diff --git a/packages/core/schemas/webagent-event.json b/packages/core/schemas/webagent-event.json
index 0eba620c..5a279620 100644
--- a/packages/core/schemas/webagent-event.json
+++ b/packages/core/schemas/webagent-event.json
@@ -3920,7 +3920,8 @@
         "TASK_ABORTED",
         "MAX_ITERATIONS",
         "MAX_ERRORS",
-        "TASK_FAILED"
+        "TASK_FAILED",
+        "ITERATION_TIMEOUT"
       ],
       "type": "string"
     },
diff --git a/packages/core/src/constants.ts b/packages/core/src/constants.ts
index afeb6406..b1ea19aa 100644
--- a/packages/core/src/constants.ts
+++ b/packages/core/src/constants.ts
@@ -20,6 +20,16 @@ export const DEFAULT_PLANNING_MAX_TOKENS = 1500;
 /** Max tokens for validation */
 export const DEFAULT_VALIDATION_MAX_TOKENS = 1000;
 
+/**
+ * Per-iteration watchdog timeout in milliseconds (5 minutes).
+ *
+ * Bounds a single agent loop iteration (page snapshot + LLM call + tool execution) so a
+ * hung operation can't freeze the task indefinitely. Generous: an iteration legitimately
+ * spans an LLM call (~120s) plus tool execution (extract can be another ~120s call), so
+ * this should only fire on a genuine hang.
+ */
+export const DEFAULT_ITERATION_TIMEOUT_MS = 300000;
+
 // ============================================================================
 // AI Retry Configuration
 // ============================================================================
diff --git a/packages/core/src/errors.ts b/packages/core/src/errors.ts
index 1a8a0fd9..42c40814 100644
--- a/packages/core/src/errors.ts
+++ b/packages/core/src/errors.ts
@@ -162,6 +162,20 @@ export class NavigationTimeoutException extends BrowserException {
   }
 }
 
+/**
+ * Thrown when a single agent iteration exceeds its watchdog timeout.
+ *
+ * Terminal: extends Error (not RecoverableError) because a hung iteration ends the
+ * task with a clear error rather than being retried. Distinct from a user abort
+ * (the caller's abortSignal is not aborted by the watchdog).
+ */
+export class IterationTimeoutError extends Error {
+  constructor(message: string) {
+    super(message);
+    this.name = "IterationTimeoutError";
+  }
+}
+
 /**
  * Thrown when the browser connection is lost mid-task (CDP session closed).
  * WebAgent catches this to trigger a browser restart and execution reset rather
diff --git a/packages/core/src/webAgent.ts b/packages/core/src/webAgent.ts
index aae5f813..4eb75e8c 100644
--- a/packages/core/src/webAgent.ts
+++ b/packages/core/src/webAgent.ts
@@ -22,6 +22,7 @@ import { Logger } from "./loggers/types.js";
 import { ConsoleLogger } from "./loggers/console.js";
 import {
   BrowserDisconnectedError,
+  IterationTimeoutError,
   NoStartingUrlError,
   PlanningError,
   RecoverableError,
@@ -51,6 +52,7 @@ import { nanoid } from "nanoid";
 import { getConfigDefaults, type SearchProviderName } from "./config/defaults.js";
 import {
   DEFAULT_GENERATION_MAX_TOKENS,
+  DEFAULT_ITERATION_TIMEOUT_MS,
   DEFAULT_PLANNING_MAX_TOKENS,
   DEFAULT_VALIDATION_MAX_TOKENS,
 } from "./constants.js";
@@ -127,6 +129,13 @@ export interface WebAgentOptions {
   unsafeMode?: boolean;
   /** Timeout for LLM provider calls in milliseconds (default: from config) */
   llmProviderTimeoutMs?: number;
+  /**
+   * Per-iteration watchdog timeout in milliseconds (default: 300000 / 5 min). A single
+   * loop iteration (page snapshot + LLM call + tool execution) that exceeds this is
+   * aborted and the task ends with an ITERATION_TIMEOUT error, instead of hanging
+   * indefinitely. Generous by default so it only fires on a genuine hang.
+   */
+  iterationTimeoutMs?: number;
 }
 
 export interface ExecuteOptions {
@@ -148,6 +157,8 @@ export enum TaskErrorCode {
   MAX_ERRORS = "MAX_ERRORS",
   /** Generic task failure */
   TASK_FAILED = "TASK_FAILED",
+  /** A single iteration exceeded its watchdog timeout */
+  ITERATION_TIMEOUT = "ITERATION_TIMEOUT",
 }
 
 /** Structured error information for failed tasks */
@@ -241,6 +252,12 @@ export class WebAgent {
   private currentIterationId: string = "";
   private data: any = null;
   private abortSignal: AbortSignal | undefined = undefined;
+  /**
+   * The abort signal for the current iteration: the caller's abortSignal combined with
+   * the per-iteration watchdog. LLM calls use this so a watchdog timeout aborts the
+   * in-flight request. Set while an iteration runs, cleared afterward.
+   */
+  private currentIterationSignal: AbortSignal | undefined = undefined;
 
