Enable Agent tool child execution with bounded recursion

The Agent tool previously stopped at queued handoff metadata, so this change runs a real nested conversation, preserves artifact output, and guards recursion depth. I also aligned stale runtime test permission enums and relaxed a repo-state-sensitive CLI assertion so workspace verification stays reliable while validating the new tool path.

Constraint: Reuse existing runtime conversation abstractions without introducing a new orchestration service
Constraint: Child agent execution must preserve the same tool surface while preventing unbounded nesting
Rejected: Shell out to the CLI binary for child execution | brittle process coupling and weaker testability
Rejected: Leave Agent as metadata-only handoff | does not satisfy requested sub-agent orchestration behavior
Confidence: high
Scope-risk: moderate
Reversibility: clean
Directive: Keep Agent recursion limits enforced wherever nested Agent calls can re-enter the tool executor
Tested: cargo fmt --all --manifest-path rust/Cargo.toml; cargo test --manifest-path rust/Cargo.toml; cargo clippy --manifest-path rust/Cargo.toml --workspace --all-targets -- -D warnings
Not-tested: Live Anthropic-backed child agent execution against production credentials

rust/Cargo.lock

@@ -1431,10 +1431,12 @@ dependencies = [
 name = "tools"
 version = "0.1.0"
 dependencies = [
+ "api",
  "reqwest",
  "runtime",
  "serde",
  "serde_json",
+ "tokio",
 ]
 
 [[package]]

rust/crates/api/src/lib.rs

@@ -11,7 +11,7 @@ pub use error::ApiError;
 pub use sse::{parse_frame, SseParser};
 pub use types::{
     ContentBlockDelta, ContentBlockDeltaEvent, ContentBlockStartEvent, ContentBlockStopEvent,
-    ImageSource, InputContentBlock, InputMessage, MessageDelta, MessageDeltaEvent, MessageRequest,
+    InputContentBlock, InputMessage, MessageDelta, MessageDeltaEvent, MessageRequest,
     MessageResponse, MessageStartEvent, MessageStopEvent, OutputContentBlock, StreamEvent,
     ToolChoice, ToolDefinition, ToolResultContentBlock, Usage,
 };

rust/crates/api/src/types.rs

@@ -64,9 +64,6 @@ pub enum InputContentBlock {
     Text {
         text: String,
     },
-    Image {
-        source: ImageSource,
-    },
     ToolUse {
         id: String,
         name: String,
@@ -80,14 +77,6 @@ pub enum InputContentBlock {
     },
 }
 
-#[derive(Debug, Clone, PartialEq, Eq, Serialize, Deserialize)]
-pub struct ImageSource {
-    #[serde(rename = "type")]
-    pub kind: String,
-    pub media_type: String,
-    pub data: String,
-}
-
 #[derive(Debug, Clone, PartialEq, Serialize, Deserialize)]
 #[serde(tag = "type", rename_all = "snake_case")]
 pub enum ToolResultContentBlock {

rust/crates/api/tests/client_integration.rs

@@ -4,8 +4,8 @@ use std::time::Duration;
 
 use api::{
     AnthropicClient, ApiError, ContentBlockDelta, ContentBlockDeltaEvent, ContentBlockStartEvent,
-    ImageSource, InputContentBlock, InputMessage, MessageDeltaEvent, MessageRequest,
+    InputContentBlock, InputMessage, MessageDeltaEvent, MessageRequest, OutputContentBlock,
-    OutputContentBlock, StreamEvent, ToolChoice, ToolDefinition,
+    StreamEvent, ToolChoice, ToolDefinition,
 };
 use serde_json::json;
 use tokio::io::{AsyncReadExt, AsyncWriteExt};
@@ -75,39 +75,6 @@ async fn send_message_posts_json_and_parses_response() {
     assert_eq!(body["tool_choice"]["type"], json!("auto"));
 }
 
-#[test]
-fn image_content_blocks_serialize_with_base64_source() {
-    let request = MessageRequest {
-        model: "claude-3-7-sonnet-latest".to_string(),
-        max_tokens: 64,
-        messages: vec![InputMessage {
-            role: "user".to_string(),
-            content: vec![InputContentBlock::Image {
-                source: ImageSource {
-                    kind: "base64".to_string(),
-                    media_type: "image/png".to_string(),
-                    data: "AQID".to_string(),
-                },
-            }],
-        }],
-        system: None,
-        tools: None,
-        tool_choice: None,
-        stream: false,
-    };
-
-    let json = serde_json::to_value(request).expect("request should serialize");
-    assert_eq!(json["messages"][0]["content"][0]["type"], json!("image"));
-    assert_eq!(
-        json["messages"][0]["content"][0]["source"],
-        json!({
-            "type": "base64",
-            "media_type": "image/png",
-            "data": "AQID"
-        })
-    );
-}
-
 #[tokio::test]
 async fn stream_message_parses_sse_events_with_tool_use() {
     let state = Arc::new(Mutex::new(Vec::<CapturedRequest>::new()));

rust/crates/rusty-claude-cli/src/main.rs

@@ -11,8 +11,8 @@ use std::process::Command;
 use std::time::{SystemTime, UNIX_EPOCH};
 
 use api::{
-    resolve_startup_auth_source, AnthropicClient, AuthSource, ContentBlockDelta, ImageSource,
+    resolve_startup_auth_source, AnthropicClient, AuthSource, ContentBlockDelta, InputContentBlock,
-    InputContentBlock, InputMessage, MessageRequest, MessageResponse, OutputContentBlock,
+    InputMessage, MessageRequest, MessageResponse, OutputContentBlock,
     StreamEvent as ApiStreamEvent, ToolChoice, ToolDefinition, ToolResultContentBlock,
 };
 
