diff --git a/CHANGELOG.md b/CHANGELOG.md
index 08809a98c8..d9060de744 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -17,6 +17,7 @@
 - Fixed the release dry-run publish cycle between `miden-air` and `miden-ace-codegen`, and preserved leaf-only DAG imports with explicit snapshots ([#2931](https://github.com/0xMiden/miden-vm/pull/2931)).
 - Added regression coverage for the exact `max_num_continuations` continuation-stack boundary ([#2995](https://github.com/0xMiden/miden-vm/pull/2995)).
 - Fixed AEAD padding handling so encrypt does not overwrite memory next to the plaintext buffer and decrypt leaves the plaintext output tail untouched ([#3008](https://github.com/0xMiden/miden-vm/pull/3008)).
+- Fixed MAST compaction after debug info is cleared so compiler-generated packages do not grow ([#3044](https://github.com/0xMiden/miden-vm/pull/3044)).
 
 #### Changes
 
diff --git a/core/src/mast/debuginfo/mod.rs b/core/src/mast/debuginfo/mod.rs
index 184a087415..c24c91fe63 100644
--- a/core/src/mast/debuginfo/mod.rs
+++ b/core/src/mast/debuginfo/mod.rs
@@ -566,6 +566,12 @@ impl DebugInfo {
     pub(crate) fn op_decorator_storage(&self) -> &OpToDecoratorIds {
         &self.op_decorator_storage
     }
+
+    /// Returns the node decorator storage.
+    #[cfg(test)]
+    pub(crate) fn node_decorator_storage(&self) -> &NodeToDecoratorIds {
+        &self.node_decorator_storage
+    }
 }
 
 impl Serializable for DebugInfo {
diff --git a/core/src/mast/merger/tests.rs b/core/src/mast/merger/tests.rs
index 59f774f845..302b500675 100644
--- a/core/src/mast/merger/tests.rs
+++ b/core/src/mast/merger/tests.rs
@@ -138,6 +138,39 @@ fn mast_forest_merge_preserves_dyn_callness_and_digest() {
     assert_eq!(merged_dyncall.digest(), dyncall_digest, "dyncall digest should be preserved");
 }
 
+#[test]
+fn mast_forest_merge_preserves_padded_basic_block_batches() {
+    let mut forest = MastForest::new();
+
+    let operations = vec![Operation::Add, Operation::Push(Felt::new_unchecked(100))];
+    let block_id = BasicBlockNodeBuilder::new(operations.clone(), Vec::new())
+        .add_to_forest(&mut forest)
+        .unwrap();
+    forest.make_root(block_id);
+
+    let original_block = forest[block_id].unwrap_basic_block();
+    assert!(
+        original_block.operations().count() > original_block.raw_operations().count(),
+        "test input must create padded operations"
+    );
+    let original_batches = original_block.op_batches().to_vec();
+
+    let (merged, root_maps) = MastForest::merge([&forest]).unwrap();
+
+    let merged_block_id = root_maps.map_root(0, &block_id).unwrap();
+    let merged_block = merged[merged_block_id].unwrap_basic_block();
+    assert_eq!(
+        merged_block.raw_operations().copied().collect::<Vec<_>>(),
+        operations,
+        "merge must not treat padded operations as raw operations"
+    );
+    assert_eq!(
+        merged_block.op_batches(),
+        original_batches,
+        "merge must preserve the original batch layout"
+    );
+}
+
 /// Tests that Call(bar) still correctly calls the remapped bar block.
 ///
 /// [Block(foo), Call(foo)]
diff --git a/core/src/mast/mod.rs b/core/src/mast/mod.rs
index 9462200519..306e4f9d7b 100644
--- a/core/src/mast/mod.rs
+++ b/core/src/mast/mod.rs
@@ -614,6 +614,10 @@ impl MastForest {
         before_enter: &[DecoratorId],
         after_exit: &[DecoratorId],
     ) {
+        if before_enter.is_empty() && after_exit.is_empty() {
+            return;
+        }
+
         self.debug_info.register_node_decorators(node_id, before_enter, after_exit);
     }
 
diff --git a/core/src/mast/tests.rs b/core/src/mast/tests.rs
index edcf0b72aa..45e1ef648c 100644
--- a/core/src/mast/tests.rs
+++ b/core/src/mast/tests.rs
@@ -298,6 +298,31 @@ fn test_clear_debug_info_multiple_node_types() {
     assert!(forest.decorator_links_for_node(block_id).unwrap().into_iter().next().is_none());
 }
 