   // === Services ===
   private compressor: SnapshotCompressor;
@@ -267,6 +284,7 @@ export class WebAgent {
   private readonly taskId: string | undefined;
   private readonly firewall: FirewallConfig;
   private readonly llmProviderTimeoutMs: number;
+  private readonly iterationTimeoutMs: number;
   // Host of the caller-provided start URL (options.startingUrl), captured at
   // execute() time. Trusted by the firewall — navigating somewhere the caller
   // explicitly named is consent to interact with that host. NOT set from the
@@ -310,6 +328,7 @@ export class WebAgent {
       unsafeMode: Boolean(options.unsafeMode),
     });
     this.llmProviderTimeoutMs = options.llmProviderTimeoutMs ?? defaults.llm_provider_timeout_ms;
+    this.iterationTimeoutMs = options.iterationTimeoutMs ?? DEFAULT_ITERATION_TIMEOUT_MS;
 
     if (this.searchProvider === "parallel-api" && !this.searchApiKey) {
       throw new Error("parallel_api_key is required when search_provider is 'parallel-api'");
@@ -442,6 +461,53 @@ export class WebAgent {
     );
   }
 
+  /**
+   * Run one iteration's work under a per-iteration watchdog.
+   *
+   * Sets `this.currentIterationSignal` to the caller's abortSignal combined with a fresh
+   * watchdog controller. The directly-issued iteration LLM calls (action `streamText` and
+   * validation) read this signal, so they abort when the watchdog fires. (The `extract`
+   * tool runs its own LLM call with the abort signal captured at tool-creation time — the
+   * external signal — so the watchdog doesn't propagate to it; the `Promise.race` below
+   * still bounds the iteration regardless.)
+   *
+   * Races the work against the timeout — the race is the correctness guarantee: the
+   * iteration is bounded even if an operation ignores the abort signal (the abort is
+   * best-effort cleanup of the in-flight LLM call). On timeout, throws
+   * `IterationTimeoutError`.
+   */
+  private async runWithIterationWatchdog<T>(work: () => Promise<T>): Promise<T> {
+    const watchdog = new AbortController();
+    this.currentIterationSignal = this.abortSignal
+      ? AbortSignal.any([this.abortSignal, watchdog.signal])
+      : watchdog.signal;
+
+    let timer!: ReturnType<typeof setTimeout>;
+    const timeout = new Promise<never>((_, reject) => {
+      timer = setTimeout(() => {
+        watchdog.abort();
+        reject(
+          new IterationTimeoutError(
+            `Iteration exceeded the ${this.iterationTimeoutMs}ms watchdog timeout`,
+          ),
+        );
+      }, this.iterationTimeoutMs);
+    });
+
+    try {
+      return await Promise.race([work(), timeout]);
+    } finally {
+      clearTimeout(timer);
+      // Only restore the signal on the normal path. If the watchdog fired, leave the
+      // (now-aborted) signal in place so any work() still running in the background
+      // cancels its remaining LLM calls instead of falling back to the un-aborted
+      // external signal. The task ends on timeout, so nothing else needs it reset.
+      if (!watchdog.signal.aborted) {
+        this.currentIterationSignal = undefined;
+      }
+    }
+  }
+
   /**
    * The main execution loop - clean and maintainable
    */
@@ -551,21 +617,25 @@ export class WebAgent {
           // after a navigation destroys the page) is routed through
           // handleBrowserDisconnect rather than escaping runMainLoop as a hard failure.
           try {
-            // Add page snapshot if needed
-            if (needsPageSnapshot) {
-              // Clear approved refs when page changes: ARIA refs reset on each snapshot,
-              // so old ref strings may now point to different DOM elements.
-              // Recoverable blocked action errors deliberately keep needsPageSnapshot=false
-              // so a blocked submit retry remains tied to the same agent-filled refs.
-              if (approvedRefs) {
-                approvedRefs.clear();
+            // Run the snapshot + action under the per-iteration watchdog so a hung
+            // operation (e.g. a stalled LLM stream) can't freeze the task indefinitely.
+            const result = await this.runWithIterationWatchdog(async () => {
+              // Add page snapshot if needed
+              if (needsPageSnapshot) {
+                // Clear approved refs when page changes: ARIA refs reset on each snapshot,
+                // so old ref strings may now point to different DOM elements.
+                // Recoverable blocked action errors deliberately keep needsPageSnapshot=false
+                // so a blocked submit retry remains tied to the same agent-filled refs.
+                if (approvedRefs) {
+                  approvedRefs.clear();
+                }
+                agentFilledRefs.clear();
+                operationalRefs.clear();
+                await this.addPageSnapshot();
               }
-              agentFilledRefs.clear();
-              operationalRefs.clear();
-              await this.addPageSnapshot();
-            }
 
-            const result = await this.generateAndProcessAction(task, allTools, executionState);
+              return await this.generateAndProcessAction(task, allTools, executionState);
+            });
 
