diff --git a/README.md b/README.md
index 493ef48..d2f4075 100644
--- a/README.md
+++ b/README.md
@@ -98,12 +98,13 @@ Note: even models with genuine native tool-calling support occasionally emit a t
 
 ## Config
 
-Config precedence: CLI flags > env vars (`LOCODE_BACKEND`, `LOCODE_MODEL`, `LOCODE_BASE_URL`) > persisted config file > defaults.
+Config precedence: CLI flags > env vars (`LOCODE_BACKEND`, `LOCODE_MODEL`, `LOCODE_BASE_URL`, `LOCODE_CONTEXT_WINDOW`, `LOCODE_MAX_ITERATIONS`) > persisted config file > defaults.
 
 ```sh
 locode config set backend ollama
 locode config set model qwen3-coder:30b
 locode config set contextWindow 32768   # fallback size when auto-detection fails
+locode config set maxIterations 40      # max tool calls per turn before locode gives up (default 25)
 locode config get
 locode config path
 ```
diff --git a/package.json b/package.json
index def1321..529a82d 100644
--- a/package.json
+++ b/package.json
@@ -1,6 +1,6 @@
 {
   "name": "locode",
-  "version": "0.1.0",
+  "version": "0.2.0",
   "description": "Agentic coding CLI for local models served via Ollama and LM Studio",
   "type": "module",
   "bin": {
diff --git a/src/agent/session.ts b/src/agent/session.ts
index ba7abab..3bd8a04 100644
--- a/src/agent/session.ts
+++ b/src/agent/session.ts
@@ -2,7 +2,7 @@ import { randomUUID } from "node:crypto";
 import type OpenAI from "openai";
 import type { ChatCompletionMessageParam } from "openai/resources/chat/completions";
 import type { ToolCallMode } from "../backend/capabilityProbe.js";
-import { DEFAULT_CONTEXT_WINDOW } from "../config/defaults.js";
+import { DEFAULT_CONTEXT_WINDOW, DEFAULT_MAX_ITERATIONS } from "../config/defaults.js";
 import type { SessionRecord } from "../persistence/sessionStore.js";
 import { PermissionManager } from "../permissions/permissionManager.js";
 import type { ConfirmFn } from "../permissions/types.js";
@@ -49,6 +49,7 @@ export function createSession(
   tools: ToolDef[] = TOOLS,
   contextWindow: number = DEFAULT_CONTEXT_WINDOW,
   contextWindowIsEstimate: boolean = true,
+  maxIterations: number = DEFAULT_MAX_ITERATIONS,
 ): Session {
   const toolset = buildToolSet(tools);
   const messages: ChatCompletionMessageParam[] = [{ role: "system", content: buildSystemPrompt(toolset.tools, mode) }];
@@ -60,7 +61,7 @@ export function createSession(
     cwd,
     mode,
     messages,
-    maxIterations: 8,
+    maxIterations,
     permissions: new PermissionManager(),
     confirm,
     toolset,
@@ -82,6 +83,7 @@ export function createSessionFromRecord(
   tools: ToolDef[] = TOOLS,
   contextWindow: number = DEFAULT_CONTEXT_WINDOW,
   contextWindowIsEstimate: boolean = true,
+  maxIterations: number = DEFAULT_MAX_ITERATIONS,
 ): Session {
   const toolset = buildToolSet(tools);
   const messages: ChatCompletionMessageParam[] = [
@@ -96,7 +98,7 @@ export function createSessionFromRecord(
     cwd,
     mode: record.mode,
     messages,
-    maxIterations: 8,
+    maxIterations,
     permissions: new PermissionManager(),
     confirm,
     toolset,
diff --git a/src/cli.ts b/src/cli.ts
index 77118e7..a09216b 100644
--- a/src/cli.ts
+++ b/src/cli.ts
@@ -18,7 +18,7 @@ function addBackendOptions(cmd: Command): Command {
 program
   .name("locode")
   .description("Agentic coding CLI for local models via Ollama and LM Studio")
-  .version("0.1.0");
+  .version("0.2.0");
 
 addBackendOptions(program)
   .option("-m, --model <name>", "model name as known to the backend")
@@ -108,20 +108,20 @@ configCmd
 
