diff --git a/packages/agent/CHANGELOG.md b/packages/agent/CHANGELOG.md
index a00dcc5b..ca83daa8 100644
--- a/packages/agent/CHANGELOG.md
+++ b/packages/agent/CHANGELOG.md
@@ -2,6 +2,10 @@
 
 ## [Unreleased]
 
+### Added
+
+- `thinkingBudgets` option on `Agent` and `AgentOptions` to customize token budgets per thinking level ([#529](https://github.com/badlogic/pi-mono/pull/529) by [@melihmucuk](https://github.com/melihmucuk))
+
 ## [0.37.8] - 2026-01-07
 
 ## [0.37.7] - 2026-01-07
diff --git a/packages/agent/src/agent.ts b/packages/agent/src/agent.ts
index 2db01d81..c79f63e9 100644
--- a/packages/agent/src/agent.ts
+++ b/packages/agent/src/agent.ts
@@ -10,6 +10,7 @@ import {
 	type Model,
 	streamSimple,
 	type TextContent,
+	type ThinkingBudgets,
 } from "@mariozechner/pi-ai";
 import { agentLoop, agentLoopContinue } from "./agent-loop.js";
 import type {
@@ -71,6 +72,11 @@ export interface AgentOptions {
 	 * Useful for expiring tokens (e.g., GitHub Copilot OAuth).
 	 */
 	getApiKey?: (provider: string) => Promise<string | undefined> | string | undefined;
+
+	/**
+	 * Custom token budgets for thinking levels (token-based providers only).
+	 */
+	thinkingBudgets?: ThinkingBudgets;
 }
 
 export class Agent {
@@ -99,6 +105,7 @@ export class Agent {
 	public getApiKey?: (provider: string) => Promise<string | undefined> | string | undefined;
 	private runningPrompt?: Promise<void>;
 	private resolveRunningPrompt?: () => void;
+	private _thinkingBudgets?: ThinkingBudgets;
 
 	constructor(opts: AgentOptions = {}) {
 		this._state = { ...this._state, ...opts.initialState };
@@ -109,6 +116,7 @@ export class Agent {
 		this.streamFn = opts.streamFn || streamSimple;
 		this._sessionId = opts.sessionId;
 		this.getApiKey = opts.getApiKey;
+		this._thinkingBudgets = opts.thinkingBudgets;
 	}
 
 	/**
@@ -126,6 +134,20 @@ export class Agent {
 		this._sessionId = value;
 	}
 
+	/**
+	 * Get the current thinking budgets.
+	 */
+	get thinkingBudgets(): ThinkingBudgets | undefined {
+		return this._thinkingBudgets;
+	}
+
+	/**
+	 * Set custom thinking budgets for token-based providers.
+	 */
+	set thinkingBudgets(value: ThinkingBudgets | undefined) {
+		this._thinkingBudgets = value;
+	}
+
 	get state(): AgentState {
 		return this._state;
 	}
@@ -310,6 +332,7 @@ export class Agent {
 			model,
 			reasoning,
 			sessionId: this._sessionId,
+			thinkingBudgets: this._thinkingBudgets,
 			convertToLlm: this.convertToLlm,
 			transformContext: this.transformContext,
 			getApiKey: this.getApiKey,
diff --git a/packages/ai/CHANGELOG.md b/packages/ai/CHANGELOG.md
index 8ff82bf4..f3950637 100644
--- a/packages/ai/CHANGELOG.md
+++ b/packages/ai/CHANGELOG.md
@@ -2,6 +2,10 @@
 
 ## [Unreleased]
 
+### Added
+
+- `thinkingBudgets` option in `SimpleStreamOptions` for customizing token budgets per thinking level on token-based providers ([#529](https://github.com/badlogic/pi-mono/pull/529) by [@melihmucuk](https://github.com/melihmucuk))
+
 ### Breaking Changes
 
 - Removed OpenAI Codex model aliases (`gpt-5`, `gpt-5-mini`, `gpt-5-nano`, `codex-mini-latest`, `gpt-5-codex`, `gpt-5.1-codex`, `gpt-5.1-chat-latest`). Use canonical model IDs: `gpt-5.1`, `gpt-5.1-codex-max`, `gpt-5.1-codex-mini`, `gpt-5.2`, `gpt-5.2-codex`. ([#536](https://github.com/badlogic/pi-mono/pull/536) by [@ghoulr](https://github.com/ghoulr))
diff --git a/packages/ai/src/stream.ts b/packages/ai/src/stream.ts
index 79bee984..688d5b18 100644
--- a/packages/ai/src/stream.ts
+++ b/packages/ai/src/stream.ts
@@ -22,6 +22,7 @@ import type {
 	Model,
 	OptionsForApi,
 	SimpleStreamOptions,
+	ThinkingBudgets,
 	ThinkingLevel,
 } from "./types.js";
 
