diff --git a/tests/lora/test_worker.py b/tests/lora/test_worker.py
index fc1be4ed4..30b74ce3e 100644
--- a/tests/lora/test_worker.py
+++ b/tests/lora/test_worker.py
@@ -52,6 +52,7 @@ def test_worker_apply_lora(sql_lora_files):
             seed=0,
             dtype="float16",
             revision=None,
+            enforce_eager=True,
         ),
         load_config=LoadConfig(
             download_dir=None,
diff --git a/vllm/config.py b/vllm/config.py
index 35411ca73..429ec0dd5 100644
--- a/vllm/config.py
+++ b/vllm/config.py
@@ -2287,9 +2287,14 @@ class LoRAConfig:
         excluding anything before input ids/embeddings and after
         the final hidden states.
         """
-        # no factors to consider.
-        # LoRA is not compatible with `torch.compile` .
         factors: list[Any] = []
+        factors.append(self.max_lora_rank)
+        factors.append(self.max_loras)
+        factors.append(self.fully_sharded_loras)
+        factors.append(self.lora_dtype)
+        factors.append(self.lora_extra_vocab_size)
+        factors.append(self.long_lora_scaling_factors)
+        factors.append(self.bias_enabled)
         hash_str = hashlib.md5(str(factors).encode()).hexdigest()
         return hash_str
 
@@ -3303,6 +3308,11 @@ class VllmConfig:
             vllm_factors.append("None")
         if self.lora_config:
             vllm_factors.append(self.lora_config.compute_hash())
+            # LoRA creates static buffers based on max_num_batched_tokens.
+            # The tensor sizes and strides get captured in the torch.compile
+            # graph explicitly.
+            vllm_factors.append(
+                str(self.scheduler_config.max_num_batched_tokens))
         else:
             vllm_factors.append("None")
         if self.speculative_config:
@@ -3453,12 +3463,15 @@ class VllmConfig:
                 " Disabling `torch.compile`.")
             self.compilation_config.level = CompilationLevel.NO_COMPILATION
 
-        if self.lora_config is not None and self.compilation_config.level !=\
-             CompilationLevel.NO_COMPILATION:
-            logger.warning("LoRA is not supported with `torch.compile` yet. "
-                           "Disabling `torch.compile`.")
+        if ((not envs.VLLM_USE_V1) and self.lora_config is not None
+                and self.compilation_config.level
+                != CompilationLevel.NO_COMPILATION):
+            logger.warning(
+                "LoRA for V0 is not supported with `torch.compile` yet. "
+                "Disabling `torch.compile`.")
             self.compilation_config.level = CompilationLevel.NO_COMPILATION
 
+
         if self.model_config and self.model_config.use_mla and \
             not (current_platform.is_cuda() or current_platform.is_rocm()):
             logger.info(
diff --git a/vllm/lora/layers.py b/vllm/lora/layers.py
index 1c1f76702..7a9d5237a 100644
--- a/vllm/lora/layers.py
+++ b/vllm/lora/layers.py
@@ -237,16 +237,19 @@ class VocabParallelEmbeddingWithLoRA(BaseLayerWithLoRA):
                 self.embeddings_weights[:embeddings.shape[0]].copy_(embeddings)
 
     def forward(self, x: torch.Tensor) -> torch.Tensor:
-        added_tokens_mask = x > self.base_layer.org_vocab_size - 1
-        embeddings_indices = self.punica_wrapper.embeddings_indices
-        indices = embeddings_indices[1].view_as(x)
+        added_tokens_mask = torch.where(x > self.base_layer.org_vocab_size - 1,
+                                        1, 0)
+        embeddings_indices = torch.narrow(
+            self.punica_wrapper._embeddings_indices, 1, 0, x.size(0))
+
+        indices = embeddings_indices[1]
         full_lora_a_embeddings = F.embedding(
             x + indices,
             self.lora_a_stacked_2d,
         )
-        indices = embeddings_indices[0].view_as(x)
-        full_output = self.base_layer.forward(
-            x.add_(indices * added_tokens_mask))
+        indices = embeddings_indices[0]
+        full_output = self.base_layer.forward(x +
+                                              (indices * added_tokens_mask))
 
         full_output_org = full_output
         if full_output.ndim == 3:
diff --git a/vllm/lora/punica_wrapper/punica_gpu.py b/vllm/lora/punica_wrapper/punica_gpu.py
index 3a4fcd04d..19a94eea9 100644
--- a/vllm/lora/punica_wrapper/punica_gpu.py
+++ b/vllm/lora/punica_wrapper/punica_gpu.py
@@ -254,7 +254,9 @@ class PunicaWrapperGPU(PunicaWrapperBase, V1KernelMixin):
         y_org = y
         y = y.view(-1, y.shape[-1])
         if lora_bias_stacked is not None:
-            self._apply_bias(self.token_lora_indices, y, output_slices,
+            token_lora_indices = torch.narrow(self._token_lora_indices, 0, 0,
+                                              y.size(0))
+            self._apply_bias(token_lora_indices, y, output_slices,
                              lora_bias_stacked)
 
         if env.VLLM_USE_V1:
@@ -365,7 +367,9 @@ class PunicaWrapperGPU(PunicaWrapperBase, V1KernelMixin):
         assert len(lora_a_stacked) == len(lora_b_stacked) == len(output_slices)
         if lora_bias_stacked is not None:
             assert len(lora_bias_stacked) == len(output_slices)
-            y = self._apply_bias(self.token_lora_indices, y, output_slices,
+            token_lora_indices = torch.narrow(self._token_lora_indices, 0, 0,
+                                              y.size(0))
+            y = self._apply_bias(token_lora_indices, y, output_slices,
                                  lora_bias_stacked)
 
         if buffer is None: