diff --git a/src/browser/components/ContextUsageIndicatorButton.tsx b/src/browser/components/ContextUsageIndicatorButton.tsx
index 65f2f46832..efe283cb0d 100644
--- a/src/browser/components/ContextUsageIndicatorButton.tsx
+++ b/src/browser/components/ContextUsageIndicatorButton.tsx
@@ -11,6 +11,18 @@ import { Switch } from "./ui/switch";
 import { formatTokens, type TokenMeterData } from "@/common/utils/tokens/tokenMeterUtils";
 import { cn } from "@/common/lib/utils";
 
+/** Output reserve indicator (context limit minus max output tokens) */
+const OutputReserveIndicator: React.FC<{ threshold: number }> = (props) => {
+  const threshold = props.threshold;
+  if (threshold <= 0 || threshold >= 100) return null;
+
+  return (
+    <div
+      className="border-dashed-warning pointer-events-none absolute top-0 z-40 h-full w-0 border-l"
+      style={{ left: `${threshold}%` }}
+    />
+  );
+};
 /** Compact threshold tick mark for the button view */
 const CompactThresholdIndicator: React.FC<{ threshold: number }> = ({ threshold }) => {
   if (threshold >= 100) return null;
@@ -79,6 +91,25 @@ const AutoCompactSettings: React.FC<{
   const showUsageSlider = usageConfig && data.maxTokens;
   const isIdleEnabled = idleConfig?.hours !== null && idleConfig?.hours !== undefined;
 
+  const outputReserveThreshold = (() => {
+    if (!data.maxTokens || !data.maxOutputTokens) return null;
+    if (data.maxOutputTokens <= 0 || data.maxOutputTokens >= data.maxTokens) return null;
+    const raw = ((data.maxTokens - data.maxOutputTokens) / data.maxTokens) * 100;
+    return Math.max(0, Math.min(100, raw));
+  })();
+
+  const outputReserveTokens =
+    data.maxTokens && data.maxOutputTokens ? data.maxTokens - data.maxOutputTokens : null;
+
+  const showOutputReserveIndicator = Boolean(showUsageSlider && outputReserveThreshold !== null);
+  const showOutputReserveWarning = Boolean(
+    showUsageSlider &&
+    usageConfig &&
+    usageConfig.threshold < 100 &&
+    outputReserveThreshold !== null &&
+    usageConfig.threshold > outputReserveThreshold
+  );
+
   const handleIdleToggle = (enabled: boolean) => {
     if (!idleConfig) return;
     const parsed = parseInt(idleInputValue, 10);
@@ -118,9 +149,26 @@ const AutoCompactSettings: React.FC<{
       <div>
         <div className="relative w-full py-1.5">
           <TokenMeter segments={data.segments} orientation="horizontal" />
+          {showOutputReserveIndicator && outputReserveThreshold !== null && (
+            <OutputReserveIndicator threshold={outputReserveThreshold} />
+          )}
           {showUsageSlider && <HorizontalThresholdSlider config={usageConfig} />}
         </div>
         {showUsageSlider && <PercentTickMarks />}
+        {showOutputReserveIndicator &&
+          outputReserveThreshold !== null &&
+          outputReserveTokens !== null && (
+            <div className="text-muted mt-1 text-[10px]">
+              Output reserve starts at {outputReserveThreshold.toFixed(1)}% (
+              {formatTokens(outputReserveTokens)} prompt max)
+            </div>
+          )}
+        {showOutputReserveWarning && outputReserveThreshold !== null && (
+          <div className="text-warning mt-1 text-[10px]">
+            Auto-compact threshold is above the output reserve ({outputReserveThreshold.toFixed(1)}
+            %). Requests may hit context_exceeded before auto-compact runs.
+          </div>
+        )}
       </div>
 
       {/* Idle-based auto-compact */}
diff --git a/src/browser/components/RightSidebar/ContextUsageBar.tsx b/src/browser/components/RightSidebar/ContextUsageBar.tsx
index 4d9fefce51..d25d3147b8 100644
--- a/src/browser/components/RightSidebar/ContextUsageBar.tsx
+++ b/src/browser/components/RightSidebar/ContextUsageBar.tsx
@@ -3,6 +3,18 @@ import { TokenMeter } from "./TokenMeter";
 import { HorizontalThresholdSlider, type AutoCompactionConfig } from "./ThresholdSlider";
 import { formatTokens, type TokenMeterData } from "@/common/utils/tokens/tokenMeterUtils";
 
