diff --git a/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.test.ts b/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.test.ts
index f0c4d00c7bdf..2f391107173a 100644
--- a/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.test.ts
+++ b/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.test.ts
@@ -8918,6 +8918,25 @@ describe("ClaudeAdapterV2 background wake turns", () => {
     { status: 503, cooldown: "999999999999999999999999h", seconds: 0 },
     { status: 503, cooldown: "4m 6s", seconds: 0, errorType: "overloaded_error" },
     { status: 401, cooldown: "4m 6s", seconds: 0 },
+    { status: 429, cooldown: "1h2m3s", seconds: 3723, proxy: true, sdkResetSeconds: 60 },
+    { status: 429, cooldown: "1h2m3s", seconds: 7200, proxy: true, sdkResetSeconds: 7200 },
+    { status: 429, cooldown: "1h2m3s", seconds: 0, proxy: true, sdkResetSeconds: null },
+    {
+      status: 429,
+      cooldown: "nested 1h",
+      seconds: 0,
+      proxy: true,
+      result:
+        "API Error: Request rejected (429) · All credentials for model claude-opus-5-5 are cooling down (last error: rate_limit_error (reset after 1h))",
+    },
+    {
+      status: 429,
+      cooldown: "outer cooldown",
+      seconds: 60,
+      proxy: true,
+      result:
+        "API Error: Request rejected (429) · All credentials for model claude-opus-5-5 are cooling down (reset after 1m) (last error: All credentials for model upstream are cooling down (reset after 1h))",
+    },
   ])("recovers wrapped gateway limits with status $status and cooldown $cooldown", (input) =>
     Effect.gen(function* () {
       const harness = yield* makeWakeHarness;
@@ -8933,13 +8952,35 @@ describe("ClaudeAdapterV2 background wake turns", () => {
         }),
       );
       yield* Queue.offerAll(harness.sdkMessages, [
+        ...(input.sdkResetSeconds !== undefined
+          ? [
+              claudeSdkFrame({
+                type: "rate_limit_event",
+                rate_limit_info: {
+                  status: "rejected",
+                  rateLimitType: "five_hour",
+                  ...(input.sdkResetSeconds === null
+                    ? {}
+                    : {
+                        resetsAt: DateTime.toEpochMillis(now) / 1000 + input.sdkResetSeconds,
+                      }),
+                },
+                uuid: "00000000-0000-4000-8000-000000000651",
+                session_id: WAKE_NATIVE_SESSION,
+              }),
+            ]
+          : []),
         makeAssistantErrorFrame({
           uuid: "00000000-0000-4000-8000-000000000652",
-          error: "server_error",
+          error: input.proxy ? "rate_limit" : "server_error",
         }),
         makeResultFrame({
           uuid: "00000000-0000-4000-8000-000000000653",
-          result: `API Error: ${input.status} [claude/claude-opus-5-5] [429]: {"type":"error","error":{"type":"${input.errorType ?? "rate_limit_error"}","message":"Please try again later."}} (reset after ${input.cooldown}).`,
+          result:
+            input.result ??
