diff --git a/examples/conversations/recontextualize_message.py b/examples/conversations/recontextualize_message.py
new file mode 100644
index 00000000..23248f81
--- /dev/null
+++ b/examples/conversations/recontextualize_message.py
@@ -0,0 +1,52 @@
+"""
+Ragbits Conversations Example: Recontextualize Last Message
+
+This example demonstrates how to use the `StandaloneMessageCompressor` compressor to recontextualize
+the last message in a conversation history.
+"""
+
+# /// script
+# requires-python = ">=3.10"
+# dependencies = [
+#     "ragbits-conversations",
+# ]
+# ///
+
+import asyncio
+
+from ragbits.conversations.history.compressors.llm import StandaloneMessageCompressor
+from ragbits.core.llms.litellm import LiteLLM
+from ragbits.core.prompt import ChatFormat
+
+# Example conversation history
+conversation: ChatFormat = [
+    {"role": "user", "content": "Who's working on Friday?"},
+    {"role": "assistant", "content": "Jim"},
+    {"role": "user", "content": "Where is he based?"},
+    {"role": "assistant", "content": "At our California Head Office"},
+    {"role": "user", "content": "Is he a senior staff member?"},
+    {"role": "assistant", "content": "Yes, he's a senior manager"},
+    {"role": "user", "content": "What's his phone number (including the prefix for his state)?"},
+]
+
+
+async def main() -> None:
+    """
+    Main function to demonstrate the StandaloneMessageCompressor compressor.
+    """
+    # Initialize the LiteLLM client
+    llm = LiteLLM("gpt-4o")
+
+    # Initialize the StandaloneMessageCompressor compressor
+    compressor = StandaloneMessageCompressor(llm, history_len=10)
+
+    # Compress the conversation history
+    recontextualized_message = await compressor.compress(conversation)
+
+    # Print the recontextualized message
+    print("Recontextualized Message:")
+    print(recontextualized_message)
+
+
+if __name__ == "__main__":
+    asyncio.run(main())
diff --git a/packages/ragbits-conversations/README.md b/packages/ragbits-conversations/README.md
new file mode 100644
index 00000000..44407896
--- /dev/null
+++ b/packages/ragbits-conversations/README.md
@@ -0,0 +1 @@
+# Ragbits Conversation
diff --git a/packages/ragbits-conversations/pyproject.toml b/packages/ragbits-conversations/pyproject.toml
new file mode 100644
index 00000000..7b3ff43b
--- /dev/null
+++ b/packages/ragbits-conversations/pyproject.toml
@@ -0,0 +1,63 @@
+[project]
+name = "ragbits-conversations"
+version = "0.6.0"
+description = "Building blocks for rapid development of GenAI applications"
+readme = "README.md"
+requires-python = ">=3.10"
+license = "MIT"
+authors = [
+    { name = "deepsense.ai", email = "ragbits@deepsense.ai"}
+]
+keywords = [
+    "Retrieval Augmented Generation",
+    "RAG",
+    "Large Language Models",
+    "LLMs",
+    "Generative AI",
+    "GenAI",
+    "Prompt Management"
+]
+classifiers = [
+    "Development Status :: 4 - Beta",
+    "Environment :: Console",
+    "Intended Audience :: Science/Research",
+    "License :: OSI Approved :: MIT License",
+    "Natural Language :: English",
+    "Operating System :: OS Independent",
+    "Programming Language :: Python :: 3.10",
+    "Programming Language :: Python :: 3.11",
+    "Programming Language :: Python :: 3.12",
+    "Programming Language :: Python :: 3.13",
+    "Topic :: Scientific/Engineering :: Artificial Intelligence",
+    "Topic :: Software Development :: Libraries :: Python Modules",
+]
+dependencies = []
+
+[project.urls]
+"Homepage" = "https://github.com/deepsense-ai/ragbits"
+"Bug Reports" = "https://github.com/deepsense-ai/ragbits/issues"
+"Documentation" = "https://ragbits.deepsense.ai/"
+"Source" = "https://github.com/deepsense-ai/ragbits"
+
+[project.optional-dependencies]
+[tool.uv]
+dev-dependencies = [
+    "pre-commit~=3.8.0",
+    "pytest~=8.3.3",
+    "pytest-cov~=5.0.0",
+    "pytest-asyncio~=0.24.0",
+    "pip-licenses>=4.0.0,<5.0.0"
+]
+
+[build-system]
+requires = ["hatchling"]
+build-backend = "hatchling.build"
+
+[tool.hatch.metadata]
+allow-direct-references = true
+
+[tool.hatch.build.targets.wheel]
+packages = ["src/ragbits"]
+
+[tool.pytest.ini_options]
+asyncio_mode = "auto"
diff --git a/packages/ragbits-conversations/src/ragbits/conversations/__init__.py b/packages/ragbits-conversations/src/ragbits/conversations/__init__.py
