diff --git a/gateway/platforms/api_server.py b/gateway/platforms/api_server.py
index 0b404af812..2534cc6bce 100644
--- a/gateway/platforms/api_server.py
+++ b/gateway/platforms/api_server.py
@@ -917,6 +917,16 @@ class APIServerAdapter(BasePlatformAdapter):
                 "type": "bearer",
                 "required": bool(self._api_key),
             },
+            "runtime": {
+                "mode": "server_agent",
+                "tool_execution": "server",
+                "split_runtime": False,
+                "description": (
+                    "The API server creates a server-side Hermes AIAgent; "
+                    "tools execute on the API-server host unless a future "
+                    "explicit split-runtime mode is enabled."
+                ),
+            },
             "features": {
                 "chat_completions": True,
                 "chat_completions_streaming": True,
diff --git a/tests/gateway/test_api_server.py b/tests/gateway/test_api_server.py
index 150ae11261..5170a1736a 100644
--- a/tests/gateway/test_api_server.py
+++ b/tests/gateway/test_api_server.py
@@ -587,6 +587,10 @@ class TestCapabilitiesEndpoint:
             assert data["model"] == "hermes-agent"
             assert data["auth"]["type"] == "bearer"
             assert data["auth"]["required"] is False
+            assert data["runtime"]["mode"] == "server_agent"
+            assert data["runtime"]["tool_execution"] == "server"
+            assert data["runtime"]["split_runtime"] is False
+            assert "API-server host" in data["runtime"]["description"]
             assert data["features"]["chat_completions"] is True
             assert data["features"]["run_status"] is True
             assert data["features"]["run_events_sse"] is True
diff --git a/website/docs/user-guide/messaging/open-webui.md b/website/docs/user-guide/messaging/open-webui.md
index 4366a0e65e..175276eb08 100644
--- a/website/docs/user-guide/messaging/open-webui.md
+++ b/website/docs/user-guide/messaging/open-webui.md
@@ -18,7 +18,13 @@ flowchart LR
     B -->|SSE streaming response| A
 ```
 
-Open WebUI connects to Hermes Agent's API server just like it would connect to OpenAI. Your agent handles the requests with its full toolset — terminal, file operations, web search, memory, skills — and returns the final response.
+Open WebUI connects to Hermes Agent's API server just like it would connect to OpenAI. Hermes handles the requests with its full toolset — terminal, file operations, web search, memory, skills — and returns the final response.
+
+:::important Runtime location
+The API server is a **Hermes agent runtime**, not a pure LLM proxy. For each request, Hermes creates a server-side `AIAgent` on the API-server host. Tool calls run where that API server is running.
+
+For example, if a laptop points Open WebUI or another OpenAI-compatible client at a Hermes API server on a remote machine, `pwd`, file tools, browser tools, local MCP tools, and other workspace tools run on the remote API-server host, not on the laptop.
+:::
 
 Open WebUI talks to Hermes server-to-server, so you do not need `API_SERVER_CORS_ORIGINS` for this integration.
 
@@ -205,13 +211,15 @@ Open WebUI currently manages conversation history client-side even in Responses
 When you send a message in Open WebUI:
 
 1. Open WebUI sends a `POST /v1/chat/completions` request with your message and conversation history
-2. Hermes Agent creates an AIAgent instance with its full toolset
-3. The agent processes your request — it may call tools (terminal, file operations, web search, etc.)
+2. Hermes Agent creates a server-side `AIAgent` instance using the API server's profile, model/provider config, memory, skills, and configured API-server toolsets
+3. The agent processes your request — it may call tools (terminal, file operations, web search, etc.) on the API-server host
 4. As tools execute, **inline progress messages stream to the UI** so you can see what the agent is doing (e.g. `` `💻 ls -la` ``, `` `🔍 Python 3.12 release` ``)
 5. The agent's final text response streams back to Open WebUI
 6. Open WebUI displays the response in its chat interface
 
-Your agent has access to all the same tools and capabilities as when using the CLI or Telegram — the only difference is the frontend.
+Your agent has access to the same tools and capabilities as that API-server Hermes instance. If the API server is remote, those tools are remote too.
+
+If you need tools to run against your **local** workspace today, run Hermes locally and point it at a pure LLM provider or pure OpenAI-compatible model proxy (for example vLLM, LiteLLM, Ollama, llama.cpp, OpenAI, OpenRouter, etc.). A future split-runtime mode for "remote brain, local hands" is being tracked in [#18715](https://github.com/NousResearch/hermes-agent/issues/18715); it is not the behavior of the current API server.
 
 :::tip Tool Progress
 With streaming enabled (the default), you'll see brief inline indicators as tools run — the tool emoji and its key argument. These appear in the response stream before the agent's final answer, giving you visibility into what's happening behind the scenes.