diff --git a/src/server/execute.ts b/src/server/execute.ts
index 1b5f6e2..18af32c 100644
--- a/src/server/execute.ts
+++ b/src/server/execute.ts
@@ -1,9 +1,11 @@
 import type { AdapterExecutionContext, AdapterExecutionResult } from "@paperclipai/adapter-utils";
 import { inferOpenAiCompatibleBiller, redactHomePathUserSegments } from "@paperclipai/adapter-utils";
-import { asString, asNumber, asBoolean, parseObject } from "@paperclipai/adapter-utils/server-utils";
+import { asString, asNumber, asBoolean, parseObject, readPaperclipRuntimeSkillEntries, resolvePaperclipDesiredSkillNames } from "@paperclipai/adapter-utils/server-utils";
+import { readFile } from "node:fs/promises";
 import {
   parseOpenCodeJsonl,
   isOpenCodeUnknownSessionError,
+  isOpenCodeStepLimitResult,
 } from "./parse.js";
 import { getSelfPodInfo, getBatchApi, getCoreApi, getLogApi } from "./k8s-client.js";
 import { buildJobManifest } from "./job-manifest.js";
@@ -127,13 +129,28 @@ async function streamPodLogs(
   kubeconfigPath?: string,
 ): Promise<string> {
   const logApi = getLogApi(kubeconfigPath);
-  const chunks: string[] = [];
+  const parts: string[] = [];
+  let lineBuffer = "";
 
   const writable = new Writable({
     write(chunk: Buffer, _encoding, callback) {
-      const text = redactHomePathUserSegments(chunk.toString("utf-8"));
-      chunks.push(text);
-      void onLog("stdout", text).then(() => callback(), callback);
+      const incoming = lineBuffer + chunk.toString("utf-8");
+      const nlIdx = incoming.lastIndexOf("\n");
+      if (nlIdx === -1) {
+        // No complete line yet — buffer until newline arrives
+        lineBuffer = incoming;
+        callback();
+        return;
+      }
+      lineBuffer = incoming.slice(nlIdx + 1);
+      // Redact each complete line individually to avoid path splits across chunk boundaries
+      const redacted = incoming
+        .slice(0, nlIdx + 1)
+        .split("\n")
+        .map((line) => redactHomePathUserSegments(line))
+        .join("\n");
+      parts.push(redacted);
+      void onLog("stdout", redacted).then(() => callback(), callback);
     },
   });
 
@@ -146,7 +163,14 @@ async function streamPodLogs(
     // follow may fail if the container already exited
   }
 
-  return chunks.join("");
+  // Flush any partial line that never received a trailing newline
+  if (lineBuffer) {
+    const redacted = redactHomePathUserSegments(lineBuffer);
+    parts.push(redacted);
+    await onLog("stdout", redacted);
+  }
+
+  return parts.join("");
 }
 
 async function readPodLogs(
@@ -264,9 +288,45 @@ export async function execute(ctx: AdapterExecutionContext): Promise<AdapterExec
     // If we can't check, proceed — heartbeat service enforces concurrency too
   }
 
+  // Read agent instructions file (instructionsFilePath config field → system prompt prepend)
+  const instructionsFilePath = asString(config.instructionsFilePath, "").trim();
+  let instructionsContent = "";
+  if (instructionsFilePath) {
+    try {
+      instructionsContent = (await readFile(instructionsFilePath, "utf-8")).trim();
+    } catch {
+      await onLog("stderr", `[paperclip] Warning: instructionsFilePath not readable: ${instructionsFilePath}\n`);
+    }
+  }
+
+  // Resolve and read desired skill content (injected into prompt bundle)
+  let skillsBundleContent = "";
+  try {
+    const moduleDir = import.meta.dirname;
+    const availableEntries = await readPaperclipRuntimeSkillEntries(config, moduleDir);
+    const desiredSkillKeys = resolvePaperclipDesiredSkillNames(config, availableEntries);
+    const skillTexts: string[] = [];
+    for (const key of desiredSkillKeys) {
+      const entry = availableEntries.find((e) => e.key === key);
+      if (entry?.source) {
+        try {
+          const text = (await readFile(entry.source, "utf-8")).trim();
+          if (text) skillTexts.push(text);
+        } catch {
+          // skip unreadable skill files — non-fatal
+        }
+      }
+    }
+    if (skillTexts.length > 0) skillsBundleContent = skillTexts.join("\n\n---\n\n");
+  } catch {
+    // non-fatal: skill bundle is optional
+  }
+
   const { job, jobName, namespace, prompt, opencodeArgs, promptMetrics } = buildJobManifest({
     ctx,
     selfPod,
+    instructionsContent: instructionsContent || undefined,
+    skillsBundleContent: skillsBundleContent || undefined,
   });
 
