diff --git a/esphome/components/improv_serial/improv_serial_component.cpp b/esphome/components/improv_serial/improv_serial_component.cpp
index b4d9943955..1ce490a590 100644
--- a/esphome/components/improv_serial/improv_serial_component.cpp
+++ b/esphome/components/improv_serial/improv_serial_component.cpp
@@ -267,7 +267,7 @@ bool ImprovSerialComponent::parse_improv_payload_(improv::ImprovCommand &command
       for (auto &scan : results) {
         if (scan.get_is_hidden())
           continue;
-        const std::string &ssid = scan.get_ssid();
+        std::string ssid = scan.get_ssid().c_str();
         if (std::find(networks.begin(), networks.end(), ssid) != networks.end())
           continue;
         // Send each ssid separately to avoid overflowing the buffer
diff --git a/esphome/components/wifi/wifi_component.cpp b/esphome/components/wifi/wifi_component.cpp
index ac90168afe..c8ea038739 100644
--- a/esphome/components/wifi/wifi_component.cpp
+++ b/esphome/components/wifi/wifi_component.cpp
@@ -351,7 +351,7 @@ bool WiFiComponent::needs_scan_results_() const {
   return this->scan_result_.empty() || !this->scan_result_[0].get_matches();
 }
 
-bool WiFiComponent::ssid_was_seen_in_scan_(const std::string &ssid) const {
+bool WiFiComponent::ssid_was_seen_in_scan_(const CompactString &ssid) const {
   // Check if this SSID is configured as hidden
   // If explicitly marked hidden, we should always try hidden mode regardless of scan results
   for (const auto &conf : this->sta_) {
@@ -939,9 +939,12 @@ WiFiAP WiFiComponent::get_sta() const {
   return config ? *config : WiFiAP{};
 }
 void WiFiComponent::save_wifi_sta(const std::string &ssid, const std::string &password) {
+  this->save_wifi_sta(ssid.c_str(), password.c_str());
+}
+void WiFiComponent::save_wifi_sta(const char *ssid, const char *password) {
   SavedWifiSettings save{};  // zero-initialized - all bytes set to \0, guaranteeing null termination
-  strncpy(save.ssid, ssid.c_str(), sizeof(save.ssid) - 1);              // max 32 chars, byte 32 remains \0
-  strncpy(save.password, password.c_str(), sizeof(save.password) - 1);  // max 64 chars, byte 64 remains \0
+  strncpy(save.ssid, ssid, sizeof(save.ssid) - 1);              // max 32 chars, byte 32 remains \0
+  strncpy(save.password, password, sizeof(save.password) - 1);  // max 64 chars, byte 64 remains \0
   this->pref_.save(&save);
   // ensure it's written immediately
   global_preferences->sync();
@@ -1786,11 +1789,11 @@ void WiFiComponent::log_and_adjust_priority_for_failed_connect_() {
   }
 
   // Get SSID for logging (use pointer to avoid copy)
-  const std::string *ssid = nullptr;
+  const char *ssid = nullptr;
   if (this->retry_phase_ == WiFiRetryPhase::SCAN_CONNECTING && !this->scan_result_.empty()) {
-    ssid = &this->scan_result_[0].get_ssid();
+    ssid = this->scan_result_[0].get_ssid().c_str();
   } else if (const WiFiAP *config = this->get_selected_sta_()) {
-    ssid = &config->get_ssid();
+    ssid = config->get_ssid().c_str();
   }
 
   // Only decrease priority on the last attempt for this phase
@@ -1810,8 +1813,8 @@ void WiFiComponent::log_and_adjust_priority_for_failed_connect_() {
   }
   char bssid_s[18];
   format_mac_addr_upper(failed_bssid.value().data(), bssid_s);
-  ESP_LOGD(TAG, "Failed " LOG_SECRET("'%s'") " " LOG_SECRET("(%s)") ", priority %d → %d",
-           ssid != nullptr ? ssid->c_str() : "", bssid_s, old_priority, new_priority);
+  ESP_LOGD(TAG, "Failed " LOG_SECRET("'%s'") " " LOG_SECRET("(%s)") ", priority %d → %d", ssid != nullptr ? ssid : "",
+           bssid_s, old_priority, new_priority);
 