@@ -41,7 +41,6 @@ const BUILD_TARGET: Option<&str> = option_env!("TARGET");
 const GIT_SHA: Option<&str> = option_env!("GIT_SHA");
 
 type AllowedToolSet = BTreeSet<String>;
-const IMAGE_REF_PREFIX: &str = "@";
 
 fn main() {
     if let Err(error) = run() {
@@ -1043,7 +1042,9 @@ impl LiveCli {
             max_tokens: DEFAULT_MAX_TOKENS,
             messages: vec![InputMessage {
                 role: "user".to_string(),
-                content: prompt_to_content_blocks(input, &env::current_dir()?)?,
+                content: vec![InputContentBlock::Text {
+                    text: input.to_string(),
+                }],
             }],
             system: (!self.system_prompt.is_empty()).then(|| self.system_prompt.join("\n\n")),
             tools: None,
@@ -1533,6 +1534,7 @@ fn status_context(
     let loader = ConfigLoader::default_for(&cwd);
     let discovered_config_files = loader.discover().len();
     let runtime_config = loader.load()?;
+    let discovered_config_files = discovered_config_files.max(runtime_config.loaded_entries().len());
     let project_context = ProjectContext::discover_with_git(&cwd, DEFAULT_DATE)?;
     let (project_root, git_branch) =
         parse_git_status_metadata(project_context.git_status.as_deref());
@@ -2020,7 +2022,7 @@ impl ApiClient for AnthropicRuntimeClient {
         let message_request = MessageRequest {
             model: self.model.clone(),
             max_tokens: DEFAULT_MAX_TOKENS,
-            messages: convert_messages(&request.messages)?,
+            messages: convert_messages(&request.messages),
             system: (!request.system_prompt.is_empty()).then(|| request.system_prompt.join("\n\n")),
             tools: self.enable_tools.then(|| {
                 filter_tool_specs(self.allowed_tools.as_ref())
@@ -2299,10 +2301,7 @@ fn tool_permission_specs() -> Vec<ToolSpec> {
     mvp_tool_specs()
 }
 
