diff --git a/src/agents/bash-tools.exec-approval-output.test.ts b/src/agents/bash-tools.exec-approval-output.test.ts
index cb58fb18083e..a72dde66c960 100644
--- a/src/agents/bash-tools.exec-approval-output.test.ts
+++ b/src/agents/bash-tools.exec-approval-output.test.ts
@@ -74,6 +74,33 @@ describe("formatExecApprovalContinuationSourceOutput", () => {
     expect(formatted.endsWith("b")).toBe(true);
   });
 
+  it.each([
+    { name: "stderr", label: "stderr", stdoutUnits: 200_000, streamUnits: 100_000 },
+    { name: "error", label: "error", stdoutUnits: 200_000, streamUnits: 100_000 },
+    { name: "head header cut", label: "stderr", stdoutUnits: 191_907, streamUnits: 100_000 },
+    { name: "tail header cut", label: "stderr", stdoutUnits: 200_000, streamUnits: 63_970 },
+    { name: "already retained header", label: "stderr", stdoutUnits: 200_000, streamUnits: 63_960 },
+  ])("preserves the retained stream label across $name", ({ label, stdoutUnits, streamUnits }) => {
+    const formatted = formatExecApprovalContinuationSourceOutput([
+      { label: "stdout", value: "a".repeat(stdoutUnits) },
+      { label, value: "b".repeat(streamUnits) },
+    ]);
+
+    expect(formatted.length).toBeLessThanOrEqual(MAX_SOURCE_UTF16_UNITS);
+    expect(formatted).toContain("[stdout]\n");
+    expect(formatted).toContain(`${MARKER}\n[${label}]\n`);
+    expect(formatted.split(`[${label}]\n`)).toHaveLength(2);
+    expect(formatted.endsWith("b")).toBe(true);
+  });
+
+  it("does not mistake stream-like text in single-stream output for a stream boundary", () => {
+    const formatted = formatExecApprovalContinuationSourceOutput([
+      { label: "stdout", value: `${"a".repeat(200_000)}\n[stderr]\n${"b".repeat(100_000)}` },
+    ]);
+
+    expect(formatted).not.toContain(`${MARKER}\n[stderr]\n`);
+  });
+
   it("uses an honest marker because capture may already have dropped output", () => {
     const formatted = formatExecApprovalContinuationSourceOutput([
       { label: "stdout", value: "z".repeat(MAX_SOURCE_UTF16_UNITS + 1) },
@@ -193,6 +220,25 @@ describe("resizeExecApprovalContinuationPrompt", () => {
     expect(resized.split(OUTPUT_BEGIN)).toHaveLength(2);
     expect(resized.split(OUTPUT_END)).toHaveLength(2);
   });
+
+  it("preserves the retained stream label when the resumed model applies its output budget", () => {
+    const output = formatExecApprovalContinuationSourceOutput([
+      { label: "stdout", value: "a".repeat(12_000) },
+      { label: "stderr", value: "b".repeat(10_000) },
+    ]);
+    const built = buildExecApprovalContinuationPrompt(
+      `Exec finished (node=node-1 id=approval-1, code 0)\n${output}`,
+    );
+    const resized = resizeExecApprovalContinuationPrompt({
+      prompt: built.message,
+      range: built.resultRange,
+      maxOutputUtf16Units: 16_000,
+    });
+
+    expect(resized).toContain(`${MARKER}\n[stderr]\n`);
+    expect(resized).toContain(OUTPUT_BEGIN);
+    expect(resized).toContain(OUTPUT_END);
+  });
 });
 
 describe("exec output rendering", () => {
diff --git a/src/agents/bash-tools.exec-approval-output.ts b/src/agents/bash-tools.exec-approval-output.ts
index b3ebf9fc5be0..27ee465a2c79 100644
--- a/src/agents/bash-tools.exec-approval-output.ts
+++ b/src/agents/bash-tools.exec-approval-output.ts
@@ -74,8 +74,18 @@ function capContinuationOutput(text: string, maxUtf16Units: number): string {
     return truncateUtf16Safe(TRUNCATION_MARKER, boundedMax);
   }
   const headBudget = Math.floor(cutBudget * HEAD_SHARE);
-  const head = alignHeadToLineBreak(truncateUtf16Safe(text, headBudget));
+  let head = alignHeadToLineBreak(truncateUtf16Safe(text, headBudget));
   const tail = alignTailToLineBreak(sliceUtf16Safe(text, text.length - (cutBudget - headBudget)));
+  // Recapping can omit a stream header while retaining its contents; restore its
+  // label from the omitted span so stderr/error never masquerades as stdout.
+  const omittedHeaders = /^\[(?:stdout|stderr|error)\]\n/m.test(head)
+    ? text.slice(head.length, text.length - tail.length).match(/^\[(?:stdout|stderr|error)\]\n/gm)
+    : null;
+  const tailHeader = omittedHeaders?.at(-1) ?? "";
+  if (tailHeader && tailHeader.length <= headBudget) {
+    head = alignHeadToLineBreak(truncateUtf16Safe(text, headBudget - tailHeader.length));
+    return `${head}\n${TRUNCATION_MARKER}\n${tailHeader}${tail}`;
+  }
   return `${head}\n${TRUNCATION_MARKER}\n${tail}`;
 }