diff --git a/packages/workflow-agent-builtin/__tests__/loop.test.ts b/packages/workflow-agent-builtin/__tests__/loop.test.ts
index c1ea654..832e84d 100644
--- a/packages/workflow-agent-builtin/__tests__/loop.test.ts
+++ b/packages/workflow-agent-builtin/__tests__/loop.test.ts
@@ -19,7 +19,14 @@ mock.module("../src/tools/index.js", () => ({
   getBuiltinTools: () => [],
 }));
 
-import { executeTurnTools, runBuiltinLoop, shouldNudge } from "../src/loop.js";
+import {
+  executeTurnTools,
+  extractFinalText,
+  runBuiltinLoop,
+  shouldInjectDeadlineWarning,
+  shouldNudge,
+  shouldProcessToolCalls,
+} from "../src/loop.js";
 
 const fakeProvider = {} as any;
 const fakeToolCtx = {} as any;
@@ -154,3 +161,96 @@ describe("runBuiltinLoop integration", () => {
     expect(original.length).toBe(1);
   });
 });
+
+describe("shouldInjectDeadlineWarning", () => {
+  test("5.1 returns true when turn count reaches warning threshold and not yet warned", () => {
+    expect(shouldInjectDeadlineWarning(7, 10, false, false)).toBe(true);
+  });
+  test("5.2 returns false when already warned", () => {
+    expect(shouldInjectDeadlineWarning(7, 10, true, false)).toBe(false);
+  });
+  test("5.3 returns false when noTools is true", () => {
+    expect(shouldInjectDeadlineWarning(7, 10, false, true)).toBe(false);
+  });
+  test("5.4 returns false when turns remaining > DEADLINE_WARNING_TURNS", () => {
+    expect(shouldInjectDeadlineWarning(5, 10, false, false)).toBe(false);
+  });
+  test("5.5 returns true when exactly at warning threshold", () => {
+    expect(shouldInjectDeadlineWarning(7, 10, false, false)).toBe(true);
+  });
+  test("5.6 returns false when turns remaining is 0", () => {
+    expect(shouldInjectDeadlineWarning(10, 10, false, false)).toBe(false);
+  });
+});
+
+describe("shouldProcessToolCalls", () => {
+  test("6.1 returns true when toolCalls present and noTools=false", () => {
+    expect(shouldProcessToolCalls([{ id: "x", name: "read", arguments: "{}" }], false)).toBe(true);
+  });
+  test("6.2 returns false when toolCalls is null", () => {
+    expect(shouldProcessToolCalls(null, false)).toBe(false);
+  });
+  test("6.3 returns false when toolCalls is empty array", () => {
+    expect(shouldProcessToolCalls([], false)).toBe(false);
+  });
+  test("6.4 returns false when noTools=true", () => {
+    expect(shouldProcessToolCalls([{ id: "x", name: "read", arguments: "{}" }], true)).toBe(false);
+  });
+  test("6.5 returns true when multiple tool calls present", () => {
+    expect(
+      shouldProcessToolCalls(
+        [
+          { id: "x1", name: "read", arguments: "{}" },
+          { id: "x2", name: "write", arguments: "{}" },
+        ],
+        false,
+      ),
+    ).toBe(true);
+  });
+});
+
+describe("extractFinalText", () => {
+  test("7.1 returns last assistant message content", () => {
+    const messages = [
+      { role: "system" as const, content: "sys", tool_calls: null },
+      { role: "assistant" as const, content: "first", tool_calls: null },
+      { role: "assistant" as const, content: "last", tool_calls: null },
+    ];
+    expect(extractFinalText(messages)).toBe("last");
+  });
+  test("7.2 returns empty string when no assistant messages", () => {
+    expect(extractFinalText([{ role: "system" as const, content: "sys", tool_calls: null }])).toBe(
+      "",
+    );
+  });
+  test("7.3 skips assistant messages with null content", () => {
+    const messages = [
+      { role: "assistant" as const, content: "first", tool_calls: null },
+      {
+        role: "assistant" as const,
+        content: null,
+        tool_calls: [{ id: "x", name: "t", arguments: "{}" }],
+      },
+      { role: "assistant" as const, content: "second", tool_calls: null },
+    ];
+    expect(extractFinalText(messages)).toBe("second");
+  });
+  test("7.4 skips assistant messages with empty content", () => {
+    const messages = [
+      { role: "assistant" as const, content: "first", tool_calls: null },
+      { role: "assistant" as const, content: "", tool_calls: null },
+      { role: "user" as const, content: "nudge", tool_calls: null },
+    ];
+    expect(extractFinalText(messages)).toBe("first");
+  });
+  test("7.5 handles empty messages array", () => {
+    expect(extractFinalText([])).toBe("");
+  });
+  test("7.6 handles messages with only user and system roles", () => {
+    const messages = [
+      { role: "system" as const, content: "sys", tool_calls: null },
+      { role: "user" as const, content: "query", tool_calls: null },
+    ];
+    expect(extractFinalText(messages)).toBe("");
+  });
+});
diff --git a/packages/workflow-agent-builtin/src/loop.ts b/packages/workflow-agent-builtin/src/loop.ts
index 3eef599..602e36c 100644
--- a/packages/workflow-agent-builtin/src/loop.ts
+++ b/packages/workflow-agent-builtin/src/loop.ts
@@ -1,7 +1,12 @@
 import type { ResolvedLlmProvider } from "@uncaged/workflow-agent-kit";
 import { createLogger } from "@uncaged/workflow-util";
 