 configCmd
   .command("set <key> <value>")
-  .description("Persist a config value (backend, model, baseUrl, contextWindow)")
+  .description("Persist a config value (backend, model, baseUrl, contextWindow, maxIterations)")
   .action((key: string, value: string) => {
-    if (key !== "backend" && key !== "model" && key !== "baseUrl" && key !== "contextWindow") {
-      console.error(`Unknown config key "${key}". Valid keys: backend, model, baseUrl, contextWindow`);
+    if (key !== "backend" && key !== "model" && key !== "baseUrl" && key !== "contextWindow" && key !== "maxIterations") {
+      console.error(`Unknown config key "${key}". Valid keys: backend, model, baseUrl, contextWindow, maxIterations`);
       process.exit(1);
     }
     const stored = loadStoredConfig();
-    if (key === "contextWindow") {
+    if (key === "contextWindow" || key === "maxIterations") {
       const n = Number(value);
       if (!Number.isFinite(n) || n <= 0) {
-        console.error(`contextWindow must be a positive number, got "${value}".`);
+        console.error(`${key} must be a positive number, got "${value}".`);
         process.exit(1);
       }
-      stored.contextWindow = n;
+      stored[key] = n;
     } else {
       stored[key] = value;
     }
diff --git a/src/config/config.ts b/src/config/config.ts
index 283f76f..5ec00d6 100644
--- a/src/config/config.ts
+++ b/src/config/config.ts
@@ -1,4 +1,4 @@
-import { DEFAULT_CONTEXT_WINDOW, KNOWN_BACKENDS, type BackendName } from "./defaults.js";
+import { DEFAULT_CONTEXT_WINDOW, DEFAULT_MAX_ITERATIONS, KNOWN_BACKENDS, type BackendName } from "./defaults.js";
 import { loadStoredConfig } from "./store.js";
 
 export class ConfigError extends Error {}
@@ -41,3 +41,12 @@ export function resolveContextWindowDefault(): number {
   if (typeof stored.contextWindow === "number" && stored.contextWindow > 0) return stored.contextWindow;
   return DEFAULT_CONTEXT_WINDOW;
 }
+
+/** Max tool calls allowed per turn before locode gives up. */
+export function resolveMaxIterations(): number {
+  const stored = loadStoredConfig();
+  const envValue = Number(process.env.LOCODE_MAX_ITERATIONS);
+  if (Number.isFinite(envValue) && envValue > 0) return envValue;
+  if (typeof stored.maxIterations === "number" && stored.maxIterations > 0) return stored.maxIterations;
+  return DEFAULT_MAX_ITERATIONS;
+}
diff --git a/src/config/defaults.ts b/src/config/defaults.ts
index 91a442d..b12b353 100644
--- a/src/config/defaults.ts
+++ b/src/config/defaults.ts
@@ -11,3 +11,7 @@ export type BackendName = keyof typeof KNOWN_BACKENDS;
 /** Used when the context window can't be auto-detected from the backend (see backend/contextWindow.ts)
  * and the user hasn't configured one — a conservative size common among smaller local models. */
 export const DEFAULT_CONTEXT_WINDOW = 8192;
+
+/** Max tool calls per turn before locode gives up rather than looping forever. 25 gives real
+ * multi-file tasks room to breathe; still bounded so a genuinely stuck model fails fast. */
+export const DEFAULT_MAX_ITERATIONS = 25;
diff --git a/src/config/store.ts b/src/config/store.ts
index 60456d5..8eff76c 100644
--- a/src/config/store.ts
+++ b/src/config/store.ts
@@ -8,6 +8,8 @@ export interface StoredConfig {
   baseUrl?: string;
   /** Fallback context window size (in tokens) used when it can't be auto-detected from the backend. */
   contextWindow?: number;
+  /** Max tool calls allowed per turn before locode gives up rather than looping forever. */
+  maxIterations?: number;
 }
 
 const paths = envPaths("locode", { suffix: "" });
diff --git a/src/mcp/client.ts b/src/mcp/client.ts
index 836c175..d202ca3 100644
--- a/src/mcp/client.ts
+++ b/src/mcp/client.ts
@@ -32,7 +32,7 @@ export async function connectMcpServer(name: string, config: McpServerConfig): P
         stderr: "pipe",
       });
 
-  const client = new Client({ name: "locode", version: "0.1.0" });
+  const client = new Client({ name: "locode", version: "0.2.0" });
   await client.connect(transport);
   const { tools } = await client.listTools();
   return { name, client, transport, tools: tools as McpToolInfo[] };
diff --git a/src/ui/ink/App.tsx b/src/ui/ink/App.tsx
index 73efed7..bfaeb8f 100644
--- a/src/ui/ink/App.tsx
+++ b/src/ui/ink/App.tsx
@@ -14,6 +14,7 @@ import type { ToolCallMode } from "../../backend/capabilityProbe.js";
 import { setCachedMode } from "../../backend/capabilityCache.js";
 import { resolveContextWindow } from "../../backend/contextWindow.js";
 import { resolveToolCallMode } from "../../backend/resolveMode.js";
+import { resolveMaxIterations } from "../../config/config.js";
 import { KNOWN_BACKENDS, type BackendName } from "../../config/defaults.js";
 import { getMcpStatuses } from "../../mcp/manager.js";
 import type { PermissionDecision, PermissionMode } from "../../permissions/types.js";
@@ -150,6 +151,7 @@ export function App({
           [...TOOLS, ...mcpTools],
           contextWindow.value,
           contextWindow.isEstimate,
+          resolveMaxIterations(),
         );
         push({ kind: "banner", cwd, model, backend: baseURLRef.current });
         setPhase("input");
@@ -191,6 +193,7 @@ export function App({
           [...TOOLS, ...mcpTools],
           contextWindow.value,
           contextWindow.isEstimate,
+          resolveMaxIterations(),
         );
         push({
           kind: "banner",