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/runtime/src/compact.rs

@@ -1,6 +1,3 @@
-use std::fs;
-use std::time::{SystemTime, UNIX_EPOCH};
-
 use crate::session::{ContentBlock, ConversationMessage, MessageRole, Session};
 
 #[derive(Debug, Clone, Copy, PartialEq, Eq)]
@@ -93,7 +90,6 @@ pub fn compact_session(session: &Session, config: CompactionConfig) -> Compactio
     let preserved = session.messages[keep_from..].to_vec();
     let summary = summarize_messages(removed);
     let formatted_summary = format_compact_summary(&summary);
-    persist_compact_summary(&formatted_summary);
     let continuation = get_compact_continuation_message(&summary, true, !preserved.is_empty());
 
     let mut compacted_messages = vec![ConversationMessage {
@@ -114,35 +110,6 @@ pub fn compact_session(session: &Session, config: CompactionConfig) -> Compactio
     }
 }
 
-fn persist_compact_summary(formatted_summary: &str) {
-    if formatted_summary.trim().is_empty() {
-        return;
-    }
-
-    let Ok(cwd) = std::env::current_dir() else {
-        return;
-    };
-    let memory_dir = cwd.join(".claude").join("memory");
-    if fs::create_dir_all(&memory_dir).is_err() {
-        return;
-    }
-
-    let path = memory_dir.join(compact_summary_filename());
-    let _ = fs::write(path, render_memory_file(formatted_summary));
-}
-
-fn compact_summary_filename() -> String {
-    let timestamp = SystemTime::now()
-        .duration_since(UNIX_EPOCH)
-        .unwrap_or_default()
-        .as_secs();
-    format!("summary-{timestamp}.md")
-}
-
-fn render_memory_file(formatted_summary: &str) -> String {
-    format!("# Project memory\n\n{}\n", formatted_summary.trim())
-}
-
 fn summarize_messages(messages: &[ConversationMessage]) -> String {
     let user_messages = messages
         .iter()
@@ -411,21 +378,14 @@ fn collapse_blank_lines(content: &str) -> String {
 mod tests {
     use super::{
         collect_key_files, compact_session, estimate_session_tokens, format_compact_summary,
-        infer_pending_work, render_memory_file, should_compact, CompactionConfig,
+        infer_pending_work, should_compact, CompactionConfig,
     };
-    use std::fs;
-    use std::time::{SystemTime, UNIX_EPOCH};
-
     use crate::session::{ContentBlock, ConversationMessage, MessageRole, Session};
 
     #[test]
     fn formats_compact_summary_like_upstream() {
         let summary = "<analysis>scratch</analysis>\n<summary>Kept work</summary>";
         assert_eq!(format_compact_summary(summary), "Summary:\nKept work");
-        assert_eq!(
-            render_memory_file("Summary:\nKept work"),
-            "# Project memory\n\nSummary:\nKept work\n"
-        );
     }
 
     #[test]
@@ -442,63 +402,6 @@ mod tests {
         assert!(result.formatted_summary.is_empty());
     }
 
-    #[test]
-    fn persists_compacted_summaries_under_dot_claude_memory() {
-        let _guard = crate::test_env_lock();
-        let temp = std::env::temp_dir().join(format!(
-            "runtime-compact-memory-{}",
-            SystemTime::now()
-                .duration_since(UNIX_EPOCH)
-                .expect("time after epoch")
-                .as_nanos()
-        ));
-        fs::create_dir_all(&temp).expect("temp dir");
-        let previous = std::env::current_dir().expect("cwd");
-        std::env::set_current_dir(&temp).expect("set cwd");
-
-        let session = Session {
-            version: 1,
-            messages: vec![
-                ConversationMessage::user_text("one ".repeat(200)),
-                ConversationMessage::assistant(vec![ContentBlock::Text {
-                    text: "two ".repeat(200),
-                }]),
-                ConversationMessage::tool_result("1", "bash", "ok ".repeat(200), false),
-                ConversationMessage {
-                    role: MessageRole::Assistant,
-                    blocks: vec![ContentBlock::Text {
-                        text: "recent".to_string(),
-                    }],
-                    usage: None,
-                },
-            ],
-        };
-
-        let result = compact_session(
-            &session,
-            CompactionConfig {
-                preserve_recent_messages: 2,
-                max_estimated_tokens: 1,
-            },
-        );
-        let memory_dir = temp.join(".claude").join("memory");
-        let files = fs::read_dir(&memory_dir)
-            .expect("memory dir exists")
-            .flatten()
-            .map(|entry| entry.path())
-            .collect::<Vec<_>>();
-
-        assert_eq!(result.removed_message_count, 2);
-        assert_eq!(files.len(), 1);
-        let persisted = fs::read_to_string(&files[0]).expect("memory file readable");
-
-        std::env::set_current_dir(previous).expect("restore cwd");
-        fs::remove_dir_all(temp).expect("cleanup temp dir");
-
-        assert!(persisted.contains("# Project memory"));
-        assert!(persisted.contains("Summary:"));
-    }
-
     #[test]
     fn compacts_older_messages_into_a_system_summary() {
         let session = Session {