             // Reset error counter on success
             consecutiveErrors = 0;
@@ -586,6 +656,23 @@ export class WebAgent {
 
             return { flow: "next" as const, needsPageSnapshot: result.pageChanged };
           } catch (error) {
+            // Iteration watchdog fired — end the task with a clear, distinct error rather
+            // than retrying a step that has already hung past its bound.
+            if (error instanceof IterationTimeoutError) {
+              stepSpan.setStatus({ code: SpanStatusCode.ERROR, message: "IterationTimeoutError" });
+              recordSanitizedException(stepSpan, error);
+              console.error(`[WebAgent] ${error.message}; ending task`);
+              const message = `Task failed: ${error.message}`;
+              return {
+                flow: "return" as const,
+                value: {
+                  success: false,
+                  finalAnswer: message,
+                  error: { code: TaskErrorCode.ITERATION_TIMEOUT, message },
+                },
+              };
+            }
+
             // Browser disconnects handled specially — don't mark span as error when recovery succeeds
             if (error instanceof BrowserDisconnectedError) {
               // May throw if all endpoints exhausted — propagates as hard error
@@ -1006,7 +1093,9 @@ export class WebAgent {
             tools: webActionTools,
             toolChoice: "required",
             maxOutputTokens: DEFAULT_GENERATION_MAX_TOKENS,
-            abortSignal: this.abortSignal,
+            // Per-iteration watchdog signal (falls back to the caller's signal) so a
+            // stalled stream is aborted when the watchdog fires.
+            abortSignal: this.currentIterationSignal ?? this.abortSignal,
             timeout: this.llmProviderTimeoutMs,
           });
 
@@ -1383,7 +1472,7 @@ export class WebAgent {
               tools: validationTools,
               toolChoice: "required", // Use "required" for compatibility with providers that don't support specific tool selection
               maxOutputTokens: DEFAULT_VALIDATION_MAX_TOKENS,
-              abortSignal: this.abortSignal,
+              abortSignal: this.currentIterationSignal ?? this.abortSignal,
             },
             {
               maxAttempts: 2,
diff --git a/packages/core/test/webAgent.test.ts b/packages/core/test/webAgent.test.ts
index cb475a8b..4d5868e9 100644
--- a/packages/core/test/webAgent.test.ts
+++ b/packages/core/test/webAgent.test.ts
@@ -691,6 +691,71 @@ describe("WebAgent", () => {
     });
   });
 
+  describe("iteration watchdog", () => {
+    function mockPlan(): void {
+      mockGenerateTextWithRetry.mockResolvedValueOnce({
+        text: "Planning",
+        toolResults: [
+          {
+            type: "tool-result",
+            toolCallId: "plan_1",
+            toolName: "create_plan",
+            input: { successCriteria: "Done", plan: "1. do it" },
+            output: { successCriteria: "Done", plan: "1. do it" },
+          },
+        ],
+      } as any);
+    }
+
+    // A streamText result whose fullStream never completes (simulates a stalled stream).
+    function hangingStreamResult(): any {
+      return {
+        fullStream: {
+          async *[Symbol.asyncIterator]() {
+            await new Promise(() => {});
+          },
+        },
+        toolResults: new Promise(() => {}),
+        response: new Promise(() => {}),
+        finishReason: new Promise(() => {}),
+        usage: new Promise(() => {}),
+        warnings: new Promise(() => {}),
+        providerMetadata: new Promise(() => {}),
+      };
+    }
+
+    it("aborts an iteration whose LLM stream never completes and returns ITERATION_TIMEOUT", async () => {
+      // Real timers + a tiny watchdog so the stalled iteration is bounded quickly.
+      vi.useRealTimers();
+      mockPlan();
+      mockStreamText.mockReturnValueOnce(hangingStreamResult());
+
+      const agent = new WebAgent(mockBrowser, { ...options, iterationTimeoutMs: 50 });
+      const result = await agent.execute("test task", { startingUrl: "https://example.com" });
+
+      expect(result.success).toBe(false);
+      expect(result.error?.code).toBe("ITERATION_TIMEOUT");
+
+      await agent.close();
+    });
+
+    it("passes a watchdog-derived abort signal to streamText that fires on timeout", async () => {
+      vi.useRealTimers();
+      mockPlan();
+      mockStreamText.mockReturnValueOnce(hangingStreamResult());
+
+      const agent = new WebAgent(mockBrowser, { ...options, iterationTimeoutMs: 50 });
+      await agent.execute("test task", { startingUrl: "https://example.com" });
+
+      const call = mockStreamText.mock.calls.at(-1)?.[0];
+      expect(call?.abortSignal).toBeInstanceOf(AbortSignal);
+      // The watchdog fired, so the signal handed to the LLM call is now aborted.
+      expect(call?.abortSignal?.aborted).toBe(true);
+
+      await agent.close();
+    });
+  });
+
   describe("planning", () => {
     it("should generate plan with URL when not provided", async () => {
       mockGenerateTextWithRetry.mockResolvedValueOnce({