diff --git a/packages/pi-agent-core/src/agent-loop.test.ts b/packages/pi-agent-core/src/agent-loop.test.ts
new file mode 100644
index 000000000..0e61d9701
--- /dev/null
+++ b/packages/pi-agent-core/src/agent-loop.test.ts
@@ -0,0 +1,45 @@
+// agent-loop pauseTurn handling tests
+// Verifies that pause_turn / pauseTurn stop reason causes the inner loop
+// to continue (re-invoke the LLM) instead of exiting.
+// Regression test for https://github.com/gsd-build/gsd-2/issues/2869
+
+import { describe, it } from "node:test";
+import assert from "node:assert/strict";
+import { readFileSync } from "node:fs";
+import { join, dirname } from "node:path";
+import { fileURLToPath } from "node:url";
+
+const __dirname = dirname(fileURLToPath(import.meta.url));
+
+describe("agent-loop — pauseTurn handling (#2869)", () => {
+	it("sets hasMoreToolCalls when stopReason is pauseTurn", () => {
+		const source = readFileSync(join(__dirname, "agent-loop.ts"), "utf-8");
+
+		// The agent loop must treat pauseTurn as a reason to continue the inner
+		// loop, just like toolUse. This prevents incomplete server_tool_use blocks
+		// from being saved to history, which would cause a 400 on the next request.
+		assert.match(
+			source,
+			/pauseTurn/,
+			"agent-loop.ts must handle the pauseTurn stop reason",
+		);
+
+		// Verify it sets hasMoreToolCalls = true for pauseTurn
+		assert.match(
+			source,
+			/stopReason\s*===?\s*["']pauseTurn["']/,
+			'agent-loop.ts must check for stopReason === "pauseTurn"',
+		);
+	});
+
+	it("pauseTurn is in the StopReason union type", () => {
+		// Read the pi-ai types to ensure pauseTurn is a valid StopReason
+		const typesPath = join(__dirname, "..", "..", "pi-ai", "src", "types.ts");
+		const typesSource = readFileSync(typesPath, "utf-8");
+		assert.match(
+			typesSource,
+			/["']pauseTurn["']/,
+			'StopReason type must include "pauseTurn"',
+		);
+	});
+});
diff --git a/packages/pi-agent-core/src/agent-loop.ts b/packages/pi-agent-core/src/agent-loop.ts
index fad23b145..82254d3bf 100644
--- a/packages/pi-agent-core/src/agent-loop.ts
+++ b/packages/pi-agent-core/src/agent-loop.ts
@@ -231,9 +231,10 @@ async function runLoop(
 				return;
 			}
 
-			// Check for tool calls
+			// Check for tool calls or paused server turn
 			const toolCalls = message.content.filter((c) => c.type === "toolCall");
-			hasMoreToolCalls = toolCalls.length > 0;
+			hasMoreToolCalls =
+				toolCalls.length > 0 || message.stopReason === "pauseTurn";
 
 			const toolResults: ToolResultMessage[] = [];
 			if (hasMoreToolCalls && config.externalToolExecution) {
diff --git a/packages/pi-agent-core/src/proxy.ts b/packages/pi-agent-core/src/proxy.ts
index 619521bda..574ec2bf6 100644
--- a/packages/pi-agent-core/src/proxy.ts
+++ b/packages/pi-agent-core/src/proxy.ts
@@ -47,7 +47,7 @@ export type ProxyAssistantMessageEvent =
 	| { type: "toolcall_end"; contentIndex: number }
 	| {
 			type: "done";
-			reason: Extract<StopReason, "stop" | "length" | "toolUse">;
+			reason: Extract<StopReason, "stop" | "length" | "toolUse" | "pauseTurn">;
 			usage: AssistantMessage["usage"];
 	  }
 	| {
diff --git a/packages/pi-ai/src/providers/anthropic-shared.test.ts b/packages/pi-ai/src/providers/anthropic-shared.test.ts
new file mode 100644
index 000000000..9b6718570
--- /dev/null
+++ b/packages/pi-ai/src/providers/anthropic-shared.test.ts
@@ -0,0 +1,29 @@
+import { describe, it } from "node:test";
+import assert from "node:assert/strict";
+import { mapStopReason } from "./anthropic-shared.js";
+
+describe("mapStopReason", () => {
+	it("maps end_turn to stop", () => {
+		assert.equal(mapStopReason("end_turn"), "stop");
+	});
+
+	it("maps max_tokens to length", () => {
+		assert.equal(mapStopReason("max_tokens"), "length");
+	});
+
+	it("maps tool_use to toolUse", () => {
+		assert.equal(mapStopReason("tool_use"), "toolUse");
+	});
+
+	it("maps pause_turn to pauseTurn (not stop)", () => {
+		// pause_turn means the server paused a long-running turn (e.g. native
+		// web search hit its iteration limit). Mapping it to "stop" causes the
+		// agent loop to exit, leaving an incomplete server_tool_use block in
+		// history which triggers a 400 on the next request.
+		assert.equal(mapStopReason("pause_turn"), "pauseTurn");
+	});
+
+	it("throws on unknown stop reason", () => {
+		assert.throws(() => mapStopReason("bogus"), /Unhandled stop reason/);
+	});
+});
diff --git a/packages/pi-ai/src/providers/anthropic-shared.ts b/packages/pi-ai/src/providers/anthropic-shared.ts
index 4425df7dd..d7cc0b41d 100644
--- a/packages/pi-ai/src/providers/anthropic-shared.ts
+++ b/packages/pi-ai/src/providers/anthropic-shared.ts
@@ -502,7 +502,7 @@ export function mapStopReason(reason: string): StopReason {
 		case "refusal":
 			return "error";
 		case "pause_turn":
-			return "stop";
+			return "pauseTurn";
 		case "stop_sequence":
 			return "stop";
 		case "sensitive":
diff --git a/packages/pi-ai/src/types.ts b/packages/pi-ai/src/types.ts
index f4d63e1de..ea3e1491a 100644
--- a/packages/pi-ai/src/types.ts
+++ b/packages/pi-ai/src/types.ts
@@ -192,7 +192,7 @@ export interface Usage {
 	};
 }
 
-export type StopReason = "stop" | "length" | "toolUse" | "error" | "aborted";
+export type StopReason = "stop" | "length" | "toolUse" | "pauseTurn" | "error" | "aborted";
 
 export interface UserMessage {
 	role: "user";
@@ -253,7 +253,7 @@ export type AssistantMessageEvent =
 	| { type: "toolcall_end"; contentIndex: number; toolCall: ToolCall; partial: AssistantMessage; malformedArguments?: boolean }
 	| { type: "server_tool_use"; contentIndex: number; partial: AssistantMessage }
 	| { type: "web_search_result"; contentIndex: number; partial: AssistantMessage }
-	| { type: "done"; reason: Extract<StopReason, "stop" | "length" | "toolUse">; message: AssistantMessage }
+	| { type: "done"; reason: Extract<StopReason, "stop" | "length" | "toolUse" | "pauseTurn">; message: AssistantMessage }
 	| { type: "error"; reason: Extract<StopReason, "aborted" | "error">; error: AssistantMessage };
 
 /**