new file mode 100644
index 00000000..e69de29b
diff --git a/packages/ragbits-conversations/src/ragbits/conversations/history/__init__.py b/packages/ragbits-conversations/src/ragbits/conversations/history/__init__.py
new file mode 100644
index 00000000..e69de29b
diff --git a/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/__init__.py b/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/__init__.py
new file mode 100644
index 00000000..66ac169a
--- /dev/null
+++ b/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/__init__.py
@@ -0,0 +1,4 @@
+from .base import ConversationHistoryCompressor
+from .llm import StandaloneMessageCompressor
+
+__all__ = ["ConversationHistoryCompressor", "StandaloneMessageCompressor"]
diff --git a/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/base.py b/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/base.py
new file mode 100644
index 00000000..9b5816e1
--- /dev/null
+++ b/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/base.py
@@ -0,0 +1,31 @@
+from abc import ABC, abstractmethod
+from typing import ClassVar
+
+from ragbits.conversations.history import compressors
+from ragbits.core.prompt.base import ChatFormat
+from ragbits.core.utils.config_handling import WithConstructionConfig
+
+
+class ConversationHistoryCompressor(WithConstructionConfig, ABC):
+    """
+    An abstract class for conversation history compressors,
+    i.e. class that takes the entire conversation history
+    and returns a single string representation of it.
+
+    The exact logic of what the string should include and represent
+    depends on the specific implementation.
+
+    Usually used to provide LLM additional context from the conversation history.
+    """
+
+    default_module: ClassVar = compressors
+    configuration_key: ClassVar = "history_compressor"
+
+    @abstractmethod
+    async def compress(self, conversation: ChatFormat) -> str:
+        """
+        Compresses the conversation history to a single string.
+
+        Args:
+            conversation:  List of dicts with "role" and "content" keys, representing the chat history so far.
+        """
diff --git a/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/llm.py b/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/llm.py
new file mode 100644
index 00000000..70797609
--- /dev/null
+++ b/packages/ragbits-conversations/src/ragbits/conversations/history/compressors/llm.py
@@ -0,0 +1,86 @@
+from pydantic import BaseModel
+
+from ragbits.conversations.history.compressors import ConversationHistoryCompressor
+from ragbits.core.llms.base import LLM
+from ragbits.core.prompt import ChatFormat, Prompt
+
+
+class LastMessageAndHistory(BaseModel):
+    """
+    A class representing the last message and the history of messages.
+    """
+
+    last_message: str
+    history: list[str]
+
+
+class StandaloneMessageCompressorPrompt(Prompt[LastMessageAndHistory, str]):
+    """
+    A prompt for recontextualizing the last message in the history.
+    """
+
+    system_prompt = """
+    Given a new message and a history of the conversation, create a standalone version of the message.
+    If the message references any context from history, it should be added to the message itself.
+    Return only the recontextualized message.
+    Do NOT return the history, do NOT answer the question, and do NOT add context irrelevant to the message.
+    """
+
+    user_prompt = """
+    Message:
+    {{ last_message }}
+
+    History:
+    {% for message in history %}
+    * {{ message }}
+    {% endfor %}
+    """
+
+
+class StandaloneMessageCompressor(ConversationHistoryCompressor):
+    """
+    A compressor that uses LLM to recontextualize the last message in the history,
+    i.e. create a standalone version of the message that includes necessary context.
+    """
+
+    def __init__(self, llm: LLM, history_len: int = 5, prompt: type[Prompt[LastMessageAndHistory, str]] | None = None):
+        """
+        Initialize the StandaloneMessageCompressor compressor with a LLM.
+
+        Args:
+            llm: A LLM instance to handle recontextualizing the last message.
+            history_len: The number of previous messages to include in the history.
+            prompt: The prompt to use for recontextualizing the last message.
