diff --git a/src/api/providers/__tests__/openrouter.spec.ts b/src/api/providers/__tests__/openrouter.spec.ts
index ae36fc1399..2525d8c1ab 100644
--- a/src/api/providers/__tests__/openrouter.spec.ts
+++ b/src/api/providers/__tests__/openrouter.spec.ts
@@ -45,6 +45,51 @@ vitest.mock("../fetchers/modelCache", () => ({
 	}),
 }))
 
+// Mock XmlMatcher
+vitest.mock("../../../utils/xml-matcher", () => ({
+	XmlMatcher: vitest.fn().mockImplementation((tagName, transform) => {
+		return {
+			update: vitest.fn((chunk) => {
+				const results = []
+				// Simple mock implementation for testing
+				const toolCallRegex = new RegExp(`<${tagName}>(.+?)</${tagName}>`, "g")
+				let lastIndex = 0
+				let match
+
+				while ((match = toolCallRegex.exec(chunk)) !== null) {
+					// Add text before the match
+					if (match.index > lastIndex) {
+						results.push({
+							type: tagName,
+							data: chunk.substring(lastIndex, match.index),
+							matched: false,
+						})
+					}
+					// Add the matched content
+					results.push({
+						type: tagName,
+						data: match[1],
+						matched: true,
+					})
+					lastIndex = toolCallRegex.lastIndex
+				}
+
+				// Add remaining text
+				if (lastIndex < chunk.length) {
+					results.push({
+						type: tagName,
+						data: chunk.substring(lastIndex),
+						matched: false,
+					})
+				}
+
+				return transform ? results.map(transform) : results
+			}),
+			final: vitest.fn(() => []),
+		}
+	}),
+}))
+
 describe("OpenRouterHandler", () => {
 	const mockOptions: ApiHandlerOptions = {
 		openRouterApiKey: "test-key",
@@ -320,4 +365,352 @@ describe("OpenRouterHandler", () => {
 			await expect(handler.completePrompt("test prompt")).rejects.toThrow("Unexpected error")
 		})
 	})
+
+	describe("GPT-OSS tool calling support", () => {
+		it("handles standard OpenAI-style tool calls in stream", async () => {
+			const handler = new OpenRouterHandler({
+				...mockOptions,
+				openRouterModelId: "openai/gpt-oss-120b",
+			})
+
+			const mockStream = {
+				async *[Symbol.asyncIterator]() {
+					// Simulate tool call chunks
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									tool_calls: [
+										{
+											id: "tool_1",
+											function: { name: "get_weather" },
+										},
+									],
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									tool_calls: [
+										{
+											function: { arguments: '{"location": ' },
+										},
+									],
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									tool_calls: [
+										{
+											function: { arguments: '"San Francisco"}' },
+										},
+									],
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [{ delta: {} }],
+						usage: { prompt_tokens: 10, completion_tokens: 20 },
+					}
+				},
+			}
+
+			const mockCreate = vitest.fn().mockResolvedValue(mockStream)
+			;(OpenAI as any).prototype.chat = {
+				completions: { create: mockCreate },
+			} as any
+
+			const generator = handler.createMessage("test", [])
+			const chunks = []
+
+			for await (const chunk of generator) {
+				chunks.push(chunk)
+			}
+
+			// Should have tool call chunk and usage chunk
+			expect(chunks).toHaveLength(2)
+			expect(chunks[0]).toEqual({
+				type: "tool_call",
+				id: "tool_1",
+				name: "get_weather",
+				arguments: '{"location": "San Francisco"}',
+			})
+			expect(chunks[1]).toEqual({
+				type: "usage",
+				inputTokens: 10,
+				outputTokens: 20,
+				cacheReadTokens: undefined,
+				reasoningTokens: undefined,
+				totalCost: 0,
+			})
+		})
+
+		it("handles tool calls within reasoning blocks for GPT-OSS models", async () => {
+			const handler = new OpenRouterHandler({
+				...mockOptions,
+				openRouterModelId: "openai/gpt-oss-20b",
+			})
+
+			const mockStream = {
+				async *[Symbol.asyncIterator]() {
+					// Simulate reasoning with embedded tool call
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									reasoning:
+										'Let me check the weather. <tool_call><name>get_weather</name><arguments>{"location": "New York"}</arguments></tool_call>',
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									content: "The weather in New York is sunny.",
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [{ delta: {} }],
+						usage: { prompt_tokens: 15, completion_tokens: 25 },
+					}
+				},
+			}
+
+			const mockCreate = vitest.fn().mockResolvedValue(mockStream)
+			;(OpenAI as any).prototype.chat = {
+				completions: { create: mockCreate },
+			} as any
+
+			const generator = handler.createMessage("test", [])
+			const chunks = []
+
+			for await (const chunk of generator) {
+				chunks.push(chunk)
+			}
+
+			// Should have reasoning, tool call, text, and usage chunks
+			expect(chunks).toHaveLength(4)
+			expect(chunks[0]).toEqual({
+				type: "reasoning",
+				text: "Let me check the weather. ",
+			})
+			expect(chunks[1]).toEqual({
+				type: "tool_call",
+				id: "tool_1",
+				name: "get_weather",
+				arguments: '{"location": "New York"}',
+			})
+			expect(chunks[2]).toEqual({
+				type: "text",
+				text: "The weather in New York is sunny.",
+			})
+			expect(chunks[3]).toEqual({
+				type: "usage",
+				inputTokens: 15,
+				outputTokens: 25,