   if (onMeta) {
@@ -412,6 +472,14 @@ export async function execute(ctx: AdapterExecutionContext): Promise<AdapterExec
       resultJson: { stdout },
     };
   }
+
+  // If OpenCode hit its step limit, clear the session so the next run starts fresh
+  // rather than resuming into an already-exhausted turn sequence.
+  const stepLimitReached = isOpenCodeStepLimitResult(stdout);
+  if (stepLimitReached) {
+    await onLog("stdout", `[paperclip] OpenCode step limit reached; clearing session for next run.\n`);
+  }
+
   const firstStderrLine = stdout.split(/\r?\n/).map((l) => l.trim()).find(Boolean) ?? "";
   const fallbackErrorMessage = parsedError || firstStderrLine || `OpenCode exited with code ${synthesizedExitCode ?? -1}`;
 
@@ -434,6 +502,6 @@ export async function execute(ctx: AdapterExecutionContext): Promise<AdapterExec
     costUsd: parsed.costUsd,
     resultJson: { stdout },
     summary: parsed.summary,
-    clearSession: false,
+    clearSession: stepLimitReached,
   } as AdapterExecutionResult;
 }
diff --git a/src/server/job-manifest.test.ts b/src/server/job-manifest.test.ts
index 9efea6b..4ed2581 100644
--- a/src/server/job-manifest.test.ts
+++ b/src/server/job-manifest.test.ts
@@ -110,4 +110,38 @@ describe("buildJobManifest", () => {
 
     expect(result.job.spec?.template?.spec?.restartPolicy).toBe("Never");
   });
+
+  it("applies nodeSelector from key=value textarea string", () => {
+    const ctx = { ...mockCtx, config: { nodeSelector: "kubernetes.io/arch=amd64\nkubernetes.io/os=linux" } };
+    const result = buildJobManifest({ ctx, selfPod: mockSelfPod });
+
+    expect(result.job.spec?.template?.spec?.nodeSelector).toEqual({
+      "kubernetes.io/arch": "amd64",
+      "kubernetes.io/os": "linux",
+    });
+  });
+
+  it("applies nodeSelector from JSON object string", () => {
+    const ctx = { ...mockCtx, config: { nodeSelector: '{"node-type":"gpu"}' } };
+    const result = buildJobManifest({ ctx, selfPod: mockSelfPod });
+
+    expect(result.job.spec?.template?.spec?.nodeSelector).toEqual({ "node-type": "gpu" });
+  });
+
+  it("applies nodeSelector from plain object config", () => {
+    const ctx = { ...mockCtx, config: { nodeSelector: { "zone": "us-east-1" } } };
+    const result = buildJobManifest({ ctx, selfPod: mockSelfPod });
+
+    expect(result.job.spec?.template?.spec?.nodeSelector).toEqual({ zone: "us-east-1" });
+  });
+
+  it("ignores blank lines and comments in nodeSelector textarea", () => {
+    const ctx = {
+      ...mockCtx,
+      config: { nodeSelector: "# comment\n\nkubernetes.io/arch=amd64\n" },
+    };
+    const result = buildJobManifest({ ctx, selfPod: mockSelfPod });
+
+    expect(result.job.spec?.template?.spec?.nodeSelector).toEqual({ "kubernetes.io/arch": "amd64" });
+  });
 });
diff --git a/src/server/job-manifest.ts b/src/server/job-manifest.ts
index dfe2ec5..8043693 100644
--- a/src/server/job-manifest.ts
+++ b/src/server/job-manifest.ts
@@ -17,6 +17,10 @@ import type { SelfPodInfo } from "./k8s-client.js";
 export interface JobBuildInput {
   ctx: AdapterExecutionContext;
   selfPod: SelfPodInfo;
+  /** Content of the agent's instructions file (e.g. AGENTS.md), prepended to the prompt. */
+  instructionsContent?: string;
+  /** Concatenated content of desired skill markdown files, prepended after instructions. */
+  skillsBundleContent?: string;
 }
 
