diff --git a/src/resources/extensions/gsd/auto-worktree.ts b/src/resources/extensions/gsd/auto-worktree.ts
index 256ad11a3..92cb389c8 100644
--- a/src/resources/extensions/gsd/auto-worktree.ts
+++ b/src/resources/extensions/gsd/auto-worktree.ts
@@ -1566,14 +1566,17 @@ export function mergeMilestoneToMain(
     // Non-fatal — proceed with merge; untracked files may block it
   }
 
-  // 7c. Clean stale MERGE_HEAD before the squash merge (#2912).
-  // The native (libgit2) merge path or a prior interrupted merge may leave
-  // MERGE_HEAD in the git dir. `git merge --squash` refuses to run when
-  // MERGE_HEAD exists, so remove it preemptively.
+  // 7b. Clean up stale merge state before attempting squash merge (#2912).
+  // A leftover MERGE_HEAD (from a previous failed merge, libgit2 native path,
+  // or interrupted operation) causes `git merge --squash` to refuse with
+  // "fatal: You have not concluded your merge (MERGE_HEAD exists)".
+  // Defensively remove merge artifacts before starting.
   try {
-    const gitDirPre = resolveGitDir(originalBasePath_);
-    const mergeHeadPre = join(gitDirPre, "MERGE_HEAD");
-    if (existsSync(mergeHeadPre)) unlinkSync(mergeHeadPre);
+    const gitDir_ = resolveGitDir(originalBasePath_);
+    for (const f of ["SQUASH_MSG", "MERGE_MSG", "MERGE_HEAD"]) {
+      const p = join(gitDir_, f);
+      if (existsSync(p)) unlinkSync(p);
+    }
   } catch { /* best-effort */ }
 
   // 8. Squash merge — auto-resolve .gsd/ state file conflicts (#530)
diff --git a/src/resources/extensions/gsd/tests/integration/auto-worktree-milestone-merge.test.ts b/src/resources/extensions/gsd/tests/integration/auto-worktree-milestone-merge.test.ts
index 826d65501..48f5897d9 100644
--- a/src/resources/extensions/gsd/tests/integration/auto-worktree-milestone-merge.test.ts
+++ b/src/resources/extensions/gsd/tests/integration/auto-worktree-milestone-merge.test.ts
@@ -739,6 +739,39 @@ describe("auto-worktree-milestone-merge", { timeout: 300_000 }, () => {
     );
   });
 
+  test("#2912: stale SQUASH_MSG and MERGE_MSG are cleaned before squash merge", () => {
+    // Verifies that the pre-merge cleanup (step 7b) removes all three merge
+    // artifacts — not just MERGE_HEAD — so that `git merge --squash` never
+    // encounters leftover state from a prior interrupted operation.
+    const repo = freshRepo();
+    const wtPath = createAutoWorktree(repo, "M294");
+
+    addSliceToMilestone(repo, wtPath, "M294", "S01", "Feature C", [
+      { file: "feature-c.ts", content: "export const c = true;\n", message: "add feature c" },
+    ]);
+
+    const roadmap = makeRoadmap("M294", "Stale merge artifacts", [
+      { id: "S01", title: "Feature C" },
+    ]);
+
+    // Plant stale merge artifacts in the git dir to simulate a prior
+    // interrupted merge.  The pre-merge cleanup must remove all of them.
+    const gitDir = join(repo, ".git");
+    writeFileSync(join(gitDir, "SQUASH_MSG"), "stale squash message\n");
+    writeFileSync(join(gitDir, "MERGE_MSG"), "stale merge message\n");
+
+    mergeMilestoneToMain(repo, "M294", roadmap);
+
+    assert.ok(
+      !existsSync(join(gitDir, "SQUASH_MSG")),
+      "#2912: stale SQUASH_MSG must be removed by pre-merge cleanup",
+    );
+    assert.ok(
+      !existsSync(join(gitDir, "MERGE_MSG")),
+      "#2912: stale MERGE_MSG must be removed by pre-merge cleanup",
+    );
+  });
+
   test("#1906: codeFilesChanged=true when real code is merged", () => {
     const repo = freshRepo();
     const wtPath = createAutoWorktree(repo, "M190");