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Incompressible encryption (Dziembowski, Crypto'06; Guan, Wichs, Zhandry, Eurocrypt'22) protects from attackers that learn the entire decryption key, but cannot store the full ciphertext. In incompressible encryption, the attacker must try to compress a ciphertext within pre-specified memory bound S before receiving the secret key. In this work, we generalize the notion of incompressibility to functional encryption. In incompressible functional encryption, the adversary can corrupt non-distinguishing keys at any point, but receives the distinguishing keys only after compressing the ciphertext to within S bits. An important efficiency measure for incompressible encryption is the ciphertext-rate (i.e., rate = |m|/|ct|). We give many new results for incompressible functional encryption for circuits, from minimal assumption of (non-incompressible) functional encryption, with 1) ct-rate-1/2 and short secret keys, 2) ct-rate-1 and large secret keys. Along the way, we also give a new incompressible attribute-based encryption for circuits from standard assumptions, with ct-rate-1/2 and short secret keys. Our results achieve optimal efficiency, as incompressible attribute-based/functional encryption with ct-rate-1 as well as short secret keys has strong barriers for provable security from standard assumptions. Moreover, our assumptions are minimal as incompressible attribute-based/functional encryption are strictly stronger than their non-incompressible counterparts.