+				cacheReadTokens: undefined,
+				reasoningTokens: undefined,
+				totalCost: 0,
+			})
+		})
+
+		it("handles multiple tool calls in reasoning for GPT-OSS", async () => {
+			const handler = new OpenRouterHandler({
+				...mockOptions,
+				openRouterModelId: "openai/gpt-oss-120b",
+			})
+
+			const mockStream = {
+				async *[Symbol.asyncIterator]() {
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									reasoning:
+										'I\'ll check multiple things. <tool_call><name>get_weather</name><arguments>{"location": "LA"}</arguments></tool_call> and then <tool_call><name>get_time</name><arguments>{"timezone": "PST"}</arguments></tool_call>',
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [{ delta: {} }],
+						usage: { prompt_tokens: 20, completion_tokens: 30 },
+					}
+				},
+			}
+
+			const mockCreate = vitest.fn().mockResolvedValue(mockStream)
+			;(OpenAI as any).prototype.chat = {
+				completions: { create: mockCreate },
+			} as any
+
+			const generator = handler.createMessage("test", [])
+			const chunks = []
+
+			for await (const chunk of generator) {
+				chunks.push(chunk)
+			}
+
+			// Should have reasoning text, two tool calls, more reasoning text, and usage
+			expect(chunks).toHaveLength(5)
+			expect(chunks[0]).toEqual({
+				type: "reasoning",
+				text: "I'll check multiple things. ",
+			})
+			expect(chunks[1]).toEqual({
+				type: "tool_call",
+				id: "tool_1",
+				name: "get_weather",
+				arguments: '{"location": "LA"}',
+			})
+			expect(chunks[2]).toEqual({
+				type: "reasoning",
+				text: " and then ",
+			})
+			expect(chunks[3]).toEqual({
+				type: "tool_call",
+				id: "tool_2",
+				name: "get_time",
+				arguments: '{"timezone": "PST"}',
+			})
+			expect(chunks[4]).toEqual({
+				type: "usage",
+				inputTokens: 20,
+				outputTokens: 30,
+				cacheReadTokens: undefined,
+				reasoningTokens: undefined,
+				totalCost: 0,
+			})
+		})
+
+		it("handles non-GPT-OSS models without tool call parsing in reasoning", async () => {
+			const handler = new OpenRouterHandler({
+				...mockOptions,
+				openRouterModelId: "anthropic/claude-sonnet-4",
+			})
+
+			const mockStream = {
+				async *[Symbol.asyncIterator]() {
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									reasoning: "This contains <tool_call> but should not be parsed as tool call",
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [{ delta: {} }],
+						usage: { prompt_tokens: 5, completion_tokens: 10 },
+					}
+				},
+			}
+
+			const mockCreate = vitest.fn().mockResolvedValue(mockStream)
+			;(OpenAI as any).prototype.chat = {
+				completions: { create: mockCreate },
+			} as any
+
+			const generator = handler.createMessage("test", [])
+			const chunks = []
+
+			for await (const chunk of generator) {
+				chunks.push(chunk)
+			}
+
+			// Should only have reasoning and usage chunks, no tool call parsing
+			expect(chunks).toHaveLength(2)
+			expect(chunks[0]).toEqual({
+				type: "reasoning",
+				text: "This contains <tool_call> but should not be parsed as tool call",
+			})
+			expect(chunks[1]).toEqual({
+				type: "usage",
+				inputTokens: 5,
+				outputTokens: 10,
+				cacheReadTokens: undefined,
+				reasoningTokens: undefined,
+				totalCost: 0,
+			})
+		})
+
+		it("handles malformed tool calls gracefully", async () => {
+			const handler = new OpenRouterHandler({
+				...mockOptions,
+				openRouterModelId: "openai/gpt-oss-20b",
+			})
+
+			const mockStream = {
+				async *[Symbol.asyncIterator]() {
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									reasoning: "Invalid tool call: <tool_call>missing closing tag",
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [
+							{
+								delta: {
+									reasoning: " and another <tool_call><name>no_args</name></tool_call>",
+								},
+							},
+						],
+					}
+					yield {
+						id: "test-id",
+						choices: [{ delta: {} }],
+						usage: { prompt_tokens: 5, completion_tokens: 10 },
+					}
+				},
+			}
+
+			const mockCreate = vitest.fn().mockResolvedValue(mockStream)
+			;(OpenAI as any).prototype.chat = {
+				completions: { create: mockCreate },
+			} as any
+
+			const generator = handler.createMessage("test", [])
+			const chunks = []
+
+			for await (const chunk of generator) {
+				chunks.push(chunk)
+			}
+
+			// Should handle malformed tool calls gracefully
+			// The first malformed one should be treated as reasoning text
+			// The second one without arguments should be ignored
+			expect(chunks.some((chunk) => chunk.type === "reasoning")).toBe(true)
+			expect(chunks[chunks.length - 1].type).toBe("usage")
+		})
+	})
 })
diff --git a/src/api/providers/openrouter.ts b/src/api/providers/openrouter.ts
index 6565daa238..9ba4318c16 100644
--- a/src/api/providers/openrouter.ts
+++ b/src/api/providers/openrouter.ts
@@ -18,6 +18,7 @@ import { addCacheBreakpoints as addAnthropicCacheBreakpoints } from "../transfor
 import { addCacheBreakpoints as addGeminiCacheBreakpoints } from "../transform/caching/gemini"
 import type { OpenRouterReasoningParams } from "../transform/reasoning"
 import { getModelParams } from "../transform/model-params"
+import { XmlMatcher } from "../../utils/xml-matcher"
 