   // After adjusting priority, check if all priorities are now at minimum
   // If so, clear the vector to save memory and reset for fresh start
@@ -2059,10 +2062,14 @@ void WiFiComponent::save_fast_connect_settings_() {
 }
 #endif
 
-void WiFiAP::set_ssid(const std::string &ssid) { this->ssid_ = ssid; }
+void WiFiAP::set_ssid(const std::string &ssid) { this->ssid_ = CompactString(ssid.c_str(), ssid.size()); }
+void WiFiAP::set_ssid(const char *ssid) { this->ssid_ = CompactString(ssid, strlen(ssid)); }
 void WiFiAP::set_bssid(const bssid_t &bssid) { this->bssid_ = bssid; }
 void WiFiAP::clear_bssid() { this->bssid_ = {}; }
-void WiFiAP::set_password(const std::string &password) { this->password_ = password; }
+void WiFiAP::set_password(const std::string &password) {
+  this->password_ = CompactString(password.c_str(), password.size());
+}
+void WiFiAP::set_password(const char *password) { this->password_ = CompactString(password, strlen(password)); }
 #ifdef USE_WIFI_WPA2_EAP
 void WiFiAP::set_eap(optional<EAPAuth> eap_auth) { this->eap_ = std::move(eap_auth); }
 #endif
@@ -2072,10 +2079,8 @@ void WiFiAP::clear_channel() { this->channel_ = 0; }
 void WiFiAP::set_manual_ip(optional<ManualIP> manual_ip) { this->manual_ip_ = manual_ip; }
 #endif
 void WiFiAP::set_hidden(bool hidden) { this->hidden_ = hidden; }
-const std::string &WiFiAP::get_ssid() const { return this->ssid_; }
 const bssid_t &WiFiAP::get_bssid() const { return this->bssid_; }
 bool WiFiAP::has_bssid() const { return this->bssid_ != bssid_t{}; }
-const std::string &WiFiAP::get_password() const { return this->password_; }
 #ifdef USE_WIFI_WPA2_EAP
 const optional<EAPAuth> &WiFiAP::get_eap() const { return this->eap_; }
 #endif
@@ -2086,12 +2091,12 @@ const optional<ManualIP> &WiFiAP::get_manual_ip() const { return this->manual_ip
 #endif
 bool WiFiAP::get_hidden() const { return this->hidden_; }
 
-WiFiScanResult::WiFiScanResult(const bssid_t &bssid, std::string ssid, uint8_t channel, int8_t rssi, bool with_auth,
-                               bool is_hidden)
+WiFiScanResult::WiFiScanResult(const bssid_t &bssid, const char *ssid, size_t ssid_len, uint8_t channel, int8_t rssi,
+                               bool with_auth, bool is_hidden)
     : bssid_(bssid),
       channel_(channel),
       rssi_(rssi),
-      ssid_(std::move(ssid)),
+      ssid_(ssid, ssid_len),
       with_auth_(with_auth),
       is_hidden_(is_hidden) {}
 bool WiFiScanResult::matches(const WiFiAP &config) const {
@@ -2134,7 +2139,6 @@ bool WiFiScanResult::matches(const WiFiAP &config) const {
 bool WiFiScanResult::get_matches() const { return this->matches_; }
 void WiFiScanResult::set_matches(bool matches) { this->matches_ = matches; }
 const bssid_t &WiFiScanResult::get_bssid() const { return this->bssid_; }
-const std::string &WiFiScanResult::get_ssid() const { return this->ssid_; }
 uint8_t WiFiScanResult::get_channel() const { return this->channel_; }
 int8_t WiFiScanResult::get_rssi() const { return this->rssi_; }
 bool WiFiScanResult::get_with_auth() const { return this->with_auth_; }
@@ -2207,7 +2211,7 @@ void WiFiComponent::process_roaming_scan_() {
 
   for (const auto &result : this->scan_result_) {
     // Must be same SSID, different BSSID
-    if (current_ssid != result.get_ssid() || result.get_bssid() == current_bssid)
+    if (result.get_ssid() != current_ssid.c_str() || result.get_bssid() == current_bssid)
       continue;
 