+        """
+        self._llm = llm
+        self._history_len = history_len
+        self._prompt = prompt or StandaloneMessageCompressorPrompt
+
+    async def compress(self, conversation: ChatFormat) -> str:
+        """
+        Contextualize the last message in the conversation history.
+
+        Args:
+            conversation: List of dicts with "role" and "content" keys, representing the chat history so far.
+                The most recent message should be from the user.
+        """
+        if len(conversation) == 0:
+            raise ValueError("Conversation history is empty.")
+
+        last_message = conversation[-1]
+        if last_message["role"] != "user":
+            raise ValueError("StandaloneMessageCompressor expects the last message to be from the user.")
+
+        # Only include "user" and "assistant" messages in the history
+        other_messages = [message for message in conversation[:-1] if message["role"] in ["user", "assistant"]]
+
+        if not other_messages:
+            # No history to use for recontextualization, simply return the user message
+            return last_message["content"]
+
+        history = [f"{message['role']}: {message['content']}" for message in other_messages[-self._history_len :]]
+
+        input_data = LastMessageAndHistory(last_message=last_message["content"], history=history)
+        prompt = self._prompt(input_data)
+        response = await self._llm.generate(prompt)
+        return response
diff --git a/packages/ragbits-conversations/tests/unit/history/test_llm_compressor.py b/packages/ragbits-conversations/tests/unit/history/test_llm_compressor.py
new file mode 100644
index 00000000..715d8828
--- /dev/null
+++ b/packages/ragbits-conversations/tests/unit/history/test_llm_compressor.py
@@ -0,0 +1,111 @@
+import pytest
+
+from ragbits.conversations.history.compressors.llm import LastMessageAndHistory, StandaloneMessageCompressor
+from ragbits.core.llms.mock import MockLLM, MockLLMOptions
+from ragbits.core.prompt import ChatFormat
+from ragbits.core.prompt.prompt import Prompt
+
+
+class MockPrompt(Prompt[LastMessageAndHistory, str]):
+    user_prompt = "mock prompt"
+
+
+async def test_messages_included():
+    conversation: ChatFormat = [
+        {"role": "user", "content": "foo1"},
+        {"role": "assistant", "content": "foo2"},
+        {"role": "user", "content": "foo3"},
+    ]
+    llm = MockLLM(default_options=MockLLMOptions(response="some answer"))
+    compressor = StandaloneMessageCompressor(llm)
+    answer = await compressor.compress(conversation)
+    assert answer == "some answer"
+    user_prompt = llm.calls[0][1]
+    assert user_prompt["role"] == "user"
+    content = user_prompt["content"]
+    assert "foo1" in content
+    assert "foo2" in content
+    assert "foo3" in content
+
+
+async def test_no_messages():
+    conversation: ChatFormat = []
+    compressor = StandaloneMessageCompressor(MockLLM())
+
+    with pytest.raises(ValueError):
+        await compressor.compress(conversation)
+
+
+async def test_last_message_not_user():
+    conversation: ChatFormat = [
+        {"role": "assistant", "content": "foo2"},
+    ]
+    compressor = StandaloneMessageCompressor(MockLLM())
+
+    with pytest.raises(ValueError):
+        await compressor.compress(conversation)
+
+
+async def test_history_len():
+    conversation: ChatFormat = [
+        {"role": "user", "content": "foo1"},
+        {"role": "assistant", "content": "foo2"},
+        {"role": "user", "content": "foo3"},
+        {"role": "user", "content": "foo4"},
+        {"role": "user", "content": "foo5"},
+    ]
+    llm = MockLLM()
+    compressor = StandaloneMessageCompressor(llm, history_len=3)
+    await compressor.compress(conversation)
+    user_prompt = llm.calls[0][1]
+    assert user_prompt["role"] == "user"
