diff --git a/documentation/docs/guides/environment-variables.md b/documentation/docs/guides/environment-variables.md
index 9d5bad6eb3f1..a9d5116fa805 100644
--- a/documentation/docs/guides/environment-variables.md
+++ b/documentation/docs/guides/environment-variables.md
@@ -228,6 +228,7 @@ These variables control how goose manages conversation sessions and context.
 | `GOOSE_RANDOM_THINKING_MESSAGES` | Controls whether to show amusing random messages during processing | "true", "false" | "true" |
 | `GOOSE_CLI_SHOW_COST` | Toggles display of model cost estimates in CLI output | "true", "1" (case insensitive) to enable | false |
 | `GOOSE_AUTO_COMPACT_THRESHOLD` | Set the percentage threshold at which goose [automatically summarizes your session](/docs/guides/sessions/smart-context-management#automatic-compaction). | Float between 0.0 and 1.0 (disabled at 0.0) | 0.8 |
+| `GOOSE_TOOL_CALL_CUTOFF` | Number of tool calls to keep in full detail before summarizing older tool outputs to help maintain efficient context usage  | Integer (e.g., 5, 10, 20) | 10 |
 
 **Examples**
 
@@ -271,6 +272,9 @@ export GOOSE_CLI_SHOW_COST=true
 
 # Automatically compact sessions when 60% of available tokens are used
 export GOOSE_AUTO_COMPACT_THRESHOLD=0.6
+
+# Keep more tool calls in full detail (useful for debugging or verbose workflows)
+export GOOSE_TOOL_CALL_CUTOFF=20
 ```
 
 ### Model Context Limit Overrides
diff --git a/documentation/docs/guides/sessions/smart-context-management.md b/documentation/docs/guides/sessions/smart-context-management.md
index c1bff50bc9d9..a6598ce6cf64 100644
--- a/documentation/docs/guides/sessions/smart-context-management.md
+++ b/documentation/docs/guides/sessions/smart-context-management.md
@@ -45,6 +45,10 @@ When you reach the auto-compaction threshold:
 You can customize how goose summarizes conversations during compaction by editing the `compaction.md` [prompt template](/docs/guides/prompt-templates).
 :::
 
+:::tip Tool Output Summarization
+To help maintain efficient context usage, goose summarizes older tool call outputs in the background while keeping recent calls in full detail. By default, this happens when you have more than 10 tool calls in a session. For advanced tuning, see [`GOOSE_TOOL_CALL_CUTOFF`](/docs/guides/environment-variables#session-management).
+:::
+
 ### Manual Compaction
 You can also trigger compaction manually before reaching context or token limits:
 
@@ -389,4 +393,4 @@ These costs are estimates only, and not connected to your actual provider bill.
   GOOSE_CLI_SHOW_COST: true
   ```
   </TabItem>
-</Tabs>
\ No newline at end of file
+</Tabs>