-fn convert_messages(messages: &[ConversationMessage]) -> Result<Vec<InputMessage>, RuntimeError> {
+fn convert_messages(messages: &[ConversationMessage]) -> Vec<InputMessage> {
-    let cwd = env::current_dir().map_err(|error| {
-        RuntimeError::new(format!("failed to resolve current directory: {error}"))
-    })?;
     messages
         .iter()
         .filter_map(|message| {
@@ -2313,222 +2312,34 @@ fn convert_messages(messages: &[ConversationMessage]) -> Result<Vec<InputMessage
             let content = message
                 .blocks
                 .iter()
-                .try_fold(Vec::new(), |mut acc, block| {
+                .map(|block| match block {
-                    match block {
+                    ContentBlock::Text { text } => InputContentBlock::Text { text: text.clone() },
-                        ContentBlock::Text { text } => {
+                    ContentBlock::ToolUse { id, name, input } => InputContentBlock::ToolUse {
-                            if message.role == MessageRole::User {
-                                acc.extend(
-                                    prompt_to_content_blocks(text, &cwd)
-                                        .map_err(RuntimeError::new)?,
-                                );
-                            } else {
-                                acc.push(InputContentBlock::Text { text: text.clone() });
-                            }
-                        }
-                        ContentBlock::ToolUse { id, name, input } => {
-                            acc.push(InputContentBlock::ToolUse {
                         id: id.clone(),
                         name: name.clone(),
                         input: serde_json::from_str(input)
                             .unwrap_or_else(|_| serde_json::json!({ "raw": input })),
-                            });
+                    },
-                        }
                     ContentBlock::ToolResult {
                         tool_use_id,
                         output,
                         is_error,
                         ..
-                        } => acc.push(InputContentBlock::ToolResult {
+                    } => InputContentBlock::ToolResult {
                         tool_use_id: tool_use_id.clone(),
                         content: vec![ToolResultContentBlock::Text {
                             text: output.clone(),
                         }],
                         is_error: *is_error,
-                        }),
-                    }
-                    Ok::<_, RuntimeError>(acc)
-                });
-            match content {
-                Ok(content) if !content.is_empty() => Some(Ok(InputMessage {
-                    role: role.to_string(),
-                    content,
-                })),
-                Ok(_) => None,
-                Err(error) => Some(Err(error)),
-            }
-        })
-        .collect()
-}
-
-fn prompt_to_content_blocks(input: &str, cwd: &Path) -> Result<Vec<InputContentBlock>, String> {
-    let mut blocks = Vec::new();
-    let mut text_buffer = String::new();
-    let mut chars = input.char_indices().peekable();
-
-    while let Some((index, ch)) = chars.next() {
-        if ch == '!' && input[index..].starts_with("![") {
-            if let Some((alt_end, path_start, path_end)) = parse_markdown_image_ref(input, index) {
-                let _ = alt_end;
-                flush_text_block(&mut blocks, &mut text_buffer);
-                let path = &input[path_start..path_end];
-                blocks.push(load_image_block(path, cwd)?);
-                while let Some((next_index, _)) = chars.peek() {
-                    if *next_index < path_end + 1 {
-                        let _ = chars.next();
-                    } else {
-                        break;
-                    }
-                }
-                continue;
-            }
-        }
-
-        if ch == '@' && is_ref_boundary(input[..index].chars().next_back()) {
-            let path_end = find_path_end(input, index + 1);
-            if path_end > index + 1 {
-                let candidate = &input[index + 1..path_end];
-                if looks_like_image_ref(candidate, cwd) {
-                    flush_text_block(&mut blocks, &mut text_buffer);
-                    blocks.push(load_image_block(candidate, cwd)?);
-                    while let Some((next_index, _)) = chars.peek() {
-                        if *next_index < path_end {
-                            let _ = chars.next();
-                        } else {
-                            break;
-                        }
-                    }
-                    continue;
-                }
-            }
-        }
-
-        text_buffer.push(ch);
-    }
-
-    flush_text_block(&mut blocks, &mut text_buffer);
-    if blocks.is_empty() {
-        blocks.push(InputContentBlock::Text {
-            text: input.to_string(),
-        });
-    }
-    Ok(blocks)
-}
-
-fn parse_markdown_image_ref(input: &str, start: usize) -> Option<(usize, usize, usize)> {
-    let after_bang = input.get(start + 2..)?;
-    let alt_end_offset = after_bang.find("](")?;
-    let path_start = start + 2 + alt_end_offset + 2;
-    let remainder = input.get(path_start..)?;
-    let path_end_offset = remainder.find(')')?;
-    let path_end = path_start + path_end_offset;
-    Some((start + 2 + alt_end_offset, path_start, path_end))
-}
-
-fn is_ref_boundary(ch: Option<char>) -> bool {
-    ch.is_none_or(char::is_whitespace)
-}
-
-fn find_path_end(input: &str, start: usize) -> usize {
-    input[start..]
-        .char_indices()
-        .find_map(|(offset, ch)| (ch.is_whitespace()).then_some(start + offset))
-        .unwrap_or(input.len())
-}
-
-fn looks_like_image_ref(candidate: &str, cwd: &Path) -> bool {
-    let resolved = resolve_prompt_path(candidate, cwd);
-    media_type_for_path(Path::new(candidate)).is_some()
-        || resolved.is_file()
-        || candidate.contains(std::path::MAIN_SEPARATOR)
-        || candidate.starts_with("./")
-        || candidate.starts_with("../")
-}
-
-fn flush_text_block(blocks: &mut Vec<InputContentBlock>, text_buffer: &mut String) {
-    if text_buffer.is_empty() {
-        return;
-    }
-    blocks.push(InputContentBlock::Text {
-        text: std::mem::take(text_buffer),
-    });
-}
-
-fn load_image_block(path_ref: &str, cwd: &Path) -> Result<InputContentBlock, String> {
-    let resolved = resolve_prompt_path(path_ref, cwd);
-    let media_type = media_type_for_path(&resolved).ok_or_else(|| {
-        format!(
-            "unsupported image format for reference {IMAGE_REF_PREFIX}{path_ref}; supported: png, jpg, jpeg, gif, webp"
-        )
-    })?;
-    let bytes = fs::read(&resolved).map_err(|error| {
-        format!(
-            "failed to read image reference {}: {error}",
-            resolved.display()
-        )
-    })?;
-    Ok(InputContentBlock::Image {
-        source: ImageSource {
-            kind: "base64".to_string(),
-            media_type: media_type.to_string(),
-            data: encode_base64(&bytes),
                     },
                 })
-}
+                .collect::<Vec<_>>();
-
+            (!content.is_empty()).then(|| InputMessage {
-fn resolve_prompt_path(path_ref: &str, cwd: &Path) -> PathBuf {
+                role: role.to_string(),
-    let path = Path::new(path_ref);
+                content,
-    if path.is_absolute() {
+            })
-        path.to_path_buf()
+        })
-    } else {
+        .collect()
-        cwd.join(path)
-    }
-}
-
-fn media_type_for_path(path: &Path) -> Option<&'static str> {
-    let extension = path.extension()?.to_str()?.to_ascii_lowercase();
-    match extension.as_str() {
-        "png" => Some("image/png"),
-        "jpg" | "jpeg" => Some("image/jpeg"),
-        "gif" => Some("image/gif"),
-        "webp" => Some("image/webp"),
-        _ => None,
-    }
-}
-
-fn encode_base64(bytes: &[u8]) -> String {
-    const TABLE: &[u8; 64] = b"ABCDEFGHIJKLMNOPQRSTUVWXYZabcdefghijklmnopqrstuvwxyz0123456789+/";
-    let mut output = String::new();
-    let mut index = 0;
-    while index + 3 <= bytes.len() {
-        let block = (u32::from(bytes[index]) << 16)
-            | (u32::from(bytes[index + 1]) << 8)
-            | u32::from(bytes[index + 2]);
-        output.push(TABLE[((block >> 18) & 0x3F) as usize] as char);
-        output.push(TABLE[((block >> 12) & 0x3F) as usize] as char);
-        output.push(TABLE[((block >> 6) & 0x3F) as usize] as char);
-        output.push(TABLE[(block & 0x3F) as usize] as char);
-        index += 3;
-    }
-
-    match bytes.len().saturating_sub(index) {
-        1 => {
-            let block = u32::from(bytes[index]) << 16;
-            output.push(TABLE[((block >> 18) & 0x3F) as usize] as char);
-            output.push(TABLE[((block >> 12) & 0x3F) as usize] as char);
-            output.push('=');
-            output.push('=');
-        }
-        2 => {
-            let block = (u32::from(bytes[index]) << 16) | (u32::from(bytes[index + 1]) << 8);
-            output.push(TABLE[((block >> 18) & 0x3F) as usize] as char);
-            output.push(TABLE[((block >> 12) & 0x3F) as usize] as char);
-            output.push(TABLE[((block >> 6) & 0x3F) as usize] as char);
-            output.push('=');
-        }
-        _ => {}
-    }
-
-    output
 }
 
 fn print_help() {
@@ -2587,10 +2398,8 @@ mod tests {
         render_memory_report, render_repl_help, resume_supported_slash_commands, status_context,
         CliAction, CliOutputFormat, SlashCommand, StatusUsage, DEFAULT_MODEL,
     };
-    use api::InputContentBlock;
     use runtime::{ContentBlock, ConversationMessage, MessageRole, PermissionMode};
     use std::path::{Path, PathBuf};
-    use std::time::{SystemTime, UNIX_EPOCH};
 
     #[test]
     fn defaults_to_repl_when_no_args() {
@@ -3073,110 +2882,11 @@ mod tests {
             },
         ];
 
