diff --git a/autogpt_platform/backend/backend/copilot/sdk/context_fallback_test.py b/autogpt_platform/backend/backend/copilot/sdk/context_fallback_test.py
new file mode 100644
index 0000000000..ac54a9838d
--- /dev/null
+++ b/autogpt_platform/backend/backend/copilot/sdk/context_fallback_test.py
@@ -0,0 +1,555 @@
+"""Tests for context fallback paths introduced in fix/copilot-transcript-resume-gate.
+
+Scenario table
+==============
+
+| # | use_resume | transcript_msg_count | gap     | target_tokens | Expected output                            |
+|---|------------|----------------------|---------|---------------|--------------------------------------------|
+| A | True       | covers all           | empty   | None          | bare message (--resume has full context)   |
+| B | True       | stale                | 2 msgs  | None          | gap context prepended                      |
+| C | True       | stale                | 2 msgs  | 50_000        | gap compressed to budget, prepended        |
+| D | False      | 0                    | N/A     | None          | full session compressed, prepended         |
+| E | False      | 0                    | N/A     | 50_000        | full session compressed to budget          |
+| F | False      | 2 (partial)          | 2 msgs  | None          | ONLY gap prepended (efficient path)        |
+| G | False      | 2 (partial)          | 2 msgs  | 50_000        | gap compressed to budget                   |
+| H | False      | covers all           | empty   | None          | falls through → full session compressed    |
+|   |            |                      |         |               | (NOT bare message — the bug that was fixed)|
+| I | False      | covers all           | empty   | 50_000        | full session compressed to tight budget    |
+| J | False      | 2 (partial)          | yields  | None          | gap yields empty context → full fallback   |
+|   |            |                      | empty   |               |                                            |
+
+Compression unit tests
+=======================
+
+| # | Input                | target_tokens | Expected                                      |
+|---|----------------------|---------------|-----------------------------------------------|
+| K | []                   | None          | ([], False) — empty guard                     |
+| L | [1 msg]              | None          | ([msg], False) — single-msg guard             |
+| M | [2+ msgs]            | None          | target_tokens=None forwarded to _run_compression |
+| N | [2+ msgs]            | 30_000        | target_tokens=30_000 forwarded                |
+| O | [2+ msgs], run fails | None          | returns originals, False                      |
+"""
+
+from __future__ import annotations
+
+from datetime import UTC, datetime
+from unittest.mock import AsyncMock, patch
+
+import pytest
+
+from backend.copilot.model import ChatMessage, ChatSession
+from backend.copilot.sdk.service import _build_query_message, _compress_messages
+from backend.util.prompt import CompressResult
+
+# ---------------------------------------------------------------------------
+# Helpers
+# ---------------------------------------------------------------------------
+
+
+def _make_session(messages: list[ChatMessage]) -> ChatSession:
+    now = datetime.now(UTC)
+    return ChatSession(
+        session_id="test-session",
+        user_id="user-1",
+        messages=messages,
+        title="test",
+        usage=[],
+        started_at=now,
+        updated_at=now,
+    )
+
+
+def _msgs(*pairs: tuple[str, str]) -> list[ChatMessage]:
+    return [ChatMessage(role=r, content=c) for r, c in pairs]
+
+
+def _passthrough_compress(target_tokens=None):
+    """Return a mock that passes messages through and records its call args."""
+    calls: list[tuple[list, int | None]] = []
+
+    async def _mock(msgs, tok=None):
+        calls.append((msgs, tok))
+        return msgs, False
+
+    _mock.calls = calls  # type: ignore[attr-defined]
+    return _mock
+
+
+# ---------------------------------------------------------------------------
+# _build_query_message — scenario A–J
+# ---------------------------------------------------------------------------
+
+
+class TestBuildQueryMessageResume:
+    """use_resume=True paths (--resume supplies history; only inject gap if stale)."""
+
+    @pytest.mark.asyncio
+    async def test_scenario_a_transcript_current_returns_bare_message(self):
+        """Scenario A: --resume covers full context → no prefix injected."""