rust/crates/runtime/src/conversation.rs

@@ -415,7 +415,6 @@ mod tests {
                 current_date: "2026-03-31".to_string(),
                 git_status: None,
                 instruction_files: Vec::new(),
-                memory_files: Vec::new(),
             })
             .with_os("linux", "6.8")
             .build();

rust/crates/runtime/src/prompt.rs

@@ -51,7 +51,6 @@ pub struct ProjectContext {
     pub current_date: String,
     pub git_status: Option<String>,
     pub instruction_files: Vec<ContextFile>,
-    pub memory_files: Vec<ContextFile>,
 }
 
 impl ProjectContext {
@@ -61,13 +60,11 @@ impl ProjectContext {
     ) -> std::io::Result<Self> {
         let cwd = cwd.into();
         let instruction_files = discover_instruction_files(&cwd)?;
-        let memory_files = discover_memory_files(&cwd)?;
         Ok(Self {
             cwd,
             current_date: current_date.into(),
             git_status: None,
             instruction_files,
-            memory_files,
         })
     }
 
@@ -147,9 +144,6 @@ impl SystemPromptBuilder {
             if !project_context.instruction_files.is_empty() {
                 sections.push(render_instruction_files(&project_context.instruction_files));
             }
-            if !project_context.memory_files.is_empty() {
-                sections.push(render_memory_files(&project_context.memory_files));
-            }
         }
         if let Some(config) = &self.config {
             sections.push(render_config_section(config));
@@ -192,7 +186,7 @@ pub fn prepend_bullets(items: Vec<String>) -> Vec<String> {
     items.into_iter().map(|item| format!(" - {item}")).collect()
 }
 
-fn discover_context_directories(cwd: &Path) -> Vec<PathBuf> {
+fn discover_instruction_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
     let mut directories = Vec::new();
     let mut cursor = Some(cwd);
     while let Some(dir) = cursor {
@@ -200,11 +194,6 @@ fn discover_context_directories(cwd: &Path) -> Vec<PathBuf> {
         cursor = dir.parent();
     }
     directories.reverse();
-    directories
-}
-
-fn discover_instruction_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
-    let directories = discover_context_directories(cwd);
 
     let mut files = Vec::new();
     for dir in directories {
@@ -220,26 +209,6 @@ fn discover_instruction_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
     Ok(dedupe_instruction_files(files))
 }
 
-fn discover_memory_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
-    let mut files = Vec::new();
-    for dir in discover_context_directories(cwd) {
-        let memory_dir = dir.join(".claude").join("memory");
-        let Ok(entries) = fs::read_dir(&memory_dir) else {
-            continue;
-        };
-        let mut paths = entries
-            .flatten()
-            .map(|entry| entry.path())
-            .filter(|path| path.is_file())
-            .collect::<Vec<_>>();
-        paths.sort();
-        for path in paths {
-            push_context_file(&mut files, path)?;
-        }
-    }
-    Ok(dedupe_instruction_files(files))
-}
-
 fn push_context_file(files: &mut Vec<ContextFile>, path: PathBuf) -> std::io::Result<()> {
     match fs::read_to_string(&path) {
         Ok(content) if !content.trim().is_empty() => {
@@ -282,12 +251,6 @@ fn render_project_context(project_context: &ProjectContext) -> String {
             project_context.instruction_files.len()
         ));
     }
-    if !project_context.memory_files.is_empty() {
-        bullets.push(format!(
-            "Project memory files discovered: {}.",
-            project_context.memory_files.len()
-        ));
-    }
     lines.extend(prepend_bullets(bullets));
     if let Some(status) = &project_context.git_status {
         lines.push(String::new());
@@ -298,15 +261,7 @@ fn render_project_context(project_context: &ProjectContext) -> String {
 }
 
