Any Lipschitz map $f : M \to N$ between two pointed metric spaces may be extended in a unique way to a bounded linear operator $\widehat {f} : \mathcal {F}(M) \to \mathcal {F}(N)$ between their corresponding Lipschitz-free spaces. In this paper, we give a necessary and sufficient condition for $\widehat {f}$ to be compact in terms of metric conditions on $f$. This extends a result by A. Jiménez-Vargas and M. Villegas-Vallecillos in the case of non-separable and unbounded metric spaces. After studying the behaviour of weakly convergent sequences made of finitely supported elements in Lipschitz-free spaces, we also deduce that $\widehat {f}$ is compact if and only if it is weakly compact.

We prove a general principle satisfied by weakly precompact sets of Lipschitz-free spaces. By this principle, certain infinite dimensional phenomena in Lipschitz-free spaces over general metric spaces may be reduced to the same phenomena in free spaces over their compact subsets. As easy consequences we derive several new and some known results. The main new results are: $\mathcal {F}(X)$ is weakly sequentially complete for every superreflexive Banach space $X$, and $\mathcal {F}(M)$ has the Schur property and the approximation property for every scattered complete metric space $M$.

Let $\mathrm {Lip}_0(M)$ be the space of Lipschitz functions on a complete metric space M that vanish at a base point. We prove that every normal functional in ${\mathrm {Lip}_0(M)}^*$ is weak* continuous; that is, in order to verify weak* continuity it suffices to do so for bounded monotone nets of Lipschitz functions. This solves a problem posed by N. Weaver. As an auxiliary result, we show that the series decomposition developed by N. J. Kalton for functionals in the predual of $\mathrm {Lip}_0(M)$ can be partially extended to ${\mathrm {Lip}_0(M)}^*$ .

Main results of the paper are as follows:

(1) For any finite metric space $M$ the Lipschitz-free space on $M$ contains a large well-complemented subspace that is close to $\ell _{1}^{n}$.

(2) Lipschitz-free spaces on large classes of recursively defined sequences of graphs are not uniformly isomorphic to $\ell _{1}^{n}$ of the corresponding dimensions. These classes contain well-known families of diamond graphs and Laakso graphs.

Interesting features of our approach are: (a) We consider averages over groups of cycle-preserving bijections of edge sets of graphs that are not necessarily graph automorphisms. (b) In the case of such recursive families of graphs as Laakso graphs, we use the well-known approach of Grünbaum (1960) and Rudin (1962) for estimating projection constants in the case where invariant projections are not unique.