@@ -192,15 +193,17 @@ function mapOptionsForApi<TApi extends Api>(
 
 			// Claude requires max_tokens > thinking.budget_tokens
 			// So we need to ensure maxTokens accounts for both thinking and output
-			const anthropicBudgets = {
+			const defaultBudgets: ThinkingBudgets = {
 				minimal: 1024,
 				low: 2048,
 				medium: 8192,
 				high: 16384,
 			};
+			const budgets = { ...defaultBudgets, ...options?.thinkingBudgets };
 
 			const minOutputTokens = 1024;
-			let thinkingBudget = anthropicBudgets[clampReasoning(options.reasoning)!];
+			const level = clampReasoning(options.reasoning)!;
+			let thinkingBudget = budgets[level]!;
 			// Caller's maxTokens is the desired output; add thinking budget on top, capped at model limit
 			const maxTokens = Math.min((base.maxTokens || 0) + thinkingBudget, model.maxTokens);
 
@@ -261,7 +264,7 @@ function mapOptionsForApi<TApi extends Api>(
 				...base,
 				thinking: {
 					enabled: true,
-					budgetTokens: getGoogleBudget(googleModel, effort),
+					budgetTokens: getGoogleBudget(googleModel, effort, options?.thinkingBudgets),
 				},
 			} satisfies GoogleOptions;
 		}
@@ -287,15 +290,16 @@ function mapOptionsForApi<TApi extends Api>(
 			// Models using thinkingBudget (Gemini 2.x, Claude via Antigravity)
 			// Claude requires max_tokens > thinking.budget_tokens
 			// So we need to ensure maxTokens accounts for both thinking and output
-			const budgets: Record<ClampedThinkingLevel, number> = {
+			const defaultBudgets: ThinkingBudgets = {
 				minimal: 1024,
 				low: 2048,
 				medium: 8192,
 				high: 16384,
 			};
+			const budgets = { ...defaultBudgets, ...options?.thinkingBudgets };
 
 			const minOutputTokens = 1024;
-			let thinkingBudget = budgets[effort];
+			let thinkingBudget = budgets[effort]!;
 			// Caller's maxTokens is the desired output; add thinking budget on top, capped at model limit
 			const maxTokens = Math.min((base.maxTokens || 0) + thinkingBudget, model.maxTokens);
 
@@ -338,7 +342,7 @@ function mapOptionsForApi<TApi extends Api>(
 				...base,
 				thinking: {
 					enabled: true,
-					budgetTokens: getGoogleBudget(geminiModel, effort),
+					budgetTokens: getGoogleBudget(geminiModel, effort, options?.thinkingBudgets),
 				},
 			} satisfies GoogleVertexOptions;
 		}
@@ -416,7 +420,16 @@ function getGeminiCliThinkingLevel(effort: ClampedThinkingLevel, modelId: string
 	}
 }
 
-function getGoogleBudget(model: Model<"google-generative-ai">, effort: ClampedThinkingLevel): number {
+function getGoogleBudget(
+	model: Model<"google-generative-ai">,
+	effort: ClampedThinkingLevel,
+	customBudgets?: ThinkingBudgets,
+): number {
+	// Custom budgets take precedence if provided for this level
+	if (customBudgets?.[effort] !== undefined) {
+		return customBudgets[effort]!;
+	}
+
 	// See https://ai.google.dev/gemini-api/docs/thinking#set-budget
 	if (model.id.includes("2.5-pro")) {
 		const budgets: Record<ClampedThinkingLevel, number> = {
diff --git a/packages/ai/src/types.ts b/packages/ai/src/types.ts
index 5c81bce9..9a865413 100644
--- a/packages/ai/src/types.ts
+++ b/packages/ai/src/types.ts
@@ -58,6 +58,14 @@ export type Provider = KnownProvider | string;
 
 export type ThinkingLevel = "minimal" | "low" | "medium" | "high" | "xhigh";
 
