
     } catch (error) {
-      console.error('Error in handleSummarize:', error);
+      console.error('Error in handleCompaction:', error);
     }
   };
 
@@ -57,17 +57,17 @@ export const ManualSummarizeButton: React.FC<ManualSummarizeButtonProps> = ({
               type="button"
               className={cn(
                 'flex items-center justify-center text-text-default/70 hover:text-text-default text-xs cursor-pointer transition-colors',
-                (isLoadingSummary || isLoading) &&
+                (isLoadingCompaction || isLoading) &&
                   'cursor-not-allowed text-text-default/30 hover:text-text-default/30 opacity-50'
               )}
               onClick={handleClick}
-              disabled={isLoadingSummary || isLoading}
+              disabled={isLoadingCompaction || isLoading}
             >
               <ScrollText size={16} />
             </button>
           </TooltipTrigger>
           <TooltipContent>
-            {isLoadingSummary ? 'Summarizing conversation...' : 'Summarize conversation context'}
+            {isLoadingCompaction ? 'Compacting conversation...' : 'Compact conversation context'}
           </TooltipContent>
         </Tooltip>
       </div>
@@ -78,10 +78,11 @@ export const ManualSummarizeButton: React.FC<ManualSummarizeButtonProps> = ({
           <DialogHeader>
             <DialogTitle className="flex items-center gap-2">
               <ScrollText className="text-iconStandard" size={24} />
-              Summarize Conversation
+              Compact Conversation
             </DialogTitle>
             <DialogDescription>
-              This will summarize your conversation history to save context space.
+              This will compact your conversation by summarizing the context into a single message
+              and will help you save context space for future interactions.
             </DialogDescription>
           </DialogHeader>
 
@@ -97,8 +98,8 @@ export const ManualSummarizeButton: React.FC<ManualSummarizeButtonProps> = ({
             <Button type="button" variant="outline" onClick={handleClose}>
               Cancel
             </Button>
-            <Button type="button" onClick={handleSummarize}>
-              Summarize
+            <Button type="button" onClick={handleCompaction}>
+              Compact Conversation
             </Button>
           </DialogFooter>
         </DialogContent>