diff --git a/ps2xRuntime/src/lib/ps2_vif1_interpreter.cpp b/ps2xRuntime/src/lib/ps2_vif1_interpreter.cpp
index 05fc764a8..12a7f50a9 100644
--- a/ps2xRuntime/src/lib/ps2_vif1_interpreter.cpp
+++ b/ps2xRuntime/src/lib/ps2_vif1_interpreter.cpp
@@ -674,13 +674,13 @@ void PS2Memory::processVIF1Data(const uint8_t *data, uint32_t sizeBytes)
                     }
                     else if (vl == 3u && vn == 3u)
                     {
-                        // V4-5: packed color-like format in a single 16-bit value.
+                        // V4-5 expands 5-bit RGB and 1-bit alpha into the upper bits of each lane.
                         uint16_t packed = 0;
                         std::memcpy(&packed, srcVec, sizeof(packed));
-                        decompressed[0] = packed & 0x1Fu;
-                        decompressed[1] = (packed >> 5) & 0x1Fu;
-                        decompressed[2] = (packed >> 10) & 0x1Fu;
-                        decompressed[3] = (packed >> 15) & 0x01u;
+                        decompressed[0] = (packed & 0x001Fu) << 3u;
+                        decompressed[1] = (packed & 0x03E0u) >> 2u;
+                        decompressed[2] = (packed & 0x7C00u) >> 7u;
+                        decompressed[3] = (packed & 0x8000u) >> 8u;
                     }
                     else
                     {
diff --git a/ps2xTest/src/ps2_memory_tests.cpp b/ps2xTest/src/ps2_memory_tests.cpp
index 7c3e8ea5d..4c9e1de0a 100644
--- a/ps2xTest/src/ps2_memory_tests.cpp
+++ b/ps2xTest/src/ps2_memory_tests.cpp
@@ -531,6 +531,31 @@ void register_ps2_memory_tests()
             t.Equals(sw, 0x00008001u, "zero-extend w");
         });
 
+        tc.Run("VIF UNPACK V4-5 expands packed channels", [](TestCase &t)
+        {
+            PS2Memory mem;
+            t.IsTrue(mem.initialize(), "PS2Memory initialize should succeed");
+            std::memset(mem.getVU1Data(), 0, PS2_VU1_DATA_SIZE);
+
+            std::vector<uint8_t> packet;
+            appendU32(packet, makeVifCmd(0x6Fu, 1u, 0u)); // UNPACK V4-5, NUM=1, ADDR=0
+            appendU32(packet, 0x0000FC41u); // X=1, Y=2, Z=31, W=1
+
+            mem.processVIF1Data(packet.data(), static_cast<uint32_t>(packet.size()));
+
+            const uint8_t *vu = mem.getVU1Data();
+            uint32_t x = 0, y = 0, z = 0, w = 0;
+            std::memcpy(&x, vu + 0u, 4u);
+            std::memcpy(&y, vu + 4u, 4u);
+            std::memcpy(&z, vu + 8u, 4u);
+            std::memcpy(&w, vu + 12u, 4u);
+
+            t.Equals(x, 8u, "V4-5 should expand X from five bits");
+            t.Equals(y, 16u, "V4-5 should expand Y from five bits");
+            t.Equals(z, 248u, "V4-5 should expand Z from five bits");
+            t.Equals(w, 128u, "V4-5 should expand W from one bit");
+        });
+
         tc.Run("VIF UNPACK bit15 adds TOPS to destination address", [](TestCase &t)
         {
             PS2Memory mem;