-import { type ChatMessage, chatCompletionWithTools, type LlmToolCall } from "./llm/index.js";
+import {
+  type ChatMessage,
+  chatCompletionWithTools,
+  type LlmToolCall,
+  type OpenAiToolDefinition,
+} from "./llm/index.js";
 import { appendSessionTurn } from "./session.js";
 import {
   builtinToolsToOpenAi,
@@ -80,10 +85,184 @@ export type ShouldNudgeOptions = {
 const MAX_NUDGES = 3;
 const DEADLINE_WARNING_TURNS = 3;
 
+export function shouldInjectDeadlineWarning(
+  turn: number,
+  maxTurns: number,
+  alreadyWarned: boolean,
+  noTools: boolean,
+): boolean {
+  const turnsRemaining = maxTurns - turn;
+  return (
+    !noTools && !alreadyWarned && turnsRemaining > 0 && turnsRemaining <= DEADLINE_WARNING_TURNS
+  );
+}
+
+export function shouldProcessToolCalls(toolCalls: LlmToolCall[] | null, noTools: boolean): boolean {
+  return !noTools && toolCalls !== null && toolCalls.length > 0;
+}
+
+export function extractFinalText(messages: ChatMessage[]): string {
+  for (let i = messages.length - 1; i >= 0; i--) {
+    const msg = messages[i];
+    if (
+      msg !== undefined &&
+      msg.role === "assistant" &&
+      msg.content !== null &&
+      msg.content.trim() !== ""
+    ) {
+      return msg.content;
+    }
+  }
+  return "";
+}
+
+function injectDeadlineWarning(messages: ChatMessage[], turnsRemaining: number): void {
+  log("4NRXW6KT", `${turnsRemaining} turns remaining, injecting deadline warning`);
+  messages.push({
+    role: "user",
+    content:
+      `⚠️ You have ${turnsRemaining} turns remaining. ` +
+      "Wrap up your work and output the YAML frontmatter starting with `---`. " +
+      "If you cannot finish in time, output frontmatter with `status: failed` and describe what remains.",
+  });
+}
+
+type HandleTextOnlyTurnResult = {
+  shouldBreak: boolean;
+  finalText: string;
+  turnCount: number;
+  nudgeCount: number;
+  turnAdjustment: number;
+};
+
+async function handleTextOnlyTurn(
+  text: string,
+  messages: ChatMessage[],
+  storageRoot: string,
+  sessionId: string,
+  noTools: boolean,
+  turn: number,
+  maxTurns: number,
+  currentNudgeCount: number,
+): Promise<HandleTextOnlyTurnResult> {
+  await appendTurn(storageRoot, sessionId, {
+    role: "assistant",
+    content: text,
+    toolCalls: null,
+    reasoning: null,
+  });
+  const turnCount = 1;
+  let nudgeCount = currentNudgeCount;
+  let turnAdjustment = 0;
+
+  if (shouldNudge({ noTools, text, turn, maxTurns })) {
+    nudgeCount += 1;
+    log("7FXQM2KN", `text-only turn without frontmatter, nudge ${nudgeCount}/${MAX_NUDGES}`);
+    const nudge =
+      "You stopped calling tools but your response does not start with the required `---` YAML frontmatter. " +
+      "Either continue using tools to complete your work, or output your final response starting with `---`.";
+    messages.push({ role: "user", content: nudge });
+    // Nudge doesn't consume turn budget (up to MAX_NUDGES)