 #if ESPHOME_LOG_LEVEL >= ESPHOME_LOG_LEVEL_VERBOSE
diff --git a/esphome/components/wifi/wifi_component.h b/esphome/components/wifi/wifi_component.h
index f27c522a1b..877ba3cd23 100644
--- a/esphome/components/wifi/wifi_component.h
+++ b/esphome/components/wifi/wifi_component.h
@@ -175,9 +175,13 @@ template<typename T> using wifi_scan_vector_t = FixedVector<T>;
 class WiFiAP {
  public:
   void set_ssid(const std::string &ssid);
+  void set_ssid(const char *ssid);
+  void set_ssid(const CompactString &ssid) { this->ssid_ = ssid; }
   void set_bssid(const bssid_t &bssid);
   void clear_bssid();
   void set_password(const std::string &password);
+  void set_password(const char *password);
+  void set_password(const CompactString &password) { this->password_ = password; }
 #ifdef USE_WIFI_WPA2_EAP
   void set_eap(optional<EAPAuth> eap_auth);
 #endif  // USE_WIFI_WPA2_EAP
@@ -188,10 +192,10 @@ class WiFiAP {
   void set_manual_ip(optional<ManualIP> manual_ip);
 #endif
   void set_hidden(bool hidden);
-  const std::string &get_ssid() const;
+  const CompactString &get_ssid() const { return this->ssid_; }
+  const CompactString &get_password() const { return this->password_; }
   const bssid_t &get_bssid() const;
   bool has_bssid() const;
-  const std::string &get_password() const;
 #ifdef USE_WIFI_WPA2_EAP
   const optional<EAPAuth> &get_eap() const;
 #endif  // USE_WIFI_WPA2_EAP
@@ -204,8 +208,8 @@ class WiFiAP {
   bool get_hidden() const;
 
  protected:
-  std::string ssid_;
-  std::string password_;
+  CompactString ssid_;
+  CompactString password_;
 #ifdef USE_WIFI_WPA2_EAP
   optional<EAPAuth> eap_;
 #endif  // USE_WIFI_WPA2_EAP
@@ -221,14 +225,15 @@ class WiFiAP {
 
 class WiFiScanResult {
  public:
-  WiFiScanResult(const bssid_t &bssid, std::string ssid, uint8_t channel, int8_t rssi, bool with_auth, bool is_hidden);
+  WiFiScanResult(const bssid_t &bssid, const char *ssid, size_t ssid_len, uint8_t channel, int8_t rssi, bool with_auth,
+                 bool is_hidden);
 
   bool matches(const WiFiAP &config) const;
 
   bool get_matches() const;
   void set_matches(bool matches);
   const bssid_t &get_bssid() const;
-  const std::string &get_ssid() const;
+  const CompactString &get_ssid() const { return this->ssid_; }
   uint8_t get_channel() const;
   int8_t get_rssi() const;
   bool get_with_auth() const;
@@ -242,7 +247,7 @@ class WiFiScanResult {
   bssid_t bssid_;
   uint8_t channel_;
   int8_t rssi_;
-  std::string ssid_;
+  CompactString ssid_;
   int8_t priority_{0};
   bool matches_{false};
   bool with_auth_;
@@ -381,6 +386,10 @@ class WiFiComponent : public Component {
   void set_passive_scan(bool passive);
 
   void save_wifi_sta(const std::string &ssid, const std::string &password);
+  void save_wifi_sta(const char *ssid, const char *password);
+  void save_wifi_sta(const CompactString &ssid, const CompactString &password) {
+    this->save_wifi_sta(ssid.c_str(), password.c_str());
+  }
 