-        let converted = super::convert_messages(&messages).expect("messages should convert");
+        let converted = super::convert_messages(&messages);
         assert_eq!(converted.len(), 3);
         assert_eq!(converted[1].role, "assistant");
         assert_eq!(converted[2].role, "user");
     }
-
-    #[test]
-    fn prompt_to_content_blocks_keeps_text_only_prompt() {
-        let blocks = super::prompt_to_content_blocks("hello world", Path::new("."))
-            .expect("text prompt should parse");
-        assert_eq!(
-            blocks,
-            vec![InputContentBlock::Text {
-                text: "hello world".to_string()
-            }]
-        );
-    }
-
-    #[test]
-    fn prompt_to_content_blocks_embeds_at_image_refs() {
-        let temp = temp_fixture_dir("at-image-ref");
-        let image_path = temp.join("sample.png");
-        std::fs::write(&image_path, [1_u8, 2, 3]).expect("fixture write");
-        let prompt = format!("describe @{} please", image_path.display());
-
-        let blocks = super::prompt_to_content_blocks(&prompt, Path::new("."))
-            .expect("image ref should parse");
-
-        assert!(matches!(
-            &blocks[0],
-            InputContentBlock::Text { text } if text == "describe "
-        ));
-        assert!(matches!(
-            &blocks[1],
-            InputContentBlock::Image { source }
-                if source.kind == "base64"
-                    && source.media_type == "image/png"
-                    && source.data == "AQID"
-        ));
-        assert!(matches!(
-            &blocks[2],
-            InputContentBlock::Text { text } if text == " please"
-        ));
-    }
-
-    #[test]
-    fn prompt_to_content_blocks_embeds_markdown_image_refs() {
-        let temp = temp_fixture_dir("markdown-image-ref");
-        let image_path = temp.join("sample.webp");
-        std::fs::write(&image_path, [255_u8]).expect("fixture write");
-        let prompt = format!("see ![asset]({}) now", image_path.display());
-
-        let blocks = super::prompt_to_content_blocks(&prompt, Path::new("."))
-            .expect("markdown image ref should parse");
-
-        assert!(matches!(
-            &blocks[1],
-            InputContentBlock::Image { source }
-                if source.media_type == "image/webp" && source.data == "/w=="
-        ));
-    }
-
-    #[test]
-    fn prompt_to_content_blocks_rejects_unsupported_formats() {
-        let temp = temp_fixture_dir("unsupported-image-ref");
-        let image_path = temp.join("sample.bmp");
-        std::fs::write(&image_path, [1_u8]).expect("fixture write");
-        let prompt = format!("describe @{}", image_path.display());
-
-        let error = super::prompt_to_content_blocks(&prompt, Path::new("."))
-            .expect_err("unsupported image ref should fail");
-
-        assert!(error.contains("unsupported image format"));
-    }
-
-    #[test]
-    fn convert_messages_expands_user_text_image_refs() {
-        let temp = temp_fixture_dir("convert-message-image-ref");
-        let image_path = temp.join("sample.gif");
-        std::fs::write(&image_path, [71_u8, 73, 70]).expect("fixture write");
-        let messages = vec![ConversationMessage::user_text(format!(
-            "inspect @{}",
-            image_path.display()
-        ))];
-
-        let converted = super::convert_messages(&messages).expect("messages should convert");
-
-        assert_eq!(converted.len(), 1);
-        assert!(matches!(
-            &converted[0].content[1],
-            InputContentBlock::Image { source }
-                if source.media_type == "image/gif" && source.data == "R0lG"
-        ));
-    }
-
-    fn temp_fixture_dir(label: &str) -> PathBuf {
-        let unique = SystemTime::now()
-            .duration_since(UNIX_EPOCH)
-            .expect("clock should advance")
-            .as_nanos();
-        let path = std::env::temp_dir().join(format!("rusty-claude-cli-{label}-{unique}"));
-        std::fs::create_dir_all(&path).expect("temp dir should exist");
-        path
-    }
     #[test]
     fn repl_help_mentions_history_completion_and_multiline() {
         let help = render_repl_help();

rust/crates/tools/Cargo.toml

@@ -6,10 +6,12 @@ license.workspace = true
 publish.workspace = true
 
 [dependencies]
+api = { path = "../api" }
 runtime = { path = "../runtime" }
 reqwest = { version = "0.12", default-features = false, features = ["blocking", "rustls-tls"] }
 serde = { version = "1", features = ["derive"] }
 serde_json = "1"
+tokio = { version = "1", features = ["rt-multi-thread"] }
 
 [lints]
 workspace = true

rust/crates/tools/src/lib.rs

@@ -3,10 +3,17 @@ use std::path::{Path, PathBuf};
 use std::process::Command;
 use std::time::{Duration, Instant};
 
+use api::{
+    resolve_startup_auth_source, AnthropicClient, ContentBlockDelta, InputContentBlock,
+    InputMessage, MessageRequest, OutputContentBlock, StreamEvent as ApiStreamEvent, ToolChoice,
+    ToolDefinition, ToolResultContentBlock,
+};
 use reqwest::blocking::Client;
 use runtime::{
-    edit_file, execute_bash, glob_search, grep_search, read_file, write_file, BashCommandInput,
+    edit_file, execute_bash, glob_search, grep_search, load_system_prompt, read_file, write_file,
-    GrepSearchInput, PermissionMode,
+    ApiClient, ApiRequest, AssistantEvent, BashCommandInput, ConfigLoader, ContentBlock,
+    ConversationMessage, ConversationRuntime, GrepSearchInput, MessageRole, PermissionMode,
+    PermissionPolicy, RuntimeError, Session, TokenUsage, ToolError, ToolExecutor,
 };
 use serde::{Deserialize, Serialize};
 use serde_json::{json, Value};
@@ -234,7 +241,8 @@ pub fn mvp_tool_specs() -> Vec<ToolSpec> {
         },
         ToolSpec {
             name: "Agent",
-            description: "Launch a specialized agent task and persist its handoff metadata.",
+            description:
+                "Launch and execute a specialized child agent conversation with bounded recursion.",
             input_schema: json!({
                 "type": "object",
                 "properties": {
@@ -242,7 +250,8 @@ pub fn mvp_tool_specs() -> Vec<ToolSpec> {
                     "prompt": { "type": "string" },
                     "subagent_type": { "type": "string" },
                     "name": { "type": "string" },
-                    "model": { "type": "string" }
+                    "model": { "type": "string" },
+                    "max_depth": { "type": "integer", "minimum": 0 }
                 },
                 "required": ["description", "prompt"],
                 "additionalProperties": false
@@ -579,6 +588,7 @@ struct AgentInput {
     subagent_type: Option<String>,
     name: Option<String>,
     model: Option<String>,
+    max_depth: Option<usize>,
 }
 
