diff --git a/packages/engine/src/__tests__/retry-with-backoff.test.ts b/packages/engine/src/__tests__/retry-with-backoff.test.ts
new file mode 100644
index 0000000000..4fde5a3fdd
--- /dev/null
+++ b/packages/engine/src/__tests__/retry-with-backoff.test.ts
@@ -0,0 +1,621 @@
+import { describe, it, expect, vi, beforeEach, afterEach } from "vitest";
+import {
+  withRetry,
+  withRetryResult,
+  computeBackoff,
+  cancellableSleep,
+  type JitterStrategy,
+  type RetryOptions,
+} from "../retry-with-backoff.js";
+import {
+  EngineError,
+  TransientError,
+  NetworkError,
+  ServiceUnavailableError,
+  TimeoutError,
+  PermanentError,
+  ConfigurationError,
+  ValidationError,
+  RateLimitError,
+  classifyThrownError,
+  isRetryableError,
+} from "../engine-errors.js";
+
+// ── engine-errors.ts tests ──────────────────────────────────────────────
+
+describe("engine-errors", () => {
+  describe("error hierarchy", () => {
+    it("TransientError is retryable EngineError", () => {
+      const err = new TransientError("blip");
+      expect(err).toBeInstanceOf(EngineError);
+      expect(err).toBeInstanceOf(TransientError);
+      expect(err.retryable).toBe(true);
+      expect(err.code).toBe("TRANSIENT");
+      expect(err.message).toBe("blip");
+    });
+
+    it("NetworkError is a TransientError", () => {
+      const err = new NetworkError("ECONNREFUSED");
+      expect(err).toBeInstanceOf(TransientError);
+      expect(err).toBeInstanceOf(NetworkError);
+      expect(err.retryable).toBe(true);
+      expect(err.code).toBe("NETWORK");
+    });
+
+    it("ServiceUnavailableError carries statusCode", () => {
+      const err = new ServiceUnavailableError("overloaded", 503);
+      expect(err).toBeInstanceOf(TransientError);
+      expect(err.statusCode).toBe(503);
+      expect(err.details?.statusCode).toBe(503);
+    });
+
+    it("TimeoutError carries timeoutMs", () => {
+      const err = new TimeoutError("timed out", 5000);
+      expect(err).toBeInstanceOf(TransientError);
+      expect(err.timeoutMs).toBe(5000);
+    });
+
+    it("PermanentError is non-retryable", () => {
+      const err = new PermanentError("bad code");
+      expect(err).toBeInstanceOf(EngineError);
+      expect(err.retryable).toBe(false);
+      expect(err.code).toBe("PERMANENT");
+    });
+
+    it("ConfigurationError is a PermanentError", () => {
+      const err = new ConfigurationError("missing API key");
+      expect(err).toBeInstanceOf(PermanentError);
+      expect(err.code).toBe("CONFIGURATION");
+    });
+
+    it("ValidationError is a PermanentError", () => {
+      const err = new ValidationError("invalid input");
+      expect(err).toBeInstanceOf(PermanentError);
+      expect(err.code).toBe("VALIDATION");
+    });
+
+    it("RateLimitError is non-retryable EngineError", () => {
+      const err = new RateLimitError("429", 5000);
+      expect(err).toBeInstanceOf(EngineError);
+      expect(err.retryable).toBe(false);
+      expect(err.code).toBe("RATE_LIMIT");
+      expect(err.retryAfterMs).toBe(5000);
+    });
+
+    it("error cause chain is preserved", () => {
+      const cause = new Error("root cause");
+      const err = new NetworkError("wrapped", undefined, cause);
+      expect(err.cause).toBe(cause);
+    });
+  });
+
+  describe("classifyThrownError", () => {
+    it("passes through existing EngineError instances", () => {
+      const original = new NetworkError("existing");
+      expect(classifyThrownError(original)).toBe(original);
+    });
+
+    it("classifies rate-limit errors", () => {
+      const err = classifyThrownError(new Error("rate limit exceeded"));
+      expect(err).toBeInstanceOf(RateLimitError);
+    });
+
+    it("classifies network errors", () => {