   // ========== INTERNAL METHODS ==========
   // (In most use cases you won't need these)
@@ -541,7 +550,7 @@ class WiFiComponent : public Component {
   int8_t find_first_non_hidden_index_() const;
   /// Check if an SSID was seen in the most recent scan results
   /// Used to skip hidden mode for SSIDs we know are visible
-  bool ssid_was_seen_in_scan_(const std::string &ssid) const;
+  bool ssid_was_seen_in_scan_(const CompactString &ssid) const;
   /// Check if full scan results are needed (captive portal active, improv, listeners)
   bool needs_full_scan_results_() const;
   /// Check if network matches any configured network (for scan result filtering)
diff --git a/esphome/components/wifi/wifi_component_esp8266.cpp b/esphome/components/wifi/wifi_component_esp8266.cpp
index 613a3f8fdb..a7524fd8b0 100644
--- a/esphome/components/wifi/wifi_component_esp8266.cpp
+++ b/esphome/components/wifi/wifi_component_esp8266.cpp
@@ -777,8 +777,8 @@ void WiFiComponent::wifi_scan_done_callback_(void *arg, STATUS status) {
     const char *ssid_cstr = reinterpret_cast<const char *>(it->ssid);
     if (needs_full || this->matches_configured_network_(ssid_cstr, it->bssid)) {
       this->scan_result_.emplace_back(
-          bssid_t{it->bssid[0], it->bssid[1], it->bssid[2], it->bssid[3], it->bssid[4], it->bssid[5]},
-          std::string(ssid_cstr, it->ssid_len), it->channel, it->rssi, it->authmode != AUTH_OPEN, it->is_hidden != 0);
+          bssid_t{it->bssid[0], it->bssid[1], it->bssid[2], it->bssid[3], it->bssid[4], it->bssid[5]}, ssid_cstr,
+          it->ssid_len, it->channel, it->rssi, it->authmode != AUTH_OPEN, it->is_hidden != 0);
     } else {
       this->log_discarded_scan_result_(ssid_cstr, it->bssid, it->rssi, it->channel);
     }
diff --git a/esphome/components/wifi/wifi_component_esp_idf.cpp b/esphome/components/wifi/wifi_component_esp_idf.cpp
index 229c430272..f7170eae4e 100644
--- a/esphome/components/wifi/wifi_component_esp_idf.cpp
+++ b/esphome/components/wifi/wifi_component_esp_idf.cpp
@@ -853,8 +853,7 @@ void WiFiComponent::wifi_process_event_(IDFWiFiEvent *data) {
       if (needs_full || this->matches_configured_network_(ssid_cstr, record.bssid)) {
         bssid_t bssid;
         std::copy(record.bssid, record.bssid + 6, bssid.begin());
-        std::string ssid(ssid_cstr);
-        this->scan_result_.emplace_back(bssid, std::move(ssid), record.primary, record.rssi,
+        this->scan_result_.emplace_back(bssid, ssid_cstr, strlen(ssid_cstr), record.primary, record.rssi,
                                         record.authmode != WIFI_AUTH_OPEN, ssid_cstr[0] == '\0');
       } else {
         this->log_discarded_scan_result_(ssid_cstr, record.bssid, record.rssi, record.primary);
diff --git a/esphome/components/wifi/wifi_component_libretiny.cpp b/esphome/components/wifi/wifi_component_libretiny.cpp
index aeecefd26f..c3c0d885e2 100644
--- a/esphome/components/wifi/wifi_component_libretiny.cpp
+++ b/esphome/components/wifi/wifi_component_libretiny.cpp
@@ -690,7 +690,7 @@ void WiFiComponent::wifi_scan_done_callback_() {
       auto &ap = scan->ap[i];
       this->scan_result_.emplace_back(bssid_t{ap.bssid.addr[0], ap.bssid.addr[1], ap.bssid.addr[2], ap.bssid.addr[3],
                                               ap.bssid.addr[4], ap.bssid.addr[5]},
-                                      std::string(ssid_cstr), ap.channel, ap.rssi, ap.auth != WIFI_AUTH_OPEN,
+                                      ssid_cstr, strlen(ssid_cstr), ap.channel, ap.rssi, ap.auth != WIFI_AUTH_OPEN,
                                       ssid_cstr[0] == '\0');
     } else {
       auto &ap = scan->ap[i];
diff --git a/esphome/components/wifi/wifi_component_pico_w.cpp b/esphome/components/wifi/wifi_component_pico_w.cpp
index 84c10d5d43..9c91d520b9 100644
--- a/esphome/components/wifi/wifi_component_pico_w.cpp
+++ b/esphome/components/wifi/wifi_component_pico_w.cpp
@@ -149,9 +149,8 @@ void WiFiComponent::wifi_scan_result(void *env, const cyw43_ev_scan_result_t *re
 