 export interface JobBuildResult {
@@ -28,6 +32,46 @@ export interface JobBuildResult {
   promptMetrics: Record<string, number>;
 }
 
+/**
+ * Parse a config field that may be a JSON object, a plain object, or a textarea
+ * with "key=value" lines (one per line). Used for nodeSelector and labels.
+ */
+function parseKeyValueOrObject(value: unknown): Record<string, string> {
+  if (value && typeof value === "object" && !Array.isArray(value)) {
+    return Object.fromEntries(
+      Object.entries(value as Record<string, unknown>)
+        .filter(([, v]) => typeof v === "string")
+        .map(([k, v]) => [k, v as string]),
+    );
+  }
+  if (typeof value !== "string") return {};
+  const text = value.trim();
+  if (!text) return {};
+  try {
+    const parsed = JSON.parse(text);
+    if (parsed && typeof parsed === "object" && !Array.isArray(parsed)) {
+      return Object.fromEntries(
+        Object.entries(parsed as Record<string, unknown>)
+          .filter(([, v]) => typeof v === "string")
+          .map(([k, v]) => [k, v as string]),
+      );
+    }
+  } catch {
+    // fall through to key=value parsing
+  }
+  const result: Record<string, string> = {};
+  for (const line of text.split(/\r?\n/)) {
+    const trimmed = line.trim();
+    if (!trimmed || trimmed.startsWith("#")) continue;
+    const eqIdx = trimmed.indexOf("=");
+    if (eqIdx === -1) continue;
+    const key = trimmed.slice(0, eqIdx).trim();
+    const val = trimmed.slice(eqIdx + 1).trim();
+    if (key) result[key] = val;
+  }
+  return result;
+}
+
 function sanitizeForK8sName(value: string): string {
   return value.toLowerCase().replace(/[^a-z0-9-]/g, "").slice(0, 8);
 }
@@ -145,9 +189,9 @@ export function buildJobManifest(input: JobBuildInput): JobBuildResult {
   const timeoutSec = asNumber(config.timeoutSec, 0);
   const ttlSeconds = asNumber(config.ttlSecondsAfterFinished, 300);
   const resources = parseObject(config.resources);
-  const nodeSelector = parseObject(config.nodeSelector);
+  const nodeSelector = parseKeyValueOrObject(config.nodeSelector);
   const tolerations = Array.isArray(config.tolerations) ? config.tolerations : [];
-  const extraLabels = parseObject(config.labels);
+  const extraLabels = parseKeyValueOrObject(config.labels);
 