 fn render_instruction_files(files: &[ContextFile]) -> String {
-    render_context_file_section("# Claude instructions", files)
-}
-
-fn render_memory_files(files: &[ContextFile]) -> String {
-    render_context_file_section("# Project memory", files)
-}
-
-fn render_context_file_section(title: &str, files: &[ContextFile]) -> String {
-    let mut sections = vec![title.to_string()];
+    let mut sections = vec!["# Claude instructions".to_string()];
     let mut remaining_chars = MAX_TOTAL_INSTRUCTION_CHARS;
     for file in files {
         if remaining_chars == 0 {
@@ -498,9 +453,8 @@ fn get_actions_section() -> String {
 mod tests {
     use super::{
         collapse_blank_lines, display_context_path, normalize_instruction_content,
-        render_instruction_content, render_instruction_files, render_memory_files,
-        truncate_instruction_content, ContextFile, ProjectContext, SystemPromptBuilder,
-        SYSTEM_PROMPT_DYNAMIC_BOUNDARY,
+        render_instruction_content, render_instruction_files, truncate_instruction_content,
+        ContextFile, ProjectContext, SystemPromptBuilder, SYSTEM_PROMPT_DYNAMIC_BOUNDARY,
     };
     use crate::config::ConfigLoader;
     use std::fs;
@@ -565,35 +519,6 @@ mod tests {
         fs::remove_dir_all(root).expect("cleanup temp dir");
     }
 
-    #[test]
-    fn discovers_project_memory_files_from_ancestor_chain() {
-        let root = temp_dir();
-        let nested = root.join("apps").join("api");
-        fs::create_dir_all(root.join(".claude").join("memory")).expect("root memory dir");
-        fs::create_dir_all(nested.join(".claude").join("memory")).expect("nested memory dir");
-        fs::write(
-            root.join(".claude").join("memory").join("2026-03-30.md"),
-            "root memory",
-        )
-        .expect("write root memory");
-        fs::write(
-            nested.join(".claude").join("memory").join("2026-03-31.md"),
-            "nested memory",
-        )
-        .expect("write nested memory");
-
-        let context = ProjectContext::discover(&nested, "2026-03-31").expect("context should load");
-        let contents = context
-            .memory_files
-            .iter()
-            .map(|file| file.content.as_str())
-            .collect::<Vec<_>>();
-
-        assert_eq!(contents, vec!["root memory", "nested memory"]);
-        assert!(render_memory_files(&context.memory_files).contains("# Project memory"));
-        fs::remove_dir_all(root).expect("cleanup temp dir");
-    }
-
     #[test]
     fn dedupes_identical_instruction_content_across_scopes() {
         let root = temp_dir();