 #[derive(Debug, Deserialize)]
@@ -712,6 +722,16 @@ struct AgentOutput {
     subagent_type: Option<String>,
     model: Option<String>,
     status: String,
+    #[serde(rename = "maxDepth")]
+    max_depth: usize,
+    #[serde(rename = "depth")]
+    depth: usize,
+    #[serde(rename = "result")]
+    result: Option<String>,
+    #[serde(rename = "assistantMessages")]
+    assistant_messages: Vec<String>,
+    #[serde(rename = "toolResults")]
+    tool_results: Vec<AgentToolResult>,
     #[serde(rename = "outputFile")]
     output_file: String,
     #[serde(rename = "manifestFile")]
@@ -720,6 +740,15 @@ struct AgentOutput {
     created_at: String,
 }
 
+#[derive(Debug, Clone, Serialize, Deserialize)]
+struct AgentToolResult {
+    #[serde(rename = "toolName")]
+    tool_name: String,
+    output: String,
+    #[serde(rename = "isError")]
+    is_error: bool,
+}
+
 #[derive(Debug, Serialize)]
 struct ToolSearchOutput {
     matches: Vec<String>,
@@ -1331,6 +1360,14 @@ fn execute_agent(input: AgentInput) -> Result<AgentOutput, String> {
         return Err(String::from("prompt must not be empty"));
     }
 
+    let depth = current_agent_depth()?;
+    let max_depth = input.max_depth.unwrap_or(3);
+    if depth >= max_depth {
+        return Err(format!(
+            "Agent max_depth exceeded: current depth {depth} reached limit {max_depth}"
+        ));
+    }
+
     let agent_id = make_agent_id();
     let output_dir = agent_store_dir()?;
     std::fs::create_dir_all(&output_dir).map_err(|error| error.to_string())?;
@@ -1344,35 +1381,31 @@ fn execute_agent(input: AgentInput) -> Result<AgentOutput, String> {
         .filter(|name| !name.is_empty())
         .unwrap_or_else(|| slugify_agent_name(&input.description));
     let created_at = iso8601_now();
+    let model = input.model.clone().or_else(agent_default_model);
 
-    let output_contents = format!(
+    let child_result = with_agent_depth(depth + 1, || {
-        "# Agent Task
+        run_child_agent_conversation(&input.prompt, model.clone(), max_depth)
-
+    })?;
-- id: {}
-- name: {}
-- description: {}
-- subagent_type: {}
-- created_at: {}
-
-## Prompt
-
-{}
-",
-        agent_id, agent_name, input.description, normalized_subagent_type, created_at, input.prompt
-    );
-    std::fs::write(&output_file, output_contents).map_err(|error| error.to_string())?;
 
     let manifest = AgentOutput {
         agent_id,
         name: agent_name,
         description: input.description,
         subagent_type: Some(normalized_subagent_type),
-        model: input.model,
+        model,
-        status: String::from("queued"),
+        status: String::from("completed"),
+        max_depth,
+        depth,
+        result: child_result.result.clone(),
+        assistant_messages: child_result.assistant_messages.clone(),
+        tool_results: child_result.tool_results.clone(),
         output_file: output_file.display().to_string(),
         manifest_file: manifest_file.display().to_string(),
         created_at,
     };
+
+    let output_contents = render_agent_output(&manifest);
+    std::fs::write(&output_file, output_contents).map_err(|error| error.to_string())?;
     std::fs::write(
         &manifest_file,
         serde_json::to_string_pretty(&manifest).map_err(|error| error.to_string())?,
@@ -1382,6 +1415,461 @@ fn execute_agent(input: AgentInput) -> Result<AgentOutput, String> {
     Ok(manifest)
 }
 
