This paper presents a combination of verification and conformance testing techniques to support the formal validation of reactive systems. The idea is to use symbolic test selection techniques to extract subgraphs (components) from a specification, and to perform the verification on the components rather than on the whole specification. Under reasonable sufficient conditions, this constitutes a sound compositional verification technique, in the sense that a property verified on the components also holds on the whole specification. This may considerably reduce the global verification effort. Moreover, once verified, a component forms the basis of an adequate test case, i.e. when executed on an implementation, it will not issue false positive or negative verdicts with respect to the verified properties. The approach has been implemented using the STG test selection tool and the PVS theorem prover. It is demonstrated here on a smart‐card application: the Common Electronic Purse System.