diff --git a/crates/headroom-core/src/transforms/smart_crusher/compaction/formatter.rs b/crates/headroom-core/src/transforms/smart_crusher/compaction/formatter.rs
index 69d85ebb9..73e264036 100644
--- a/crates/headroom-core/src/transforms/smart_crusher/compaction/formatter.rs
+++ b/crates/headroom-core/src/transforms/smart_crusher/compaction/formatter.rs
@@ -1,4 +1,4 @@
-//! Formatter trait + two built-in implementations.
+//! Formatter trait + the built-in implementations.
 //!
 //! [`Formatter`] walks a [`Compaction`] tree and renders bytes. It's the
 //! pluggable seam where users (or Enterprise plugins) choose how the
@@ -14,10 +14,14 @@
 //!   TOON's most useful idea (the `[N]{cols}` declaration) without
 //!   adopting TOON's bespoke escaping rules — every model has seen
 //!   millions of CSV examples in training.
+//! - [`MarkdownKvFormatter`] — the same `[N]{cols}` declaration +
+//!   one Markdown list item per row with `key: value` lines.
+//!   Token-heavier than CSV (field names repeat per row) but
+//!   format-comprehension benchmarks favor KV for read-back accuracy.
 //!
 //! # Nested cells
 //!
-//! Both formatters handle [`CellValue::Nested`] by recursively
+//! The formatters handle [`CellValue::Nested`] by recursively
 //! formatting the sub-compaction and embedding the result. The CSV
 //! formatter wraps nested output in CSV-quoted form; the JSON
 //! formatter embeds it as a structured JSON object.
@@ -26,7 +30,7 @@
 //!
 //! [`CellValue::OpaqueRef`] renders as a structured marker the model
 //! can recognize: `<<ccr:HASH,KIND,SIZE>>`. This format is fixed across
-//! both built-in formatters so downstream consumers can pattern-match
+//! all built-in formatters so downstream consumers can pattern-match
 //! markers regardless of which formatter produced them.
 
 use serde_json::{json, Value};
@@ -368,6 +372,200 @@ fn csv_quote(s: &str) -> String {
     out
 }
 
+// ─────────────────────────── Markdown-KV formatter ───────────────────────────
+
+/// Renders a `Compaction` as a `[N]{cols}` declaration followed by one
+/// Markdown list item per row, each cell on its own `key: value` line.
+///
+/// Token-heavier than [`CsvSchemaFormatter`] (field names repeat per
+/// row), but format-comprehension benchmarks show models retrieve
+/// values from Markdown-KV substantially more reliably than from CSV.
+/// Offered as an opt-in trade of tokens for read accuracy.
+///
+/// Rendering rules:
+/// - Missing cells are omitted entirely (no `key:` line) — sparse rows
+///   cost nothing, unlike CSV's positional empty cells.
+/// - Strings that would be ambiguous on a line (contain newlines,
+///   leading/trailing whitespace, or are empty) render JSON-quoted;
+///   everything else renders raw.
+/// - Nested cells render as compact inline JSON, matching
+///   [`CsvSchemaFormatter`].
+/// - Opaque cells keep the fixed `<<ccr:HASH,KIND,SIZE>>` marker
+///   contract shared by all formatters.
+#[derive(Debug, Clone, Default)]
+pub struct MarkdownKvFormatter {
+    /// If true, emit a `__dropped:N` note on the declaration line when
+    /// rows were dropped under budget. Mirrors
+    /// [`CsvSchemaFormatter::include_drop_summary`].