+/** Token budgets for each thinking level (token-based providers only) */
+export interface ThinkingBudgets {
+	minimal?: number;
+	low?: number;
+	medium?: number;
+	high?: number;
+}
+
 // Base options all providers share
 export interface StreamOptions {
 	temperature?: number;
@@ -75,6 +83,8 @@ export interface StreamOptions {
 // Unified options with reasoning passed to streamSimple() and completeSimple()
 export interface SimpleStreamOptions extends StreamOptions {
 	reasoning?: ThinkingLevel;
+	/** Custom token budgets for thinking levels (token-based providers only) */
+	thinkingBudgets?: ThinkingBudgets;
 }
 
 // Generic StreamFunction with typed options
diff --git a/packages/coding-agent/CHANGELOG.md b/packages/coding-agent/CHANGELOG.md
index 2886706a..1ced4b13 100644
--- a/packages/coding-agent/CHANGELOG.md
+++ b/packages/coding-agent/CHANGELOG.md
@@ -16,6 +16,7 @@
 
 - SDK: `InteractiveMode`, `runPrintMode()`, `runRpcMode()` exported for building custom run modes. See `docs/sdk.md`.
 - `PI_SKIP_VERSION_CHECK` environment variable to disable new version notifications at startup ([#549](https://github.com/badlogic/pi-mono/pull/549) by [@aos](https://github.com/aos))
+- `thinkingBudgets` setting to customize token budgets per thinking level for token-based providers ([#529](https://github.com/badlogic/pi-mono/pull/529) by [@melihmucuk](https://github.com/melihmucuk))
 - Extension UI dialogs (`ctx.ui.select()`, `ctx.ui.confirm()`, `ctx.ui.input()`) now support a `timeout` option with live countdown display ([#522](https://github.com/badlogic/pi-mono/pull/522) by [@nicobailon](https://github.com/nicobailon))
 - Extensions can now provide custom editor components via `ctx.ui.setEditorComponent()`. See `examples/extensions/modal-editor.ts` and `docs/tui.md` Pattern 7.
 - Extension factories can now be async, enabling dynamic imports and lazy-loaded dependencies ([#513](https://github.com/badlogic/pi-mono/pull/513) by [@austinm911](https://github.com/austinm911))
@@ -135,6 +136,7 @@
 This release unifies hooks and custom tools into a single "extensions" system and renames "slash commands" to "prompt templates". ([#454](https://github.com/badlogic/pi-mono/issues/454))
 
 **Before migrating, read:**
+
 - [docs/extensions.md](docs/extensions.md) - Full API reference
 - [README.md](README.md) - Extensions section with examples
 - [examples/extensions/](examples/extensions/) - Working examples
@@ -144,14 +146,17 @@ This release unifies hooks and custom tools into a single "extensions" system an
 Hooks and custom tools are now unified as **extensions**. Both were TypeScript modules exporting a factory function that receives an API object. Now there's one concept, one discovery location, one CLI flag, one settings.json entry.
 
 **Automatic migration:**
+
 - `commands/` directories are automatically renamed to `prompts/` on startup (both `~/.pi/agent/commands/` and `.pi/commands/`)
 
 **Manual migration required:**
+
 1. Move files from `hooks/` and `tools/` directories to `extensions/` (deprecation warnings shown on startup)
 2. Update imports and type names in your extension code
 3. Update `settings.json` if you have explicit hook and custom tool paths configured
 
 **Directory changes:**
+
 ```
 # Before
 ~/.pi/agent/hooks/*.ts       →  ~/.pi/agent/extensions/*.ts
@@ -161,6 +166,7 @@ Hooks and custom tools are now unified as **extensions**. Both were TypeScript m
 ```
 
 **Extension discovery rules** (in `extensions/` directories):
+
 1. **Direct files:** `extensions/*.ts` or `*.js` → loaded directly
 2. **Subdirectory with index:** `extensions/myext/index.ts` → loaded as single extension
 3. **Subdirectory with package.json:** `extensions/myext/package.json` with `"pi"` field → loads declared paths
@@ -179,6 +185,7 @@ Hooks and custom tools are now unified as **extensions**. Both were TypeScript m
 No recursion beyond one level. Complex packages must use the `package.json` manifest. Dependencies are resolved via jiti, and extensions can be published to and installed from npm.
 
