diff --git a/gateway/run.py b/gateway/run.py
index 9e4dc7c377ba..26cf8859ac42 100644
--- a/gateway/run.py
+++ b/gateway/run.py
@@ -13671,6 +13671,7 @@ class GatewayRunner(GatewayAuthorizationMixin, GatewayKanbanWatchersMixin, Gatew
             if _show_reasoning_effective and response and not _intentional_silence:
                 last_reasoning = agent_result.get("last_reasoning")
                 if last_reasoning:
+                    from gateway.stream_consumer import escape_code_fences_for_display
                     # Collapse long reasoning to keep messages readable
                     lines = last_reasoning.strip().splitlines()
                     if len(lines) > 15:
@@ -13702,6 +13703,9 @@ class GatewayRunner(GatewayAuthorizationMixin, GatewayKanbanWatchersMixin, Gatew
                         )
                         response = f"> 💭 **Reasoning:**\n{_quoted}\n\n{response}"
                     else:
+                        # Escape ``` inside reasoning so inner fences don't
+                        # break the outer code block used to render it.
+                        display_reasoning = escape_code_fences_for_display(display_reasoning)
                         response = f"💭 **Reasoning:**\n```\n{display_reasoning}\n```\n\n{response}"
 
             # Runtime-metadata footer — only on the FINAL message of the turn.
diff --git a/gateway/stream_consumer.py b/gateway/stream_consumer.py
index a269aa8198d3..dc4f5f956ac7 100644
--- a/gateway/stream_consumer.py
+++ b/gateway/stream_consumer.py
@@ -61,6 +61,24 @@ _COMMENTARY = object()
 _FLUSH = object()
 
 
+def escape_code_fences_for_display(text: str) -> str:
+    """Escape triple-backtick markers so text can be safely wrapped
+    inside an outer ``` code block without breaking the fence.
+
+    When reasoning content contains ``` (e.g. the model quotes code
+    in its thinking), wrapping it in an outer ``` for display causes
+    the inner fence to break the outer block.  Solution: replace each
+    `` ``` `` with `` \\`\\`\\` `` before wrapping.
+
+    Returns:
+        The input text with each `` ``` `` replaced by `` \\`\\`\\` ``,
+        or the input unchanged if no triple-backticks are present.
+    """
+    if not isinstance(text, str) or "```" not in text:
+        return text
+    return text.replace("```", "\\`\\`\\`")
+
+
 @dataclass
 class StreamConsumerConfig:
     """Runtime config for a single stream consumer instance."""
diff --git a/tests/gateway/test_escape_reasoning_fences.py b/tests/gateway/test_escape_reasoning_fences.py
new file mode 100644
index 000000000000..3a54ea09dcc3
--- /dev/null
+++ b/tests/gateway/test_escape_reasoning_fences.py
@@ -0,0 +1,45 @@
+"""
+Tests for escape_code_fences_for_display.
+
+B1: Escape triple-backtick markers inside reasoning text before wrapping
+    in an outer ``` fence, so inner ``` doesn't break the outer block.
+"""
+
+import pytest
+from gateway.stream_consumer import escape_code_fences_for_display
+
+
+class TestEscapeCodeFencesForDisplay:
+    """escape_code_fences_for_display prevents inner ``` from breaking
+    the outer code block used to render reasoning."""
+
+    def test_no_fence_passthrough(self):
+        text = "plain reasoning text"
+        assert escape_code_fences_for_display(text) == text
+
+    def test_single_fence_escaped(self):
+        text = "model used ```python\nx = 1\n``` in its thinking"
+        result = escape_code_fences_for_display(text)
+        assert "```" not in result
+        assert "\\`\\`\\`" in result
+
+    def test_multiple_fences_all_escaped(self):
+        text = "```\nblock1\n``` and ```python\nblock2\n```"
+        result = escape_code_fences_for_display(text)
+        assert result.count("```") == 0
+        assert result.count("\\`\\`\\`") == 4
+
+    def test_empty_string(self):
+        assert escape_code_fences_for_display("") == ""
+
+    def test_none_returns_none(self):
+        assert escape_code_fences_for_display(None) is None
+
+    def test_integration_with_outer_fence(self):
+        """Simulates the gateway's reasoning wrapping logic."""
+        raw = "thinking about:\n```python\nprint('hi')\n```\nok"
+        escaped = escape_code_fences_for_display(raw)
+        wrapped = f"💭 **Reasoning:**\n```\n{escaped}\n```\n\nHere's the answer."
+        # The outer ``` should not be broken by inner ```
+        assert wrapped.count("```") == 2  # only outer open + close
+        assert "\\`\\`\\`" in wrapped