+    pub include_drop_summary: bool,
+}
+
+impl MarkdownKvFormatter {
+    pub fn new() -> Self {
+        Self::default()
+    }
+    pub fn with_drop_summary(mut self) -> Self {
+        self.include_drop_summary = true;
+        self
+    }
+}
+
+impl Formatter for MarkdownKvFormatter {
+    fn name(&self) -> &str {
+        "markdown-kv"
+    }
+
+    fn format(&self, c: &Compaction) -> String {
+        let mut out = String::new();
+        write_compaction_kv(&mut out, c, self);
+        out
+    }
+}
+
+fn write_compaction_kv(out: &mut String, c: &Compaction, fmt: &MarkdownKvFormatter) {
+    match c {
+        Compaction::Table {
+            schema,
+            rows,
+            original_count,
+        } => {
+            write_kv_table(out, schema, rows, *original_count, fmt);
+        }
+        Compaction::Buckets {
+            discriminator,
+            buckets,
+            original_count,
+        } => {
+            out.push_str("__buckets:");
+            out.push_str(discriminator);
+            if fmt.include_drop_summary {
+                let kept: usize = buckets.iter().map(|b| b.rows.len()).sum();
+                if kept < *original_count {
+                    out.push_str(&format!(" __dropped:{}", original_count - kept));
+                }
+            }
+            out.push('\n');
+            for b in buckets {
+                out.push_str(&format!("__key:{}\n", kv_scalar(&b.key)));
+                write_kv_table(out, &b.schema, &b.rows, b.rows.len(), fmt);
+            }
+        }
+        Compaction::OpaqueRef {
+            ccr_hash,
+            byte_size,
+            kind,
+        } => {
+            out.push_str(&format_ccr_marker(ccr_hash, *byte_size, kind));
+        }
+        Compaction::Untouched(v) => {
+            out.push_str(&serde_json::to_string(v).unwrap_or_default());
+        }
+    }
+}
+
+fn write_kv_table(
+    out: &mut String,
+    schema: &Schema,
+    rows: &[Row],
+    original_count: usize,
+    fmt: &MarkdownKvFormatter,
+) {
+    // Same declaration line as the CSV formatter: keeps row count and
+    // typed shape up front where the model (and telemetry) expect it.
+    // Unlike CSV (pre-existing exposure, kept byte-identical), KV quotes
+    // pathological field names here so the declaration parses the same
+    // way as the row lines below.
+    out.push('[');
+    out.push_str(&rows.len().to_string());
+    out.push_str("]{");
+    let col_decl: Vec<String> = schema
+        .fields
+        .iter()
+        .map(|f| {
+            let name = kv_field_name(&f.name);
+            if f.nullable {
+                format!("{}:{}?", name, f.type_tag)
+            } else {
+                format!("{}:{}", name, f.type_tag)
+            }
+        })
+        .collect();
+    out.push_str(&col_decl.join(","));
+    out.push('}');
+    if fmt.include_drop_summary && rows.len() < original_count {
+        out.push_str(&format!(" __dropped:{}", original_count - rows.len()));
+    }
+    out.push('\n');
+
+    for row in rows {
+        // Compactor invariant: one cell per schema field. zip() would
+        // silently drop extras — fail loudly in debug builds instead.
+        debug_assert_eq!(row.0.len(), schema.fields.len());
+        let mut wrote_first = false;
+        for (field, cell) in schema.fields.iter().zip(row.0.iter()) {
+            let rendered = match cell {
+                CellValue::Missing => continue,
+                CellValue::Scalar(v) => kv_scalar(v),
+                CellValue::Nested(sub) => JsonFormatter::new().format(sub),
+                CellValue::OpaqueRef {
+                    ccr_hash,
+                    byte_size,
+                    kind,
+                } => format_ccr_marker(ccr_hash, *byte_size, kind),
+            };
+            out.push_str(if wrote_first { "  " } else { "- " });
+            out.push_str(&kv_field_name(&field.name));
+            out.push_str(": ");
+            out.push_str(&rendered);
+            out.push('\n');
+            wrote_first = true;
+        }
+        // All-missing row: keep a bare list item so the rendered row
+        // count still matches the declaration.
+        if !wrote_first {
+            out.push_str("-\n");
+        }
+    }
+}
+
+fn kv_scalar(v: &Value) -> String {
+    match v {
+        Value::Null => "null".to_string(),
+        Value::Bool(b) => if *b { "true" } else { "false" }.to_string(),
+        Value::Number(n) => n.to_string(),
+        Value::String(s) => {
+            if needs_kv_quote(s) {
+                serde_json::to_string(s).unwrap_or_default()
+            } else {
+                s.clone()
+            }
+        }
+        // Object/array fall back to compact JSON (rare — usually
+        // already promoted to Nested by the compactor).
