diff --git a/CHANGELOG.md b/CHANGELOG.md
index dfd13a1ae..9efbb243d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -32,6 +32,7 @@
 - Agents: auto-recover from compaction context overflow by resetting the session and retrying; propagate overflow details from embedded runs so callers can recover.
 - MiniMax: strip malformed tool invocation XML; include `MiniMax-VL-01` in implicit provider for image pairing.
 - Onboarding/Auth: honor `CLAWDBOT_AGENT_DIR` / `PI_CODING_AGENT_DIR` when writing auth profiles (MiniMax). (#829) — thanks @roshanasingh4.
+- Anthropic: handle `overloaded_error` with a friendly message and failover classification. (#832) — thanks @danielz1z.
 - Anthropic: merge consecutive user turns (preserve newest metadata) before validation to avoid incorrect role errors.
 - Messaging: enforce context isolation for message tool sends; keep typing indicators alive during tool execution.
 - Auto-reply: `/status` allowlist behavior, reasoning-tag enforcement on fallback, and system-event enqueueing for elevated/reasoning toggles.
diff --git a/src/agents/pi-embedded-helpers.test.ts b/src/agents/pi-embedded-helpers.test.ts
index bdf2a7db0..938e4b654 100644
--- a/src/agents/pi-embedded-helpers.test.ts
+++ b/src/agents/pi-embedded-helpers.test.ts
@@ -209,6 +209,11 @@ describe("classifyFailoverReason", () => {
     expect(classifyFailoverReason("resource has been exhausted")).toBe(
       "rate_limit",
     );
+    expect(
+      classifyFailoverReason(
+        '{"type":"error","error":{"type":"overloaded_error","message":"Overloaded"}}',
+      ),
+    ).toBe("rate_limit");
     expect(classifyFailoverReason("invalid request format")).toBe("format");
     expect(classifyFailoverReason("credit balance too low")).toBe("billing");
     expect(classifyFailoverReason("deadline exceeded")).toBe("timeout");
@@ -265,6 +270,15 @@ describe("formatAssistantErrorText", () => {
       "Message ordering conflict",
     );
   });
+
+  it("returns a friendly message for Anthropic overload errors", () => {
+    const msg = makeAssistantError(
+      '{"type":"error","error":{"details":null,"type":"overloaded_error","message":"Overloaded"},"request_id":"req_123"}',
+    );
+    expect(formatAssistantErrorText(msg)).toBe(
+      "The AI service is temporarily overloaded. Please try again in a moment.",
+    );
+  });
 });
 
 describe("sanitizeToolCallId", () => {
diff --git a/src/agents/pi-embedded-helpers.ts b/src/agents/pi-embedded-helpers.ts
index 7acdd2e52..89588701d 100644
--- a/src/agents/pi-embedded-helpers.ts
+++ b/src/agents/pi-embedded-helpers.ts
@@ -419,7 +419,10 @@ const ERROR_PATTERNS = {
     "resource_exhausted",
     "usage limit",
   ],
-  overloaded: [/overloaded_error|"type"\s*:\s*"overloaded"/i, "overloaded"],
+  overloaded: [
+    /overloaded_error|"type"\s*:\s*"overloaded_error"/i,
+    "overloaded",
+  ],
   timeout: [
     "timeout",
     "timed out",
diff --git a/src/auto-reply/reply.triggers.test.ts b/src/auto-reply/reply.triggers.test.ts
index 9925b27bf..ce593fade 100644
--- a/src/auto-reply/reply.triggers.test.ts
+++ b/src/auto-reply/reply.triggers.test.ts
@@ -1456,7 +1456,7 @@ describe("trigger handling", () => {
 
       const text = Array.isArray(res) ? res[0]?.text : res?.text;
       expect(text).toBe(
-        "⚠️ Context overflow - conversation too long. Starting fresh might help!",
+        "⚠️ Context overflow — prompt too large for this model. Try a shorter message or a larger-context model.",
       );
       expect(runEmbeddedPiAgent).toHaveBeenCalledOnce();
     });