+      const err = classifyThrownError(new Error("ECONNREFUSED 127.0.0.1:443"));
+      expect(err).toBeInstanceOf(NetworkError);
+    });
+
+    it("classifies timeout errors", () => {
+      const err = classifyThrownError(new Error("ETIMEDOUT connection timed out"));
+      expect(err).toBeInstanceOf(TimeoutError);
+    });
+
+    it("classifies upstream service errors", () => {
+      const err = classifyThrownError(new Error("upstream connect error"));
+      expect(err).toBeInstanceOf(ServiceUnavailableError);
+    });
+
+    it("classifies server_error JSON payloads", () => {
+      const err = classifyThrownError(new Error('{"type":"server_error","code":"server_error"}'));
+      expect(err).toBeInstanceOf(ServiceUnavailableError);
+    });
+
+    it("classifies WebSocket errors as transient", () => {
+      const err = classifyThrownError(new Error("WebSocket error"));
+      expect(err).toBeInstanceOf(TransientError);
+      expect(err.retryable).toBe(true);
+    });
+
+    it("classifies unknown errors as permanent", () => {
+      const err = classifyThrownError(new Error("something unexpected"));
+      expect(err).toBeInstanceOf(PermanentError);
+      expect(err.code).toBe("UNKNOWN");
+    });
+
+    it("handles string thrown values", () => {
+      const err = classifyThrownError("plain string error");
+      expect(err).toBeInstanceOf(PermanentError);
+    });
+
+    it("handles null/undefined thrown values", () => {
+      const err = classifyThrownError(null);
+      expect(err).toBeInstanceOf(PermanentError);
+    });
+  });
+
+  describe("isRetryableError", () => {
+    it("returns true for TransientError subclasses", () => {
+      expect(isRetryableError(new NetworkError("net"))).toBe(true);
+      expect(isRetryableError(new ServiceUnavailableError("svc"))).toBe(true);
+      expect(isRetryableError(new TimeoutError("tmr"))).toBe(true);
+      expect(isRetryableError(new TransientError("gen"))).toBe(true);
+    });
+
+    it("returns false for PermanentError", () => {
+      expect(isRetryableError(new PermanentError("perm"))).toBe(false);
+    });
+
+    it("returns false for RateLimitError", () => {
+      expect(isRetryableError(new RateLimitError("rl"))).toBe(false);
+    });
+
+    it("falls back to string detection for untyped errors", () => {
+      expect(isRetryableError(new Error("ECONNREFUSED"))).toBe(true);
+      expect(isRetryableError(new Error("socket hang up"))).toBe(true);
+      expect(isRetryableError(new Error("bad code"))).toBe(false);
+    });
+  });
+});
+
+// ── retry-with-backoff.ts tests ─────────────────────────────────────────
+
+describe("computeBackoff", () => {
+  it("returns raw delay with jitter=none", () => {
+    expect(computeBackoff(0, 1000, 30000, "none")).toBe(1000);
+    expect(computeBackoff(1, 1000, 30000, "none")).toBe(2000);
+    expect(computeBackoff(2, 1000, 30000, "none")).toBe(4000);
+    expect(computeBackoff(3, 1000, 30000, "none")).toBe(8000);
+  });
+
+  it("caps delay at maxDelayMs", () => {
+    expect(computeBackoff(10, 1000, 5000, "none")).toBe(5000);
+  });
+
+  it("full jitter returns value in [0, rawDelay]", () => {
+    vi.spyOn(Math, "random").mockReturnValue(0.5);
+    const delay = computeBackoff(0, 1000, 30000, "full");
+    expect(delay).toBe(500); // floor(0.5 * 1000)
+    vi.restoreAllMocks();
+  });
+
+  it("equal jitter returns value in [rawDelay/2, rawDelay]", () => {
+    vi.spyOn(Math, "random").mockReturnValue(0.5);
+    const delay = computeBackoff(0, 1000, 30000, "equal");
+    expect(delay).toBe(750); // floor(500 + 0.5 * 500)
+    vi.restoreAllMocks();
+  });
+
+  it("exponential growth is correct with no jitter", () => {
+    const delays = [0, 1, 2, 3, 4].map((a) => computeBackoff(a, 500, 100000, "none"));
