diff --git a/python/llm/src/ipex_llm/transformers/npu_model.py b/python/llm/src/ipex_llm/transformers/npu_model.py
index 771dff62a5b..00df48a7ff5 100644
--- a/python/llm/src/ipex_llm/transformers/npu_model.py
+++ b/python/llm/src/ipex_llm/transformers/npu_model.py
@@ -27,6 +27,7 @@
 
 from ipex_llm.utils.common.log4Error import invalidInputError
 from ipex_llm.transformers.utils import logger
+from ipex_llm.transformers.npu_models.convert import optimize_llm
 
 
 def patch_flash_attn_import(filename: str) -> List[str]:
@@ -112,7 +113,23 @@ def from_pretrained(cls,
         model = cls.HF_Model.from_pretrained(*args, **kwargs)
 
         logger.info(f"Converting model, it may takes up to several minutes ...")
-        model = npu_lib.compile(model, qtype, False)
+        try:
+            # for intel_npu_acceleration_library >= 1.1.0
+            from intel_npu_acceleration_library.quantization import quantize_model
+            from intel_npu_acceleration_library.compiler import (
+                apply_horizontal_fusion, create_npu_kernels
+            )
+            with torch.no_grad():
+                optimize_llm(model)
+                apply_horizontal_fusion(model)
+                if not qtype.is_floating_point:
+                    model = quantize_model(model, qtype)
+                create_npu_kernels(model)
+            model = model.eval()
+        except ImportError as _e:
+            # for intel_npu_acceleration_library < 1.1.0
+            model = npu_lib.compile(model, qtype, False)
+        logger.info(f"Finish to convert model")
 
