diff --git a/packages/coding-agent/src/core/custom-tools/index.ts b/packages/coding-agent/src/core/custom-tools/index.ts
index 2bfe0ead..d78b6858 100644
--- a/packages/coding-agent/src/core/custom-tools/index.ts
+++ b/packages/coding-agent/src/core/custom-tools/index.ts
@@ -4,6 +4,7 @@
 
 export { discoverAndLoadCustomTools, loadCustomTools } from "./loader.js";
 export type {
+	AgentToolUpdateCallback,
 	CustomAgentTool,
 	CustomToolFactory,
 	CustomToolsLoadResult,
diff --git a/packages/coding-agent/src/core/custom-tools/types.ts b/packages/coding-agent/src/core/custom-tools/types.ts
index dc90c65a..bc4d1d74 100644
--- a/packages/coding-agent/src/core/custom-tools/types.ts
+++ b/packages/coding-agent/src/core/custom-tools/types.ts
@@ -5,7 +5,7 @@
  * They can provide custom rendering for tool calls and results in the TUI.
  */
 
-import type { AgentTool, AgentToolResult } from "@mariozechner/pi-ai";
+import type { AgentTool, AgentToolResult, AgentToolUpdateCallback } from "@mariozechner/pi-ai";
 import type { Component } from "@mariozechner/pi-tui";
 import type { Static, TSchema } from "@sinclair/typebox";
 import type { Theme } from "../../modes/interactive/theme/theme.js";
@@ -15,6 +15,9 @@ import type { SessionEntry } from "../session-manager.js";
 /** Alias for clarity */
 export type ToolUIContext = HookUIContext;
 
+/** Re-export for custom tools to use in execute signature */
+export type { AgentToolUpdateCallback };
+
 export interface ExecResult {
 	stdout: string;
 	stderr: string;
@@ -62,7 +65,35 @@ export interface RenderResultOptions {
 	isPartial: boolean;
 }
 
-/** Custom tool with optional lifecycle and rendering methods */
+/**
+ * Custom tool with optional lifecycle and rendering methods.
+ *
+ * The execute signature inherited from AgentTool includes an optional onUpdate callback
+ * for streaming progress updates during long-running operations:
+ * - The callback emits partial results to subscribers (e.g. TUI/RPC), not to the LLM.
+ * - Partial updates should use the same TDetails type as the final result (use a union if needed).
+ *
+ * @example
+ * ```typescript
+ * type Details =
+ *   | { status: "running"; step: number; total: number }
+ *   | { status: "done"; count: number };
+ *
+ * async execute(toolCallId, params, signal, onUpdate) {
+ *   const items = params.items || [];
+ *   for (let i = 0; i < items.length; i++) {
+ *     onUpdate?.({
+ *       content: [{ type: "text", text: `Step ${i + 1}/${items.length}...` }],
+ *       details: { status: "running", step: i + 1, total: items.length },
+ *     });
+ *     await processItem(items[i], signal);
+ *   }
+ *   return { content: [{ type: "text", text: "Done" }], details: { status: "done", count: items.length } };
+ * }
+ * ```
+ *
+ * Progress updates are rendered via renderResult with isPartial: true.
+ */
 export interface CustomAgentTool<TParams extends TSchema = TSchema, TDetails = any>
 	extends AgentTool<TParams, TDetails> {
 	/** Called on session start/switch/branch/clear - use to reconstruct state from entries */
diff --git a/packages/coding-agent/src/core/hooks/tool-wrapper.ts b/packages/coding-agent/src/core/hooks/tool-wrapper.ts
index a36fe8d6..b9e518d2 100644
--- a/packages/coding-agent/src/core/hooks/tool-wrapper.ts
+++ b/packages/coding-agent/src/core/hooks/tool-wrapper.ts
@@ -2,7 +2,7 @@
  * Tool wrapper - wraps tools with hook callbacks for interception.
  */
 
-import type { AgentTool } from "@mariozechner/pi-ai";
+import type { AgentTool, AgentToolUpdateCallback } from "@mariozechner/pi-ai";
 import type { HookRunner } from "./runner.js";
 import type { ToolCallEventResult, ToolResultEventResult } from "./types.js";
 
@@ -10,11 +10,17 @@ import type { ToolCallEventResult, ToolResultEventResult } from "./types.js";
  * Wrap a tool with hook callbacks.
  * - Emits tool_call event before execution (can block)
  * - Emits tool_result event after execution (can modify result)
+ * - Forwards onUpdate callback to wrapped tool for progress streaming
  */
 export function wrapToolWithHooks<T>(tool: AgentTool<any, T>, hookRunner: HookRunner): AgentTool<any, T> {
 	return {
 		...tool,
-		execute: async (toolCallId: string, params: Record<string, unknown>, signal?: AbortSignal) => {
+		execute: async (
+			toolCallId: string,
+			params: Record<string, unknown>,
+			signal?: AbortSignal,
+			onUpdate?: AgentToolUpdateCallback<T>,
+		) => {
 			// Emit tool_call event - hooks can block execution
 			// If hook errors/times out, block by default (fail-safe)
 			if (hookRunner.hasHandlers("tool_call")) {
@@ -39,8 +45,8 @@ export function wrapToolWithHooks<T>(tool: AgentTool<any, T>, hookRunner: HookRu
 				}
 			}
 
-			// Execute the actual tool
-			const result = await tool.execute(toolCallId, params, signal);
+			// Execute the actual tool, forwarding onUpdate for progress streaming
+			const result = await tool.execute(toolCallId, params, signal, onUpdate);
 
 			// Emit tool_result event - hooks can modify the result
 			if (hookRunner.hasHandlers("tool_result")) {
diff --git a/packages/coding-agent/src/index.ts b/packages/coding-agent/src/index.ts
index a9bf29a6..aa5a4bbb 100644
--- a/packages/coding-agent/src/index.ts
+++ b/packages/coding-agent/src/index.ts
@@ -24,6 +24,7 @@ export {
 } from "./core/compaction.js";
 // Custom tools
 export type {
+	AgentToolUpdateCallback,
 	CustomAgentTool,
 	CustomToolFactory,
 	CustomToolsLoadResult,