diff --git a/Sources/UntoldEngine/Physics/PhysicsQuery.swift b/Sources/UntoldEngine/Physics/PhysicsQuery.swift
index f0d8954a..093e9c55 100644
--- a/Sources/UntoldEngine/Physics/PhysicsQuery.swift
+++ b/Sources/UntoldEngine/Physics/PhysicsQuery.swift
@@ -73,11 +73,19 @@ public enum PhysicsQuery {
         // farther candidates even though its reported hit distance is 0 — so
         // inside-origin candidates are always examined and the scan never
         // breaks out of the sorted order early.
+        //
+        // The query itself is asked for the unbounded distance, not the
+        // caller's maxDistance: its own internal cull compares maxDistance
+        // against that same entry-or-exit value, so an inside-origin box
+        // whose EXIT point lies beyond a tight maxDistance would otherwise be
+        // dropped before the narrow phase ever sees it — even though its true
+        // hit distance (0, at the ray origin) is well within range. The real
+        // cap is enforced below, against the recomputed entry distance.
         var best: PhysicsRayHit?
         for (entity, sortedDistance) in OctreeSystem.shared.query(
             rayOrigin: ray.origin,
             rayDirection: direction,
-            maxDistance: maxDistance
+            maxDistance: fallbackUnboundedDistance
         ) {
             guard passesFilter(entity, filter),
                   let bounds = OctreeSystem.shared.getBounds(for: entity)
diff --git a/Tests/UntoldEngineTests/PhysicsQueryTests.swift b/Tests/UntoldEngineTests/PhysicsQueryTests.swift
index d67fc946..8f8599d1 100644
--- a/Tests/UntoldEngineTests/PhysicsQueryTests.swift
+++ b/Tests/UntoldEngineTests/PhysicsQueryTests.swift
@@ -189,6 +189,29 @@ final class PhysicsQueryTests: XCTestCase {
         XCTAssertEqual(hit.normal, -direction)
     }
 
+    func testInsideBoxHitSurvivesTightMaxDistance() throws {
+        // Regression: the broad-phase cull inside OctreeSystem.query compares
+        // maxDistance against the sorted distance, which for an inside-origin
+        // box is its far EXIT distance, not the true hit distance (0). Passing
+        // the caller's maxDistance straight through to that query would drop
+        // this box before the narrow phase ever saw it, even though the real
+        // hit (distance 0, at the ray origin) is well inside a tight budget.
+        let bigBox = makeObstacle(
+            center: simd_float3(0, 0, -50),
+            halfExtents: simd_float3(50, 50, 100)
+        )
+
+        let direction = simd_float3(0, 0, -1)
+        let hit = try XCTUnwrap(PhysicsQuery.raycast(
+            PhysicsRay(origin: .zero, direction: direction, maxDistance: 5.0)
+        ))
+
+        XCTAssertEqual(hit.entity, bigBox)
+        XCTAssertEqual(hit.distance, 0.0)
+        XCTAssertEqual(hit.position, .zero)
+        XCTAssertEqual(hit.normal, -direction)
+    }
+
     func testFallbackMissReturnsNil() {
         _ = makeObstacle(center: simd_float3(0.0, 10.0, -5.0))