diff --git a/src/init.cpp b/src/init.cpp
--- a/src/init.cpp
+++ b/src/init.cpp
@@ -1748,12 +1748,15 @@
         }
     }
 
-    // Basic filters are the only supported filters. The basic filters index
-    // must be enabled to serve compact filters
-    if (args.GetBoolArg("-peerblockfilters", DEFAULT_PEERBLOCKFILTERS) &&
-        g_enabled_filter_types.count(BlockFilterType::BASIC) != 1) {
-        return InitError(
-            _("Cannot set -peerblockfilters without -blockfilterindex."));
+    // Signal NODE_COMPACT_FILTERS if peerblockfilters and basic filters index
+    // are both enabled.
+    if (gArgs.GetBoolArg("-peerblockfilters", DEFAULT_PEERBLOCKFILTERS)) {
+        if (g_enabled_filter_types.count(BlockFilterType::BASIC) != 1) {
+            return InitError(
+                _("Cannot set -peerblockfilters without -blockfilterindex."));
+        }
+
+        nLocalServices = ServiceFlags(nLocalServices | NODE_COMPACT_FILTERS);
     }
 
     // if using block pruning, then disallow txindex
diff --git a/src/net_processing.cpp b/src/net_processing.cpp
--- a/src/net_processing.cpp
+++ b/src/net_processing.cpp
@@ -2262,7 +2262,7 @@
     const CBlockIndex *&stop_index, BlockFilterIndex *&filter_index) {
     const bool supported_filter_type =
         (filter_type == BlockFilterType::BASIC &&
-         gArgs.GetBoolArg("-peerblockfilters", DEFAULT_PEERBLOCKFILTERS));
+         (peer.GetLocalServices() & NODE_COMPACT_FILTERS));
     if (!supported_filter_type) {
         LogPrint(BCLog::NET,
                  "peer %d requested unsupported block filter type: %d\n",
diff --git a/src/protocol.h b/src/protocol.h
--- a/src/protocol.h
+++ b/src/protocol.h
@@ -337,6 +337,11 @@
 
     // Bit 5 was NODE_BITCOIN_CASH, removed in v0.22.8
 
+    // NODE_COMPACT_FILTERS means the node will service basic block filter
+    // requests.
+    // See BIP157 and BIP158 for details on how this is implemented.
+    NODE_COMPACT_FILTERS = (1 << 6),
+
     // NODE_NETWORK_LIMITED means the same as NODE_NETWORK with the limitation
     // of only serving the last 288 (2 day) blocks
     // See BIP159 for details on how this is implemented.
diff --git a/src/protocol.cpp b/src/protocol.cpp
--- a/src/protocol.cpp
+++ b/src/protocol.cpp
@@ -276,6 +276,8 @@
             return "XTHIN";
         case NODE_NETWORK_LIMITED:
             return "NETWORK_LIMITED";
+        case NODE_COMPACT_FILTERS:
+            return "COMPACT_FILTERS";
         case NODE_AVALANCHE:
             return "AVALANCHE";
         default: