diff --git a/pkg/storage/stores/shipper/compactor/compactor_test.go b/pkg/storage/stores/shipper/compactor/compactor_test.go
index 4a8a1645beb70..e330d5b92592c 100644
--- a/pkg/storage/stores/shipper/compactor/compactor_test.go
+++ b/pkg/storage/stores/shipper/compactor/compactor_test.go
@@ -1,16 +1,40 @@
 package compactor
 
 import (
+	"context"
 	"fmt"
+	"io/ioutil"
+	"os"
+	"path/filepath"
+	"strings"
 	"testing"
 	"time"
 
 	"github.com/cortexproject/cortex/pkg/chunk"
-	"github.com/prometheus/common/model"
+	"github.com/cortexproject/cortex/pkg/chunk/local"
+	"github.com/cortexproject/cortex/pkg/chunk/storage"
+	"github.com/cortexproject/cortex/pkg/util/flagext"
 
+	"github.com/prometheus/common/model"
 	"github.com/stretchr/testify/require"
+
+	loki_storage "github.com/grafana/loki/pkg/storage"
+	"github.com/grafana/loki/pkg/storage/stores/shipper/testutil"
 )
 
+func setupTestCompactor(t *testing.T, tempDir string) *Compactor {
+	cfg := Config{}
+	flagext.DefaultValues(&cfg)
+	cfg.WorkingDirectory = filepath.Join(tempDir, workingDirName)
+	cfg.SharedStoreType = "filesystem"
+	cfg.RetentionEnabled = false
+
+	c, err := NewCompactor(cfg, storage.Config{FSConfig: local.FSConfig{Directory: tempDir}}, loki_storage.SchemaConfig{}, nil, nil)
+	require.NoError(t, err)
+
+	return c
+}
+
 func TestIsDefaults(t *testing.T) {
 	for i, tc := range []struct {
 		in  *Config
@@ -71,3 +95,76 @@ func TestExtractIntervalFromTableName(t *testing.T) {
 	}
 
 }
+
+func TestCompactor_RunCompaction(t *testing.T) {
+	tempDir, err := ioutil.TempDir("", "compactor-run-compaction")
+	require.NoError(t, err)
+
+	defer func() {
+		require.NoError(t, os.RemoveAll(tempDir))
+	}()
+
+	tablesPath := filepath.Join(tempDir, "index")
+	tablesCopyPath := filepath.Join(tempDir, "index-copy")
+
+	tables := map[string]map[string]testutil.DBRecords{
+		"table1": {
+			"db1": {
+				Start:      0,
+				NumRecords: 10,
+			},
+			"db2": {
+				Start:      10,
+				NumRecords: 10,
+			},
+			"db3": {
+				Start:      20,
+				NumRecords: 10,
+			},
+			"db4": {
+				Start:      30,
+				NumRecords: 10,
+			},
+		},
+		"table2": {
+			"db1": {
+				Start:      40,
+				NumRecords: 10,
+			},
+			"db2": {
+				Start:      50,
+				NumRecords: 10,
+			},
+			"db3": {
+				Start:      60,
+				NumRecords: 10,
+			},
+			"db4": {
+				Start:      70,
+				NumRecords: 10,
+			},
+		},
+	}
+
+	for name, dbs := range tables {
+		testutil.SetupDBTablesAtPath(t, name, tablesPath, dbs, false)
+
+		// setup exact same copy of dbs for comparison.
+		testutil.SetupDBTablesAtPath(t, name, tablesCopyPath, dbs, false)
+	}
+
+	compactor := setupTestCompactor(t, tempDir)
+	err = compactor.RunCompaction(context.Background())
+	require.NoError(t, err)
+
+	for name := range tables {
+		// verify that we have only 1 file left in storage after compaction.
+		files, err := ioutil.ReadDir(filepath.Join(tablesPath, name))
+		require.NoError(t, err)
+		require.Len(t, files, 1)
+		require.True(t, strings.HasSuffix(files[0].Name(), ".gz"))
+
+		// verify we have all the kvs in compacted db which were there in source dbs.
+		compareCompactedDB(t, filepath.Join(tablesPath, name, files[0].Name()), filepath.Join(tablesCopyPath, name))
+	}
+}
diff --git a/pkg/storage/stores/shipper/compactor/retention/expiration.go b/pkg/storage/stores/shipper/compactor/retention/expiration.go
index 301b0b9ddccad..5cf9c9fdf2d7c 100644
--- a/pkg/storage/stores/shipper/compactor/retention/expiration.go
+++ b/pkg/storage/stores/shipper/compactor/retention/expiration.go
@@ -50,7 +50,7 @@ func (e *expirationChecker) MarkPhaseFailed()   {}
 func (e *expirationChecker) MarkPhaseFinished() {}
 
 func (e *expirationChecker) IntervalHasExpiredChunks(interval model.Interval) bool {
-	return e.earliestRetentionStartTime.Before(interval.Start) || e.earliestRetentionStartTime.Before(interval.End)
+	return interval.Start.Before(e.earliestRetentionStartTime)
 }
 
 type TenantsRetention struct {
diff --git a/pkg/storage/stores/shipper/compactor/retention/expiration_test.go b/pkg/storage/stores/shipper/compactor/retention/expiration_test.go
index f193041dcbc4b..d86b602e1a84e 100644
--- a/pkg/storage/stores/shipper/compactor/retention/expiration_test.go
+++ b/pkg/storage/stores/shipper/compactor/retention/expiration_test.go
@@ -208,3 +208,49 @@ func TestFindEarliestRetentionStartTime(t *testing.T) {
 		})
 	}
 }
+
+func TestExpirationChecker_IntervalHasExpiredChunks(t *testing.T) {
+	for _, tc := range []struct {
+		name              string
+		expirationChecker expirationChecker
+		interval          model.Interval
+		hasExpiredChunks  bool
+	}{
+		{
+			name: "not expired",
+			expirationChecker: expirationChecker{
+				earliestRetentionStartTime: model.Now().Add(-24 * time.Hour),
+			},
+			interval: model.Interval{
+				Start: model.Now().Add(-time.Hour),
+				End:   model.Now(),
+			},
+		},
+		{
+			name: "partially expired",
+			expirationChecker: expirationChecker{
+				earliestRetentionStartTime: model.Now().Add(-24 * time.Hour),
+			},
+			interval: model.Interval{
+				Start: model.Now().Add(-25 * time.Hour),
+				End:   model.Now().Add(-22 * time.Hour),
+			},
+			hasExpiredChunks: true,
+		},
+		{
+			name: "fully expired",
+			expirationChecker: expirationChecker{
+				earliestRetentionStartTime: model.Now().Add(-24 * time.Hour),
+			},
+			interval: model.Interval{
+				Start: model.Now().Add(-26 * time.Hour),
+				End:   model.Now().Add(-25 * time.Hour),
+			},
+			hasExpiredChunks: true,
+		},
+	} {
+		t.Run(tc.name, func(t *testing.T) {
+			require.Equal(t, tc.hasExpiredChunks, tc.expirationChecker.IntervalHasExpiredChunks(tc.interval))
+		})
+	}
+}