diff --git a/src/littlefs/__main__.py b/src/littlefs/__main__.py
index f92b077..7119994 100644
--- a/src/littlefs/__main__.py
+++ b/src/littlefs/__main__.py
@@ -85,7 +85,7 @@ def create(parser: argparse.ArgumentParser, args: argparse.Namespace) -> int:
 
     source = Path(args.source).absolute()
     if source.is_dir():
-        sources = _walk_all(source)
+        sources = list(_walk_all(source))
         root = source
     else:
         sources = [source]
@@ -108,15 +108,13 @@ def create(parser: argparse.ArgumentParser, args: argparse.Namespace) -> int:
         if args.verbose:
             print(f"Compacting... {fs.used_block_count} / {args.block_count}")
         compact_fs = _fs_from_args(args, block_count=fs.used_block_count)
-        for root, dirs, files in fs.walk("/"):
-            if not root.endswith("/"):
-                root += "/"
-            for _dir in dirs:
-                compact_fs.makedirs(root + _dir, exist_ok=True)
-            for file in files:
-                path = root + file
-                with fs.open(path, "rb") as src, compact_fs.open(path, "wb") as dest:
-                    dest.write(src.read())
+        for path in sources:
+            rel_path = path.relative_to(root)
+            if path.is_dir():
+                compact_fs.mkdir(rel_path.as_posix())
+            else:
+                with compact_fs.open(rel_path.as_posix(), "wb") as dest:
+                    dest.write(path.read_bytes())
         compact_fs.fs_grow(args.block_count)
         data = compact_fs.context.buffer
         if not args.no_pad:
diff --git a/test/cli/test_create_and_extract.py b/test/cli/test_create_and_extract.py
index f27c407..9be48ed 100644
--- a/test/cli/test_create_and_extract.py
+++ b/test/cli/test_create_and_extract.py
@@ -1,6 +1,8 @@
 from pathlib import Path
 import filecmp
 
+import pytest
+
 from littlefs.__main__ import main
 
 
@@ -50,3 +52,50 @@ def test_create_and_extract(tmp_path):
     # Verify file contents
     assert (extract_dir / "file1.txt").read_text() == "hello world"
     assert (extract_dir / "subdir" / "file2.txt").read_text() == "test content"
+
+
+@pytest.mark.parametrize(
+    "num_files, file_size",
+    [
+        (1, 10),
+        (5, 100),
+        (10, 200),
+        (15, 300),
+        (20, 400),
+        (30, 500),
+        (1, 10000),
+        (5, 5000),
+    ],
+)
+def test_create_compact_roundtrip(tmp_path, num_files, file_size):
+    """Test that --compact creates a valid image with all files preserved."""
+    source_dir = tmp_path / "source"
+    source_dir.mkdir()
+
+    # Create source files with deterministic content
+    for i in range(num_files):
+        (source_dir / f"file_{i}.txt").write_text(f"content_{i}_" + "x" * file_size)
+
+    image_file = tmp_path / "test_compact.bin"
+    create_argv = [
+        "littlefs", "create", str(source_dir), str(image_file),
+        "--block-size", "512", "--fs-size", "64KB",
+        "--compact", "--no-pad",
+    ]
+
+    assert main(create_argv) == 0
+    assert image_file.exists()
+    assert image_file.stat().st_size < 64 * 1024
+
+    # Extract and verify all files survived compaction
+    extract_dir = tmp_path / "extracted"
+    extract_argv = [
+        "littlefs", "extract", str(image_file), str(extract_dir),
+        "--block-size", "512",
+    ]
+    assert main(extract_argv) == 0
+
+    for i in range(num_files):
+        extracted_file = extract_dir / f"file_{i}.txt"
+        assert extracted_file.exists(), f"file_{i}.txt missing from compact image"
+        assert extracted_file.read_text() == f"content_{i}_" + "x" * file_size