diff --git a/Cargo.lock b/Cargo.lock
index 06cd0182c..0f83aa0a6 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -4174,7 +4174,9 @@ name = "uu_unexpand"
 version = "0.2.2"
 dependencies = [
  "clap",
+ "codspeed-divan-compat",
  "fluent",
+ "tempfile",
  "thiserror 2.0.16",
  "unicode-width 0.2.1",
  "uucore",
diff --git a/src/uu/unexpand/Cargo.toml b/src/uu/unexpand/Cargo.toml
index 95610ad5a..19128ad03 100644
--- a/src/uu/unexpand/Cargo.toml
+++ b/src/uu/unexpand/Cargo.toml
@@ -24,6 +24,15 @@ unicode-width = { workspace = true }
 uucore = { workspace = true }
 fluent = { workspace = true }
 
+[dev-dependencies]
+divan = { workspace = true }
+tempfile = { workspace = true }
+uucore = { workspace = true, features = ["benchmark"] }
+
 [[bin]]
 name = "unexpand"
 path = "src/main.rs"
+
+[[bench]]
+name = "unexpand_bench"
+harness = false
diff --git a/src/uu/unexpand/benches/unexpand_bench.rs b/src/uu/unexpand/benches/unexpand_bench.rs
new file mode 100644
index 000000000..1f9c19469
--- /dev/null
+++ b/src/uu/unexpand/benches/unexpand_bench.rs
@@ -0,0 +1,54 @@
+// This file is part of the uutils coreutils package.
+//
+// For the full copyright and license information, please view the LICENSE
+// file that was distributed with this source code.
+
+use divan::{Bencher, black_box};
+use uu_unexpand::uumain;
+use uucore::benchmark::{create_test_file, run_util_function};
+
+/// Generate text data with leading spaces (typical unexpand use case)
+fn generate_indented_text(num_lines: usize) -> Vec<u8> {
+    let mut data = Vec::new();
+    for i in 0..num_lines {
+        // Add varying amounts of leading spaces (4, 8, 12, etc.)
+        let indent = (i % 4 + 1) * 4;
+        data.extend(vec![b' '; indent]);
+        data.extend_from_slice(b"This is a line of text with leading spaces\n");
+    }
+    data
+}
+
+/// Benchmark unexpanding many lines with leading spaces (most common use case)
+#[divan::bench(args = [100_000])]
+fn unexpand_many_lines(bencher: Bencher, num_lines: usize) {
+    let temp_dir = tempfile::tempdir().unwrap();
+    let data = generate_indented_text(num_lines);
+    let file_path = create_test_file(&data, temp_dir.path());
+    let file_path_str = file_path.to_str().unwrap();
+
+    bencher.bench(|| {
+        black_box(run_util_function(uumain, &[file_path_str]));
+    });
+}
+
+/// Benchmark large file with spaces (tests performance on large files)
+#[divan::bench(args = [10])]
+fn unexpand_large_file(bencher: Bencher, size_mb: usize) {
+    let temp_dir = tempfile::tempdir().unwrap();
+
+    // Generate approximately size_mb worth of indented lines
+    let line_size = 50; // approximate bytes per line
+    let num_lines = (size_mb * 1024 * 1024) / line_size;
+    let data = generate_indented_text(num_lines);
+    let file_path = create_test_file(&data, temp_dir.path());
+    let file_path_str = file_path.to_str().unwrap();
+
+    bencher.bench(|| {
+        black_box(run_util_function(uumain, &[file_path_str]));
+    });
+}
+
+fn main() {
+    divan::main();
+}