diff --git a/AGENTS.md b/AGENTS.md
index d58f2d4..e843bde 100644
--- a/AGENTS.md
+++ b/AGENTS.md
@@ -267,7 +267,7 @@ sourced as needed.
 | `lib/load-project.sh` | Parses a `projects/*.toml` file into env vars (`PROJECT_NAME`, `CODEBERG_REPO`, `WOODPECKER_REPO_ID`, monitoring toggles, Matrix config, etc.). | env.sh (when `PROJECT_TOML` is set), supervisor-poll (per-project iteration) |
 | `lib/parse-deps.sh` | Extracts dependency issue numbers from an issue body (stdin → stdout, one number per line). Matches `## Dependencies` / `## Depends on` / `## Blocked by` sections and inline `depends on #N` patterns. Not sourced — executed via `bash lib/parse-deps.sh`. | dev-poll, supervisor-poll |
 | `lib/matrix_listener.sh` | Long-poll Matrix sync daemon. Dispatches thread replies to the correct agent via well-known files (`/tmp/{agent}-escalation-reply`). Handles supervisor, gardener, dev, review, vault, and action reply routing. Run as systemd service. | Standalone daemon |
-| `lib/agent-session.sh` | Shared tmux + Claude session helpers: `create_agent_session()`, `inject_formula()`, `agent_wait_for_claude_ready()`, `agent_inject_into_session()`, `agent_kill_session()`, `monitor_phase_loop()`, `read_phase()`. `create_agent_session(session, workdir, [phase_file])` optionally installs a PostToolUse hook (matcher `Bash\|Write`) that detects phase file writes in real-time — when Claude writes to the phase file, the hook writes a marker so `monitor_phase_loop` reacts on the next poll instead of waiting for mtime changes. When `MATRIX_THREAD_ID` is exported, also installs a Stop hook (`on-stop-matrix.sh`) that streams each Claude response to the Matrix thread. `monitor_phase_loop` sets `_MONITOR_LOOP_EXIT` to one of: `done`, `idle_timeout`, `idle_prompt` (Claude returned to `❯` for 3 consecutive polls without writing any phase — callback invoked with `PHASE:failed`, session already dead), `crashed`, or a `PHASE:*` string. Agents must handle `idle_prompt` in both their callback and their post-loop exit handler. | dev-agent.sh, gardener-agent.sh, action-agent.sh |
+| `lib/agent-session.sh` | Shared tmux + Claude session helpers: `create_agent_session()`, `inject_formula()`, `agent_wait_for_claude_ready()`, `agent_inject_into_session()`, `agent_kill_session()`, `monitor_phase_loop()`, `read_phase()`. `create_agent_session(session, workdir, [phase_file])` optionally installs a PostToolUse hook (matcher `Bash\|Write`) that detects phase file writes in real-time — when Claude writes to the phase file, the hook writes a marker so `monitor_phase_loop` reacts on the next poll instead of waiting for mtime changes. Also installs a StopFailure hook (matcher `rate_limit\|server_error\|authentication_failed\|billing_error`) that writes `PHASE:failed` with an `api_error` reason to the phase file and touches the phase-changed marker, so the orchestrator discovers API errors within one poll cycle instead of waiting for idle timeout. When `MATRIX_THREAD_ID` is exported, also installs a Stop hook (`on-stop-matrix.sh`) that streams each Claude response to the Matrix thread. `monitor_phase_loop` sets `_MONITOR_LOOP_EXIT` to one of: `done`, `idle_timeout`, `idle_prompt` (Claude returned to `❯` for 3 consecutive polls without writing any phase — callback invoked with `PHASE:failed`, session already dead), `crashed`, or a `PHASE:*` string. Agents must handle `idle_prompt` in both their callback and their post-loop exit handler. | dev-agent.sh, gardener-agent.sh, action-agent.sh |
 
 ---
 
diff --git a/dev/phase-test.sh b/dev/phase-test.sh
index 438a80c..6c07c6c 100755
--- a/dev/phase-test.sh
+++ b/dev/phase-test.sh
@@ -226,7 +226,64 @@ else
   fail "PostToolUse hook script not found or not executable: $HOOK_SCRIPT"
 fi
 