+    expect(delays).toEqual([500, 1000, 2000, 4000, 8000]);
+  });
+});
+
+describe("cancellableSleep", () => {
+  beforeEach(() => vi.useFakeTimers());
+  afterEach(() => vi.useRealTimers());
+
+  it("resolves after the specified delay", async () => {
+    const promise = cancellableSleep(1000);
+    await vi.advanceTimersByTimeAsync(1000);
+    await expect(promise).resolves.toBeUndefined();
+  });
+
+  it("rejects immediately if signal is already aborted", async () => {
+    const ac = new AbortController();
+    ac.abort(new Error("Already done"));
+    await expect(cancellableSleep(1000, ac.signal)).rejects.toThrow("Already done");
+  });
+
+  it("rejects when signal fires during sleep", async () => {
+    const ac = new AbortController();
+    const promise = cancellableSleep(10000, ac.signal);
+    await vi.advanceTimersByTimeAsync(100);
+    ac.abort(new Error("Cancelled"));
+    await expect(promise).rejects.toThrow("Cancelled");
+  });
+});
+
+describe("withRetry", () => {
+  beforeEach(() => vi.useFakeTimers());
+  afterEach(() => vi.useRealTimers());
+
+  it("returns the result when fn succeeds on first call", async () => {
+    const fn = vi.fn().mockResolvedValue("ok");
+    const result = await withRetry(fn);
+    expect(result).toBe("ok");
+    expect(fn).toHaveBeenCalledTimes(1);
+  });
+
+  it("retries on TransientError and succeeds", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new NetworkError("ECONNREFUSED"))
+      .mockResolvedValueOnce("recovered");
+
+    const onRetry = vi.fn();
+    const promise = withRetry(fn, {
+      baseDelayMs: 100,
+      maxDelayMs: 1000,
+      jitter: "none",
+      onRetry,
+    });
+
+    await vi.advanceTimersByTimeAsync(200);
+    const result = await promise;
+
+    expect(result).toBe("recovered");
+    expect(fn).toHaveBeenCalledTimes(2);
+    expect(onRetry).toHaveBeenCalledTimes(1);
+    expect(onRetry).toHaveBeenCalledWith(1, 100, expect.any(NetworkError));
+  });
+
+  it("retries on raw transient error strings (untyped)", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new Error("socket hang up"))
+      .mockResolvedValueOnce("ok");
+
+    const promise = withRetry(fn, {
+      baseDelayMs: 100,
+      maxDelayMs: 1000,
+      jitter: "none",
+    });
+
+    await vi.advanceTimersByTimeAsync(200);
+    const result = await promise;
+
+    expect(result).toBe("ok");
+    expect(fn).toHaveBeenCalledTimes(2);
+  });
+
+  it("re-throws non-retryable errors immediately without retry", async () => {
+    const fn = vi.fn().mockRejectedValue(new Error("ENOENT: file not found"));
+    const onRetry = vi.fn();
+
+    await expect(
+      withRetry(fn, { baseDelayMs: 100, onRetry }),
+    ).rejects.toThrow("ENOENT: file not found");
+
+    expect(fn).toHaveBeenCalledTimes(1);
+    expect(onRetry).not.toHaveBeenCalled();
+  });
+
+  it("re-throws PermanentError immediately", async () => {
+    const fn = vi.fn().mockRejectedValue(new PermanentError("bad config"));
+    const onRetry = vi.fn();
+
+    await expect(
+      withRetry(fn, { baseDelayMs: 100, onRetry }),
+    ).rejects.toThrow("bad config");
+
+    expect(fn).toHaveBeenCalledTimes(1);
+    expect(onRetry).not.toHaveBeenCalled();
+  });
+
+  it("never retries rate-limit errors", async () => {
+    const fn = vi.fn().mockRejectedValue(new Error("rate limit exceeded"));
+    const onRetry = vi.fn();
+
+    await expect(
+      withRetry(fn, { baseDelayMs: 100, onRetry }),
+    ).rejects.toThrow("rate limit exceeded");
+
+    expect(fn).toHaveBeenCalledTimes(1);
+    expect(onRetry).not.toHaveBeenCalled();
+  });
+
+  it("never retries RateLimitError instances", async () => {
+    const fn = vi.fn().mockRejectedValue(new RateLimitError("429"));
+    const onRetry = vi.fn();
+
