diff --git a/.changeset/keep-reasoning-output-budget.md b/.changeset/keep-reasoning-output-budget.md
new file mode 100644
index 00000000000..dc0df20cf97
--- /dev/null
+++ b/.changeset/keep-reasoning-output-budget.md
@@ -0,0 +1,5 @@
+---
+"@kilocode/cli": patch
+---
+
+Prevent encrypted reasoning state from incorrectly reducing the output token budget for long-running sessions.
diff --git a/packages/opencode/src/kilocode/session/llm.ts b/packages/opencode/src/kilocode/session/llm.ts
index c6627a28b9f..12fcd00fb1c 100644
--- a/packages/opencode/src/kilocode/session/llm.ts
+++ b/packages/opencode/src/kilocode/session/llm.ts
@@ -44,10 +44,11 @@ export namespace KiloLLM {
    * Like opencode, the provider is the source of truth: when the last finished
    * turn reported usage, `reported` carries that provider-tokenized context size
    * (input + output + cache), which already accounts for image/vision input the
-   * client cannot see. The client-side media-normalized estimate (encoded bytes
-   * excluded) is used as a floor so newly added text or tool schemas still cap
-   * output, and as the sole basis on the first turn before any usage is reported.
-   * The larger of the two is used so the cap never under-counts.
+   * client cannot see. The client-side normalized estimate (encoded media and
+   * opaque reasoning-state bytes excluded) is used as a floor so newly added
+   * text or tool schemas still cap output, and as the sole basis on the first
+   * turn before any usage is reported. The larger of the two is used so the cap
+   * never under-counts.
    *
    * Many small models (e.g. qwen 7B, 32K context) ship with a default
    * max_output of 32K, leaving no room for input once tools are included.
diff --git a/packages/opencode/src/kilocode/session/overflow.ts b/packages/opencode/src/kilocode/session/overflow.ts
index bf299c00f7d..ea842033482 100644
--- a/packages/opencode/src/kilocode/session/overflow.ts
+++ b/packages/opencode/src/kilocode/session/overflow.ts
@@ -8,6 +8,8 @@ import type { ModelMessage } from "ai"
 const FACTOR = 1.3
 const MEDIA = "[encoded media]"
 const MEDIA_TOKENS = Token.estimate(MEDIA)
+const OPAQUE = "[opaque reasoning state]"
+const OPAQUE_TOKENS = Token.estimate(OPAQUE)
 
 type Payload = {
   messages: ModelMessage[]
@@ -46,6 +48,13 @@ export namespace KiloSessionOverflow {
   export function measure(input: Payload) {
     let extra = 0
     const normalized = JSON.stringify(input.messages, function (this: unknown, key, value: unknown) {
+      // Providers replay encrypted reasoning state as an opaque continuation value.
+      // Its encoded byte length is not a token count and can be several times larger
+      // than the context the provider reports for the same request.
+      if (key === "reasoningEncryptedContent" && typeof value === "string") {
+        extra += Math.max(0, Token.estimate(value) - OPAQUE_TOKENS)
+        return OPAQUE
+      }
       if (!["data", "url", "image"].includes(key)) return value
       if (!this || typeof this !== "object" || !("type" in this)) return value
       if (!["file", "image", "media"].includes(String(this.type))) return value
diff --git a/packages/opencode/test/kilocode/session-overflow.test.ts b/packages/opencode/test/kilocode/session-overflow.test.ts
index 7f5c67afa16..ee1cc2492d3 100644
--- a/packages/opencode/test/kilocode/session-overflow.test.ts
+++ b/packages/opencode/test/kilocode/session-overflow.test.ts
@@ -163,6 +163,53 @@ describe("Kilo request estimation", () => {
     expect(KiloLLM.capOutputTokens({ model: mdl, messages, tools: {}, configured: 32_000, usage })).toBe(32_000)
   })
 
+  test.each(["providerMetadata", "providerOptions"] as const)(
+    "does not reduce output for encrypted reasoning in %s",
+    (field) => {
+      const mdl = model({ context: 1_050_000, output: 128_000 })
+      const reasoning = {
+        type: "reasoning" as const,
+        text: "Checked the previous tool results.",
+        [field]: {
+          openai: {
+            itemId: "rs_1",
+            reasoningEncryptedContent: "x".repeat(3_200_000),
+          },
+        },
+      }
+      const messages = [
+        { role: "assistant", content: [reasoning] },
+        { role: "user", content: "Continue." },
+      ] satisfies ModelMessage[]
+      const usage = KiloSessionOverflow.measure({ messages, tools: {} })
+
+      expect(usage.raw).toBeGreaterThan(1_000_000)
+      expect(usage.normalized).toBeLessThan(1_000)
+      expect(
+        KiloLLM.capOutputTokens({
+          model: mdl,
+          messages,
+          tools: {},
+          configured: 32_000,
+          usage,
+          reported: 624_205,
+        }),
+      ).toBe(32_000)
+    },
+  )
+
+  test("still counts visible reasoning text", () => {
+    const mdl = model({ context: 200_000, output: 32_000 })
+    const messages = [
+      {
+        role: "assistant",
+        content: [{ type: "reasoning", text: "x".repeat(600_000) }],
+      },
+    ] satisfies ModelMessage[]
+
+    expect(KiloLLM.capOutputTokens({ model: mdl, messages, tools: {}, configured: 32_000 })).toBeLessThan(32_000)
+  })
+
   test("still reduces output for oversized text", () => {
     const mdl = model({ context: 200_000, output: 32_000 })
     const messages = [{ role: "user" as const, content: "x".repeat(600_000) }]