-# ── Test 10: phase-changed marker resets mtime guard ─────────────────────
+# ── Test 10: StopFailure hook writes phase file and marker on API error ───
+STOP_FAILURE_HOOK="$(dirname "$0")/../lib/hooks/on-stop-failure.sh"
+SF_MARKER="/tmp/phase-changed-test-sf.marker"
+rm -f "$SF_MARKER" "$PHASE_FILE"
+
+if [ -x "$STOP_FAILURE_HOOK" ]; then
+  # 10a: rate_limit stop reason → PHASE:failed with api_error reason
+  printf '{"stop_reason":"rate_limit"}' \
+    | "$STOP_FAILURE_HOOK" "$PHASE_FILE" "$SF_MARKER"
+  sf_first=$(head -1 "$PHASE_FILE" 2>/dev/null)
+  sf_second=$(sed -n '2p' "$PHASE_FILE" 2>/dev/null)
+  if [ "$sf_first" = "PHASE:failed" ] && echo "$sf_second" | grep -q "api_error: rate_limit"; then
+    ok "StopFailure hook writes PHASE:failed with api_error: rate_limit"
+  else
+    fail "StopFailure hook phase file: first='$sf_first' second='$sf_second'"
+  fi
+  if [ -f "$SF_MARKER" ]; then
+    ok "StopFailure hook writes phase-changed marker"
+  else
+    fail "StopFailure hook did not write phase-changed marker"
+  fi
+  rm -f "$SF_MARKER" "$PHASE_FILE"
+
+  # 10b: server_error stop reason
+  printf '{"stop_reason":"server_error"}' \
+    | "$STOP_FAILURE_HOOK" "$PHASE_FILE" "$SF_MARKER"
+  sf_second=$(sed -n '2p' "$PHASE_FILE" 2>/dev/null)
+  if echo "$sf_second" | grep -q "api_error: server_error"; then
+    ok "StopFailure hook writes api_error: server_error"
+  else
+    fail "StopFailure hook server_error: got '$sf_second'"
+  fi
+  rm -f "$SF_MARKER" "$PHASE_FILE"
+
+  # 10c: missing phase_file arg → no-op (exit 0, no crash)
+  printf '{"stop_reason":"rate_limit"}' | "$STOP_FAILURE_HOOK" "" "$SF_MARKER"
+  if [ ! -f "$PHASE_FILE" ]; then
+    ok "StopFailure hook no-ops when phase_file is empty"
+  else
+    fail "StopFailure hook should not write when phase_file is empty"
+  fi
+  rm -f "$SF_MARKER"
+
+  # 10d: missing marker arg → phase file still written, no marker
+  printf '{"stop_reason":"billing_error"}' \
+    | "$STOP_FAILURE_HOOK" "$PHASE_FILE" ""
+  sf_first=$(head -1 "$PHASE_FILE" 2>/dev/null)
+  if [ "$sf_first" = "PHASE:failed" ] && [ ! -f "$SF_MARKER" ]; then
+    ok "StopFailure hook writes phase without marker when marker arg is empty"
+  else
+    fail "StopFailure hook: first='$sf_first' marker_exists=$([ -f "$SF_MARKER" ] && echo yes || echo no)"
+  fi
+  rm -f "$PHASE_FILE"
+else
+  fail "StopFailure hook script not found or not executable: $STOP_FAILURE_HOOK"
+fi
+
+# ── Test 11: phase-changed marker resets mtime guard ─────────────────────
 # Simulates monitor_phase_loop behavior: when marker exists, last_mtime
 # is reset to 0 so the phase is processed even if mtime hasn't changed.
 echo "PHASE:awaiting_ci" > "$PHASE_FILE"
@@ -241,7 +298,7 @@ else
 fi
 