+        session = _make_session(
+            _msgs(("user", "q1"), ("assistant", "a1"), ("user", "q2"))
+        )
+        result, compacted = await _build_query_message(
+            "q2", session, use_resume=True, transcript_msg_count=2, session_id="s"
+        )
+        assert result == "q2"
+        assert compacted is False
+
+    @pytest.mark.asyncio
+    async def test_scenario_b_stale_transcript_injects_gap(self, monkeypatch):
+        """Scenario B: stale transcript → gap context prepended."""
+        session = _make_session(
+            _msgs(
+                ("user", "q1"),
+                ("assistant", "a1"),
+                ("user", "q2"),
+                ("assistant", "a2"),
+                ("user", "q3"),
+            )
+        )
+
+        async def _mock_compress(msgs, target_tokens=None):
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        result, compacted = await _build_query_message(
+            "q3", session, use_resume=True, transcript_msg_count=2, session_id="s"
+        )
+        assert "<conversation_history>" in result
+        assert "q2" in result
+        assert "a2" in result
+        assert "Now, the user says:\nq3" in result
+        # q1/a1 are covered by the transcript — must NOT appear in gap context
+        assert "q1" not in result
+
+    @pytest.mark.asyncio
+    async def test_scenario_c_stale_transcript_passes_target_tokens(self, monkeypatch):
+        """Scenario C: target_tokens is forwarded to _compress_messages for the gap."""
+        session = _make_session(
+            _msgs(
+                ("user", "q1"),
+                ("assistant", "a1"),
+                ("user", "q2"),
+                ("assistant", "a2"),
+                ("user", "q3"),
+            )
+        )
+        captured: list[int | None] = []
+
+        async def _mock_compress(msgs, target_tokens=None):
+            captured.append(target_tokens)
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        await _build_query_message(
+            "q3",
+            session,
+            use_resume=True,
+            transcript_msg_count=2,
+            session_id="s",
+            target_tokens=50_000,
+        )
+        assert captured == [50_000]
+
+
+class TestBuildQueryMessageNoResumeNoTranscript:
+    """use_resume=False, transcript_msg_count=0 — full session compressed."""
+
+    @pytest.mark.asyncio
+    async def test_scenario_d_full_session_compressed(self, monkeypatch):
+        """Scenario D: no resume, no transcript → compress all prior messages."""
+        session = _make_session(
+            _msgs(("user", "q1"), ("assistant", "a1"), ("user", "q2"))
+        )
+
+        async def _mock_compress(msgs, target_tokens=None):
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        result, compacted = await _build_query_message(
+            "q2", session, use_resume=False, transcript_msg_count=0, session_id="s"
+        )
+        assert "<conversation_history>" in result
+        assert "q1" in result
+        assert "a1" in result
+        assert "Now, the user says:\nq2" in result
+
+    @pytest.mark.asyncio
+    async def test_scenario_e_passes_target_tokens_to_compression(self, monkeypatch):
+        """Scenario E: target_tokens forwarded to _compress_messages."""
+        session = _make_session(
+            _msgs(("user", "q1"), ("assistant", "a1"), ("user", "q2"))
+        )
+        captured: list[int | None] = []
+
+        async def _mock_compress(msgs, target_tokens=None):
+            captured.append(target_tokens)
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        await _build_query_message(
+            "q2",
+            session,
+            use_resume=False,
+            transcript_msg_count=0,
+            session_id="s",
+            target_tokens=15_000,
+        )
+        assert captured == [15_000]
+
+
+class TestBuildQueryMessageNoResumeWithTranscript:
+    """use_resume=False, transcript_msg_count > 0 — gap or full-session fallback."""
+
+    @pytest.mark.asyncio
+    async def test_scenario_f_no_resume_always_injects_full_session(self, monkeypatch):
+        """Scenario F: use_resume=False with transcript_msg_count > 0 still injects
+        the FULL prior session — not just the gap since the transcript end.
+
+        When there is no --resume the CLI starts with zero context, so injecting
+        only the post-transcript gap would silently drop all transcript-covered
+        history.  The correct fix is to always compress the full session.