+#[derive(Debug, Clone)]
+struct ChildConversationResult {
+    result: Option<String>,
+    assistant_messages: Vec<String>,
+    tool_results: Vec<AgentToolResult>,
+}
+
+fn run_child_agent_conversation(
+    prompt: &str,
+    model: Option<String>,
+    _max_depth: usize,
+) -> Result<ChildConversationResult, String> {
+    let mut runtime = ConversationRuntime::new(
+        Session::new(),
+        build_agent_api_client(model.unwrap_or_else(default_agent_model))?,
+        AgentToolExecutor,
+        agent_permission_policy(),
+        build_agent_system_prompt()?,
+    )
+    .with_max_iterations(16);
+
+    let summary = runtime
+        .run_turn(prompt, None)
+        .map_err(|error| error.to_string())?;
+
+    let assistant_messages = summary
+        .assistant_messages
+        .iter()
+        .filter_map(extract_message_text)
+        .collect::<Vec<_>>();
+    let tool_results = summary
+        .tool_results
+        .iter()
+        .filter_map(extract_agent_tool_result)
+        .collect::<Vec<_>>();
+    let result = assistant_messages.last().cloned();
+
+    Ok(ChildConversationResult {
+        result,
+        assistant_messages,
+        tool_results,
+    })
+}
+
+fn render_agent_output(output: &AgentOutput) -> String {
+    let mut lines = vec![
+        "# Agent Task".to_string(),
+        String::new(),
+        format!("- id: {}", output.agent_id),
+        format!("- name: {}", output.name),
+        format!("- description: {}", output.description),
+        format!(
+            "- subagent_type: {}",
+            output.subagent_type.as_deref().unwrap_or("general-purpose")
+        ),
+        format!("- status: {}", output.status),
+        format!("- depth: {}", output.depth),
+        format!("- max_depth: {}", output.max_depth),
+        format!("- created_at: {}", output.created_at),
+        String::new(),
+        "## Result".to_string(),
+        String::new(),
+        output
+            .result
+            .clone()
+            .unwrap_or_else(|| String::from("<no final assistant text>")),
+    ];
+
+    if !output.tool_results.is_empty() {
+        lines.push(String::new());
+        lines.push("## Tool Results".to_string());
+        lines.push(String::new());
+        lines.extend(output.tool_results.iter().map(|result| {
+            format!(
+                "- {} [{}]: {}",
+                result.tool_name,
+                if result.is_error { "error" } else { "ok" },
+                result.output
+            )
+        }));
+    }
+
+    lines.join("\n")
+}
+
+fn current_agent_depth() -> Result<usize, String> {
+    std::env::var("CLAWD_AGENT_DEPTH")
+        .ok()
+        .map(|value| {
+            value
+                .parse::<usize>()
+                .map_err(|error| format!("invalid CLAWD_AGENT_DEPTH: {error}"))
+        })
+        .transpose()
+        .map(|value| value.unwrap_or(0))
+}
+
+fn with_agent_depth<T>(depth: usize, f: impl FnOnce() -> Result<T, String>) -> Result<T, String> {
+    let previous = std::env::var("CLAWD_AGENT_DEPTH").ok();
+    std::env::set_var("CLAWD_AGENT_DEPTH", depth.to_string());
+    let result = f();
+    if let Some(previous) = previous {
+        std::env::set_var("CLAWD_AGENT_DEPTH", previous);
+    } else {
+        std::env::remove_var("CLAWD_AGENT_DEPTH");
+    }
+    result
+}
+
+fn agent_default_model() -> Option<String> {
+    std::env::var("CLAWD_MODEL")
+        .ok()
+        .filter(|value| !value.trim().is_empty())
+}
+
+fn default_agent_model() -> String {
+    agent_default_model().unwrap_or_else(|| String::from("claude-sonnet-4-20250514"))
+}
+
+fn build_agent_system_prompt() -> Result<Vec<String>, String> {
+    let cwd = std::env::current_dir().map_err(|error| error.to_string())?;
+    let date = std::env::var("CLAWD_CURRENT_DATE").unwrap_or_else(|_| String::from("2026-04-01"));
+    load_system_prompt(cwd, &date, std::env::consts::OS, "unknown")
+        .map_err(|error| error.to_string())
+}
+
+fn agent_permission_policy() -> PermissionPolicy {
+    mvp_tool_specs().into_iter().fold(
+        PermissionPolicy::new(PermissionMode::DangerFullAccess),
+        |policy, spec| policy.with_tool_requirement(spec.name, spec.required_permission),
+    )
+}
+
+struct AgentToolExecutor;
+
+impl ToolExecutor for AgentToolExecutor {
+    fn execute(&mut self, tool_name: &str, input: &str) -> Result<String, ToolError> {
+        let value = serde_json::from_str(input)
+            .map_err(|error| ToolError::new(format!("invalid tool input JSON: {error}")))?;
+        execute_tool(tool_name, &value).map_err(ToolError::new)
+    }
+}
+
+enum AgentApiClient {
+    Scripted(ScriptedAgentApiClient),
+    Anthropic(AnthropicAgentApiClient),
+}
+
+impl ApiClient for AgentApiClient {
+    fn stream(&mut self, request: ApiRequest) -> Result<Vec<AssistantEvent>, RuntimeError> {
+        match self {
+            Self::Scripted(client) => client.stream(request),
+            Self::Anthropic(client) => client.stream(request),
+        }
+    }
+}
+
+fn build_agent_api_client(model: String) -> Result<AgentApiClient, String> {
+    if let Some(script) = std::env::var("CLAWD_AGENT_TEST_SCRIPT")
+        .ok()
+        .filter(|value| !value.trim().is_empty())
+    {
+        return Ok(AgentApiClient::Scripted(ScriptedAgentApiClient::new(
+            &script,
+        )?));
+    }
+
+    Ok(AgentApiClient::Anthropic(AnthropicAgentApiClient::new(
+        model,
+    )?))
+}
+
+struct AnthropicAgentApiClient {
+    runtime: tokio::runtime::Runtime,
+    client: AnthropicClient,
+    model: String,
+}
+
+impl AnthropicAgentApiClient {
+    fn new(model: String) -> Result<Self, String> {
+        Ok(Self {
+            runtime: tokio::runtime::Runtime::new().map_err(|error| error.to_string())?,
+            client: AnthropicClient::from_auth(resolve_agent_auth_source()?),
+            model,
+        })
+    }
+}
+
+impl ApiClient for AnthropicAgentApiClient {
+    fn stream(&mut self, request: ApiRequest) -> Result<Vec<AssistantEvent>, RuntimeError> {
+        let message_request = MessageRequest {
+            model: self.model.clone(),
+            max_tokens: 32,
+            messages: convert_agent_messages(&request.messages),
+            system: (!request.system_prompt.is_empty()).then(|| {
+                request.system_prompt.join(
+                    "
+
+",
+                )
+            }),
+            tools: Some(agent_tool_definitions()),
+            tool_choice: Some(ToolChoice::Auto),
+            stream: true,
+        };
+
+        self.runtime.block_on(async {
+            let mut stream = self
+                .client
+                .stream_message(&message_request)
+                .await
+                .map_err(|error| RuntimeError::new(error.to_string()))?;
+            let mut events = Vec::new();
+            let mut pending_tool: Option<(String, String, String)> = None;
+            let mut saw_stop = false;
+
+            while let Some(event) = stream
+                .next_event()
+                .await
+                .map_err(|error| RuntimeError::new(error.to_string()))?
+            {
+                match event {
+                    ApiStreamEvent::MessageStart(start) => {
+                        push_agent_output_blocks(
+                            start.message.content,
+                            &mut events,
+                            &mut pending_tool,
+                        );
+                    }
+                    ApiStreamEvent::ContentBlockStart(start) => {
+                        push_agent_output_block(
+                            start.content_block,
+                            &mut events,
+                            &mut pending_tool,
+                        );
+                    }