 # Now simulate marker present — reset last_mtime to 0
-MARKER_FILE="/tmp/phase-changed-test-session.marker"
+MARKER_FILE="/tmp/phase-changed-test-mtime.marker"
 date +%s > "$MARKER_FILE"
 if [ -f "$MARKER_FILE" ]; then
   rm -f "$MARKER_FILE"
diff --git a/lib/agent-session.sh b/lib/agent-session.sh
index 599b2c0..04638bb 100644
--- a/lib/agent-session.sh
+++ b/lib/agent-session.sh
@@ -47,6 +47,7 @@ agent_inject_into_session() {
 # Installs a Stop hook for idle detection (see monitor_phase_loop).
 # Installs a PreToolUse hook to guard destructive Bash operations.
 # Optionally installs a PostToolUse hook for phase file write detection.
+# Optionally installs a StopFailure hook for immediate phase file update on API error.
 # Args: session workdir [phase_file]
 # Returns 0 if session is ready, 1 otherwise.
 create_agent_session() {
@@ -121,6 +122,38 @@ create_agent_session() {
     fi
   fi
 
+  # Install StopFailure hook for immediate phase file update on API error:
+  # when Claude hits a rate limit, server error, billing error, or auth failure,
+  # the hook writes PHASE:failed to the phase file and touches the phase-changed
+  # marker so monitor_phase_loop picks it up within one poll cycle instead of
+  # waiting for idle timeout (up to 2 hours).
+  if [ -n "$phase_file" ]; then
+    local stop_failure_hook_script="${FACTORY_ROOT}/lib/hooks/on-stop-failure.sh"
+    if [ -x "$stop_failure_hook_script" ]; then
+      local stop_failure_hook_cmd="${stop_failure_hook_script} ${phase_file} ${phase_marker}"
+      if [ -f "$settings" ]; then
+        jq --arg cmd "$stop_failure_hook_cmd" '
+          if (.hooks.StopFailure // [] | any(.[]; .hooks[]?.command == $cmd))
+          then .
+          else .hooks.StopFailure = (.hooks.StopFailure // []) + [{
+            matcher: "rate_limit|server_error|authentication_failed|billing_error",
+            hooks: [{type: "command", command: $cmd}]
+          }]
+          end
+        ' "$settings" > "${settings}.tmp" && mv "${settings}.tmp" "$settings"
+      else
+        jq -n --arg cmd "$stop_failure_hook_cmd" '{
+          hooks: {
+            StopFailure: [{
+              matcher: "rate_limit|server_error|authentication_failed|billing_error",
+              hooks: [{type: "command", command: $cmd}]
+            }]
+          }
+        }' > "$settings"
+      fi
+    fi
+  fi
+
   # Install PreToolUse hook for destructive operation guard: blocks force push
   # to primary branch, rm -rf outside worktree, direct API merge calls, and
   # checkout/switch to primary branch.  Claude sees the denial reason on exit 2
diff --git a/lib/hooks/on-stop-failure.sh b/lib/hooks/on-stop-failure.sh
new file mode 100755
index 0000000..01fb484
--- /dev/null
+++ b/lib/hooks/on-stop-failure.sh
@@ -0,0 +1,34 @@
+#!/bin/bash
+# on-stop-failure.sh — StopFailure hook for immediate phase file update on API error.
+#
+# Called by Claude Code when a turn ends due to an API error (rate limit,
+# server error, billing error, authentication failure). Writes PHASE:failed
+# to the phase file and touches the phase-changed marker so the orchestrator
+# picks up the failure within one poll cycle instead of waiting for idle
+# timeout (up to 2 hours).
+#
+# Usage (in .claude/settings.json):
+#   {"type": "command", "command": "this-script /path/to/phase-file /path/to/marker"}
+#
+# Args: $1 = phase file path, $2 = phase-changed marker path
+
+phase_file="${1:-}"
+marker_file="${2:-}"
+
+[ -z "$phase_file" ] && exit 0
+
+input=$(cat)  # consume hook JSON from stdin
+
+# Extract the stop reason from the hook payload
+reason=$(printf '%s' "$input" | jq -r '
+  .stop_reason // .matched_hook // .reason // .type // "unknown"
+' 2>/dev/null)
+[ -z "$reason" ] && reason="unknown"
+
+# Write phase file immediately — orchestrator reads first line as phase sentinel
+printf 'PHASE:failed\nReason: api_error: %s\n' "$reason" > "$phase_file"
+
+# Touch marker so monitor_phase_loop picks this up on the next poll cycle
+if [ -n "$marker_file" ]; then
+  date +%s > "$marker_file"
+fi