         # add save_low_bit to pretrained model dynamically
         model.save_low_bit = types.MethodType(cls.save_low_bit, model)
diff --git a/python/llm/src/ipex_llm/transformers/npu_models/__init__.py b/python/llm/src/ipex_llm/transformers/npu_models/__init__.py
new file mode 100644
index 00000000000..265f7fc29bb
--- /dev/null
+++ b/python/llm/src/ipex_llm/transformers/npu_models/__init__.py
@@ -0,0 +1,15 @@
+#
+# Copyright 2016 The BigDL Authors.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
diff --git a/python/llm/src/ipex_llm/transformers/npu_models/convert.py b/python/llm/src/ipex_llm/transformers/npu_models/convert.py
new file mode 100644
index 00000000000..20482057ffa
--- /dev/null
+++ b/python/llm/src/ipex_llm/transformers/npu_models/convert.py
@@ -0,0 +1,34 @@
+#
+# Copyright 2016 The BigDL Authors.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+
+import torch
+
+
+def convert_forward(m, target_m, new_forward):
+    if m.__class__ == target_m:
+        bound_method = new_forward.__get__(m, m.__class__)
+        setattr(m, "forward", bound_method)
+    for _, sub_m in m.named_children():
+        convert_forward(sub_m, target_m, new_forward)
+
+
+def optimize_llm(model: torch.nn.Module):
+    if model.config.model_type == "llama":
+        from ipex_llm.transformers.npu_models.llama import merge_qkv
+        model.apply(merge_qkv)
+        from ipex_llm.transformers.npu_models.llama import llama_attention_forward
+        from transformers.models.llama.modeling_llama import LlamaAttention
+        convert_forward(model, LlamaAttention, llama_attention_forward)
diff --git a/python/llm/src/ipex_llm/transformers/npu_models/llama.py b/python/llm/src/ipex_llm/transformers/npu_models/llama.py
new file mode 100644
index 00000000000..65d5f324883
--- /dev/null
+++ b/python/llm/src/ipex_llm/transformers/npu_models/llama.py
@@ -0,0 +1,123 @@
+#
+# Copyright 2016 The BigDL Authors.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+#
+# Some parts of this file is adapted from
+# https://github.com/huggingface/transformers/blob/v4.40.0/src/transformers/models/llama/modeling_llama.py
+# which is licensed under Apache License 2.0:
+#
+# Copyright 2021 The HuggingFace Inc. team. All rights reserved.
+#
+# Licensed under the Apache License, Version 2.0 (the "License");
+# you may not use this file except in compliance with the License.
+# You may obtain a copy of the License at
+#
+#     http://www.apache.org/licenses/LICENSE-2.0
+#
+# Unless required by applicable law or agreed to in writing, software
+# distributed under the License is distributed on an "AS IS" BASIS,
+# WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+# See the License for the specific language governing permissions and
+# limitations under the License.
+
+
+from typing import Optional, Tuple
+from transformers.cache_utils import Cache
+
+import torch
+from transformers.models.llama.modeling_llama import LlamaAttention, repeat_kv, apply_rotary_pos_emb
+
+
+def merge_qkv(module: torch.nn.Module):
+    if isinstance(module, LlamaAttention):
+        new_weight = torch.cat([
+            module.q_proj.weight.data,
+            module.k_proj.weight.data,
+            module.v_proj.weight.data,
+        ], dim=0)
+
+        if module.q_proj.bias is not None:
+            qkv_proj = torch.nn.Linear(0, 0, bias=True)
+            new_bias = torch.cat([
+                module.q_proj.bias.data,
+                module.k_proj.bias.data,
+                module.v_proj.bias.data,
+            ], dim=0)
+            qkv_proj.bias = torch.nn.Parameter(new_bias, requires_grad=False)
+        else:
+            qkv_proj = torch.nn.Linear(0, 0, bias=False)
+        qkv_proj.weight = torch.nn.Parameter(new_weight, requires_grad=False)
+        qkv_proj.in_features = new_weight.size(1)
+        qkv_proj.out_features = new_weight.size(0)
+        module.qkv_proj = qkv_proj
+
+        del module.q_proj, module.k_proj, module.v_proj
+
+
+def llama_attention_forward(
+    self,
+    hidden_states: torch.Tensor,
+    attention_mask: Optional[torch.Tensor] = None,
+    position_ids: Optional[torch.LongTensor] = None,
+    past_key_value: Optional[Cache] = None,
+    output_attentions: bool = False,
+    use_cache: bool = False,
+    cache_position: Optional[torch.LongTensor] = None,
+    **kwargs,
+) -> Tuple[torch.Tensor, Optional[torch.Tensor], Optional[Tuple[torch.Tensor]]]:
+    bsz, q_len, _ = hidden_states.size()
+
+    qkv = self.qkv_proj(hidden_states)
+    qkv = qkv.view(bsz, q_len, self.num_heads + 2 * self.num_key_value_heads, self.head_dim)
+    qkv = qkv.transpose(1, 2)
+    query_states, key_states, value_states = qkv.split([self.num_heads,
+                                                        self.num_key_value_heads,
+                                                        self.num_key_value_heads], dim=1)
+
+    past_key_value = getattr(self, "past_key_value", past_key_value)
+    cos, sin = self.rotary_emb(value_states, position_ids)
+    query_states, key_states = apply_rotary_pos_emb(query_states, key_states, cos, sin)
+
+    if past_key_value is not None:
+        # sin and cos are specific to RoPE models; cache_position needed for the static cache
+        cache_kwargs = {"sin": sin, "cos": cos, "cache_position": cache_position}
+        key_states, value_states = past_key_value.update(key_states, value_states,
+                                                         self.layer_idx, cache_kwargs)
+
+    key_states = repeat_kv(key_states, self.num_key_value_groups)
+    value_states = repeat_kv(value_states, self.num_key_value_groups)
+
+    if attention_mask is not None:
+        causal_mask = attention_mask[:, :, :, : key_states.shape[-2]]
+    else:
+        causal_mask = None
+
+    attn_output = torch.nn.functional.scaled_dot_product_attention(
+        query_states,
+        key_states,
+        value_states,
+        attn_mask=causal_mask,
+        is_causal=self.is_causal and attention_mask is None and q_len > 1,
+    )
+
+    attn_output = attn_output.transpose(1, 2).contiguous()
+
+    attn_output = attn_output.reshape(bsz, q_len, self.hidden_size)
+
+    attn_output = self.o_proj(attn_output)
+
+    if not output_attentions:
+        attn_weights = None
+
+    return attn_output, attn_weights, past_key_value