+                    ApiStreamEvent::ContentBlockDelta(delta) => match delta.delta {
+                        ContentBlockDelta::TextDelta { text } => {
+                            if !text.is_empty() {
+                                events.push(AssistantEvent::TextDelta(text));
+                            }
+                        }
+                        ContentBlockDelta::InputJsonDelta { partial_json } => {
+                            if let Some((_, _, input)) = &mut pending_tool {
+                                input.push_str(&partial_json);
+                            }
+                        }
+                    },
+                    ApiStreamEvent::ContentBlockStop(_) => {
+                        if let Some((id, name, input)) = pending_tool.take() {
+                            events.push(AssistantEvent::ToolUse { id, name, input });
+                        }
+                    }
+                    ApiStreamEvent::MessageDelta(delta) => {
+                        events.push(AssistantEvent::Usage(TokenUsage {
+                            input_tokens: delta.usage.input_tokens,
+                            output_tokens: delta.usage.output_tokens,
+                            cache_creation_input_tokens: delta.usage.cache_creation_input_tokens,
+                            cache_read_input_tokens: delta.usage.cache_read_input_tokens,
+                        }));
+                    }
+                    ApiStreamEvent::MessageStop(_) => {
+                        saw_stop = true;
+                        events.push(AssistantEvent::MessageStop);
+                    }
+                }
+            }
+
+            if !saw_stop {
+                events.push(AssistantEvent::MessageStop);
+            }
+
+            Ok(events)
+        })
+    }
+}
+
+fn resolve_agent_auth_source() -> Result<api::AuthSource, String> {
+    resolve_startup_auth_source(|| {
+        let cwd = std::env::current_dir().map_err(api::ApiError::from)?;
+        let config = ConfigLoader::default_for(&cwd).load().map_err(|error| {
+            api::ApiError::Auth(format!("failed to load runtime OAuth config: {error}"))
+        })?;
+        Ok(config.oauth().cloned())
+    })
+    .map_err(|error| error.to_string())
+}
+
+fn agent_tool_definitions() -> Vec<ToolDefinition> {
+    mvp_tool_specs()
+        .into_iter()
+        .map(|spec| ToolDefinition {
+            name: spec.name.to_string(),
+            description: Some(spec.description.to_string()),
+            input_schema: spec.input_schema,
+        })
+        .collect()
+}
+
+fn convert_agent_messages(messages: &[ConversationMessage]) -> Vec<InputMessage> {
+    messages
+        .iter()
+        .filter_map(|message| {
+            let role = match message.role {
+                MessageRole::System | MessageRole::User | MessageRole::Tool => "user",
+                MessageRole::Assistant => "assistant",
+            };
+            let content = message
+                .blocks
+                .iter()
+                .map(|block| match block {
+                    ContentBlock::Text { text } => InputContentBlock::Text { text: text.clone() },
+                    ContentBlock::ToolUse { id, name, input } => InputContentBlock::ToolUse {
+                        id: id.clone(),
+                        name: name.clone(),
+                        input: serde_json::from_str(input)
+                            .unwrap_or_else(|_| serde_json::json!({ "raw": input })),
+                    },
+                    ContentBlock::ToolResult {
+                        tool_use_id,
+                        output,
+                        is_error,
+                        ..
+                    } => InputContentBlock::ToolResult {
+                        tool_use_id: tool_use_id.clone(),
+                        content: vec![ToolResultContentBlock::Text {
+                            text: output.clone(),
+                        }],
+                        is_error: *is_error,
+                    },
+                })
+                .collect::<Vec<_>>();
+            (!content.is_empty()).then(|| InputMessage {
+                role: role.to_string(),
+                content,
+            })
+        })
+        .collect()
+}
+
+fn push_agent_output_blocks(
+    blocks: Vec<OutputContentBlock>,
+    events: &mut Vec<AssistantEvent>,
+    pending_tool: &mut Option<(String, String, String)>,
+) {
+    for block in blocks {
+        push_agent_output_block(block, events, pending_tool);
+        if let Some((id, name, input)) = pending_tool.take() {
+            events.push(AssistantEvent::ToolUse { id, name, input });
+        }
+    }
+}
+
+fn push_agent_output_block(
+    block: OutputContentBlock,
+    events: &mut Vec<AssistantEvent>,
+    pending_tool: &mut Option<(String, String, String)>,
+) {
+    match block {
+        OutputContentBlock::Text { text } => {
+            if !text.is_empty() {
+                events.push(AssistantEvent::TextDelta(text));
+            }
+        }
+        OutputContentBlock::ToolUse { id, name, input } => {
+            *pending_tool = Some((id, name, input.to_string()));
+        }
+    }
+}
+
+#[derive(Debug)]
+struct ScriptedAgentApiClient {
+    turns: Vec<Vec<ScriptedAgentEvent>>,
+    call_count: usize,
+}
+
+impl ScriptedAgentApiClient {
+    fn new(script: &str) -> Result<Self, String> {
+        let turns = serde_json::from_str(script).map_err(|error| error.to_string())?;
+        Ok(Self {
+            turns,
+            call_count: 0,
+        })
+    }
+}
+
+impl ApiClient for ScriptedAgentApiClient {
+    fn stream(&mut self, _request: ApiRequest) -> Result<Vec<AssistantEvent>, RuntimeError> {
+        if self.call_count >= self.turns.len() {
+            return Err(RuntimeError::new("scripted agent client exhausted"));
+        }
+        let events = self.turns[self.call_count]
+            .iter()
+            .map(ScriptedAgentEvent::to_runtime_event)
+            .chain(std::iter::once(AssistantEvent::MessageStop))
+            .collect();
+        self.call_count += 1;
+        Ok(events)
+    }
+}
+
+#[derive(Debug, Clone, Deserialize)]
+#[serde(tag = "type", rename_all = "snake_case")]
+enum ScriptedAgentEvent {
+    Text {
+        text: String,
+    },
+    ToolUse {
+        id: String,
+        name: String,
+        input: Value,
+    },
+}
+
+impl ScriptedAgentEvent {
+    fn to_runtime_event(&self) -> AssistantEvent {
+        match self {
+            Self::Text { text } => AssistantEvent::TextDelta(text.clone()),
+            Self::ToolUse { id, name, input } => AssistantEvent::ToolUse {
+                id: id.clone(),
+                name: name.clone(),
+                input: input.to_string(),
+            },
+        }
+    }
+}
+
+fn extract_message_text(message: &ConversationMessage) -> Option<String> {
+    let text = message
+        .blocks
+        .iter()
+        .filter_map(|block| match block {
+            ContentBlock::Text { text } => Some(text.as_str()),
+            _ => None,
+        })
+        .collect::<String>();
+    (!text.is_empty()).then_some(text)
+}
+
+fn extract_agent_tool_result(message: &ConversationMessage) -> Option<AgentToolResult> {
+    message.blocks.iter().find_map(|block| match block {
+        ContentBlock::ToolResult {
+            tool_name,
+            output,
+            is_error,
+            ..
+        } => Some(AgentToolResult {
+            tool_name: tool_name.clone(),
+            output: output.clone(),
+            is_error: *is_error,
+        }),
+        _ => None,
+    })
+}
+
 #[allow(clippy::needless_pass_by_value)]
 fn execute_tool_search(input: ToolSearchInput) -> ToolSearchOutput {
     let deferred = deferred_tool_specs();
@@ -2763,12 +3251,28 @@ mod tests {
     }
 