   bssid_t bssid;
   std::copy(result->bssid, result->bssid + 6, bssid.begin());
-  std::string ssid(ssid_cstr);
-  WiFiScanResult res(bssid, std::move(ssid), result->channel, result->rssi, result->auth_mode != CYW43_AUTH_OPEN,
-                     ssid_cstr[0] == '\0');
+  WiFiScanResult res(bssid, ssid_cstr, strlen(ssid_cstr), result->channel, result->rssi,
+                     result->auth_mode != CYW43_AUTH_OPEN, ssid_cstr[0] == '\0');
   if (std::find(this->scan_result_.begin(), this->scan_result_.end(), res) == this->scan_result_.end()) {
     this->scan_result_.push_back(res);
   }
diff --git a/esphome/components/wifi_info/wifi_info_text_sensor.cpp b/esphome/components/wifi_info/wifi_info_text_sensor.cpp
index a63b30b892..b5ebfd7390 100644
--- a/esphome/components/wifi_info/wifi_info_text_sensor.cpp
+++ b/esphome/components/wifi_info/wifi_info_text_sensor.cpp
@@ -89,7 +89,7 @@ void ScanResultsWiFiInfo::on_wifi_scan_results(const wifi::wifi_scan_vector_t<wi
   for (const auto &scan : results) {
     if (scan.get_is_hidden())
       continue;
-    const std::string &ssid = scan.get_ssid();
+    const auto &ssid = scan.get_ssid();
     // Max space: ssid + ": " (2) + "-128" (4) + "dB\n" (3) = ssid + 9
     if (ptr + ssid.size() + 9 > end)
       break;
diff --git a/esphome/core/helpers.cpp b/esphome/core/helpers.cpp
index e7b901d71f..2f1eeb03e2 100644
--- a/esphome/core/helpers.cpp
+++ b/esphome/core/helpers.cpp
@@ -857,4 +857,87 @@ void IRAM_ATTR HOT delay_microseconds_safe(uint32_t us) {
     ;
 }
 
+// CompactString implementation
+CompactString::CompactString(const char *str, size_t len) {
+  if (len > MAX_LENGTH) {
+    len = MAX_LENGTH;  // Clamp to max valid length
+  }
+
+  this->length_ = len;
+  if (len <= INLINE_CAPACITY) {
+    // Store inline with null terminator
+    this->is_heap_ = 0;
+    if (len > 0) {
+      std::memcpy(this->storage_, str, len);
+    }
+    this->storage_[len] = '\0';
+  } else {
+    // Heap allocate with null terminator
+    this->is_heap_ = 1;
+    char *heap_data = new char[len + 1];  // NOLINT(cppcoreguidelines-owning-memory)
+    std::memcpy(heap_data, str, len);
+    heap_data[len] = '\0';
+    this->set_heap_ptr_(heap_data);
+  }
+}
+
+CompactString::CompactString(const CompactString &other) : length_(other.length_), is_heap_(other.is_heap_) {
+  if (!other.is_heap_) {
+    // Copy inline storage including null terminator
+    std::memcpy(this->storage_, other.storage_, other.length_ + 1);
+  } else {
+    char *heap_data = new char[other.length_ + 1];  // NOLINT(cppcoreguidelines-owning-memory)
+    std::memcpy(heap_data, other.get_heap_ptr_(), other.length_ + 1);
+    this->set_heap_ptr_(heap_data);
+  }
+}
+
+CompactString &CompactString::operator=(const CompactString &other) {
+  if (this != &other) {
+    if (this->is_heap_) {
+      delete[] this->get_heap_ptr_();  // NOLINT(cppcoreguidelines-owning-memory)
+    }
+    this->length_ = other.length_;
+    this->is_heap_ = other.is_heap_;
+    if (!other.is_heap_) {
+      // Copy inline storage including null terminator
+      std::memcpy(this->storage_, other.storage_, other.length_ + 1);
+    } else {
+      char *heap_data = new char[other.length_ + 1];  // NOLINT(cppcoreguidelines-owning-memory)
+      std::memcpy(heap_data, other.get_heap_ptr_(), other.length_ + 1);
+      this->set_heap_ptr_(heap_data);
+    }
+  }
+  return *this;
+}
+
+CompactString::CompactString(CompactString &&other) noexcept : length_(other.length_), is_heap_(other.is_heap_) {
+  // Copy full storage (includes null terminator for inline, or pointer for heap)
+  std::memcpy(this->storage_, other.storage_, INLINE_CAPACITY + 1);
+  other.length_ = 0;
+  other.is_heap_ = 0;
+  other.storage_[0] = '\0';
+}
+
+CompactString &CompactString::operator=(CompactString &&other) noexcept {
+  if (this != &other) {
+    if (this->is_heap_) {
+      delete[] this->get_heap_ptr_();  // NOLINT(cppcoreguidelines-owning-memory)
+    }
+    this->length_ = other.length_;
+    this->is_heap_ = other.is_heap_;
+    std::memcpy(this->storage_, other.storage_, INLINE_CAPACITY + 1);
+    other.length_ = 0;
+    other.is_heap_ = 0;
+    other.storage_[0] = '\0';
+  }
+  return *this;
+}
+
+CompactString::~CompactString() {
+  if (this->is_heap_) {
+    delete[] this->get_heap_ptr_();  // NOLINT(cppcoreguidelines-owning-memory)
+  }
+}
+
 }  // namespace esphome
diff --git a/esphome/core/helpers.h b/esphome/core/helpers.h
index 1aa29fa3f7..842f3b885e 100644
--- a/esphome/core/helpers.h
+++ b/esphome/core/helpers.h
@@ -1749,4 +1749,55 @@ template<typename T, enable_if_t<std::is_pointer<T *>::value, int> = 0> T &id(T
 
