GFD-OPD: Guidance-Folded On-Policy Distillation of Diffusion Models Across Scales

On-policy distillation (OPD) has demonstrated two important capabilities in language models: compressing large teachers into smaller students and merging expert models into a single model. Existing diffusion OPD, however, mostly focus on the latter, with teachers and students sharing the same backbone and scale. We investigate large-to-small diffusion opd from large teachers to a small student and find that the standard recipe fails. To find the underlying cause, we propose Fixed-State KL, an effective and fair way to measure the distribution gap between student and teacher during OPD training for diffusion models. We are the first to clarify why large-to-small OPD is challenging for diffusion models: a smaller student struggles to perfectly match the distribution of a larger teacher, while classifier-free guidance can accumulate and amplify the distributional discrepancies between the student’s conditional and unconditional branches and those of the teacher. To solve this problem, we propose GFD-OPD, a simple yet effective method that reduces the student–teacher gap while avoiding the error amplification of the CFG composition. Across numerous experiments, GFD outperforms previous baselines in both training efficiency and final performance, achieving state-of-the-art results on all benchmarks.