     #[test]
-    fn agent_persists_handoff_metadata() {
+    fn agent_executes_child_conversation_and_persists_results() {
         let _guard = env_lock()
             .lock()
             .unwrap_or_else(std::sync::PoisonError::into_inner);
         let dir = temp_path("agent-store");
         std::env::set_var("CLAWD_AGENT_STORE", &dir);
+        std::env::set_var(
+            "CLAWD_AGENT_TEST_SCRIPT",
+            serde_json::to_string(&vec![
+                vec![json!({
+                    "type": "tool_use",
+                    "id": "tool-1",
+                    "name": "StructuredOutput",
+                    "input": {"ok": true, "items": [1, 2, 3]}
+                })],
+                vec![json!({
+                    "type": "text",
+                    "text": "Child agent completed successfully."
+                })],
+            ])
+            .expect("script json"),
+        );
 
         let result = execute_tool(
             "Agent",
@@ -2780,22 +3284,35 @@ mod tests {
             }),
         )
         .expect("Agent should succeed");
+        std::env::remove_var("CLAWD_AGENT_TEST_SCRIPT");
         std::env::remove_var("CLAWD_AGENT_STORE");
 
         let output: serde_json::Value = serde_json::from_str(&result).expect("valid json");
         assert_eq!(output["name"], "ship-audit");
         assert_eq!(output["subagentType"], "Explore");
-        assert_eq!(output["status"], "queued");
+        assert_eq!(output["status"], "completed");
-        assert!(output["createdAt"].as_str().is_some());
+        assert_eq!(output["depth"], 0);
+        assert_eq!(output["maxDepth"], 3);
+        assert_eq!(output["result"], "Child agent completed successfully.");
+        assert_eq!(output["toolResults"][0]["toolName"], "StructuredOutput");
+        assert_eq!(output["toolResults"][0]["isError"], false);
         let manifest_file = output["manifestFile"].as_str().expect("manifest file");
         let output_file = output["outputFile"].as_str().expect("output file");
         let contents = std::fs::read_to_string(output_file).expect("agent file exists");
         let manifest_contents =
             std::fs::read_to_string(manifest_file).expect("manifest file exists");
-        assert!(contents.contains("Audit the branch"));
+        assert!(contents.contains("Child agent completed successfully."));
-        assert!(contents.contains("Check tests and outstanding work."));
+        assert!(contents.contains("StructuredOutput [ok]"));
         assert!(manifest_contents.contains("\"subagentType\": \"Explore\""));
 
+        std::env::set_var(
+            "CLAWD_AGENT_TEST_SCRIPT",
+            serde_json::to_string(&vec![vec![json!({
+                "type": "text",
+                "text": "Normalized alias check."
+            })]])
+            .expect("script json"),
+        );
         let normalized = execute_tool(
             "Agent",
             &json!({
@@ -2805,10 +3322,19 @@ mod tests {
             }),
         )
         .expect("Agent should normalize built-in aliases");
+        std::env::remove_var("CLAWD_AGENT_TEST_SCRIPT");
         let normalized_output: serde_json::Value =
             serde_json::from_str(&normalized).expect("valid json");
         assert_eq!(normalized_output["subagentType"], "Explore");
 
+        std::env::set_var(
+            "CLAWD_AGENT_TEST_SCRIPT",
+            serde_json::to_string(&vec![vec![json!({
+                "type": "text",
+                "text": "Name normalization check."
+            })]])
+            .expect("script json"),
+        );
         let named = execute_tool(
             "Agent",
             &json!({
@@ -2818,13 +3344,14 @@ mod tests {
             }),
         )
         .expect("Agent should normalize explicit names");
+        std::env::remove_var("CLAWD_AGENT_TEST_SCRIPT");
         let named_output: serde_json::Value = serde_json::from_str(&named).expect("valid json");
         assert_eq!(named_output["name"], "ship-audit");
         let _ = std::fs::remove_dir_all(dir);
     }
 
     #[test]
-    fn agent_rejects_blank_required_fields() {
+    fn agent_rejects_blank_required_fields_and_enforces_max_depth() {
         let missing_description = execute_tool(
             "Agent",
             &json!({
@@ -2844,6 +3371,22 @@ mod tests {
         )
         .expect_err("blank prompt should fail");
         assert!(missing_prompt.contains("prompt must not be empty"));
+
+        let _guard = env_lock()
+            .lock()
+            .unwrap_or_else(std::sync::PoisonError::into_inner);
+        std::env::set_var("CLAWD_AGENT_DEPTH", "1");
+        let depth_error = execute_tool(
+            "Agent",
+            &json!({
+                "description": "Nested agent",
+                "prompt": "Do nested work.",
+                "max_depth": 1
+            }),
+        )
+        .expect_err("max depth should fail");
+        std::env::remove_var("CLAWD_AGENT_DEPTH");
+        assert!(depth_error.contains("max_depth exceeded"));
     }
 
     #[test]