 ///@}
 
+/// 20-byte string: 18 chars inline + null, heap for longer. Always null-terminated.
+class CompactString {
+ public:
+  static constexpr uint8_t MAX_LENGTH = 127;
+  static constexpr uint8_t INLINE_CAPACITY = 18;          // 18 chars + null terminator fits in 19 bytes
+  static constexpr uint8_t BUFFER_SIZE = MAX_LENGTH + 1;  // For external buffer (128 bytes)
+
+  CompactString() : length_(0), is_heap_(0) { this->storage_[0] = '\0'; }
+  CompactString(const char *str, size_t len);
+  CompactString(const CompactString &other);
+  CompactString(CompactString &&other) noexcept;
+  CompactString &operator=(const CompactString &other);
+  CompactString &operator=(CompactString &&other) noexcept;
+  ~CompactString();
+
+  const char *data() const { return this->is_heap_ ? this->get_heap_ptr_() : this->storage_; }
+  const char *c_str() const { return this->data(); }  // Always null-terminated
+  size_t size() const { return this->length_; }
+  bool empty() const { return this->length_ == 0; }
+
+  bool operator==(const CompactString &other) const {
+    return this->size() == other.size() && std::memcmp(this->data(), other.data(), this->size()) == 0;
+  }
+  bool operator==(const std::string &other) const {
+    return this->size() == other.size() && std::memcmp(this->data(), other.data(), this->size()) == 0;
+  }
+  bool operator==(const char *other) const {
+    return this->size() == std::strlen(other) && std::memcmp(this->data(), other, this->size()) == 0;
+  }
+  bool operator!=(const CompactString &other) const { return !(*this == other); }
+  bool operator!=(const std::string &other) const { return !(*this == other); }
+  bool operator!=(const char *other) const { return !(*this == other); }
+
+ protected:
+  char *get_heap_ptr_() const {
+    char *ptr;
+    std::memcpy(&ptr, this->storage_, sizeof(ptr));
+    return ptr;
+  }
+  void set_heap_ptr_(char *ptr) { std::memcpy(this->storage_, &ptr, sizeof(ptr)); }
+
+  // Storage for string data. When is_heap_=0, contains the string directly (null-terminated).
+  // When is_heap_=1, first sizeof(char*) bytes contain pointer to heap allocation.
+  char storage_[INLINE_CAPACITY + 1];  // 19 bytes: 18 chars + null terminator
+  uint8_t length_ : 7;                 // String length (0-127)
+  uint8_t is_heap_ : 1;                // 1 if using heap pointer, 0 if using inline storage
+  // Total size: 20 bytes (19 bytes storage + 1 byte bitfields)
+};
+
+static_assert(sizeof(CompactString) == 20, "CompactString must be exactly 20 bytes");
+
 }  // namespace esphome