diff --git a/README.md b/README.md
index c2c5b96..c10ebd6 100644
--- a/README.md
+++ b/README.md
@@ -217,8 +217,9 @@ for the `cwd` segment are set in `~/.powerline-shell.py` like:
 The options for the `cwd` segment are:
 
 - `mode`: If "plain" then simple text will be used to show the cwd. If
-  "dironly," only the current directory will be shown. Otherwise expands the
-  cwd into individual directories.
+  "dironly," only the current directory will be shown. If "compact",
+  simple text is used but is shortened according to "max_depth" and
+  "max_dir_size". Otherwise expands the cwd into individual directories.
 - `max_depth`: Maximum number of directories to show in path
 - `max_dir_size`: Maximum number of characters displayed for each directory in
   the path
diff --git a/powerline_shell/segments/cwd.py b/powerline_shell/segments/cwd.py
index f99eb13..781f112 100644
--- a/powerline_shell/segments/cwd.py
+++ b/powerline_shell/segments/cwd.py
@@ -83,6 +83,10 @@ def add_cwd_segment(powerline):
         # displayed, so chop everything else off
         names = names[-1:]
 
+    if powerline.segment_conf("cwd", "mode") == "compact":
+        # Like plain but uses max_depth.
+        names = [os.path.join(*names)]
+
     for i, name in enumerate(names):
         is_last_dir = (i == len(names) - 1)
         fg, bg = get_fg_bg(powerline, name, is_last_dir)