+            (input.proxy
+              ? `API Error: Request rejected (429) · All credentials for model claude-opus-5-5 are cooling down (reset after ${input.cooldown}) (last error: rate_limit_error: Please try again later.)`
+              : `API Error: ${input.status} [claude/claude-opus-5-5] [429]: {"type":"error","error":{"type":"${input.errorType ?? "rate_limit_error"}","message":"Please try again later."}} (reset after ${input.cooldown}).`),
           terminalReason: "api_error",
           isError: true,
           apiErrorStatus: input.status,
@@ -8948,7 +8989,10 @@ describe("ClaudeAdapterV2 background wake turns", () => {
       const terminal = yield* Queue.take(harness.terminalReceipts);
       assert.equal(terminal.status, "failed");
       if (terminal.status !== "failed") return;
-      assert.equal(terminal.failure.class, input.seconds > 0 ? "usage_limit" : "provider_error");
+      assert.equal(
+        terminal.failure.class,
+        input.seconds > 0 || input.proxy ? "usage_limit" : "provider_error",
+      );
       if (input.seconds > 0) {
         assert.equal(terminal.failure.retryable, true);
         assert.equal(
@@ -8958,7 +9002,7 @@ describe("ClaudeAdapterV2 background wake turns", () => {
           ),
         );
       } else {
-        assert.isUndefined(terminal.failure.resetAt);
+        assert.equal(terminal.failure.resetAt, input.proxy ? null : undefined);
       }
     }).pipe(
       Effect.provide(
diff --git a/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.ts b/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.ts
index 74cdde264e7e..dd416b3f5289 100644
--- a/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.ts
+++ b/apps/server/src/orchestration-v2/Adapters/ClaudeAdapterV2.ts
@@ -4637,7 +4637,13 @@ function providerFailureFromResult(
   const resetAt =
     apiErrorStatus === 429 && message.result.startsWith("API Error:")
       ? gatewayCooldownResetAt(
-          /\(reset after (?:(\d+)h ?)?(?:(\d+)m ?)?(?:(\d+)s)?\)/.exec(message.result),
+          // CLIProxyAPI nests upstream errors in its message; only its own cooldown counts.
+          (message.result.startsWith(
+            "API Error: Request rejected (429) · All credentials for model ",
+          )
+            ? /^API Error: Request rejected \(429\) · All credentials for model [^\s()]+ are cooling down \(reset after (?:(\d+)h ?)?(?:(\d+)m ?)?(?:(\d+)s)?\)/
+            : /\(reset after (?:(\d+)h ?)?(?:(\d+)m ?)?(?:(\d+)s)?\)/
+          ).exec(message.result),
           receivedAt,
         )
       : undefined;
@@ -11397,18 +11403,6 @@ export const makeClaudeAdapterV2 = Effect.fn("makeClaudeAdapterV2")(function* (
               usageLimited && message.subtype === "success" && message.local_command === "compact"
                 ? context.compactionFailure
                 : null;
-            const resetTimes = Array.from(context.rateLimitResetTimes.values());
-            const assistantLimit = context.latestAssistantRateLimit;
-            if (
-              assistantLimit?.type != null &&
-              !context.rateLimitResetTimes.has(assistantLimit.type)
-            ) {
-              resetTimes.push(assistantLimit.resetAt);
-            }
-            const resetAt =
-              resetTimes.length > 0 && resetTimes.every((time) => time !== null)
-                ? resetTimes.reduce((latest, time) => (time! > latest ? time! : latest), "")
-                : null;
             const resultFailure = interrupted
               ? null
               : limitedCompaction !== null
@@ -11423,9 +11417,24 @@ export const makeClaudeAdapterV2 = Effect.fn("makeClaudeAdapterV2")(function* (
                     failureHint,
                     usageLimited,
                   );
+            const resetTimes = Array.from(context.rateLimitResetTimes.values());
+            const assistantLimit = context.latestAssistantRateLimit;
+            if (
+              assistantLimit?.type != null &&
+              !context.rateLimitResetTimes.has(assistantLimit.type)
+            ) {
+              resetTimes.push(assistantLimit.resetAt);
+            }
+            if (resultFailure?.class === "usage_limit" && resultFailure.resetAt != null) {
+              resetTimes.push(resultFailure.resetAt);
+            }
+            const resetAt =
+              resetTimes.length > 0 && resetTimes.every((time) => time !== null)
+                ? resetTimes.reduce((latest, time) => (time! > latest ? time! : latest), "")
+                : null;
             const terminalFailure =
               resultFailure?.class === "usage_limit"
-                ? { ...resultFailure, resetAt: resetAt ?? resultFailure.resetAt ?? null }
+                ? { ...resultFailure, resetAt }
                 : resultFailure;
             yield* finalizeActiveTurn({
               context,