 import { getModels } from "./fetchers/modelCache"
 import { getModelEndpoints } from "./fetchers/modelEndpointCache"
@@ -138,6 +139,20 @@ export class OpenRouterHandler extends BaseProvider implements SingleCompletionH
 
 		let lastUsage: CompletionUsage | undefined = undefined
 
+		// For GPT-OSS models, we need to handle tool calls that may appear within reasoning blocks
+		const isGptOss = modelId.includes("gpt-oss")
+		const toolCallMatcher = isGptOss
+			? new XmlMatcher("tool_call", (chunk) => ({
+					type: "tool_call" as const,
+					data: chunk.data,
+					matched: chunk.matched,
+				}))
+			: null
+
+		// Track accumulated tool call data for streaming
+		let currentToolCall: { id?: string; name?: string; arguments?: string } | null = null
+		let toolCallIdCounter = 0
+
 		for await (const chunk of stream) {
 			// OpenRouter returns an error object instead of the OpenAI SDK throwing an error.
 			if ("error" in chunk) {
@@ -148,19 +163,121 @@ export class OpenRouterHandler extends BaseProvider implements SingleCompletionH
 
 			const delta = chunk.choices[0]?.delta
 
+			// Handle reasoning content (which may contain tool calls for GPT-OSS)
 			if ("reasoning" in delta && delta.reasoning && typeof delta.reasoning === "string") {
-				yield { type: "reasoning", text: delta.reasoning }
+				if (isGptOss && toolCallMatcher) {
+					// Process reasoning content through the tool call matcher
+					for (const matchChunk of toolCallMatcher.update(delta.reasoning)) {
+						if (matchChunk.type === "tool_call" && matchChunk.matched) {
+							// Parse the tool call from the matched content
+							try {
+								const toolCallContent = matchChunk.data
+								// Extract tool name and arguments from the XML-like format
+								const nameMatch = toolCallContent.match(/<name>([^<]+)<\/name>/)
+								const argsMatch = toolCallContent.match(/<arguments>([\s\S]*?)<\/arguments>/)
+
+								if (nameMatch && argsMatch) {
+									// Emit a tool call chunk
+									yield {
+										type: "tool_call" as const,
+										id: `tool_${++toolCallIdCounter}`,
+										name: nameMatch[1],
+										arguments: argsMatch[1],
+									}
+								}
+							} catch (e) {
+								console.warn("Failed to parse tool call from reasoning:", e)
+								// If parsing fails, treat it as regular reasoning text
+								yield { type: "reasoning", text: delta.reasoning }
+							}
+						} else {
+							// Regular reasoning text
+							yield { type: "reasoning", text: matchChunk.data }
+						}
+					}
+				} else {
+					// Non-GPT-OSS models or no tool call matching
+					yield { type: "reasoning", text: delta.reasoning }
+				}
 			}
 