+    if (nudgeCount <= MAX_NUDGES) {
+      turnAdjustment = -1;
+    }
+    return { shouldBreak: false, finalText: "", turnCount, nudgeCount, turnAdjustment };
+  }
+
+  return { shouldBreak: true, finalText: text, turnCount, nudgeCount, turnAdjustment };
+}
+
+async function handleToolCallTurn(
+  content: string,
+  toolCalls: LlmToolCall[],
+  messages: ChatMessage[],
+  storageRoot: string,
+  sessionId: string,
+  toolCtx: ToolContext,
+): Promise<number> {
+  await appendTurn(storageRoot, sessionId, {
+    role: "assistant",
+    content,
+    toolCalls: mapToolCallsForPayload(toolCalls),
+    reasoning: null,
+  });
+  let turnCount = 1;
+
+  // Execute tools
+  turnCount += await executeTurnTools(toolCalls, toolCtx, messages, storageRoot, sessionId);
+
+  return turnCount;
+}
+
 export function shouldNudge({ noTools, text, turn, maxTurns }: ShouldNudgeOptions): boolean {
   return !noTools && !text.trimStart().startsWith("---") && turn < maxTurns - 1;
 }
 
+type ProcessLoopIterationResult = {
+  shouldBreak: boolean;
+  finalText: string;
+  turnCount: number;
+  nudgeCount: number;
+  turnAdjustment: number;
+};
+
+async function processLoopIteration(
+  options: RunBuiltinLoopOptions,
+  messages: ChatMessage[],
+  openAiTools: OpenAiToolDefinition[],
+  turn: number,
+  nudgeCount: number,
+): Promise<ProcessLoopIterationResult> {
+  const response = await chatCompletionWithTools(
+    options.provider,
+    messages,
+    openAiTools.length > 0 ? openAiTools : null,
+  );
+
+  // When noTools is set, ignore any tool_calls the LLM might still return
+  const effectiveToolCalls = options.noTools ? null : (response.toolCalls ?? null);
+
+  const assistantMessage: ChatMessage = {
+    role: "assistant",
+    content: response.content,
+    tool_calls: effectiveToolCalls,
+  };
+  messages.push(assistantMessage);
+
+  if (!shouldProcessToolCalls(effectiveToolCalls, options.noTools)) {
+    const text = response.content ?? "";
+    const result = await handleTextOnlyTurn(
+      text,
+      messages,
+      options.storageRoot,
+      options.sessionId,
+      options.noTools,
+      turn,
+      options.maxTurns,
+      nudgeCount,
+    );
+    return result;
+  }
+
+  // At this point, effectiveToolCalls is guaranteed to be non-null and non-empty
+  const turnCount = await handleToolCallTurn(
+    response.content ?? "",
+    effectiveToolCalls as LlmToolCall[],
+    messages,
+    options.storageRoot,
+    options.sessionId,
+    options.toolCtx,
+  );
+
+  return {
+    shouldBreak: false,
+    finalText: "",
+    turnCount,
+    nudgeCount,
+    turnAdjustment: 0,
+  };
+}
+
 /** Agent run loop: LLM ↔ tools until no tool_calls or maxTurns. */
 export async function runBuiltinLoop(
   options: RunBuiltinLoopOptions,
@@ -99,95 +278,25 @@ export async function runBuiltinLoop(
     log("8K2M4N7P", `builtin loop turn ${turn + 1}/${options.maxTurns}`);
 