+        _ => serde_json::to_string(v).unwrap_or_default(),
+    }
+}
+
+fn needs_kv_quote(s: &str) -> bool {
+    s.is_empty()
+        || s.contains('\n')
+        || s.contains('\r')
+        || s.starts_with(char::is_whitespace)
+        || s.ends_with(char::is_whitespace)
+}
+
+/// Field names are normally bare identifiers, but nothing upstream
+/// enforces that. Quote the pathological ones the same way as values:
+/// an embedded newline would inject fake row lines, and `": "` inside
+/// a key would split the line at the wrong colon on read-back.
+fn kv_field_name(name: &str) -> String {
+    if needs_kv_quote(name) || name.contains(": ") {
+        serde_json::to_string(name).unwrap_or_default()
+    } else {
+        name.to_string()
+    }
+}
+
 #[cfg(test)]
 mod tests {
     use super::*;
@@ -591,4 +789,173 @@ mod tests {
             raw_json.len()
         );
     }
+
+    // ── MarkdownKvFormatter ──
+
+    #[test]
+    fn markdown_kv_renders_table() {
+        let items = vec![
+            json!({"id": 1, "name": "alice"}),
+            json!({"id": 2, "name": "bob"}),
+        ];
+        let c = compact(&items, &cfg());
+        let out = MarkdownKvFormatter::new().format(&c);
+        let lines: Vec<&str> = out.trim_end().lines().collect();
+        assert!(lines[0].starts_with("[2]{"), "got line[0]: {}", lines[0]);
+        assert!(lines[0].contains("id:int"));
+        assert!(out.contains("- id: 1\n  name: alice\n"), "got: {out}");
+        assert!(out.contains("- id: 2\n  name: bob\n"), "got: {out}");
+    }
+
+    #[test]
+    fn markdown_kv_omits_missing_cells() {
+        let items = vec![json!({"id": 1, "note": "has note"}), json!({"id": 2})];
+        let c = compact(&items, &cfg());
+        let out = MarkdownKvFormatter::new().format(&c);
+        assert!(out.contains("note: has note"), "got: {out}");
+        // Row 2 has no `note:` line at all.
+        let row2 = out.split("- id: 2").nth(1).expect("row 2 present");
+        assert!(!row2.contains("note:"), "got row2 tail: {row2}");
+    }
+
+    #[test]
+    fn markdown_kv_quotes_ambiguous_strings() {
+        let items = vec![
+            json!({"id": 1, "msg": "line one\nline two"}),
+            json!({"id": 2, "msg": "plain"}),
+        ];
+        let c = compact(&items, &cfg());
+        let out = MarkdownKvFormatter::new().format(&c);
+        assert!(
+            out.contains(r#"msg: "line one\nline two""#),
+            "multiline must be JSON-quoted, got: {out}"
+        );
+        assert!(out.contains("msg: plain\n"), "got: {out}");
+    }
+
+    #[test]
+    fn markdown_kv_quotes_pathological_field_names() {
+        // A newline in a key would inject fake row lines; ": " in a key
+        // would split read-back at the wrong colon. Both get JSON-quoted
+        // in the declaration and in every row line.
+        let items = vec![
+            json!({"bad\nkey": 1, "note: extra": "x"}),
+            json!({"bad\nkey": 2, "note: extra": "y"}),
+        ];
+        let c = compact(&items, &cfg());
+        let out = MarkdownKvFormatter::new().format(&c);
+        assert!(!out.contains("bad\nkey"), "raw newline key leaked: {out}");
+        assert!(out.contains(r#""bad\nkey""#), "got: {out}");
+        assert!(out.contains(r#""note: extra": x"#), "got: {out}");
+        let decl = out.lines().next().unwrap();
+        assert!(decl.contains(r#""bad\nkey":int"#), "got decl: {decl}");
+    }
+
+    #[test]
+    fn markdown_kv_plain_strings_unquoted() {
+        let items = vec![
+            json!({"id": 1, "name": "alice, the \"great\""}),
+            json!({"id": 2, "name": "bob"}),
+        ];
+        let c = compact(&items, &cfg());
+        let out = MarkdownKvFormatter::new().format(&c);
+        // Commas and quotes are fine on a KV line — no CSV-style quoting.