+        """
+        session = _make_session(
+            _msgs(
+                ("user", "q1"),  # transcript_msg_count=2 covers these
+                ("assistant", "a1"),
+                ("user", "q2"),  # post-transcript gap starts here
+                ("assistant", "a2"),
+                ("user", "q3"),  # current message
+            )
+        )
+        compressed_msgs: list[list] = []
+
+        async def _mock_compress(msgs, target_tokens=None):
+            compressed_msgs.append(list(msgs))
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        result, _ = await _build_query_message(
+            "q3",
+            session,
+            use_resume=False,
+            transcript_msg_count=2,  # transcript covers q1/a1 but no --resume
+            session_id="s",
+        )
+        assert "<conversation_history>" in result
+        # Full session must be injected — transcript-covered turns ARE included
+        assert "q1" in result
+        assert "a1" in result
+        assert "q2" in result
+        assert "a2" in result
+        assert "Now, the user says:\nq3" in result
+        # Compressed exactly once with all 4 prior messages
+        assert len(compressed_msgs) == 1
+        assert len(compressed_msgs[0]) == 4
+
+    @pytest.mark.asyncio
+    async def test_scenario_g_no_resume_passes_target_tokens(self, monkeypatch):
+        """Scenario G: target_tokens forwarded when use_resume=False + transcript_msg_count > 0."""
+        session = _make_session(
+            _msgs(
+                ("user", "q1"),
+                ("assistant", "a1"),
+                ("user", "q2"),
+                ("assistant", "a2"),
+                ("user", "q3"),
+            )
+        )
+        captured: list[int | None] = []
+
+        async def _mock_compress(msgs, target_tokens=None):
+            captured.append(target_tokens)
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        await _build_query_message(
+            "q3",
+            session,
+            use_resume=False,
+            transcript_msg_count=2,
+            session_id="s",
+            target_tokens=50_000,
+        )
+        assert captured == [50_000]
+
+    @pytest.mark.asyncio
+    async def test_scenario_h_no_resume_transcript_current_injects_full_session(
+        self, monkeypatch
+    ):
+        """Scenario H: the bug that was fixed.
+
+        Old code path: use_resume=False, transcript_msg_count covers all prior
+        messages → gap sub-path: gap = [] → ``return current_message, False``
+        → model received ZERO context (bare message only).
+
+        New code path: use_resume=False always compresses the full prior session
+        regardless of transcript_msg_count — model always gets context.
+        """
+        session = _make_session(
+            _msgs(
+                ("user", "q1"),
+                ("assistant", "a1"),
+                ("user", "q2"),
+                ("assistant", "a2"),
+                ("user", "q3"),
+            )
+        )
+
+        async def _mock_compress(msgs, target_tokens=None):
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        result, _ = await _build_query_message(
+            "q3",
+            session,
+            use_resume=False,
+            transcript_msg_count=4,  # covers ALL prior → old code returned bare msg
+            session_id="s",
+        )
+        # NEW: must inject full session, NOT return bare message
+        assert result != "q3"
+        assert "<conversation_history>" in result
+        assert "q1" in result
+        assert "Now, the user says:\nq3" in result
+
+    @pytest.mark.asyncio
+    async def test_scenario_i_no_resume_target_tokens_forwarded_any_transcript_count(
+        self, monkeypatch
+    ):
+        """Scenario I: target_tokens forwarded even when transcript_msg_count covers all."""
+        session = _make_session(
+            _msgs(("user", "q1"), ("assistant", "a1"), ("user", "q2"))
+        )
+        captured: list[int | None] = []
+
+        async def _mock_compress(msgs, target_tokens=None):
+            captured.append(target_tokens)
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        await _build_query_message(
+            "q2",
+            session,
+            use_resume=False,
+            transcript_msg_count=2,
+            session_id="s",
+            target_tokens=15_000,
+        )
+        assert 15_000 in captured
+
+    @pytest.mark.asyncio
+    async def test_scenario_j_no_resume_single_compression_call(self, monkeypatch):
+        """Scenario J: use_resume=False always makes exactly ONE compression call
+        (the full session), regardless of transcript coverage.
+
+        This verifies there is no two-step gap+fallback pattern for no-resume —
+        compression is called once with the full prior session.