+    content = user_prompt["content"]
+
+    # The rephrased message should be included
+    assert "foo5" in content
+
+    # Three previous messages should be included
+    assert "foo2" in content
+    assert "foo3" in content
+    assert "foo4" in content
+
+    # Earlier messages should not be included
+    assert "foo1" not in content
+
+
+async def test_only_user_and_assistant_messages_in_history():
+    conversation: ChatFormat = [
+        {"role": "user", "content": "foo4"},
+        {"role": "system", "content": "foo1"},
+        {"role": "unknown", "content": "foo2"},
+        {"role": "assistant", "content": "foo3"},
+        {"role": "user", "content": "foo4"},
+        {"role": "assistant", "content": "foo5"},
+        {"role": "user", "content": "foo6"},
+    ]
+    llm = MockLLM()
+    compressor = StandaloneMessageCompressor(llm, history_len=4)
+    await compressor.compress(conversation)
+    user_prompt = llm.calls[0][1]
+    assert user_prompt["role"] == "user"
+    content = user_prompt["content"]
+    assert "foo4" in content
+    assert "foo5" in content
+    assert "foo6" in content
+    assert "foo3" in content
+    assert "foo1" not in content
+    assert "foo2" not in content
+
+
+async def test_changing_prompt():
+    conversation: ChatFormat = [
+        {"role": "user", "content": "foo1"},
+        {"role": "assistant", "content": "foo2"},
+        {"role": "user", "content": "foo3"},
+    ]
+    llm = MockLLM()
+    compressor = StandaloneMessageCompressor(llm, prompt=MockPrompt)
+    await compressor.compress(conversation)
+    user_prompt = llm.calls[0][0]
+    assert user_prompt["role"] == "user"
+    assert user_prompt["content"] == "mock prompt"
diff --git a/packages/ragbits-core/src/ragbits/core/llms/mock.py b/packages/ragbits-core/src/ragbits/core/llms/mock.py
new file mode 100644
index 00000000..9a82489f
--- /dev/null
+++ b/packages/ragbits-core/src/ragbits/core/llms/mock.py
@@ -0,0 +1,75 @@
+from collections.abc import AsyncGenerator
+
+from pydantic import BaseModel
+
+from ragbits.core.options import Options
+from ragbits.core.prompt import ChatFormat
+from ragbits.core.types import NOT_GIVEN, NotGiven
+
+from .base import LLM
+
+
+class MockLLMOptions(Options):
+    """
+    Options for the MockLLM class.
+    """
+
+    response: str | NotGiven = NOT_GIVEN
+    response_stream: list[str] | NotGiven = NOT_GIVEN
+
+
+class MockLLM(LLM[MockLLMOptions]):
+    """
+    Class for mocking interactions with LLMs - useful for testing.
+    """
+
+    options_cls = MockLLMOptions
+
+    def __init__(self, model_name: str = "mock", default_options: MockLLMOptions | None = None) -> None:
+        """
+        Constructs a new MockLLM instance.
+
+        Args:
+            model_name: Name of the model to be used.
+            default_options: Default options to be used.
+        """
+        super().__init__(model_name, default_options=default_options)
+        self.calls: list[ChatFormat] = []
+
+    async def _call(  # noqa: PLR6301
+        self,
+        conversation: ChatFormat,
+        options: MockLLMOptions,
+        json_mode: bool = False,
+        output_schema: type[BaseModel] | dict | None = None,
+    ) -> str:
+        """
+        Mocks the call to the LLM, using the response from the options if provided.
+        """
+        self.calls.append(conversation)
+        if not isinstance(options.response, NotGiven):
+            return options.response
+        return "mocked response"
+
+    async def _call_streaming(  # noqa: PLR6301
+        self,
+        conversation: ChatFormat,
+        options: MockLLMOptions,
+        json_mode: bool = False,
+        output_schema: type[BaseModel] | dict | None = None,
+    ) -> AsyncGenerator[str, None]:
+        """
+        Mocks the call to the LLM, using the response from the options if provided.