+        assert!(out.contains(r#"name: alice, the "great""#), "got: {out}");
+    }
+
+    #[test]
+    fn markdown_kv_emits_ccr_marker() {
+        let big = "ABCDEFGHIJKLMNOPQRSTUVWXYZabcdefghijklmnopqrstuvwxyz0123456789+/=".repeat(8);
+        let items = vec![
+            json!({"id": 1, "blob": big.clone()}),
+            json!({"id": 2, "blob": big.clone()}),
+        ];
+        let c = compact(&items, &cfg());
+        let out = MarkdownKvFormatter::new().format(&c);
+        assert!(out.contains("<<ccr:"), "got: {out}");
+        assert!(out.contains(",base64,"));
+    }
+
+    #[test]
+    fn markdown_kv_renders_buckets() {
+        let items = vec![
+            json!({"type": "user", "id": 1, "name": "alice"}),
+            json!({"type": "user", "id": 2, "name": "bob"}),
+            json!({"type": "order", "id": 99, "total": 50}),
+            json!({"type": "order", "id": 100, "total": 75}),
+        ];
+        let c = compact(&items, &cfg());
+        let out = MarkdownKvFormatter::new().format(&c);
+        assert!(out.starts_with("__buckets:type"), "got: {out}");
+        assert!(out.contains("__key:order"));
+        assert!(out.contains("__key:user"));
+        assert!(out.contains("- id:"), "got: {out}");
+    }
+
+    #[test]
+    fn markdown_kv_drop_summary_opt_in() {
+        let rows = vec![
+            Row::new(vec![CellValue::Scalar(json!(1))]),
+            Row::new(vec![CellValue::Scalar(json!(2))]),
+        ];
+        let c = Compaction::Table {
+            schema: Schema {
+                fields: vec![super::super::ir::FieldSpec {
+                    name: "x".into(),
+                    type_tag: "int".into(),
+                    nullable: false,
+                }],
+            },
+            rows,
+            original_count: 5, // 3 dropped
+        };
+        let with_summary = MarkdownKvFormatter::new().with_drop_summary().format(&c);
+        assert!(with_summary.contains("__dropped:3"));
+        let without = MarkdownKvFormatter::new().format(&c);
+        assert!(!without.contains("__dropped"));
+    }
+
+    #[test]
+    fn markdown_kv_nested_cell_inline_json() {
+        let items = vec![
+            json!({"event": "batch", "payload": r#"[{"x":1},{"x":2},{"x":3}]"#}),
+            json!({"event": "batch", "payload": r#"[{"x":4},{"x":5}]"#}),
+        ];
+        let c = compact(&items, &cfg());
+        let out = MarkdownKvFormatter::new().format(&c);
+        assert!(out.contains("_compaction"), "got: {out}");
+    }
+
+    #[test]
+    fn markdown_kv_estimate_matches_format_len() {
+        let items = vec![json!({"a": 1}), json!({"a": 2})];
+        let c = compact(&items, &cfg());
+        let f = MarkdownKvFormatter::new();
+        assert_eq!(f.estimate_bytes(&c), f.format(&c).len());
+    }
+
+    #[test]
+    fn markdown_kv_smaller_than_raw_json() {
+        // KV repeats field names per row, so it loses to CSV on bytes —
+        // but it should still beat naïve JSON (quotes + braces + commas).