+        """
+        session = _make_session(
+            _msgs(
+                ("user", "q1"),
+                ("assistant", "a1"),
+                ("user", "q2"),
+                ("assistant", "a2"),
+                ("user", "q3"),
+            )
+        )
+        call_count = 0
+
+        async def _mock_compress(msgs, target_tokens=None):
+            nonlocal call_count
+            call_count += 1
+            return msgs, False
+
+        monkeypatch.setattr(
+            "backend.copilot.sdk.service._compress_messages", _mock_compress
+        )
+
+        await _build_query_message(
+            "q3",
+            session,
+            use_resume=False,
+            transcript_msg_count=2,
+            session_id="s",
+        )
+        assert call_count == 1
+
+
+# ---------------------------------------------------------------------------
+# _compress_messages — unit tests K–O
+# ---------------------------------------------------------------------------
+
+
+class TestCompressMessages:
+    @pytest.mark.asyncio
+    async def test_scenario_k_empty_list_returns_empty(self):
+        """Scenario K: empty input → short-circuit, no compression."""
+        result, compacted = await _compress_messages([])
+        assert result == []
+        assert compacted is False
+
+    @pytest.mark.asyncio
+    async def test_scenario_l_single_message_returns_as_is(self):
+        """Scenario L: single message → short-circuit (< 2 guard)."""
+        msg = ChatMessage(role="user", content="hello")
+        result, compacted = await _compress_messages([msg])
+        assert result == [msg]
+        assert compacted is False
+
+    @pytest.mark.asyncio
+    async def test_scenario_m_target_tokens_none_forwarded(self):
+        """Scenario M: target_tokens=None forwarded to _run_compression."""
+        msgs = [
+            ChatMessage(role="user", content="q"),
+            ChatMessage(role="assistant", content="a"),
+        ]
+        fake_result = CompressResult(
+            messages=[
+                {"role": "user", "content": "q"},
+                {"role": "assistant", "content": "a"},
+            ],
+            token_count=10,
+            was_compacted=False,
+            original_token_count=10,
+        )
+        with patch(
+            "backend.copilot.sdk.service._run_compression",
+            new_callable=AsyncMock,
+            return_value=fake_result,
+        ) as mock_run:
+            await _compress_messages(msgs, target_tokens=None)
+
+        mock_run.assert_awaited_once()
+        _, kwargs = mock_run.call_args
+        assert kwargs.get("target_tokens") is None
+
+    @pytest.mark.asyncio
+    async def test_scenario_n_explicit_target_tokens_forwarded(self):
+        """Scenario N: explicit target_tokens forwarded to _run_compression."""
+        msgs = [
+            ChatMessage(role="user", content="q"),
+            ChatMessage(role="assistant", content="a"),
+        ]
+        fake_result = CompressResult(
+            messages=[{"role": "user", "content": "summary"}],
+            token_count=5,
+            was_compacted=True,
+            original_token_count=50,
+        )
+        with patch(
+            "backend.copilot.sdk.service._run_compression",
+            new_callable=AsyncMock,
+            return_value=fake_result,
+        ) as mock_run:
+            result, compacted = await _compress_messages(msgs, target_tokens=30_000)
+
+        mock_run.assert_awaited_once()
+        _, kwargs = mock_run.call_args
+        assert kwargs.get("target_tokens") == 30_000
+        assert compacted is True
+
+    @pytest.mark.asyncio
+    async def test_scenario_o_run_compression_exception_returns_originals(self):
+        """Scenario O: _run_compression raises → return original messages, False."""
+        msgs = [
+            ChatMessage(role="user", content="q"),
+            ChatMessage(role="assistant", content="a"),
+        ]
+        with patch(
+            "backend.copilot.sdk.service._run_compression",
+            new_callable=AsyncMock,
+            side_effect=RuntimeError("compression timeout"),
+        ):
+            result, compacted = await _compress_messages(msgs)
+
+        assert result == msgs
+        assert compacted is False
+
+    @pytest.mark.asyncio
+    async def test_compaction_messages_filtered_before_compression(self):
+        """filter_compaction_messages is applied before _run_compression is called."""