 **Type renames:**
+
 - `HookAPI` → `ExtensionAPI`
 - `HookContext` → `ExtensionContext`
 - `HookCommandContext` → `ExtensionCommandContext`
@@ -191,6 +198,7 @@ No recursion beyond one level. Complex packages must use the `package.json` mani
 - `HookMessage` → `CustomMessage`
 
 **Import changes:**
+
 ```typescript
 // Before (hook)
 import type { HookAPI, HookContext } from "@mariozechner/pi-coding-agent";
@@ -233,6 +241,7 @@ export default function (pi: ExtensionAPI) {
 - `ctx.sessionManager` - Read session entries, get branch history
 
 **Settings changes:**
+
 ```json
 // Before
 {
@@ -247,6 +256,7 @@ export default function (pi: ExtensionAPI) {
 ```
 
 **CLI changes:**
+
 ```bash
 # Before
 pi --hook ./safety.ts --tool ./todo.ts
@@ -262,22 +272,26 @@ pi --extension ./safety.ts -e ./todo.ts
 **Automatic migration:** The `commands/` directory is automatically renamed to `prompts/` on startup (if `prompts/` doesn't exist). Works for both regular directories and symlinks.
 
 **Directory changes:**
+
 ```
 ~/.pi/agent/commands/*.md    →  ~/.pi/agent/prompts/*.md
 .pi/commands/*.md            →  .pi/prompts/*.md
 ```
 
 **SDK type renames:**
+
 - `FileSlashCommand` → `PromptTemplate`
 - `LoadSlashCommandsOptions` → `LoadPromptTemplatesOptions`
 
 **SDK function renames:**
+
 - `discoverSlashCommands()` → `discoverPromptTemplates()`
 - `loadSlashCommands()` → `loadPromptTemplates()`
 - `expandSlashCommand()` → `expandPromptTemplate()`
 - `getCommandsDir()` → `getPromptsDir()`
 
 **SDK option renames:**
+
 - `CreateAgentSessionOptions.slashCommands` → `.promptTemplates`
 - `AgentSession.fileCommands` → `.promptTemplates`
 - `PromptOptions.expandSlashCommands` → `.expandPromptTemplates`
@@ -285,17 +299,20 @@ pi --extension ./safety.ts -e ./todo.ts
 ### SDK Migration
 
 **Discovery functions:**
+
 - `discoverAndLoadHooks()` → `discoverAndLoadExtensions()`
 - `discoverAndLoadCustomTools()` → merged into `discoverAndLoadExtensions()`
 - `loadHooks()` → `loadExtensions()`
 - `loadCustomTools()` → merged into `loadExtensions()`
 
 **Runner and wrapper:**
+
 - `HookRunner` → `ExtensionRunner`
 - `wrapToolsWithHooks()` → `wrapToolsWithExtensions()`
 - `wrapToolWithHooks()` → `wrapToolWithExtensions()`
 
 **CreateAgentSessionOptions:**
+
 - `.hooks` → removed (use `.additionalExtensionPaths` for paths)
 - `.additionalHookPaths` → `.additionalExtensionPaths`
 - `.preloadedHooks` → `.preloadedExtensions`
@@ -304,6 +321,7 @@ pi --extension ./safety.ts -e ./todo.ts
 - `.slashCommands` → `.promptTemplates`
 
 **AgentSession:**
+
 - `.hookRunner` → `.extensionRunner`
 - `.fileCommands` → `.promptTemplates`
 - `.sendHookMessage()` → `.sendCustomMessage()`
@@ -311,6 +329,7 @@ pi --extension ./safety.ts -e ./todo.ts
 ### Session Migration
 
 **Automatic.** Session version bumped from 2 to 3. Existing sessions are migrated on first load:
+
 - Message role `"hookMessage"` → `"custom"`
 
 ### Breaking Changes
@@ -424,7 +443,7 @@ pi --extension ./safety.ts -e ./todo.ts
   - `steer()` and `followUp()` now expand file-based slash commands and error on hook commands (hook commands cannot be queued)
   - `prompt()` accepts new `streamingBehavior` option (`"steer"` or `"followUp"`) to specify queueing behavior during streaming
   - RPC `prompt` command now accepts optional `streamingBehavior` field
-  ([#420](https://github.com/badlogic/pi-mono/issues/420))
+    ([#420](https://github.com/badlogic/pi-mono/issues/420))
 
 ### Fixed
 
@@ -510,10 +529,12 @@ See [docs/session.md](docs/session.md) for the file format and `SessionManager`
 The hooks API has been restructured with more granular events and better session access.
 