   // Resolve working directory
   const workspaceContext = parseObject(context.paperclipWorkspace);
@@ -185,7 +229,11 @@ export function buildJobManifest(input: JobBuildInput): JobBuildResult {
   const shouldUseResumeDeltaPrompt = Boolean(runtimeSessionId) && wakePrompt.length > 0;
   const renderedPrompt = shouldUseResumeDeltaPrompt ? "" : renderTemplate(promptTemplate, templateData);
   const sessionHandoffNote = asString(context.paperclipSessionHandoffMarkdown, "").trim();
+  const instructionsContent = input.instructionsContent?.trim() ?? "";
+  const skillsBundleContent = input.skillsBundleContent?.trim() ?? "";
   const prompt = joinPromptSections([
+    instructionsContent,
+    skillsBundleContent,
     renderedBootstrapPrompt,
     wakePrompt,
     sessionHandoffNote,
@@ -193,6 +241,8 @@ export function buildJobManifest(input: JobBuildInput): JobBuildResult {
   ]);
   const promptMetrics = {
     promptChars: prompt.length,
+    instructionsChars: instructionsContent.length,
+    skillsBundleChars: skillsBundleContent.length,
     bootstrapPromptChars: renderedBootstrapPrompt.length,
     wakePromptChars: wakePrompt.length,
     sessionHandoffChars: sessionHandoffNote.length,
diff --git a/src/server/parse.test.ts b/src/server/parse.test.ts
index 0505bb3..d934dc8 100644
--- a/src/server/parse.test.ts
+++ b/src/server/parse.test.ts
@@ -1,5 +1,5 @@
 import { describe, it, expect } from "vitest";
-import { parseOpenCodeJsonl, isOpenCodeUnknownSessionError } from "./parse.js";
+import { parseOpenCodeJsonl, isOpenCodeUnknownSessionError, isOpenCodeStepLimitResult } from "./parse.js";
 
 describe("parseOpenCodeJsonl", () => {
   it("parses text messages", () => {
@@ -119,6 +119,37 @@ describe("parseOpenCodeJsonl", () => {
   });
 });
 
+describe("isOpenCodeStepLimitResult", () => {
+  it("returns true for step_finish with reason max_turns", () => {
+    const stdout = JSON.stringify({ type: "step_finish", part: { reason: "max_turns", tokens: {} } });
+    expect(isOpenCodeStepLimitResult(stdout)).toBe(true);
+  });
+
+  it("returns true for step_finish with reason max_steps", () => {
+    const stdout = JSON.stringify({ type: "step_finish", part: { reason: "max_steps", tokens: {} } });
+    expect(isOpenCodeStepLimitResult(stdout)).toBe(true);
+  });
+
+  it("returns true for step_finish with reason step_limit", () => {
+    const stdout = JSON.stringify({ type: "step_finish", part: { reason: "step_limit", tokens: {} } });
+    expect(isOpenCodeStepLimitResult(stdout)).toBe(true);
+  });
+
+  it("returns false for step_finish with reason end_turn", () => {
+    const stdout = JSON.stringify({ type: "step_finish", part: { reason: "end_turn", tokens: {} } });
+    expect(isOpenCodeStepLimitResult(stdout)).toBe(false);
+  });
+
+  it("returns false with no step_finish events", () => {
+    const stdout = JSON.stringify({ type: "text", part: { text: "Hello" } });
+    expect(isOpenCodeStepLimitResult(stdout)).toBe(false);
+  });
+
+  it("returns false for empty stdout", () => {
+    expect(isOpenCodeStepLimitResult("")).toBe(false);
+  });
+});
+
 describe("isOpenCodeUnknownSessionError", () => {
   it("detects 'unknown session' in stdout", () => {
     const stdout = "Error: unknown session";
diff --git a/src/server/parse.ts b/src/server/parse.ts
index de049fa..4751a7a 100644
--- a/src/server/parse.ts
+++ b/src/server/parse.ts
@@ -88,6 +88,23 @@ export function parseOpenCodeJsonl(stdout: string) {
   };
 }
 
