diff --git a/src/tools/image.ts b/src/tools/image.ts
index 4b15dac..d343d1b 100644
--- a/src/tools/image.ts
+++ b/src/tools/image.ts
@@ -692,11 +692,15 @@ export const imageEditTool = {
     if (!fs.existsSync(resolved)) return { success: false, error: `File not found: ${resolved}` };
 
     // determine output path
+    // Default to PNG for lossy source formats to avoid cumulative compression loss.
+    // Only exception: 'convert' operation (user explicitly wants a format change).
     let outPath = String(args?.output || '').trim();
     if (!outPath) {
+      const origExt = path.extname(resolved).toLowerCase();
+      const lossyFmts = new Set(['.jpg', '.jpeg', '.webp']);
       const ext = args?.format
         ? `.${args.format}`
-        : (operation === 'convert' ? '.png' : path.extname(resolved));
+        : (operation === 'convert' ? origExt : (lossyFmts.has(origExt) ? '.png' : origExt));
       const base = path.basename(resolved, path.extname(resolved));
       outPath = path.join(path.dirname(resolved), `${base}_${operation}_${Date.now()}${ext}`);
     } else if (!path.isAbsolute(outPath)) {
@@ -718,7 +722,7 @@ export const imageEditTool = {
       text: args?.text ?? '',
       position: args?.position ?? 'bottom-right',
       opacity: args?.opacity ?? 0.5,
-      quality: args?.quality ?? 85,
+      quality: args?.quality ?? 92,
       style: args?.style ?? 'painting',
     };