+			// Handle regular content
 			if (delta?.content) {
 				yield { type: "text", text: delta.content }
 			}
 
+			// Handle standard OpenAI-style tool calls (if they appear in the stream)
+			if (delta?.tool_calls) {
+				for (const toolCall of delta.tool_calls) {
+					if (toolCall.id) {
+						// Start of a new tool call
+						if (currentToolCall) {
+							// Emit the previous tool call if it exists
+							if (currentToolCall.id && currentToolCall.name && currentToolCall.arguments) {
+								yield {
+									type: "tool_call" as const,
+									id: currentToolCall.id,
+									name: currentToolCall.name,
+									arguments: currentToolCall.arguments,
+								}
+							}
+						}
+						currentToolCall = {
+							id: toolCall.id,
+							name: toolCall.function?.name || "",
+							arguments: toolCall.function?.arguments || "",
+						}
+					} else if (currentToolCall && toolCall.function) {
+						// Continue accumulating the current tool call
+						if (toolCall.function.name) {
+							currentToolCall.name = (currentToolCall.name || "") + toolCall.function.name
+						}
+						if (toolCall.function.arguments) {
+							currentToolCall.arguments = (currentToolCall.arguments || "") + toolCall.function.arguments
+						}
+					}
+				}
+			}
+
 			if (chunk.usage) {
 				lastUsage = chunk.usage
 			}
 		}
 
+		// Finalize any remaining tool call matcher content
+		if (isGptOss && toolCallMatcher) {
+			for (const matchChunk of toolCallMatcher.final()) {
+				if (matchChunk.type === "tool_call" && matchChunk.matched) {
+					try {
+						const toolCallContent = matchChunk.data
+						const nameMatch = toolCallContent.match(/<name>([^<]+)<\/name>/)
+						const argsMatch = toolCallContent.match(/<arguments>([\s\S]*?)<\/arguments>/)
+
+						if (nameMatch && argsMatch) {
+							yield {
+								type: "tool_call" as const,
+								id: `tool_${++toolCallIdCounter}`,
+								name: nameMatch[1],
+								arguments: argsMatch[1],
+							}
+						}
+					} catch (e) {
+						console.warn("Failed to parse tool call from reasoning:", e)
+					}
+				}
+			}
+		}
+
+		// Emit any remaining accumulated tool call
+		if (currentToolCall && currentToolCall.id && currentToolCall.name && currentToolCall.arguments) {
+			yield {
+				type: "tool_call" as const,
+				id: currentToolCall.id,
+				name: currentToolCall.name,
+				arguments: currentToolCall.arguments,
+			}
+		}
+
 		if (lastUsage) {
 			yield {
 				type: "usage",
diff --git a/src/api/transform/stream.ts b/src/api/transform/stream.ts
index 89655a3f56..09f05b0925 100644
--- a/src/api/transform/stream.ts
+++ b/src/api/transform/stream.ts
@@ -1,6 +1,11 @@
 export type ApiStream = AsyncGenerator<ApiStreamChunk>
 
-export type ApiStreamChunk = ApiStreamTextChunk | ApiStreamUsageChunk | ApiStreamReasoningChunk | ApiStreamError
+export type ApiStreamChunk =
+	| ApiStreamTextChunk
+	| ApiStreamUsageChunk
+	| ApiStreamReasoningChunk
+	| ApiStreamToolCallChunk
+	| ApiStreamError
 
 export interface ApiStreamError {
 	type: "error"
@@ -18,6 +23,13 @@ export interface ApiStreamReasoningChunk {
 	text: string
 }
 
+export interface ApiStreamToolCallChunk {
+	type: "tool_call"
+	id: string
+	name: string
+	arguments: string
+}
+
 export interface ApiStreamUsageChunk {
 	type: "usage"
 	inputTokens: number