A novel device to compress the phase space of a muon beam by a factor of 10 10 with a 10 - 3 efficiency is under development. A surface muon beam is stopped in a helium gas target consisting of several compression stages, wherein strong electric and magnetic fields are applied. The spatial extent of the stopped muon swarm is decreased by means of these fields until muons with eV energy are extracted into vacuum through a small orifice. It was observed that a 20 cm long muon stop distribution can be compressed in the longitudinal direction to a sub-mm extent within 2 μ s . Additionally, a drift perpendicular to the magnetic field of the compressed low-energy muon swarm was successfully demonstrated, paving the way towards extraction from the gas and re-acceleration of the muons.