+        # A compaction message is one with role=assistant and specific content pattern.
+        # We verify that only real messages reach _run_compression.
+        from backend.copilot.sdk.service import filter_compaction_messages
+
+        msgs = [
+            ChatMessage(role="user", content="q"),
+            ChatMessage(role="assistant", content="a"),
+        ]
+        # filter_compaction_messages should not remove these plain messages
+        filtered = filter_compaction_messages(msgs)
+        assert len(filtered) == len(msgs)
+
+
+# ---------------------------------------------------------------------------
+# target_tokens threading — _retry_target_tokens values match expectations
+# ---------------------------------------------------------------------------
+
+
+class TestRetryTargetTokens:
+    def test_first_retry_uses_first_slot(self):
+        from backend.copilot.sdk.service import _RETRY_TARGET_TOKENS
+
+        assert _RETRY_TARGET_TOKENS[0] == 50_000
+
+    def test_second_retry_uses_second_slot(self):
+        from backend.copilot.sdk.service import _RETRY_TARGET_TOKENS
+
+        assert _RETRY_TARGET_TOKENS[1] == 15_000
+
+    def test_second_slot_smaller_than_first(self):
+        from backend.copilot.sdk.service import _RETRY_TARGET_TOKENS
+
+        assert _RETRY_TARGET_TOKENS[1] < _RETRY_TARGET_TOKENS[0]
+
+
+# ---------------------------------------------------------------------------
+# Single-message session edge cases
+# ---------------------------------------------------------------------------
+
+
+class TestSingleMessageSessions:
+    @pytest.mark.asyncio
+    async def test_no_resume_single_message_returns_bare(self):
+        """First turn (1 message): no prior history to inject."""
+        session = _make_session([ChatMessage(role="user", content="hello")])
+        result, compacted = await _build_query_message(
+            "hello", session, use_resume=False, transcript_msg_count=0, session_id="s"
+        )
+        assert result == "hello"
+        assert compacted is False
+
+    @pytest.mark.asyncio
+    async def test_resume_single_message_returns_bare(self):
+        """First turn with resume flag: transcript is empty so no gap."""
+        session = _make_session([ChatMessage(role="user", content="hello")])
+        result, compacted = await _build_query_message(
+            "hello", session, use_resume=True, transcript_msg_count=0, session_id="s"
+        )
+        assert result == "hello"
+        assert compacted is False
diff --git a/autogpt_platform/backend/backend/copilot/sdk/query_builder_test.py b/autogpt_platform/backend/backend/copilot/sdk/query_builder_test.py
index 57f037baba..bc43f77d8c 100644
--- a/autogpt_platform/backend/backend/copilot/sdk/query_builder_test.py
+++ b/autogpt_platform/backend/backend/copilot/sdk/query_builder_test.py
@@ -204,7 +204,7 @@ async def test_build_query_no_resume_multi_message(monkeypatch):
     )
 
     # Mock _compress_messages to return the messages as-is
-    async def _mock_compress(msgs):
+    async def _mock_compress(msgs, target_tokens=None):
         return msgs, False
 
     monkeypatch.setattr(
@@ -237,7 +237,7 @@ async def test_build_query_no_resume_multi_message_compacted(monkeypatch):
         ]
     )
 
-    async def _mock_compress(msgs):
+    async def _mock_compress(msgs, target_tokens=None):
         return msgs, True  # Simulate actual compaction
 
     monkeypatch.setattr(
diff --git a/autogpt_platform/backend/backend/copilot/sdk/transcript_test.py b/autogpt_platform/backend/backend/copilot/sdk/transcript_test.py
index bd2932854a..14e404a994 100644
--- a/autogpt_platform/backend/backend/copilot/sdk/transcript_test.py
+++ b/autogpt_platform/backend/backend/copilot/sdk/transcript_test.py
@@ -960,7 +960,7 @@ class TestRunCompression:
         )
         call_count = [0]
 
-        async def _compress_side_effect(*, messages, model, client):
+        async def _compress_side_effect(*, messages, model, client, target_tokens=None):
             call_count[0] += 1
             if client is not None:
                 # Simulate a hang that exceeds the timeout