+        let items: Vec<Value> = (0..50)
+            .map(|i| {
+                json!({
+                    "id": i,
+                    "name": format!("user_{i}"),
+                    "email": format!("user_{i}@example.com"),
+                    "status": if i % 3 == 0 { "ok" } else { "pending" },
+                })
+            })
+            .collect();
+        let c = compact(&items, &cfg());
+        let kv_out = MarkdownKvFormatter::new().format(&c);
+        let raw_json = serde_json::to_string(&Value::Array(items.clone())).unwrap();
+        assert!(
+            kv_out.len() < raw_json.len(),
+            "kv {} bytes vs raw json {} bytes",
+            kv_out.len(),
+            raw_json.len()
+        );
+    }
 }
diff --git a/crates/headroom-core/src/transforms/smart_crusher/compaction/mod.rs b/crates/headroom-core/src/transforms/smart_crusher/compaction/mod.rs
index cecfe60d7..891975aea 100644
--- a/crates/headroom-core/src/transforms/smart_crusher/compaction/mod.rs
+++ b/crates/headroom-core/src/transforms/smart_crusher/compaction/mod.rs
@@ -31,7 +31,7 @@ pub mod walker;
 
 pub use classifier::{classify_cell, CellClass, ClassifyConfig};
 pub use compactor::{compact, CompactConfig};
-pub use formatter::{CsvSchemaFormatter, Formatter, JsonFormatter};
+pub use formatter::{CsvSchemaFormatter, Formatter, JsonFormatter, MarkdownKvFormatter};
 pub use ir::{Bucket, CellValue, Compaction, FieldSpec, OpaqueKind, Row, Schema};
 pub use walker::{
     compact_document, emit_opaque_ccr_marker, try_parse_json_container, DocumentCompactor,
@@ -69,6 +69,34 @@ impl CompactionStage {
         }
     }
 
+    /// Markdown-KV formatter, default config — opt-in trade of tokens
+    /// for model read accuracy (field names repeat per row, but
+    /// format-comprehension benchmarks favor KV over CSV).
+    pub fn default_markdown_kv() -> Self {
+        Self {
+            config: CompactConfig::default(),
+            formatter: Box::new(MarkdownKvFormatter::new()),
+        }
+    }
+
+    /// Formatter names accepted by [`Self::from_format_name`]. The
+    /// single source of truth for caller error messages (the PyO3
+    /// bridge renders this list) — keep in sync with the match below.
+    pub const SUPPORTED_FORMAT_NAMES: &'static [&'static str] =
+        &["csv-schema", "json", "markdown-kv"];
+
+    /// Look up a preset by its formatter name (see
+    /// [`Self::SUPPORTED_FORMAT_NAMES`]). `None` for unknown names —
+    /// callers own the fallback/error policy.
+    pub fn from_format_name(name: &str) -> Option<Self> {
+        match name {
+            "csv-schema" => Some(Self::default_csv_schema()),
+            "json" => Some(Self::default_json()),
+            "markdown-kv" => Some(Self::default_markdown_kv()),
+            _ => None,
+        }
+    }
+
     /// Run the stage end-to-end: compact + format. Returns the
     /// [`Compaction`] tree (so callers can inspect kept/total row
     /// counts) alongside the rendered bytes.
diff --git a/crates/headroom-core/src/transforms/smart_crusher/crusher.rs b/crates/headroom-core/src/transforms/smart_crusher/crusher.rs
index 8054f9caa..9ef951f54 100644
--- a/crates/headroom-core/src/transforms/smart_crusher/crusher.rs
+++ b/crates/headroom-core/src/transforms/smart_crusher/crusher.rs
@@ -179,6 +179,21 @@ impl SmartCrusher {
             .build()
     }
 
+    /// Construct like [`SmartCrusher::new`] but with the compaction
+    /// stage's formatter chosen by name (`"csv-schema"`, `"json"`,
+    /// `"markdown-kv"`). `None` for unknown names — callers own the
+    /// fallback/error policy. `"csv-schema"` is equivalent to `new`.
+    pub fn with_compaction_format(config: SmartCrusherConfig, format_name: &str) -> Option<Self> {
+        let stage = CompactionStage::from_format_name(format_name)?;
+        Some(
+            SmartCrusherBuilder::new(config)
+                .with_default_oss_setup()
+                .with_compaction(stage)
+                .with_default_ccr_store()
+                .build(),
+        )
+    }
+
     /// Begin a builder chain for custom composition. The Enterprise
     /// entry point: swap the scorer, add business-rule constraints,
     /// attach an audit observer.
diff --git a/crates/headroom-py/src/lib.rs b/crates/headroom-py/src/lib.rs
index d753244a8..99f08d62b 100644
--- a/crates/headroom-py/src/lib.rs
+++ b/crates/headroom-py/src/lib.rs
@@ -677,6 +677,26 @@ impl PySmartCrusher {
         }
     }
 
+    /// Construct with the lossless-first compaction stage's formatter
+    /// chosen by name: `"csv-schema"` (the `new()` default), `"json"`,
+    /// or `"markdown-kv"`. Raises `ValueError` on unknown names so a
+    /// misconfigured knob is visible instead of silently falling back.