+export function isOpenCodeStepLimitResult(stdout: string): boolean {
+  for (const rawLine of stdout.split(/\r?\n/)) {
+    const line = rawLine.trim();
+    if (!line) continue;
+    const event = parseJson(line);
+    if (!event) continue;
+    if (asString(event.type, "") === "step_finish") {
+      const part = parseObject(event.part);
+      const reason = asString(part.reason, "").toLowerCase();
+      if (reason === "max_turns" || reason === "max_steps" || reason === "step_limit") {
+        return true;
+      }
+    }
+  }
+  return false;
+}
+
 export function isOpenCodeUnknownSessionError(stdout: string, stderr: string): boolean {
   const haystack = `${stdout}\n${stderr}`
     .split(/\r?\n/)
diff --git a/src/ui-parser.test.ts b/src/ui-parser.test.ts
new file mode 100644
index 0000000..409f29a
--- /dev/null
+++ b/src/ui-parser.test.ts
@@ -0,0 +1,149 @@
+import { describe, it, expect } from "vitest";
+import { parseStdoutLine } from "./ui-parser.js";
+
+const TS = "2026-01-01T00:00:00.000Z";
+
+describe("parseStdoutLine", () => {
+  it("returns empty for blank lines", () => {
+    expect(parseStdoutLine("", TS)).toEqual([]);
+    expect(parseStdoutLine("   ", TS)).toEqual([]);
+  });
+
+  it("returns stdout kind for non-JSON input", () => {
+    const entries = parseStdoutLine("plain text", TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("stdout");
+  });
+
+  it("maps text event to assistant kind", () => {
+    const line = JSON.stringify({ type: "text", part: { text: "Hello" } });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("assistant");
+    expect((entries[0] as { kind: "assistant"; text: string }).text).toBe("Hello");
+  });
+
+  it("maps standalone thinking event to thinking kind", () => {
+    const line = JSON.stringify({ type: "thinking", part: { thinking: "My reasoning" } });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("thinking");
+    expect((entries[0] as unknown as { text: string }).text).toBe("My reasoning");
+  });
+
+  it("maps thinking block inside assistant event to thinking kind", () => {
+    const line = JSON.stringify({
+      type: "assistant",
+      part: {
+        message: {
+          content: [{ type: "thinking", thinking: "Inner reasoning" }],
+        },
+      },
+    });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("thinking");
+    expect((entries[0] as unknown as { text: string }).text).toBe("Inner reasoning");
+  });
+
+  it("collects both text and thinking blocks from assistant event", () => {
+    const line = JSON.stringify({
+      type: "assistant",
+      part: {
+        message: {
+          content: [
+            { type: "thinking", thinking: "Let me think" },
+            { type: "text", text: "Here is my answer" },
+          ],
+        },
+      },
+    });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(2);
+    expect(entries[0].kind).toBe("thinking");
+    expect(entries[1].kind).toBe("assistant");
+  });
+
+  it("maps user event tool_result to tool_result kind", () => {
+    const line = JSON.stringify({
+      type: "user",
+      part: {
+        message: {
+          content: [
+            {
+              type: "tool_result",
+              tool_use_id: "tu_abc",
+              content: "File contents here",
+            },
+          ],
+        },
+      },
+    });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("tool_result");
+    const tr = entries[0] as { kind: "tool_result"; toolUseId: string; content: string; isError: boolean };
+    expect(tr.toolUseId).toBe("tu_abc");
+    expect(tr.content).toBe("File contents here");
+    expect(tr.isError).toBe(false);
+  });
+
+  it("maps user event tool_result with array content", () => {
+    const line = JSON.stringify({
+      type: "user",
+      part: {
+        message: {
+          content: [
+            {
+              type: "tool_result",
+              tool_use_id: "tu_xyz",
+              content: [{ type: "text", text: "part1" }, { type: "text", text: "part2" }],
+            },
+          ],
+        },
+      },
+    });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("tool_result");
+    expect((entries[0] as { content: string }).content).toBe("part1part2");
+  });
+
+  it("returns empty for user event with no content", () => {
+    const line = JSON.stringify({ type: "user", part: {} });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toEqual([]);
+  });
+
+  it("maps tool_use completed to tool_result kind", () => {
+    const line = JSON.stringify({
+      type: "tool_use",
+      part: { tool: "read_file", id: "tu_1", state: { status: "completed", output: "ok" } },
+    });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("tool_result");
+  });
+
+  it("maps step_finish to result kind", () => {
+    const line = JSON.stringify({
+      type: "step_finish",
+      part: { reason: "end_turn", tokens: { input: 10, output: 5, cache: { read: 0 } }, cost: 0.001 },
+    });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("result");
+  });
+
+  it("maps error event to stderr kind", () => {
+    const line = JSON.stringify({ type: "error", error: { message: "Something broke" } });
+    const entries = parseStdoutLine(line, TS);
+    expect(entries).toHaveLength(1);
+    expect(entries[0].kind).toBe("stderr");
+  });
+
+  it("ignores thinking event with empty text", () => {
+    const line = JSON.stringify({ type: "thinking", part: { thinking: "  " } });
+    expect(parseStdoutLine(line, TS)).toEqual([]);
+  });
+});
diff --git a/src/ui-parser.ts b/src/ui-parser.ts
index 24e8f11..4520869 100644
--- a/src/ui-parser.ts
+++ b/src/ui-parser.ts
@@ -9,6 +9,7 @@
 