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

@@ -1534,6 +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());
@@ -1542,8 +1543,7 @@ fn status_context(
         session_path: session_path.map(Path::to_path_buf),
         loaded_config_files: runtime_config.loaded_entries().len(),
         discovered_config_files,
-        memory_file_count: project_context.instruction_files.len()
-            + project_context.memory_files.len(),
+        memory_file_count: project_context.instruction_files.len(),
         project_root,
         git_branch,
     })
@@ -1688,50 +1688,26 @@ fn render_memory_report() -> Result<String, Box<dyn std::error::Error>> {
     let mut lines = vec![format!(
         "Memory
   Working directory {}
-  Instruction files {}
-  Project memory files {}",
+  Instruction files {}",
         cwd.display(),
-        project_context.instruction_files.len(),
-        project_context.memory_files.len()
+        project_context.instruction_files.len()
     )];
-    append_memory_section(
-        &mut lines,
-        "Instruction files",
-        &project_context.instruction_files,
-        "No CLAUDE instruction files discovered in the current directory ancestry.",
+    if project_context.instruction_files.is_empty() {
+        lines.push("Discovered files".to_string());
+        lines.push(
+            "  No CLAUDE instruction files discovered in the current directory ancestry."
+                .to_string(),
         );
-    append_memory_section(
-        &mut lines,
-        "Project memory files",
-        &project_context.memory_files,
-        "No persisted project memory files discovered in .claude/memory.",
-    );
-    Ok(lines.join(
-        "
-",
-    ))
-}
-
-fn append_memory_section(
-    lines: &mut Vec<String>,
-    title: &str,
-    files: &[runtime::ContextFile],
-    empty_message: &str,
-) {
-    lines.push(title.to_string());
-    if files.is_empty() {
-        lines.push(format!("  {empty_message}"));
-        return;
-    }
-
-    for (index, file) in files.iter().enumerate() {
+    } else {
+        lines.push("Discovered files".to_string());
+        for (index, file) in project_context.instruction_files.iter().enumerate() {
             let preview = file.content.lines().next().unwrap_or("").trim();
             let preview = if preview.is_empty() {
                 "<empty>"
             } else {
                 preview
             };
-        lines.push(format!("  {}. {}", index + 1, file.path.display()));
+            lines.push(format!("  {}. {}", index + 1, file.path.display(),));
             lines.push(format!(
                 "     lines={} preview={}",
                 file.content.lines().count(),
@@ -1739,6 +1715,11 @@ fn append_memory_section(
             ));
         }
     }
+    Ok(lines.join(
+        "
+",
+    ))
+}
 
 fn init_claude_md() -> Result<String, Box<dyn std::error::Error>> {
     let cwd = env::current_dir()?;
@@ -2792,7 +2773,7 @@ mod tests {
         assert!(report.contains("Memory"));
         assert!(report.contains("Working directory"));
         assert!(report.contains("Instruction files"));
-        assert!(report.contains("Project memory files"));
+        assert!(report.contains("Discovered files"));
     }
 
     #[test]

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,
-    GrepSearchInput, PermissionMode,
+    edit_file, execute_bash, glob_search, grep_search, load_system_prompt, read_file, write_file,
+    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>,
@@ -1199,9 +1228,10 @@ fn execute_todo_write(input: TodoWriteInput) -> Result<TodoWriteOutput, String>
     validate_todos(&input.todos)?;
     let store_path = todo_store_path()?;
     let old_todos = if store_path.exists() {
-        parse_todo_markdown(
+        serde_json::from_str::<Vec<TodoItem>>(
             &std::fs::read_to_string(&store_path).map_err(|error| error.to_string())?,
-        )?
+        )
+        .map_err(|error| error.to_string())?
     } else {
         Vec::new()
     };
@@ -1219,7 +1249,10 @@ fn execute_todo_write(input: TodoWriteInput) -> Result<TodoWriteOutput, String>
     if let Some(parent) = store_path.parent() {
         std::fs::create_dir_all(parent).map_err(|error| error.to_string())?;
     }
-    std::fs::write(&store_path, render_todo_markdown(&persisted))
+    std::fs::write(
+        &store_path,
+        serde_json::to_string_pretty(&persisted).map_err(|error| error.to_string())?,
+    )
     .map_err(|error| error.to_string())?;
 