     // Warn agent when approaching turn limit
-    const turnsRemaining = options.maxTurns - turn;
-    if (!options.noTools && !deadlineWarned && turnsRemaining <= DEADLINE_WARNING_TURNS) {
+    if (shouldInjectDeadlineWarning(turn, options.maxTurns, deadlineWarned, options.noTools)) {
       deadlineWarned = true;
-      log("4NRXW6KT", `${turnsRemaining} turns remaining, injecting deadline warning`);
-      messages.push({
-        role: "user",
-        content:
-          `⚠️ You have ${turnsRemaining} turns remaining. ` +
-          "Wrap up your work and output the YAML frontmatter starting with `---`. " +
-          "If you cannot finish in time, output frontmatter with `status: failed` and describe what remains.",
-      });
+      const turnsRemaining = options.maxTurns - turn;
+      injectDeadlineWarning(messages, turnsRemaining);
     }
 
-    const response = await chatCompletionWithTools(
-      options.provider,
-      messages,
-      openAiTools.length > 0 ? openAiTools : null,
-    );
+    const result = await processLoopIteration(options, messages, openAiTools, turn, nudgeCount);
+    turnCount += result.turnCount;
+    nudgeCount = result.nudgeCount;
+    turn += result.turnAdjustment;
 
-    // When noTools is set, ignore any tool_calls the LLM might still return
-    const effectiveToolCalls = options.noTools ? null : (response.toolCalls ?? null);
-
-    const assistantMessage: ChatMessage = {
-      role: "assistant",
-      content: response.content,
-      tool_calls: effectiveToolCalls,
-    };
-    messages.push(assistantMessage);
-
-    if (effectiveToolCalls === null || effectiveToolCalls.length === 0) {
-      const text = response.content ?? "";
-      await appendTurn(options.storageRoot, options.sessionId, {
-        role: "assistant",
-        content: text,
-        toolCalls: null,
-        reasoning: null,
-      });
-      turnCount += 1;
-
-      if (shouldNudge({ noTools: options.noTools, text, turn, maxTurns: options.maxTurns })) {
-        nudgeCount += 1;
-        log("7FXQM2KN", `text-only turn without frontmatter, nudge ${nudgeCount}/${MAX_NUDGES}`);
-        const nudge =
-          "You stopped calling tools but your response does not start with the required `---` YAML frontmatter. " +
-          "Either continue using tools to complete your work, or output your final response starting with `---`.";
-        messages.push({ role: "user", content: nudge });
-        // Nudge doesn't consume turn budget (up to MAX_NUDGES)
-        if (nudgeCount <= MAX_NUDGES) {
-          turn -= 1;
-        }
-        continue;
-      }
-
-      finalText = text;
+    if (result.shouldBreak) {
+      finalText = result.finalText;
       break;
     }
-
-    // Assistant turn with tool calls
-    await appendTurn(options.storageRoot, options.sessionId, {
-      role: "assistant",
-      content: response.content ?? "",
-      toolCalls: mapToolCallsForPayload(effectiveToolCalls),
-      reasoning: null,
-    });
-    turnCount += 1;
-
-    // Execute tools
-    turnCount += await executeTurnTools(
-      effectiveToolCalls,
-      options.toolCtx,
-      messages,
-      options.storageRoot,
-      options.sessionId,
-    );
   }
 
-  if (finalText === "" && messages.length > 0) {
-    for (let i = messages.length - 1; i >= 0; i--) {
-      const msg = messages[i];
-      if (
-        msg !== undefined &&
-        msg.role === "assistant" &&
-        msg.content !== null &&
-        msg.content.trim() !== ""
-      ) {
-        finalText = msg.content;
-        break;
-      }
-    }
+  if (finalText === "") {
+    finalText = extractFinalText(messages);
   }
 
   return { finalText, messages, turnCount };