+    #[staticmethod]
+    #[pyo3(signature = (config = None, format_name = "csv-schema"))]
+    fn with_compaction_format(
+        config: Option<&PySmartCrusherConfig>,
+        format_name: &str,
+    ) -> PyResult<Self> {
+        let cfg = config.map(|c| c.inner.clone()).unwrap_or_default();
+        match RustSmartCrusher::with_compaction_format(cfg, format_name) {
+            Some(inner) => Ok(Self { inner }),
+            None => Err(pyo3::exceptions::PyValueError::new_err(format!(
+                "unknown compaction format {format_name:?}; expected one of: {}",
+                headroom_core::transforms::smart_crusher::compaction::CompactionStage::SUPPORTED_FORMAT_NAMES.join(", ")
+            ))),
+        }
+    }
+
     /// `crush(content, query="", bias=1.0) -> CrushResult`. Argument
     /// order and keyword names mirror the Python implementation.
     ///
diff --git a/headroom/config.py b/headroom/config.py
index daa3615ad..5a18e3c3a 100644
--- a/headroom/config.py
+++ b/headroom/config.py
@@ -358,6 +358,11 @@ class SmartCrusherConfig:
     first_fraction: float = 0.3  # 30% of K from start of array
     last_fraction: float = 0.15  # 15% of K from end of array
 
+    # Lossless compaction only replaces the original when it saves at
+    # least this byte fraction vs the (minified) input. Mirrors the
+    # Rust default.
+    lossless_min_savings_ratio: float = 0.30
+
 
 @dataclass
 class CacheOptimizerConfig:
diff --git a/headroom/transforms/smart_crusher.py b/headroom/transforms/smart_crusher.py
index 82c8dfed4..a0c59797d 100644
--- a/headroom/transforms/smart_crusher.py
+++ b/headroom/transforms/smart_crusher.py
@@ -45,6 +45,7 @@ from __future__ import annotations
 
 import json
 import logging
+import os
 from dataclasses import dataclass
 from typing import Any
 
@@ -56,6 +57,12 @@ from .base import Transform
 logger = logging.getLogger(__name__)
 
 
+# Lossless-compaction renderers known to the Rust core — mirrors
+# `CompactionStage::SUPPORTED_FORMAT_NAMES` in
+# `crates/headroom-core/.../compaction/mod.rs`.
+_SUPPORTED_COMPACTION_FORMATS = ("csv-schema", "json", "markdown-kv")
+
+
 # ─── CCR sentinel ─────────────────────────────────────────────────────────
 #
 # When SmartCrusher's lossy path drops rows, it appends a sentinel object
@@ -172,6 +179,11 @@ class SmartCrusherConfig:
     dedup_identical_items: bool = True
     first_fraction: float = 0.3
     last_fraction: float = 0.15
+    # Lossless compaction only replaces the original when it saves at
+    # least this byte fraction vs the (minified) input. Mirrors the Rust
+    # default; mainly lowered in tests and KV experiments — KV repeats
+    # field names per row, so it clears the gate less often than CSV.
+    lossless_min_savings_ratio: float = 0.30
 
 
 # ─── Rust-backed SmartCrusher ─────────────────────────────────────────────
@@ -198,6 +210,7 @@ class SmartCrusher(Transform):
         ccr_config: CCRConfig | None = None,
         with_compaction: bool = True,
         observer: Any = None,
+        compaction_format: str | None = None,
     ):
         # Hard import — no Python fallback. If the wheel is missing the
         # caller must build it (scripts/build_rust_extension.sh) or
@@ -303,6 +316,7 @@ class SmartCrusher(Transform):
             dedup_identical_items=cfg.dedup_identical_items,
             first_fraction=cfg.first_fraction,
             last_fraction=cfg.last_fraction,
+            lossless_min_savings_ratio=cfg.lossless_min_savings_ratio,
             relevance_threshold=0.3,
             enable_ccr_marker=(
                 self._ccr_config.enabled and self._ccr_config.inject_retrieval_marker
@@ -314,10 +328,34 @@ class SmartCrusher(Transform):