 **Type renames:**
+
 - `HookEventContext` → `HookContext`
 - `HookCommandContext` is now a new interface extending `HookContext` with session control methods
 
 **Event changes:**
+
 - The monolithic `session` event is now split into granular events: `session_start`, `session_before_switch`, `session_switch`, `session_before_branch`, `session_branch`, `session_before_compact`, `session_compact`, `session_shutdown`
 - `session_before_switch` and `session_switch` events now include `reason: "new" | "resume"` to distinguish between `/new` and `/resume`
 - New `session_before_tree` and `session_tree` events for `/tree` navigation (hook can provide custom branch summary)
@@ -522,6 +543,7 @@ The hooks API has been restructured with more granular events and better session
 - Session entries are no longer passed in events. Use `ctx.sessionManager.getEntries()` or `ctx.sessionManager.getBranch()` instead
 
 **API changes:**
+
 - `pi.send(text, attachments?)` → `pi.sendMessage(message, triggerTurn?)` (creates `CustomMessageEntry`)
 - New `pi.appendEntry(customType, data?)` for hook state persistence (not in LLM context)
 - New `pi.registerCommand(name, options)` for custom slash commands (handler receives `HookCommandContext`)
@@ -536,6 +558,7 @@ The hooks API has been restructured with more granular events and better session
 - New `ctx.modelRegistry` and `ctx.model` for API key resolution
 
 **HookCommandContext (slash commands only):**
+
 - `ctx.waitForIdle()` - wait for agent to finish streaming
 - `ctx.newSession(options?)` - create new sessions with optional setup callback
 - `ctx.branch(entryId)` - branch from a specific entry
@@ -544,6 +567,7 @@ The hooks API has been restructured with more granular events and better session
 These methods are only on `HookCommandContext` (not `HookContext`) because they can deadlock if called from event handlers that run inside the agent loop.
 
 **Removed:**
+
 - `hookTimeout` setting (hooks no longer have timeouts; use Ctrl+C to abort)
 - `resolveApiKey` parameter (use `ctx.modelRegistry.getApiKey(model)`)
 
@@ -554,12 +578,14 @@ See [docs/hooks.md](docs/hooks.md) and [examples/hooks/](examples/hooks/) for th
 The custom tools API has been restructured to mirror the hooks pattern with a context object.
 
 **Type renames:**
+
 - `CustomAgentTool` → `CustomTool`
 - `ToolAPI` → `CustomToolAPI`
 - `ToolContext` → `CustomToolContext`
 - `ToolSessionEvent` → `CustomToolSessionEvent`
 
 **Execute signature changed:**
+
 ```typescript
 // Before (v0.30.2)
 execute(toolCallId, params, signal, onUpdate)
@@ -569,11 +595,13 @@ execute(toolCallId, params, onUpdate, ctx, signal?)
 ```
 
 The new `ctx: CustomToolContext` provides `sessionManager`, `modelRegistry`, `model`, and agent state methods:
+
 - `ctx.isIdle()` - check if agent is streaming
 - `ctx.hasQueuedMessages()` - check if user has queued messages (skip interactive prompts)
 - `ctx.abort()` - abort current operation (fire-and-forget)
 
 **Session event changes:**
+
 - `CustomToolSessionEvent` now only has `reason` and `previousSessionFile`
 - Session entries are no longer in the event. Use `ctx.sessionManager.getBranch()` or `ctx.sessionManager.getEntries()` to reconstruct state
 - Reasons: `"start" | "switch" | "branch" | "tree" | "shutdown"` (no separate `"new"` reason; `/new` triggers `"switch"`)
@@ -584,6 +612,7 @@ See [docs/custom-tools.md](docs/custom-tools.md) and [examples/custom-tools/](ex
 ### SDK Migration
 
 **Type changes:**
+
 - `CustomAgentTool` → `CustomTool`
 - `AppMessage` → `AgentMessage`
 - `sessionFile` returns `string | undefined` (was `string | null`)
@@ -591,6 +620,7 @@ See [docs/custom-tools.md](docs/custom-tools.md) and [examples/custom-tools/](ex
 - `Attachment` type removed. Use `ImageContent` from `@mariozechner/pi-ai` instead. Add images directly to message content arrays.
 
