Presented herein are techniques to facilitate dynamic negotiation and compression of Packet Forwarding Control Protocol (PFCP) messages in a mobile networking environment. In one example, a method includes identifying, by a function, a negotiated compression algorithm to utilize for compressing one or more Packet Forwarding Control Protocol (PFCP) messages; determining whether a payload for a particular PFCP message is to be compressed based on at least one of system resources of the function and a size of the payload; based on determining that the payload is to be compressed, compressing the payload utilizing the negotiated compression algorithm to generate a compressed PFCP message; and setting a compression indication in a header of the compressed PFCP message.