diff --git a/src/integrations/misc/__tests__/read-file-truncation.spec.ts b/src/integrations/misc/__tests__/read-file-truncation.spec.ts
new file mode 100644
index 0000000000..e200fb91b0
--- /dev/null
+++ b/src/integrations/misc/__tests__/read-file-truncation.spec.ts
@@ -0,0 +1,64 @@
+import { promises as fs } from "fs"
+import path from "path"
+import { readIndentationBlock } from "../read-file-content"
+
+describe("readIndentationBlock truncation", () => {
+	const testDir = __dirname
+
+	async function withTempFile(filename: string, content: string, testFn: (filepath: string) => Promise<void>) {
+		const filepath = path.join(testDir, filename)
+		await fs.writeFile(filepath, content)
+		try {
+			await testFn(filepath)
+		} finally {
+			await fs.unlink(filepath)
+		}
+	}
+
+	it("should NOT be truncated when block size equals limit and no content remains", async () => {
+		// Use indentation to ensure lines are treated as content block, not siblings
+		const content = "  Line 1\n  Line 2\n  Line 3"
+		await withTempFile("truncation-exact-test.txt", content, async (filepath) => {
+			const result = await readIndentationBlock(filepath, 1, 3)
+			// Should get all 3 lines
+			expect(result.lineCount).toBe(3)
+			expect(result.metadata.truncatedByLimit).toBe(false)
+		})
+	})
+
+	it("should be truncated when block size exceeds limit", async () => {
+		// Use indentation to ensure lines are treated as content block, not siblings
+		const content = "  Line 1\n  Line 2\n  Line 3\n  Line 4"
+		await withTempFile("truncation-exceeds-test.txt", content, async (filepath) => {
+			const result = await readIndentationBlock(filepath, 1, 3)
+			// Should get 3 lines
+			expect(result.lineCount).toBe(3)
+			expect(result.metadata.truncatedByLimit).toBe(true)
+		})
+	})
+
+	it("should NOT be truncated when block ends naturally before limit (with maxLevels)", async () => {
+		// Block: lines 1-2 (indent 8). File has lines 3-4 (indent 0). Limit 10.
+		// maxLevels: 1 => minIndent = 8 - 4 = 4.
+		const content = "        Line 1\n        Line 2\nLine 3\nLine 4"
+		await withTempFile("truncation-natural-end-levels-test.txt", content, async (filepath) => {
+			const result = await readIndentationBlock(filepath, 1, 10, {
+				anchorLine: 1,
+				maxLevels: 1,
+			})
+			// Should get 2 lines (Line 1, Line 2)
+			expect(result.lineCount).toBe(2)
+			expect(result.metadata.truncatedByLimit).toBe(false)
+		})
+	})
+
+	it("should be truncated when block continues but limit reached", async () => {
+		// Block: lines 1-4. Limit 3.
+		const content = "  Line 1\n  Line 2\n  Line 3\n  Line 4"
+		await withTempFile("truncation-limit-reached-test.txt", content, async (filepath) => {
+			const result = await readIndentationBlock(filepath, 1, 3, { anchorLine: 1 })
+			expect(result.lineCount).toBe(3)
+			expect(result.metadata.truncatedByLimit).toBe(true)
+		})
+	})
+})
diff --git a/src/integrations/misc/read-file-content.ts b/src/integrations/misc/read-file-content.ts
index 4eace8e5b7..88d752a0b3 100644
--- a/src/integrations/misc/read-file-content.ts
+++ b/src/integrations/misc/read-file-content.ts
@@ -241,6 +241,11 @@ async function collectFileLines(filePath: string): Promise<LineRecord[]> {
 				lineNumber++
 				records.push(createLineRecord(lineNumber, buffer))
 			}
+			console.log(
+				"collectFileLines records:",
+				records.length,
+				records.map((r) => r.raw),
+			)
 			resolve(records)
 		})
 	})
@@ -506,8 +511,9 @@ export async function readIndentationBlock(
 	let j = anchorIndex + 1 // downward cursor
 	let iMinIndentCount = 0
 	let jMinIndentCount = 0
+	let truncatedByLimit = false
 
-	while (out.length < finalLimit) {
+	while (out.length <= finalLimit) {
 		let progressed = 0
 
 		// Expand upward
@@ -530,12 +536,15 @@ export async function readIndentationBlock(
 					}
 				}
 
-				if (i >= 0) {
-					i--
+				// Check if we've exceeded the limit
+				if (out.length > finalLimit) {
+					truncatedByLimit = true
+					out.shift()
+					break
 				}
 
-				if (out.length >= finalLimit) {
-					break
+				if (i >= 0) {
+					i--
 				}
 			} else {
 				i = -1 // Stop upward expansion
@@ -558,6 +567,13 @@ export async function readIndentationBlock(
 					jMinIndentCount++
 				}
 
+				// Check if we've exceeded the limit
+				if (out.length > finalLimit) {
+					truncatedByLimit = true
+					out.pop()
+					break
+				}
+
 				if (j < records.length) {
 					j++
 				}
@@ -594,9 +610,6 @@ export async function readIndentationBlock(
 	const totalLines = records.length
 	const linesAfterEnd = totalLines - endLine
 
-	// Determine if truncated by limit (expansion stopped due to limit, not natural boundaries)
-	const truncatedByLimit = out.length >= finalLimit
-
 	return {
 		content,
 		lineCount: linesReturned,