+        """
+        self.calls.append(conversation)
+
+        async def generator() -> AsyncGenerator[str, None]:
+            if not isinstance(options.response_stream, NotGiven):
+                for response in options.response_stream:
+                    yield response
+            elif not isinstance(options.response, NotGiven):
+                yield options.response
+            else:
+                yield "mocked response"
+
+        return generator()
diff --git a/packages/ragbits/pyproject.toml b/packages/ragbits/pyproject.toml
index cd32f813..29e436a0 100644
--- a/packages/ragbits/pyproject.toml
+++ b/packages/ragbits/pyproject.toml
@@ -31,7 +31,14 @@ classifiers = [
     "Topic :: Scientific/Engineering :: Artificial Intelligence",
     "Topic :: Software Development :: Libraries :: Python Modules",
 ]
-dependencies = ["ragbits-document-search==0.6.0", "ragbits-cli==0.6.0", "ragbits-evaluate==0.6.0", "ragbits-guardrails==0.6.0", "ragbits-core==0.6.0"]
+dependencies = [
+    "ragbits-document-search==0.6.0",
+    "ragbits-cli==0.6.0",
+    "ragbits-evaluate==0.6.0",
+    "ragbits-guardrails==0.6.0",
+    "ragbits-core==0.6.0",
+    "ragbits-conversations==0.6.0",
+]
 
 [project.urls]
 "Homepage" = "https://github.com/deepsense-ai/ragbits"
diff --git a/pyproject.toml b/pyproject.toml
index 2502b26b..ea1b2263 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -10,6 +10,7 @@ dependencies = [
     "ragbits-document-search[gcs,huggingface,distributed]",
     "ragbits-evaluate[relari]",
     "ragbits-guardrails[openai]",
+    "ragbits-conversations",
 ]
 
 [tool.uv]
@@ -38,6 +39,7 @@ ragbits-core = { workspace = true }
 ragbits-document-search = { workspace = true }
 ragbits-evaluate = {workspace = true}
 ragbits-guardrails = {workspace = true}
+ragbits-conversations = {workspace = true}
 
 [tool.uv.workspace]
 members = [
@@ -46,6 +48,7 @@ members = [
     "packages/ragbits-document-search",
     "packages/ragbits-evaluate",
     "packages/ragbits-guardrails",
+    "packages/ragbits-conversations",
 ]
 
 [tool.pytest]
@@ -93,6 +96,7 @@ mypy_path = [
     "packages/ragbits-document-search/src",
     "packages/ragbits-evaluate/src",
     "packages/ragbits-guardrails/src",
+    "packages/ragbits-conversations/src",
 ]
 exclude = ["scripts"]
 
diff --git a/uv.lock b/uv.lock
index 299460ca..2424ad2e 100644
--- a/uv.lock
+++ b/uv.lock
@@ -11,6 +11,7 @@ resolution-markers = [
 [manifest]
 members = [
     "ragbits-cli",
+    "ragbits-conversations",
     "ragbits-core",
     "ragbits-document-search",
     "ragbits-evaluate",
@@ -3845,6 +3846,31 @@ requires-dist = [
     { name = "typer", specifier = ">=0.12.5" },
 ]
 
+[[package]]
+name = "ragbits-conversations"
+version = "0.6.0"
+source = { editable = "packages/ragbits-conversations" }
+
+[package.dev-dependencies]
+dev = [
+    { name = "pip-licenses" },
+    { name = "pre-commit" },
+    { name = "pytest" },
+    { name = "pytest-asyncio" },
+    { name = "pytest-cov" },
+]
+
+[package.metadata]
+
+[package.metadata.requires-dev]
+dev = [
+    { name = "pip-licenses", specifier = ">=4.0.0,<5.0.0" },
+    { name = "pre-commit", specifier = "~=3.8.0" },
+    { name = "pytest", specifier = "~=8.3.3" },
+    { name = "pytest-asyncio", specifier = "~=0.24.0" },
+    { name = "pytest-cov", specifier = "~=5.0.0" },
+]
+
 [[package]]
 name = "ragbits-core"
 version = "0.6.0"
@@ -4055,6 +4081,7 @@ version = "0.1.0"
 source = { virtual = "." }
 dependencies = [
     { name = "ragbits-cli" },
+    { name = "ragbits-conversations" },
     { name = "ragbits-core", extra = ["chroma", "lab", "local", "otel", "qdrant"] },
     { name = "ragbits-document-search", extra = ["distributed", "gcs", "huggingface"] },
     { name = "ragbits-evaluate", extra = ["relari"] },
@@ -4084,6 +4111,7 @@ dev = [
 [package.metadata]
 requires-dist = [
     { name = "ragbits-cli", editable = "packages/ragbits-cli" },
+    { name = "ragbits-conversations", editable = "packages/ragbits-conversations" },
     { name = "ragbits-core", extras = ["chroma", "lab", "local", "otel", "qdrant"], editable = "packages/ragbits-core" },
     { name = "ragbits-document-search", extras = ["gcs", "huggingface", "distributed"], editable = "packages/ragbits-document-search" },
     { name = "ragbits-evaluate", extras = ["relari"], editable = "packages/ragbits-evaluate" },