diff --git a/agent/conversation_loop.py b/agent/conversation_loop.py
index dd05ce1e4795..5906cf60eada 100644
--- a/agent/conversation_loop.py
+++ b/agent/conversation_loop.py
@@ -4676,11 +4676,30 @@ def run_conversation(
 
                 assistant_msg = agent._build_assistant_message(assistant_message, finish_reason)
                 
+                turn_content = assistant_message.content or ""
+
+                # Classify tools in this turn to determine if they are all housekeeping.
+                # This classification is needed regardless of whether the turn has visible content,
+                # because a substantive tool-only turn must invalidate any older housekeeping fallback.
+                _HOUSEKEEPING_TOOLS = frozenset({
+                    "memory", "todo", "skill_manage", "session_search",
+                })
+                _all_housekeeping = all(
+                    tc.function.name in _HOUSEKEEPING_TOOLS
+                    for tc in assistant_message.tool_calls
+                )
+
+                # If this turn has substantive tools (non-housekeeping), clear any older fallback.
+                # Prevents a two-turn-old housekeeping narration from being treated as if it belonged
+                # to the immediately preceding substantive tool turn.
+                if assistant_message.tool_calls and not _all_housekeeping:
+                    agent._last_content_with_tools = None
+                    agent._last_content_tools_all_housekeeping = False
+
                 # If this turn has both content AND tool_calls, capture the content
                 # as a fallback final response. Common pattern: model delivers its
                 # answer and calls memory/skill tools as a side-effect in the same
                 # turn. If the follow-up turn after tools is empty, we use this.
-                turn_content = assistant_message.content or ""
                 if turn_content and agent._has_content_after_think_block(turn_content):
                     agent._last_content_with_tools = turn_content
                     # Only mute subsequent output when EVERY tool call in
@@ -4688,13 +4707,6 @@ def run_conversation(
                     # skill_manage, etc.).  If any substantive tool is present
                     # (search_files, read_file, write_file, terminal, ...),
                     # keep output visible so the user sees progress.
-                    _HOUSEKEEPING_TOOLS = frozenset({
-                        "memory", "todo", "skill_manage", "session_search",
-                    })
-                    _all_housekeeping = all(
-                        tc.function.name in _HOUSEKEEPING_TOOLS
-                        for tc in assistant_message.tool_calls
-                    )
                     agent._last_content_tools_all_housekeeping = _all_housekeeping
                     if _all_housekeeping and agent._has_stream_consumers():
                         agent._mute_post_response = True
diff --git a/tests/run_agent/test_conversation_fallback_state.py b/tests/run_agent/test_conversation_fallback_state.py
new file mode 100644
index 000000000000..126e0a861ae4
--- /dev/null
+++ b/tests/run_agent/test_conversation_fallback_state.py
@@ -0,0 +1,126 @@
+"""Regression tests for conversation loop fallback state management."""
+from types import SimpleNamespace
+from unittest.mock import MagicMock, patch
+
+import pytest
+
+from run_agent import AIAgent
+
+
+def _tool_defs(*names):
+    """Helper: create minimal tool definitions for given names."""
+    return [
+        {
+            "type": "function", "function": {
+                "name": name,
+                "description": "test tool",
+                "parameters": {"type": "object", "properties": {}},
+            }
+        }
+        for name in names
+    ]
+
+
+def _tool_call(name, call_id):
+    """Helper: create a minimal tool call object."""
+    return SimpleNamespace(
+        id=call_id, type="function",
+        function=SimpleNamespace(name=name, arguments="{}"),
+    )
+
+
+def _response(*, content, finish_reason, tool_calls=None):
+    """Helper: create a minimal API response object."""
+    message = SimpleNamespace(content=content, tool_calls=tool_calls)
+    choice = SimpleNamespace(message=message, finish_reason=finish_reason)
+    return SimpleNamespace(choices=[choice], model="test/model", usage=None)
+
+
+def test_substantive_tool_only_turn_invalidates_older_housekeeping_fallback():
+    """
+    Regression test for #63860.
+
+    A cached `_last_content_with_tools` response from a housekeeping-only turn
+    must not survive a later substantive tool-only turn. When the model returns
+    an empty response after the substantive tool turn, the system should enter
+    the post-tool nudge path, not use the stale housekeeping fallback.
+
+    Production impact: scheduled cron jobs could return early without
+    completing their actual work (e.g., daily report job returning a
+    housekeeping message instead of producing the report artifact).
+
+    Test sequence:
+    1. Content + todo (housekeeping) → sets fallback, marks as all-housekeeping
+    2. Empty content + web_search (substantive) → should CLEAR old fallback
+    3. Empty content, no tool calls → should enter post-tool nudge, not use old fallback
+    4. Content "Recovered after nudge." → should be returned as final response
+
+    Before the fix:
+    - Step 2 would not clear the fallback state (no visible content)
+    - Step 3 would incorrectly use the housekeeping fallback from step 1
+    - API calls would stop at 3, never reaching the nudge response
+
+    After the fix:
+    - Step 2 classifies tools and clears the fallback because web_search is substantive
+    - Step 3 enters the post-tool nudge path (no stale housekeeping fallback available)
+    - Step 4 returns the nudge response as the final answer
+    """
+    with (
+        patch("run_agent.get_tool_definitions", return_value=_tool_defs("todo", "web_search")),
+        patch("run_agent.check_toolset_requirements", return_value={}),
+        patch("run_agent.OpenAI"),
+    ):
+        agent = AIAgent(
+            api_key="test-key",
+            base_url="https://openrouter.ai/api/v1/",
+            quiet_mode=True,
+            skip_context_files=True,
+            skip_memory=True,
+        )
+
+    agent._cached_system_prompt = "You are helpful."
+    agent._use_prompt_caching = False
+    agent.tool_delay = 0
+    agent.compression_enabled = False
+    agent.save_trajectories = False
+    agent.valid_tool_names = {"todo", "web_search"}
+    agent.client = MagicMock()
+    agent.client.chat.completions.create.side_effect = [
+        # Turn 1: Content + housekeeping tool
+        _response(
+            content="I'll begin the work.",
+            finish_reason="tool_calls",
+            tool_calls=[_tool_call("todo", "todo1")],
+        ),
+        # Turn 2: Empty content + substantive tool (should clear stale fallback)
+        _response(
+            content="",
+            finish_reason="tool_calls",
+            tool_calls=[_tool_call("web_search", "search1")],
+        ),
+        # Turn 3: Empty response (should enter nudge path, not use stale fallback)
+        _response(content="", finish_reason="stop"),
+        # Turn 4: Nudge response
+        _response(content="Recovered after nudge.", finish_reason="stop"),
+    ]
+
+    with (
+        patch("run_agent.handle_function_call", return_value="ok"),
+        patch.object(agent, "_persist_session"),
+        patch.object(agent, "_save_trajectory"),
+        patch.object(agent, "_cleanup_task_resources"),
+    ):
+        result = agent.run_conversation("do the full task")
+
+    assert result["final_response"] == "Recovered after nudge.", (
+        f"Expected nudge recovery response, got: {result['final_response']}. "
+        f"This indicates the stale housekeeping fallback was incorrectly used."
+    )
+    assert result["api_calls"] == 4, (
+        f"Expected 4 API calls (including nudge), got: {result['api_calls']}. "
+        f"This indicates the conversation exited early without retrying."
+    )
+    assert result["turn_exit_reason"].startswith("text_response"), (
+        f"Expected text_response exit, got: {result['turn_exit_reason']}. "
+        f"This indicates the wrong fallback path was taken."
+    )
\ No newline at end of file