diff --git a/run_agent.py b/run_agent.py
index 3f4573bac52..2931c4fa349 100644
--- a/run_agent.py
+++ b/run_agent.py
@@ -9223,6 +9223,14 @@ class AIAgent:
         ``gateway/run.py``), so this restoration IS needed there too.
         """
         if not self._fallback_activated:
+            # Reset the chain index even when no fallback was activated this
+            # turn.  Without this, a turn where _try_activate_fallback() was
+            # called but returned False (chain exhausted or provider not
+            # configured) leaves _fallback_index >= len(_fallback_chain) while
+            # _fallback_activated stays False.  The next turn skips this block
+            # entirely, stranding the index and silently blocking all future
+            # fallback attempts for the session.  Fixes #20465.
+            self._fallback_index = 0
             return False
 
         if getattr(self, "_rate_limited_until", 0) > time.monotonic():
diff --git a/tests/run_agent/test_primary_runtime_restore.py b/tests/run_agent/test_primary_runtime_restore.py
index d082f047f27..b921e61ab14 100644
--- a/tests/run_agent/test_primary_runtime_restore.py
+++ b/tests/run_agent/test_primary_runtime_restore.py
@@ -123,6 +123,26 @@ class TestRestorePrimaryRuntime:
         assert agent._fallback_activated is False
         assert agent._restore_primary_runtime() is False
 
+    def test_resets_index_when_fallback_not_activated(self):
+        """Regression for #20465: failed activation leaves _fallback_index advanced
+        with _fallback_activated=False; the next turn's restore must reset the index."""
+        fbs = [{"provider": "custom", "model": "gpt-oss:20b",
+                "base_url": "http://host.docker.internal:11434/v1", "api_key": "ollama"}]
+        agent = _make_agent(fallback_model=fbs)
+
+        # resolve_provider_client returns None → _try_activate_fallback returns False
+        # but _fallback_index has already been incremented to 1
+        with patch("agent.auxiliary_client.resolve_provider_client", return_value=(None, None)):
+            assert agent._try_activate_fallback() is False
+
+        assert agent._fallback_activated is False
+        assert agent._fallback_index == 1  # advanced past the only entry
+
+        # _restore_primary_runtime must reset the index so the next turn can retry
+        result = agent._restore_primary_runtime()
+        assert result is False  # still no-op (primary was never left)
+        assert agent._fallback_index == 0  # chain available again
+
     def test_restores_model_and_provider(self):
         agent = _make_agent(
             fallback_model={"provider": "openrouter", "model": "anthropic/claude-sonnet-4"},