         # markers. Pass `with_compaction=False` to opt into the
         # pre-PR4 lossy-only path (used by retention-property tests
         # that depend on row-level item preservation).
-        if with_compaction:
+        #
+        # `compaction_format` picks the lossless renderer:
+        # "csv-schema" (default), "json", or "markdown-kv" (opt-in
+        # trade of tokens for model read accuracy). Falls back to the
+        # HEADROOM_COMPACTION_FORMAT env var when the kwarg is None.
+        # Ignored when with_compaction=False.
+        resolved_format = compaction_format or os.environ.get(
+            "HEADROOM_COMPACTION_FORMAT", "csv-schema"
+        )
+        # Validate even when with_compaction=False: an explicit bogus
+        # format (kwarg or env var) is a misconfiguration that should be
+        # visible, not silently accepted because the knob happens to be
+        # ignored on this path.
+        if resolved_format not in _SUPPORTED_COMPACTION_FORMATS:
+            raise ValueError(
+                f"unknown compaction format {resolved_format!r}; "
+                f"expected one of: {', '.join(_SUPPORTED_COMPACTION_FORMATS)}"
+            )
+        self._compaction_format = resolved_format if with_compaction else None
+        if not with_compaction:
+            self._rust = _RustSmartCrusher.without_compaction(rust_cfg)
+        elif resolved_format == "csv-schema":
+            # Keep the `new()` constructor for the default path so its
+            # byte-parity coverage stays on the exact production
+            # codepath.
             self._rust = _RustSmartCrusher(rust_cfg)
         else:
-            self._rust = _RustSmartCrusher.without_compaction(rust_cfg)
+            self._rust = _RustSmartCrusher.with_compaction_format(rust_cfg, resolved_format)
 
     def crush(self, content: str, query: str = "", bias: float = 1.0) -> CrushResult:
         """Crush a single JSON content string.
diff --git a/tests/test_compaction_markdown_kv.py b/tests/test_compaction_markdown_kv.py
new file mode 100644
index 000000000..ffcdeb09b
--- /dev/null
+++ b/tests/test_compaction_markdown_kv.py
@@ -0,0 +1,141 @@
+"""Markdown-KV compaction formatter — opt-in serialization-aware output.
+
+Covers the plumbing added for issue #858:
+
+- ``headroom._core.SmartCrusher.with_compaction_format`` renders uniform
+  arrays as Markdown-KV when the lossless gate passes.
+- The high-level ``SmartCrusher`` exposes the knob via the
+  ``compaction_format`` kwarg and the ``HEADROOM_COMPACTION_FORMAT`` env
+  var, defaulting to the unchanged ``csv-schema`` path.
+- Unknown format names fail loudly (``ValueError``) instead of silently
+  falling back.
+
+The formatter's rendering rules themselves (missing-cell omission,
+string quoting, CCR marker contract, buckets) are covered by the Rust
+unit tests in ``compaction/formatter.rs``.
+"""
+
+from __future__ import annotations
+
+import json
+
+import pytest
+
+from headroom._core import SmartCrusher as RustSmartCrusher
+from headroom._core import SmartCrusherConfig as RustSmartCrusherConfig
+from headroom.transforms.smart_crusher import SmartCrusher
+from headroom.transforms.smart_crusher import SmartCrusherConfig as PySmartCrusherConfig
+
+
+def _tabular_json(n: int = 50) -> str:
+    return json.dumps(
+        [
+            {
+                "id": i,
+                "name": f"user_{i}",
+                "email": f"user_{i}@example.com",
+                "status": "ok" if i % 3 == 0 else "pending",
+            }
+            for i in range(n)
+        ]
+    )
+
+
+# ── Rust bridge: with_compaction_format ──
+
+
+def test_markdown_kv_renders_kv_lines() -> None:
+    # Lower the lossless gate: Markdown-KV repeats field names per row,
+    # so its savings vs raw JSON are real but below the 30% default.
