diff --git a/src/v/storage/spill_key_index.cc b/src/v/storage/spill_key_index.cc
index 0feaf59bfdbf6..a492676e0d9d5 100644
--- a/src/v/storage/spill_key_index.cc
+++ b/src/v/storage/spill_key_index.cc
@@ -88,14 +88,34 @@ ss::future<> spill_key_index::add_key(compaction_key b, value_type v) {
     auto const key_size = b.size();
     auto const expected_size = idx_mem_usage() + _keys_mem_usage + key_size;
 
-    // TODO call into storage_resources
+    auto take_result = _resources.compaction_index_take_bytes(key_size);
+    if (_mem_units.count() == 0) {
+        _mem_units = std::move(take_result.units);
+    } else {
+        _mem_units.adopt(std::move(take_result.units));
+    }
+
+    // Don't spill unless we're at least this big.  Prevents a situation
+    // where some other index has used up the memory allowance, and we
+    // would end up spilling on every key.
+    const size_t min_index_size = std::min(32_KiB, _max_mem);
 
-    if (expected_size >= _max_mem) {
+    if (
+      (take_result.checkpoint_hint && expected_size > min_index_size)
+      || expected_size >= _max_mem) {
         f = ss::do_until(
-          [this, key_size] {
-              // stop condition
-              return _midx.empty()
-                     || idx_mem_usage() + _keys_mem_usage + key_size < _max_mem;
+          [this, key_size, min_index_size] {
+              size_t total_mem = idx_mem_usage() + _keys_mem_usage + key_size;
+
+              // Instance-local capacity check
+              bool local_ok = total_mem < _max_mem;
+
+              // Shard-wide capacity check
+              bool global_ok = _resources.compaction_index_bytes_available()
+                               || total_mem < min_index_size;
+
+              // Stop condition: none of our size thresholds must be violated
+              return _midx.empty() || (local_ok && global_ok);
           },
           [this] {
               /**
@@ -110,6 +130,7 @@ ss::future<> spill_key_index::add_key(compaction_key b, value_type v) {
                 node.mapped(),
                 [this](const bytes& k, value_type o) {
                     _keys_mem_usage -= k.size();
+                    _mem_units.return_units(k.size());
                     return spill(compacted_index::entry_type::key, k, o);
                 });
           });
@@ -118,6 +139,10 @@ ss::future<> spill_key_index::add_key(compaction_key b, value_type v) {
     return f.then([this, b = std::move(b), v]() mutable {
         // convert iobuf to key
         _keys_mem_usage += b.size();
+
+        // No update to _mem_units here: we already took units at top
+        // of add_key before starting the write.
+
         _midx.insert({std::move(b), v});
     });
 }
@@ -217,6 +242,7 @@ ss::future<> spill_key_index::drain_all_keys() {
       [this] {
           auto node = _midx.extract(_midx.begin());
           _keys_mem_usage -= node.key().size();
+          _mem_units.return_units(node.key().size());
           return ss::do_with(
             node.key(), node.mapped(), [this](const bytes& k, value_type o) {
                 return spill(compacted_index::entry_type::key, k, o);
diff --git a/src/v/storage/spill_key_index.h b/src/v/storage/spill_key_index.h
index 20f64a213a45c..2c086f82f33d7 100644
--- a/src/v/storage/spill_key_index.h
+++ b/src/v/storage/spill_key_index.h
@@ -100,7 +100,15 @@ class spill_key_index final : public compacted_index_writer::impl {
     bool _truncate;
     std::optional<segment_appender> _appender;
     underlying_t _midx;
+
+    // Max memory we'll use for _midx, although we may spill earlier
+    // if hinted to by storage_resources
     size_t _max_mem{512_KiB};
+
+    // Units handed out by storage_resources to track our consumption
+    // of the per-shard compaction index memory allowance.
+    ss::semaphore_units<> _mem_units;
+
     size_t _keys_mem_usage{0};
     compacted_index::footer _footer;
     crc::crc32c _crc;