 **AgentSession API:**
+
 - `branch(entryIndex: number)` → `branch(entryId: string)`
 - `getUserMessagesForBranching()` returns `{ entryId, text }` instead of `{ entryIndex, text }`
 - `reset()` → `newSession(options?)` where options has optional `parentSession` for lineage tracking
@@ -598,9 +628,11 @@ See [docs/custom-tools.md](docs/custom-tools.md) and [examples/custom-tools/](ex
 - New `navigateTree(targetId, options?)` for in-place tree navigation
 
 **Hook integration:**
+
 - New `sendHookMessage(message, triggerTurn?)` for hook message injection
 
 **SessionManager API:**
+
 - Method renames: `saveXXX()` → `appendXXX()` (e.g., `appendMessage`, `appendCompaction`)
 - `branchInPlace()` → `branch()`
 - `reset()` → `newSession(options?)` with optional `parentSession` for lineage tracking
@@ -618,10 +650,13 @@ See [docs/custom-tools.md](docs/custom-tools.md) and [examples/custom-tools/](ex
 `ModelRegistry` is a new class that manages model discovery and API key resolution. It combines built-in models with custom models from `models.json` and resolves API keys via `AuthStorage`.
 
 ```typescript
-import { discoverAuthStorage, discoverModels } from "@mariozechner/pi-coding-agent";
+import {
+  discoverAuthStorage,
+  discoverModels,
+} from "@mariozechner/pi-coding-agent";
 
-const authStorage = discoverAuthStorage();  // ~/.pi/agent/auth.json
-const modelRegistry = discoverModels(authStorage);  // + ~/.pi/agent/models.json
+const authStorage = discoverAuthStorage(); // ~/.pi/agent/auth.json
+const modelRegistry = discoverModels(authStorage); // + ~/.pi/agent/models.json
 
 // Get all models (built-in + custom)
 const allModels = modelRegistry.getAll();
@@ -639,6 +674,7 @@ const apiKey = await modelRegistry.getApiKey(model);
 This replaces the old `resolveApiKey` callback pattern. Hooks and custom tools access it via `ctx.modelRegistry`.
 
 **Renamed exports:**
+
 - `messageTransformer` → `convertToLlm`
 - `SessionContext` alias `LoadedSession` removed
 
@@ -647,17 +683,21 @@ See [docs/sdk.md](docs/sdk.md) and [examples/sdk/](examples/sdk/) for the curren
 ### RPC Migration
 
 **Session commands:**
+
 - `reset` command → `new_session` command with optional `parentSession` field
 
 **Branching commands:**
+
 - `branch` command: `entryIndex` → `entryId`
 - `get_branch_messages` response: `entryIndex` → `entryId`
 
 **Type changes:**
+
 - Messages are now `AgentMessage` (was `AppMessage`)
 - `prompt` command: `attachments` field replaced with `images` field using `ImageContent` format
 
 **Compaction events:**
+
 - `auto_compaction_start` now includes `reason` field (`"threshold"` or `"overflow"`)
 - `auto_compaction_end` now includes `willRetry` field
 - `compact` response includes full `CompactionResult` (`summary`, `firstKeptEntryId`, `tokensBefore`, `details`)
@@ -667,6 +707,7 @@ See [docs/rpc.md](docs/rpc.md) for the current protocol.
 ### Structured Compaction
 
 Compaction and branch summarization now use a structured output format:
+
 - Clear sections: Goal, Progress, Key Information, File Operations
 - File tracking: `readFiles` and `modifiedFiles` arrays in `details`, accumulated across compactions
 - Conversations are serialized to text before summarization to prevent the model from "continuing" them
@@ -676,6 +717,7 @@ The `before_compact` and `before_tree` hook events allow custom compaction imple
 ### Interactive Mode
 
 **`/tree` command:**
+
 - Navigate the full session tree in-place
 - Search by typing, page with ←/→
 - Filter modes (Ctrl+O): default → no-tools → user-only → labeled-only → all
@@ -683,12 +725,14 @@ The `before_compact` and `before_tree` hook events allow custom compaction imple
 - Selecting a branch switches context and optionally injects a summary of the abandoned branch
 
 **Entry labels:**
+
 - Bookmark any entry via `/tree` → select → `l`
 - Labels appear in tree view and persist as `LabelEntry`
 
 **Theme changes (breaking for custom themes):**
 
 Custom themes must add these new color tokens or they will fail to load:
+
 - `selectedBg`: background for selected/highlighted items in tree selector and other components
