diff --git a/src/agents/pi-embedded-runner/compact.hooks.test.ts b/src/agents/pi-embedded-runner/compact.hooks.test.ts
index 9ef2a3efe76..7d09cf89759 100644
--- a/src/agents/pi-embedded-runner/compact.hooks.test.ts
+++ b/src/agents/pi-embedded-runner/compact.hooks.test.ts
@@ -160,7 +160,7 @@ vi.mock("../transcript-policy.js", () => ({
 }));
 
 vi.mock("./extensions.js", () => ({
-  buildEmbeddedExtensionFactories: vi.fn(() => []),
+  buildEmbeddedExtensionFactories: vi.fn(() => ({ factories: [] })),
 }));
 
 vi.mock("./history.js", () => ({
diff --git a/src/agents/pi-embedded-runner/compact.ts b/src/agents/pi-embedded-runner/compact.ts
index 91f99571db4..64426e5f783 100644
--- a/src/agents/pi-embedded-runner/compact.ts
+++ b/src/agents/pi-embedded-runner/compact.ts
@@ -936,6 +936,40 @@ export async function compactEmbeddedPiSession(
           modelContextWindow: ceModel?.contextWindow,
           defaultTokens: DEFAULT_CONTEXT_TOKENS,
         });
+        // When the context engine owns compaction, its compact() implementation
+        // bypasses compactEmbeddedPiSessionDirect (which fires the hooks internally).
+        // Fire before_compaction / after_compaction hooks here so plugin subscribers
+        // are notified regardless of which engine is active.
+        const engineOwnsCompaction = contextEngine.info.ownsCompaction === true;
+        const hookRunner = engineOwnsCompaction ? getGlobalHookRunner() : null;
+        const hookSessionKey = params.sessionKey?.trim() || params.sessionId;
+        const { sessionAgentId } = resolveSessionAgentIds({
+          sessionKey: params.sessionKey,
+          config: params.config,
+        });
+        const resolvedMessageProvider = params.messageChannel ?? params.messageProvider;
+        const hookCtx = {
+          sessionId: params.sessionId,
+          agentId: sessionAgentId,
+          sessionKey: hookSessionKey,
+          workspaceDir: params.workspaceDir,
+          messageProvider: resolvedMessageProvider,
+        };
+        if (hookRunner?.hasHooks("before_compaction")) {
+          try {
+            await hookRunner.runBeforeCompaction(
+              {
+                messageCount: 0,
+                sessionFile: params.sessionFile,
+              },
+              hookCtx,
+            );
+          } catch (err) {
+            log.warn("before_compaction hook failed", {
+              errorMessage: err instanceof Error ? err.message : String(err),
+            });
+          }
+        }
         const result = await contextEngine.compact({
           sessionId: params.sessionId,
           sessionFile: params.sessionFile,
@@ -944,6 +978,23 @@ export async function compactEmbeddedPiSession(
           force: params.trigger === "manual",
           runtimeContext: params as Record<string, unknown>,
         });
+        if (hookRunner?.hasHooks("after_compaction")) {
+          try {
+            await hookRunner.runAfterCompaction(
+              {
+                messageCount: 0,
+                compactedCount: 0,
+                tokenCount: result.result?.tokensAfter,
+                sessionFile: params.sessionFile,
+              },
+              hookCtx,
+            );
+          } catch (err) {
+            log.warn("after_compaction hook failed", {
+              errorMessage: err instanceof Error ? err.message : String(err),
+            });
+          }
+        }
         return {
           ok: result.ok,
           compacted: result.compacted,
diff --git a/src/agents/pi-embedded-runner/run.ts b/src/agents/pi-embedded-runner/run.ts
index a28d74bf71e..6695f174801 100644
--- a/src/agents/pi-embedded-runner/run.ts
+++ b/src/agents/pi-embedded-runner/run.ts
@@ -1028,37 +1028,45 @@ export async function runEmbeddedPiAgent(
               log.warn(
                 `context overflow detected (attempt ${overflowCompactionAttempts}/${MAX_OVERFLOW_COMPACTION_ATTEMPTS}); attempting auto-compaction for ${provider}/${modelId}`,
               );
-              const compactResult = await contextEngine.compact({
-                sessionId: params.sessionId,
-                sessionFile: params.sessionFile,
-                tokenBudget: ctxInfo.tokens,
-                force: true,
-                compactionTarget: "budget",
-                runtimeContext: {
-                  sessionKey: params.sessionKey,
-                  messageChannel: params.messageChannel,
-                  messageProvider: params.messageProvider,
-                  agentAccountId: params.agentAccountId,
-                  authProfileId: lastProfileId,
-                  workspaceDir: resolvedWorkspace,
-                  agentDir,
-                  config: params.config,
-                  skillsSnapshot: params.skillsSnapshot,
-                  senderIsOwner: params.senderIsOwner,
-                  provider,
-                  model: modelId,
-                  runId: params.runId,
-                  thinkLevel,
-                  reasoningLevel: params.reasoningLevel,
-                  bashElevated: params.bashElevated,
-                  extraSystemPrompt: params.extraSystemPrompt,
-                  ownerNumbers: params.ownerNumbers,
-                  trigger: "overflow",
-                  diagId: overflowDiagId,
-                  attempt: overflowCompactionAttempts,
-                  maxAttempts: MAX_OVERFLOW_COMPACTION_ATTEMPTS,
-                },
-              });
+              let compactResult: Awaited<ReturnType<typeof contextEngine.compact>>;
+              try {
+                compactResult = await contextEngine.compact({
+                  sessionId: params.sessionId,
+                  sessionFile: params.sessionFile,
+                  tokenBudget: ctxInfo.tokens,
+                  force: true,
+                  compactionTarget: "budget",
+                  runtimeContext: {
+                    sessionKey: params.sessionKey,
+                    messageChannel: params.messageChannel,
+                    messageProvider: params.messageProvider,
+                    agentAccountId: params.agentAccountId,
+                    authProfileId: lastProfileId,
+                    workspaceDir: resolvedWorkspace,
+                    agentDir,
+                    config: params.config,
+                    skillsSnapshot: params.skillsSnapshot,
+                    senderIsOwner: params.senderIsOwner,
+                    provider,
+                    model: modelId,
+                    runId: params.runId,
+                    thinkLevel,
+                    reasoningLevel: params.reasoningLevel,
+                    bashElevated: params.bashElevated,
+                    extraSystemPrompt: params.extraSystemPrompt,
+                    ownerNumbers: params.ownerNumbers,
+                    trigger: "overflow",
+                    diagId: overflowDiagId,
+                    attempt: overflowCompactionAttempts,
+                    maxAttempts: MAX_OVERFLOW_COMPACTION_ATTEMPTS,
+                  },
+                });
+              } catch (compactErr) {
+                log.warn(
+                  `contextEngine.compact() threw during overflow recovery for ${provider}/${modelId}: ${String(compactErr)}`,
+                );
+                compactResult = { ok: false, compacted: false, reason: String(compactErr) };
+              }
               if (compactResult.compacted) {
                 autoCompactionCount += 1;
                 log.info(`auto-compaction succeeded for ${provider}/${modelId}; retrying prompt`);