diff --git a/server/etcdserver/server.go b/server/etcdserver/server.go
index 6708f71bf9af..5571b6d3862d 100644
--- a/server/etcdserver/server.go
+++ b/server/etcdserver/server.go
@@ -108,6 +108,10 @@ const (
 	readyPercentThreshold = 0.9
 
 	DowngradeEnabledPath = "/downgrade/enabled"
+
+	// CompactRaftLogEveryNApplies improves performance by compacting raft log once every N applies.
+	// Minimum value is 1, which means compacting raft log every apply.
+	CompactRaftLogEveryNApplies uint64 = 100
 )
 
 var (
@@ -963,6 +967,7 @@ func (s *EtcdServer) applyAll(ep *etcdProgress, apply *toApply) {
 	<-apply.notifyc
 
 	s.triggerSnapshot(ep)
+	s.compactRaftLog(ep.appliedi)
 	select {
 	// snapshot requested via send()
 	case m := <-s.r.msgSnapC:
@@ -2153,6 +2158,20 @@ func (s *EtcdServer) snapshot(snapi uint64, confState raftpb.ConfState) {
 		"saved snapshot",
 		zap.Uint64("snapshot-index", snap.Metadata.Index),
 	)
+}
+
+func (s *EtcdServer) compactRaftLog(appliedi uint64) {
+	lg := s.Logger()
+
+	// keep some in memory log entries for slow followers
+	if appliedi <= s.Cfg.SnapshotCatchUpEntries {
+		return
+	}
+	compacti := appliedi - s.Cfg.SnapshotCatchUpEntries
+	//  only compact raft log once every N applies
+	if compacti%CompactRaftLogEveryNApplies != 0 {
+		return
+	}
 
 	// When sending a snapshot, etcd will pause compaction.
 	// After receives a snapshot, the slow follower needs to get all the entries right after
@@ -2164,13 +2183,7 @@ func (s *EtcdServer) snapshot(snapi uint64, confState raftpb.ConfState) {
 		return
 	}
 
-	// keep some in memory log entries for slow followers.
-	compacti := uint64(1)
-	if snapi > s.Cfg.SnapshotCatchUpEntries {
-		compacti = snapi - s.Cfg.SnapshotCatchUpEntries
-	}
-
-	err = s.r.raftStorage.Compact(compacti)
+	err := s.r.raftStorage.Compact(compacti)
 	if err != nil {
 		// the compaction was done asynchronously with the progress of raft.
 		// raft log might already been compact.
diff --git a/server/etcdserver/server_test.go b/server/etcdserver/server_test.go
index 215c86abbc9c..12d2f824f27f 100644
--- a/server/etcdserver/server_test.go
+++ b/server/etcdserver/server_test.go
@@ -19,6 +19,7 @@ import (
 	"encoding/json"
 	"fmt"
 	"math"
+	"math/rand/v2"
 	"net/http"
 	"os"
 	"path/filepath"
@@ -853,6 +854,97 @@ func TestConcurrentApplyAndSnapshotV3(t *testing.T) {
 	}
 }
 
+// TestCompact ensures that:
+// 1. raft log gets compacted only when entries size is greater than SnapshotCatchUpEntries
+// 2. raft log gets compacted only once every CompactRaftLogEveryNApplies applies
+// 3. after a compaction, entries size equals SnapshotCatchUpEntries
+func TestCompact(t *testing.T) {
+	lg := zaptest.NewLogger(t)
+	n := newNodeConfChangeCommitterRecorder()
+	n.readyc <- raft.Ready{
+		SoftState: &raft.SoftState{RaftState: raft.StateLeader},
+	}
+	rs := raft.NewMemoryStorage()
+
+	cl := newTestCluster(t)
+	cl.SetStore(v2store.New())
+	be, _ := betesting.NewDefaultTmpBackend(t)
+	defer betesting.Close(t, be)
+	cl.SetBackend(schema.NewMembershipBackend(lg, be))
+	cl.AddMember(&membership.Member{ID: 1234}, true)
+
+	r := newRaftNode(raftNodeConfig{
+		lg:          zaptest.NewLogger(t),
+		Node:        n,
+		raftStorage: rs,
+		storage:     mockstorage.NewStorageRecorder(""),
+		transport:   newNopTransporter(),
+	})
+
+	snapshotCatchUpEntries := rand.Uint64N(10000) + 1
+	s := &EtcdServer{
+		lgMu:         new(sync.RWMutex),
+		lg:           zaptest.NewLogger(t),
+		Cfg:          config.ServerConfig{Logger: lg, SnapshotCatchUpEntries: snapshotCatchUpEntries},
+		r:            *r,
+		v2store:      v2store.New(),
+		cluster:      cl,
+		reqIDGen:     idutil.NewGenerator(0, time.Time{}),
+		SyncTicker:   &time.Ticker{},
+		consistIndex: cindex.NewFakeConsistentIndex(0),
+		uberApply:    uberApplierMock{},
+		kv:           mvcc.New(zaptest.NewLogger(t), be, &lease.FakeLessor{}, mvcc.StoreConfig{}),
+	}
+	s.start()
+
+	putFooBar := func(index uint64) {
+		req := &pb.InternalRaftRequest{
+			Header: &pb.RequestHeader{ID: index},
+			Put:    &pb.PutRequest{Key: []byte("foo"), Value: []byte("bar")},
+		}
+		ents := []raftpb.Entry{{Index: index, Data: pbutil.MustMarshal(req)}}
+		n.readyc <- raft.Ready{Entries: ents}
+		n.readyc <- raft.Ready{CommittedEntries: ents}
+	}
+
+	// get first index, last index and count of entries
+	mustGetEntriesInfo := func() (fi, li, cnt uint64) {
+		fi, err := rs.FirstIndex()
+		if err != nil {
+			t.Fatalf("FirstIndex error: %v", err)
+		}
+		li, err = rs.LastIndex()
+		if err != nil {
+			t.Fatalf("LastIndex error: %v", err)
+		}
+		return fi, li, li - fi + 1
+	}
+
+	nextIndex := uint64(1)
+	for nextIndex < snapshotCatchUpEntries+CompactRaftLogEveryNApplies {
+		putFooBar(nextIndex)
+		nextIndex++
+	}
+	time.Sleep(time.Second)
+	// compact should not happen before entries size reaches snapshotCatchUpEntries+CompactRaftLogEveryNApplies
+	fi, li, cnt := mustGetEntriesInfo()
+	assert.Equal(t, uint64(1), fi)
+	assert.Equal(t, snapshotCatchUpEntries+CompactRaftLogEveryNApplies-1, li)
+	assert.Equal(t, snapshotCatchUpEntries+CompactRaftLogEveryNApplies-1, cnt)
+
+	// trigger the first compaction
+	putFooBar(nextIndex)
+	nextIndex++
+	time.Sleep(time.Second)
+	fi, li, cnt = mustGetEntriesInfo()
+	assert.Equal(t, nextIndex-1, li)
+	assert.Equal(t, li-snapshotCatchUpEntries+1, fi)
+	// after each compaction, entries size should equal snapshotCatchUpEntries
+	assert.Equal(t, snapshotCatchUpEntries, cnt)
+
+	s.Stop()
+}
+
 // TestAddMember tests AddMember can propose and perform node addition.
 func TestAddMember(t *testing.T) {
 	lg := zaptest.NewLogger(t)