     let verification_nudge_needed = (all_done
@@ -1278,58 +1311,7 @@ fn todo_store_path() -> Result<std::path::PathBuf, String> {
         return Ok(std::path::PathBuf::from(path));
     }
     let cwd = std::env::current_dir().map_err(|error| error.to_string())?;
-    Ok(cwd.join(".claude").join("todos.md"))
-}
-
-fn render_todo_markdown(todos: &[TodoItem]) -> String {
-    let mut lines = vec!["# Todo list".to_string(), String::new()];
-    for todo in todos {
-        let marker = match todo.status {
-            TodoStatus::Pending => "[ ]",
-            TodoStatus::InProgress => "[~]",
-            TodoStatus::Completed => "[x]",
-        };
-        lines.push(format!(
-            "- {marker} {} :: {}",
-            todo.content, todo.active_form
-        ));
-    }
-    lines.push(String::new());
-    lines.join("\n")
-}
-
-fn parse_todo_markdown(content: &str) -> Result<Vec<TodoItem>, String> {
-    let mut todos = Vec::new();
-    for line in content.lines() {
-        let trimmed = line.trim();
-        if trimmed.is_empty() || trimmed.starts_with('#') {
-            continue;
-        }
-        let Some(rest) = trimmed.strip_prefix("- [") else {
-            continue;
-        };
-        let mut chars = rest.chars();
-        let status = match chars.next() {
-            Some(' ') => TodoStatus::Pending,
-            Some('~') => TodoStatus::InProgress,
-            Some('x' | 'X') => TodoStatus::Completed,
-            Some(other) => return Err(format!("unsupported todo status marker: {other}")),
-            None => return Err(String::from("malformed todo line")),
-        };
-        let remainder = chars.as_str();
-        let Some(body) = remainder.strip_prefix("] ") else {
-            return Err(String::from("malformed todo line"));
-        };
-        let Some((content, active_form)) = body.split_once(" :: ") else {
-            return Err(String::from("todo line missing active form separator"));
-        };
-        todos.push(TodoItem {
-            content: content.trim().to_string(),
-            active_form: active_form.trim().to_string(),
-            status,
-        });
-    }
-    Ok(todos)
+    Ok(cwd.join(".clawd-todos.json"))
 }
 
 fn resolve_skill_path(skill: &str) -> Result<std::path::PathBuf, String> {
@@ -1378,6 +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())?;
@@ -1391,35 +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!(
-        "# Agent Task
-
-- 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 child_result = with_agent_depth(depth + 1, || {
+        run_child_agent_conversation(&input.prompt, model.clone(), max_depth)
+    })?;
 
     let manifest = AgentOutput {
         agent_id,
         name: agent_name,
         description: input.description,
         subagent_type: Some(normalized_subagent_type),
-        model: input.model,
-        status: String::from("queued"),
+        model,
+        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())?,
@@ -1429,6 +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();
@@ -2685,37 +3126,6 @@ mod tests {
         assert!(second_output["verificationNudgeNeeded"].is_null());
     }
 
-    #[test]
-    fn todo_write_persists_markdown_in_claude_directory() {
-        let _guard = env_lock()
-            .lock()
-            .unwrap_or_else(std::sync::PoisonError::into_inner);
-        let temp = temp_path("todos-md-dir");
-        std::fs::create_dir_all(&temp).expect("temp dir");
-        let previous = std::env::current_dir().expect("cwd");
-        std::env::set_current_dir(&temp).expect("set cwd");
-
-        execute_tool(
-            "TodoWrite",
-            &json!({
-                "todos": [
-                    {"content": "Add tool", "activeForm": "Adding tool", "status": "in_progress"},
-                    {"content": "Run tests", "activeForm": "Running tests", "status": "pending"}
-                ]
-            }),
-        )
-        .expect("TodoWrite should succeed");
-
-        let persisted = std::fs::read_to_string(temp.join(".claude").join("todos.md"))
-            .expect("todo markdown exists");
-        std::env::set_current_dir(previous).expect("restore cwd");
-        let _ = std::fs::remove_dir_all(temp);
-
-        assert!(persisted.contains("# Todo list"));
-        assert!(persisted.contains("- [~] Add tool :: Adding tool"));
-        assert!(persisted.contains("- [ ] Run tests :: Running tests"));
-    }
-
     #[test]
     fn todo_write_rejects_invalid_payloads_and_sets_verification_nudge() {
         let _guard = env_lock()
@@ -2841,12 +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",
@@ -2858,22 +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!(output["createdAt"].as_str().is_some());
+        assert_eq!(output["status"], "completed");
+        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("Check tests and outstanding work."));
+        assert!(contents.contains("Child agent completed successfully."));
+        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!({
@@ -2883,10 +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!({
@@ -2896,13 +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!({
@@ -2922,6 +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]