 type TranscriptEntry =
   | { kind: "assistant"; ts: string; text: string; delta?: boolean }
+  | { kind: "thinking"; ts: string; text: string }
   | { kind: "tool_call"; ts: string; name: string; input: unknown; toolUseId?: string }
   | { kind: "tool_result"; ts: string; toolUseId: string; toolName?: string; content: string; isError: boolean }
   | { kind: "result"; ts: string; text: string; inputTokens: number; outputTokens: number; cachedTokens: number; costUsd: number; subtype: string; isError: boolean; errors: string[] }
@@ -155,7 +156,14 @@ export function parseStdoutLine(line: string, ts: string): TranscriptEntry[] {
     return [{ kind: "system", ts, text: "Starting step…" }];
   }
 
-  // Assistant message (nested content blocks)
+  // Standalone thinking event (extended reasoning)
+  if (type === "thinking") {
+    const text = asString(part.thinking ?? part.text, "").trim();
+    if (text) return [{ kind: "thinking", ts, text }];
+    return [];
+  }
+
+  // Assistant message (nested content blocks — text and thinking)
   if (type === "assistant") {
     const content = part.message ?? part;
     const contentRecord = asRecord(content);
@@ -163,13 +171,57 @@ export function parseStdoutLine(line: string, ts: string): TranscriptEntry[] {
       const contentArr = Array.isArray(contentRecord.content)
         ? contentRecord.content
         : [contentRecord.content];
+      const entries: TranscriptEntry[] = [];
       for (const item of contentArr) {
         const itemRecord = asRecord(item);
         if (itemRecord.type === "text" && typeof itemRecord.text === "string") {
           const text = (itemRecord.text as string).trim();
-          if (text) return [{ kind: "assistant", ts, text }];
+          if (text) entries.push({ kind: "assistant", ts, text });
+        } else if (itemRecord.type === "thinking" && typeof itemRecord.thinking === "string") {
+          const text = (itemRecord.thinking as string).trim();
+          if (text) entries.push({ kind: "thinking", ts, text });
         }
       }
+      return entries;
+    }
+    return [];
+  }
+
+  // User turn — surface tool_result blocks so they appear in the transcript
+  if (type === "user") {
+    const content = part.message ?? part;
+    const contentRecord = asRecord(content);
+    if (contentRecord.content) {
+      const contentArr = Array.isArray(contentRecord.content)
+        ? contentRecord.content
+        : [contentRecord.content];
+      const entries: TranscriptEntry[] = [];
+      for (const item of contentArr) {
+        const itemRecord = asRecord(item);
+        if (itemRecord.type === "tool_result") {
+          const toolUseId = asString(itemRecord.tool_use_id ?? itemRecord.toolUseId ?? "", "");
+          const contentVal = itemRecord.content;
+          let resultText = "";
+          if (typeof contentVal === "string") {
+            resultText = contentVal.trim();
+          } else if (Array.isArray(contentVal)) {
+            resultText = contentVal
+              .map((c) => asString(asRecord(c).text, ""))
+              .join("")
+              .trim();
+          }
+          if (toolUseId || resultText) {
+            entries.push({
+              kind: "tool_result",
+              ts,
+              toolUseId: toolUseId || "unknown",
+              content: resultText,
+              isError: false,
+            });
+          }
+        }
+      }
+      return entries;
     }
     return [];
   }