+const OutputReserveIndicator: React.FC<{ threshold: number }> = (props) => {
+  const threshold = props.threshold;
+  if (threshold <= 0 || threshold >= 100) return null;
+
+  return (
+    <div
+      className="border-dashed-warning pointer-events-none absolute top-0 z-40 h-full w-0 border-l"
+      style={{ left: `${threshold}%` }}
+    />
+  );
+};
+
 interface ContextUsageBarProps {
   data: TokenMeterData;
   /** Auto-compaction settings for threshold slider */
@@ -17,8 +29,6 @@ const ContextUsageBarComponent: React.FC<ContextUsageBarProps> = ({
   showTitle = true,
   testId,
 }) => {
-  if (data.totalTokens === 0) return null;
-
   const totalDisplay = formatTokens(data.totalTokens);
   const maxDisplay = data.maxTokens ? ` / ${formatTokens(data.maxTokens)}` : "";
   const percentageDisplay = data.maxTokens ? ` (${data.totalPercentage.toFixed(1)}%)` : "";
@@ -26,6 +36,29 @@ const ContextUsageBarComponent: React.FC<ContextUsageBarProps> = ({
   const showWarning = !data.maxTokens;
   const showThresholdSlider = autoCompaction && data.maxTokens;
 
+  const outputReserveThreshold = (() => {
+    if (!data.maxTokens || !data.maxOutputTokens) return null;
+    if (data.maxOutputTokens <= 0 || data.maxOutputTokens >= data.maxTokens) return null;
+    const raw = ((data.maxTokens - data.maxOutputTokens) / data.maxTokens) * 100;
+    return Math.max(0, Math.min(100, raw));
+  })();
+
+  const outputReserveTokens =
+    data.maxTokens && data.maxOutputTokens ? data.maxTokens - data.maxOutputTokens : null;
+
+  const showOutputReserveIndicator = Boolean(
+    showThresholdSlider && outputReserveThreshold !== null
+  );
+  const showOutputReserveWarning = Boolean(
+    showThresholdSlider &&
+    autoCompaction &&
+    autoCompaction.threshold < 100 &&
+    outputReserveThreshold !== null &&
+    autoCompaction.threshold > outputReserveThreshold
+  );
+
+  if (data.totalTokens === 0) return null;
+
   return (
     <div data-testid={testId} className="relative flex flex-col gap-1">
       <div className="flex items-baseline justify-between">
@@ -43,9 +76,28 @@ const ContextUsageBarComponent: React.FC<ContextUsageBarProps> = ({
 
       <div className="relative w-full overflow-hidden py-2">
         <TokenMeter segments={data.segments} orientation="horizontal" />
+        {showOutputReserveIndicator && outputReserveThreshold !== null && (
+          <OutputReserveIndicator threshold={outputReserveThreshold} />
+        )}
         {showThresholdSlider && <HorizontalThresholdSlider config={autoCompaction} />}
       </div>
 
+      {showOutputReserveIndicator &&
+        outputReserveThreshold !== null &&
+        outputReserveTokens !== null && (
+          <div className="text-muted mt-1 text-[11px]">
+            Output reserve starts at {outputReserveThreshold.toFixed(1)}% (
+            {formatTokens(outputReserveTokens)} prompt max)
+          </div>
+        )}
+
+      {showOutputReserveWarning && outputReserveThreshold !== null && (
+        <div className="text-warning mt-1 text-[11px]">
+          Auto-compact threshold is above the output reserve ({outputReserveThreshold.toFixed(1)}%).
+          Requests may hit context_exceeded before auto-compact runs.
+        </div>
+      )}
+
       {showWarning && (
         <div className="text-subtle mt-2 text-[11px] italic">
           Unknown model limits - showing relative usage only
diff --git a/src/common/utils/tokens/tokenMeterUtils.ts b/src/common/utils/tokens/tokenMeterUtils.ts
index 5943fa99f7..ca13a61728 100644
--- a/src/common/utils/tokens/tokenMeterUtils.ts
+++ b/src/common/utils/tokens/tokenMeterUtils.ts
@@ -23,6 +23,7 @@ export interface TokenMeterData {
   segments: TokenSegment[];
   totalTokens: number;
   maxTokens?: number;
+  maxOutputTokens?: number;
   totalPercentage: number;
 }
 
@@ -65,6 +66,7 @@ export function calculateTokenMeterData(
 
   const modelStats = getModelStats(model);
   const maxTokens = use1M && supports1MContext(model) ? 1_000_000 : modelStats?.max_input_tokens;
+  const maxOutputTokens = modelStats?.max_output_tokens;
 
   // Total tokens used in the request.
   // For Anthropic prompt caching, cacheCreate tokens are reported separately but still
@@ -96,6 +98,7 @@ export function calculateTokenMeterData(
     segments,
     totalTokens: totalUsed,
     maxTokens,
+    maxOutputTokens,
     totalPercentage: verticalProportions
       ? maxTokens
         ? (totalUsed / maxTokens) * 100