+    cfg = RustSmartCrusherConfig(lossless_min_savings_ratio=0.01)
+    crusher = RustSmartCrusher.with_compaction_format(cfg, "markdown-kv")
+    result = crusher.crush(_tabular_json(), "", 1.0)
+    assert result.was_modified
+    assert "lossless" in result.strategy
+    # Columns are schema-sorted, so `email` opens each row and `id`
+    # renders as a continuation line.
+    assert "- email: user_0@example.com" in result.compressed
+    assert "id: 0" in result.compressed
+    assert "name: user_1" in result.compressed
+    # Declaration line survives (shared with the CSV formatter).
+    assert "[50]{" in result.compressed
+
+
+def test_csv_schema_format_name_matches_default() -> None:
+    cfg = RustSmartCrusherConfig(lossless_min_savings_ratio=0.01)
+    via_name = RustSmartCrusher.with_compaction_format(cfg, "csv-schema")
+    via_default = RustSmartCrusher(cfg)
+    content = _tabular_json()
+    assert (
+        via_name.crush(content, "", 1.0).compressed
+        == via_default.crush(content, "", 1.0).compressed
+    )
+
+
+def test_unknown_format_name_raises() -> None:
+    with pytest.raises(ValueError, match="markdown-kv"):
+        RustSmartCrusher.with_compaction_format(None, "toon")
+
+
+# ── High-level SmartCrusher knob ──
+
+
+def test_default_format_is_csv_schema() -> None:
+    crusher = SmartCrusher()
+    assert crusher._compaction_format == "csv-schema"
+
+
+def test_kwarg_opts_into_markdown_kv() -> None:
+    crusher = SmartCrusher(compaction_format="markdown-kv")
+    assert crusher._compaction_format == "markdown-kv"
+
+
+def test_env_var_opts_in(monkeypatch: pytest.MonkeyPatch) -> None:
+    monkeypatch.setenv("HEADROOM_COMPACTION_FORMAT", "markdown-kv")
+    crusher = SmartCrusher()
+    assert crusher._compaction_format == "markdown-kv"
+
+
+def test_kwarg_overrides_env_var(monkeypatch: pytest.MonkeyPatch) -> None:
+    monkeypatch.setenv("HEADROOM_COMPACTION_FORMAT", "json")
+    crusher = SmartCrusher(compaction_format="markdown-kv")
+    assert crusher._compaction_format == "markdown-kv"
+
+
+def test_unknown_format_kwarg_raises() -> None:
+    with pytest.raises(ValueError):
+        SmartCrusher(compaction_format="bogus")
+
+
+def test_without_compaction_ignores_format() -> None:
+    crusher = SmartCrusher(with_compaction=False, compaction_format="markdown-kv")
+    assert crusher._compaction_format is None
+
+
+def test_without_compaction_still_validates_format() -> None:
+    # An explicit bogus format is a misconfiguration even when the knob
+    # is ignored on this path — fail loudly, don't silently accept.
+    with pytest.raises(ValueError, match="bogus"):
+        SmartCrusher(with_compaction=False, compaction_format="bogus")
+
+
+def test_end_to_end_crush_emits_markdown_kv() -> None:
+    # Through the high-level Python SmartCrusher, not the Rust bridge:
+    # proves the kwarg changes crush() output, not just the stored
+    # attribute. Same lowered gate as the bridge test — KV's savings on
+    # minified JSON sit below the 30% default.
+    config = PySmartCrusherConfig(lossless_min_savings_ratio=0.01)
+    crusher = SmartCrusher(config=config, compaction_format="markdown-kv")
+    result = crusher.crush(_tabular_json())
+    assert result.was_modified
+    assert "- email: user_0@example.com" in result.compressed
+    assert "[50]{" in result.compressed
+
+
+def test_default_output_unchanged_by_feature() -> None:
+    # The default constructor path must stay byte-identical to an
+    # explicit csv-schema opt-in — proves the gate is truly default-off.
+    content = _tabular_json()
+    default_out = SmartCrusher().crush(content)
+    explicit_out = SmartCrusher(compaction_format="csv-schema").crush(content)
+    assert default_out.compressed == explicit_out.compressed