diff --git a/pkg/agent/agent_test.go b/pkg/agent/agent_test.go
index ffd72f1ce..4c596dddd 100644
--- a/pkg/agent/agent_test.go
+++ b/pkg/agent/agent_test.go
@@ -479,7 +479,7 @@ func TestRun(t *testing.T) {
 	)
 
 	t.Run(
-		"context cancellation",
+		"context cancellation triggers graceful suspend",
 		func(t *testing.T) {
 			t.Parallel()
 
@@ -500,8 +500,10 @@ func TestRun(t *testing.T) {
 
 			_, err := ag.Run(ctx, []llm.Message{userMessage("test")})
 
-			require.Error(t, err)
-			assert.Contains(t, err.Error(), "cannot complete")
+			var se *agent.SuspendedError
+			require.ErrorAs(t, err, &se)
+			require.NotNil(t, se.Checkpoint)
+			assert.Equal(t, agent.AgentStatusSuspended, se.Checkpoint.Status)
 			assert.Equal(t, 0, provider.calls)
 		},
 	)
diff --git a/pkg/agent/cancel_test.go b/pkg/agent/cancel_test.go
new file mode 100644
index 000000000..9ea4cd83b
--- /dev/null
+++ b/pkg/agent/cancel_test.go
@@ -0,0 +1,138 @@
+// Copyright (c) 2026 Probo Inc <hello@getprobo.com>.
+//
+// Permission to use, copy, modify, and/or distribute this software for any
+// purpose with or without fee is hereby granted, provided that the above
+// copyright notice and this permission notice appear in all copies.
+//
+// THE SOFTWARE IS PROVIDED "AS IS" AND THE AUTHOR DISCLAIMS ALL WARRANTIES WITH
+// REGARD TO THIS SOFTWARE INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY
+// AND FITNESS. IN NO EVENT SHALL THE AUTHOR BE LIABLE FOR ANY SPECIAL, DIRECT,
+// INDIRECT, OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES WHATSOEVER RESULTING FROM
+// LOSS OF USE, DATA OR PROFITS, WHETHER IN AN ACTION OF CONTRACT, NEGLIGENCE OR
+// OTHER TORTIOUS ACTION, ARISING OUT OF OR IN CONNECTION WITH THE USE OR
+// PERFORMANCE OF THIS SOFTWARE.
+
+package agent_test
+
+import (
+	"context"
+	"testing"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+	"go.probo.inc/probo/pkg/agent"
+	"go.probo.inc/probo/pkg/llm"
+)
+
+func TestRun_CtxCancelGracefulSuspend(t *testing.T) {
+	t.Parallel()
+
+	t.Run(
+		"cancel before first turn suspends with empty checkpoint",
+		func(t *testing.T) {
+			t.Parallel()
+
+			provider := &mockProvider{
+				responses: []*llm.ChatCompletionResponse{
+					stopResponse("never called"),
+				},
+			}
+
+			ag := agent.New(
+				"assistant",
+				newTestClient(provider),
+				agent.WithModel("test-model"),
+			)
+
+			store := newMemoryCheckpointer()
+
+			ctx, cancel := context.WithCancel(context.Background())
+			cancel()
+
+			_, err := ag.Run(
+				ctx,
+				[]llm.Message{userMessage("hi")},
+				agent.WithCheckpointer(store, "run-cancel"),
+			)
+
+			var se *agent.SuspendedError
+			require.ErrorAs(t, err, &se)
+			assert.Equal(t, 0, provider.calls, "LLM must not be invoked when ctx was already cancelled at entry")
+
+			// When a checkpointer is configured, the persistent store
+			// is the source of truth — the error itself doesn't carry a
+			// Checkpoint. Load from the store to verify.
+			cp, loadErr := store.Load(context.Background(), "run-cancel")
+			require.NoError(t, loadErr)
+			require.NotNil(t, cp, "checkpoint should be persisted before SuspendedError surfaces")
+			assert.Equal(t, agent.AgentStatusSuspended, cp.Status)
+		},
+	)
+
+	t.Run(
+		"cancel mid-run preserves the just-completed turn",
+		func(t *testing.T) {
+			t.Parallel()
+
+			ctx, cancel := context.WithCancel(context.Background())
+			defer cancel()
+
+			provider := &mockProvider{
+				responses: []*llm.ChatCompletionResponse{
+					// First turn completes a tool call; the tool body
+					// then cancels ctx so the next turn-boundary check
+					// in coreLoop observes the cancellation.
+					{
+						Message: llm.Message{
+							Role: llm.RoleAssistant,
+							ToolCalls: []llm.ToolCall{{
+								ID:       "tc_1",
+								Function: llm.FunctionCall{Name: "noop", Arguments: `{}`},
+							}},
+						},
+						FinishReason: llm.FinishReasonToolCalls,
+					},
+					stopResponse("never reached"),
+				},
+			}
+
+			noopTool := agent.FunctionTool[struct{}](
+				"noop",
+				"no-op",
+				func(_ context.Context, _ struct{}) (agent.ToolResult, error) {
+					cancel()
+					return agent.ToolResult{Content: "ok"}, nil
+				},
+			)
+
+			ag := agent.New(
+				"assistant",
+				newTestClient(provider),
+				agent.WithModel("test-model"),
+				agent.WithTools(noopTool),
+			)
+
+			store := newMemoryCheckpointer()
+
+			_, err := ag.Run(
+				ctx,
+				[]llm.Message{userMessage("hi")},
+				agent.WithCheckpointer(store, "run-mid"),
+			)
+
+			var se *agent.SuspendedError
+			require.ErrorAs(t, err, &se)
+			assert.Equal(t, 1, provider.calls, "second LLM call must not fire after cancel")
+
+			cp, loadErr := store.Load(context.Background(), "run-mid")
+			require.NoError(t, loadErr)
+			require.NotNil(t, cp)
+			assert.Equal(t, agent.AgentStatusSuspended, cp.Status)
+			// The first LLM call completed; its output and the tool
+			// reply must be in the checkpointed messages so a Restore
+			// can resume from the next turn.
+			assert.Equal(t, 1, cp.Turns)
+			assert.GreaterOrEqual(t, len(cp.Messages), 3, "user + assistant tool-call + tool result")
+		},
+	)
+}
diff --git a/pkg/agent/restore_test.go b/pkg/agent/restore_test.go
index d5ba3ed05..b5f52f963 100644
--- a/pkg/agent/restore_test.go
+++ b/pkg/agent/restore_test.go
@@ -476,9 +476,8 @@ func TestRestore(t *testing.T) {
 
 			store := newMemoryCheckpointer()
 
-			stopCh := make(chan struct{})
-			close(stopCh)
-			ctx := agent.WithStopSignal(context.Background(), stopCh)
+			ctx, cancel := context.WithCancel(context.Background())
+			cancel()
 
 			_, err := ag.Run(
 				ctx,