+#[test]
+fn test_compact_after_clear_debug_info_does_not_materialize_empty_node_decorators() {
+    let mut forest = MastForest::new();
+    let decorator = forest.add_decorator(Decorator::Trace(1)).unwrap();
+    let block_id = BasicBlockNodeBuilder::new(
+        vec![Operation::Push(Felt::new_unchecked(1)), Operation::Add],
+        vec![(0, decorator)],
+    )
+    .with_before_enter(vec![decorator])
+    .add_to_forest(&mut forest)
+    .unwrap();
+    let call_id = CallNodeBuilder::new(block_id).add_to_forest(&mut forest).unwrap();
+    forest.make_root(call_id);
+
+    forest.clear_debug_info();
+    let (compacted, _) = forest.compact();
+
+    assert!(compacted.debug_info.node_decorator_storage().is_empty());
+    for node_idx in 0..compacted.nodes().len() {
+        let node_id = crate::mast::MastNodeId::new_unchecked(node_idx as u32);
+        assert!(compacted.before_enter_decorators(node_id).is_empty());
+        assert!(compacted.after_exit_decorators(node_id).is_empty());
+    }
+}
+
 #[test]
 fn test_mast_forest_roundtrip_with_basic_blocks_and_decorators() {
     use crate::mast::MastNode;
diff --git a/crates/assembly/src/tests.rs b/crates/assembly/src/tests.rs
index f36a5a3b56..0608a9aa35 100644
--- a/crates/assembly/src/tests.rs
+++ b/crates/assembly/src/tests.rs
@@ -4990,6 +4990,64 @@ fn regression_empty_kernel_library_is_rejected() {
     assert_diagnostic_lines!(err, "library must contain at least one exported procedure");
 }
 
+/// Reproduces issue #3035: a MAST with padded basic blocks grows when debug info is cleared and the
+/// forest is compacted via self-merge.
+#[test]
+fn issue_3035_compact_after_clear_debug_info_does_not_grow_mast() -> TestResult {
+    let context = TestContext::default();
+    let module = context.parse_module_with_path(
+        "issue_3035::repro",
+        source_file!(
+            &context,
+            "
+            pub proc repro
+                add
+                push.100
+            end
+            "
+        ),
+    )?;
+
+    let library = Assembler::new(context.source_manager()).assemble_library([module])?;
+    let mut forest = library.mast_forest().as_ref().clone();
+    assert!(
+        forest
+            .nodes()
+            .iter()
+            .filter_map(|node| node.get_basic_block())
+            .any(|block| { block.operations().count() > block.raw_operations().count() }),
+        "test input must create at least one padded basic block"
+    );
+
+    forest.clear_debug_info();
+    let stripped_size = forest.to_bytes().len();
+    let stripped_without_debug_info_size = {
+        let mut bytes = Vec::new();
+        forest.write_stripped(&mut bytes);
+        bytes.len()
+    };
+    let stripped_nodes = forest.nodes().len();
+    let (compacted, _) = forest.compact();
+    let compacted_size = compacted.to_bytes().len();
+    let compacted_without_debug_info_size = {
+        let mut bytes = Vec::new();
+        compacted.write_stripped(&mut bytes);
+        bytes.len()
+    };
+    let compacted_nodes = compacted.nodes().len();
+
+    assert!(
+        compacted_size <= stripped_size,
+        "MastForest::compact increased serialized size after clear_debug_info(): \
+         stripped={stripped_size}, compacted={compacted_size}, \
+         stripped_without_debug_info={stripped_without_debug_info_size}, \
+         compacted_without_debug_info={compacted_without_debug_info_size}, \
+         stripped_nodes={stripped_nodes}, compacted_nodes={compacted_nodes}"
+    );
+
+    Ok(())
+}
+
 /// Test for issue #1644: verify that single-forest merge doesn't preserves node digests
 #[test]
 fn issue_1644_single_forest_merge_identity() -> TestResult {