 - `customMessageBg`: background for hook-injected messages (`CustomMessageEntry`)
 - `customMessageText`: text color for hook messages
@@ -697,6 +741,7 @@ Custom themes must add these new color tokens or they will fail to load:
 Total color count increased from 46 to 50. See [docs/theme.md](docs/theme.md) for the full color list and copy values from the built-in dark/light themes.
 
 **Settings:**
+
 - `enabledModels`: allowlist models in `settings.json` (same format as `--models` CLI)
 
 ### Added
@@ -794,6 +839,7 @@ Total color count increased from 46 to 50. See [docs/theme.md](docs/theme.md) fo
 - **Credential storage refactored**: API keys and OAuth tokens are now stored in `~/.pi/agent/auth.json` instead of `oauth.json` and `settings.json`. Existing credentials are automatically migrated on first run. ([#296](https://github.com/badlogic/pi-mono/issues/296))
 
 - **SDK API changes** ([#296](https://github.com/badlogic/pi-mono/issues/296)):
+
   - Added `AuthStorage` class for credential management (API keys and OAuth tokens)
   - Added `ModelRegistry` class for model discovery and API key resolution
   - Added `discoverAuthStorage()` and `discoverModels()` discovery functions
@@ -832,6 +878,7 @@ Total color count increased from 46 to 50. See [docs/theme.md](docs/theme.md) fo
 ### Added
 
 - **Compaction hook improvements**: The `before_compact` session event now includes:
+
   - `previousSummary`: Summary from the last compaction (if any), so hooks can preserve accumulated context
   - `messagesToKeep`: Messages that will be kept after the summary (recent turns), in addition to `messagesToSummarize`
   - `resolveApiKey`: Function to resolve API keys for any model (checks settings, OAuth, env vars)
@@ -1094,6 +1141,7 @@ Total color count increased from 46 to 50. See [docs/theme.md](docs/theme.md) fo
 - Improved system prompt documentation section with clearer pointers to specific doc files for custom models, themes, skills, hooks, custom tools, and RPC.
 
 - Cleaned up documentation:
+
   - `theme.md`: Added missing color tokens (`thinkingXhigh`, `bashMode`)
   - `skills.md`: Rewrote with better framing and examples
   - `hooks.md`: Fixed timeout/error handling docs, added import aliases section
diff --git a/packages/coding-agent/src/core/sdk.ts b/packages/coding-agent/src/core/sdk.ts
index 6ceb512f..e2a04582 100644
--- a/packages/coding-agent/src/core/sdk.ts
+++ b/packages/coding-agent/src/core/sdk.ts
@@ -644,6 +644,7 @@ export async function createAgentSession(options: CreateAgentSessionOptions = {}
 			: undefined,
 		steeringMode: settingsManager.getSteeringMode(),
 		followUpMode: settingsManager.getFollowUpMode(),
+		thinkingBudgets: settingsManager.getThinkingBudgets(),
 		getApiKey: async () => {
 			const currentModel = agent.state.model;
 			if (!currentModel) {
diff --git a/packages/coding-agent/src/core/settings-manager.ts b/packages/coding-agent/src/core/settings-manager.ts
index aae42ac5..0f7b51c3 100644
--- a/packages/coding-agent/src/core/settings-manager.ts
+++ b/packages/coding-agent/src/core/settings-manager.ts
@@ -39,6 +39,13 @@ export interface ImageSettings {
 	blockImages?: boolean; // default: false - when true, prevents all images from being sent to LLM providers
 }
 
+export interface ThinkingBudgetsSettings {
+	minimal?: number;
+	low?: number;
+	medium?: number;
+	high?: number;
+}
+
 export interface Settings {
 	lastChangelogVersion?: string;
 	defaultProvider?: string;
@@ -59,6 +66,7 @@ export interface Settings {
 	images?: ImageSettings;
 	enabledModels?: string[]; // Model patterns for cycling (same format as --models CLI flag)
 	doubleEscapeAction?: "branch" | "tree"; // Action for double-escape with empty editor (default: "tree")
+	thinkingBudgets?: ThinkingBudgetsSettings; // Custom token budgets for thinking levels
 }
 
 /** Deep merge settings: project/overrides take precedence, nested objects merge recursively */
@@ -381,6 +389,10 @@ export class SettingsManager {
 		};
 	}
 
+	getThinkingBudgets(): ThinkingBudgetsSettings | undefined {
+		return this.settings.thinkingBudgets;
+	}
+
 	getShowImages(): boolean {
 		return this.settings.terminal?.showImages ?? true;
 	}