+    await expect(
+      withRetry(fn, { baseDelayMs: 100, onRetry }),
+    ).rejects.toThrow("429");
+
+    expect(fn).toHaveBeenCalledTimes(1);
+    expect(onRetry).not.toHaveBeenCalled();
+  });
+
+  it("applies exponential backoff with increasing delays", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new NetworkError("net-1"))
+      .mockRejectedValueOnce(new NetworkError("net-2"))
+      .mockResolvedValueOnce("ok");
+
+    const delays: number[] = [];
+    const onRetry = (_attempt: number, delayMs: number) => delays.push(delayMs);
+
+    const promise = withRetry(fn, {
+      baseDelayMs: 1000,
+      maxDelayMs: 10000,
+      jitter: "none",
+      onRetry,
+    });
+
+    await vi.advanceTimersByTimeAsync(1100);  // 1st delay: 1000ms
+    await vi.advanceTimersByTimeAsync(2100);  // 2nd delay: 2000ms
+    await promise;
+
+    expect(delays).toEqual([1000, 2000]);
+    expect(fn).toHaveBeenCalledTimes(3);
+  });
+
+  it("caps delay at maxDelayMs", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new TimeoutError("slow"))
+      .mockResolvedValueOnce("ok");
+
+    const delays: number[] = [];
+    const promise = withRetry(fn, {
+      baseDelayMs: 100000,
+      maxDelayMs: 5000,
+      jitter: "none",
+      onRetry: (_a, d) => delays.push(d),
+    });
+
+    await vi.advanceTimersByTimeAsync(6000);
+    await promise;
+
+    expect(delays[0]).toBe(5000);
+  });
+
+  it("throws after all retries are exhausted", async () => {
+    const fn = vi.fn().mockRejectedValue(new NetworkError("always fails"));
+    const onRetry = vi.fn();
+
+    const promise = withRetry(fn, {
+      maxRetries: 2,
+      baseDelayMs: 100,
+      maxDelayMs: 1000,
+      jitter: "none",
+      onRetry,
+    });
+
+    const assertion = expect(promise).rejects.toThrow("always fails");
+
+    for (let i = 0; i < 10; i++) {
+      await vi.advanceTimersByTimeAsync(500);
+    }
+
+    await assertion;
+    expect(fn).toHaveBeenCalledTimes(3); // initial + 2 retries
+    expect(onRetry).toHaveBeenCalledTimes(2);
+  });
+
+  it("cancels backoff sleep when abort signal fires", async () => {
+    const fn = vi.fn().mockRejectedValue(new NetworkError("net"));
+    const ac = new AbortController();
+
+    const promise = withRetry(fn, {
+      baseDelayMs: 60000,
+      maxDelayMs: 120000,
+      jitter: "none",
+      signal: ac.signal,
+    });
+
+    // Let first call fail and start sleeping
+    await vi.advanceTimersByTimeAsync(10);
+    ac.abort(new Error("Task paused"));
+
+    await expect(promise).rejects.toThrow("Task paused");
+    expect(fn).toHaveBeenCalledTimes(1);
+  });
+
+  it("does not retry if abort signal is already aborted at start", async () => {
+    const fn = vi.fn().mockRejectedValue(new NetworkError("net"));
+    const ac = new AbortController();
+    ac.abort(new Error("Already cancelled"));
+
+    await expect(
+      withRetry(fn, { signal: ac.signal }),
+    ).rejects.toThrow("Aborted before first attempt");
+
+    expect(fn).toHaveBeenCalledTimes(0); // never called — aborted before first attempt
+  });
+
+  it("supports custom isRetryable check", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new Error("custom-retryable"))
+      .mockResolvedValueOnce("ok");
+
+    const promise = withRetry(fn, {
+      baseDelayMs: 100,
+      maxDelayMs: 1000,
+      jitter: "none",
+      isRetryable: (err) => err instanceof Error && err.message === "custom-retryable",
+    });
+
+    await vi.advanceTimersByTimeAsync(200);
+    const result = await promise;
+
+    expect(result).toBe("ok");
+    expect(fn).toHaveBeenCalledTimes(2);
+  });
+
+  it("custom isRetryable returning false prevents retry", async () => {
+    const fn = vi.fn().mockRejectedValue(new Error("custom-retryable"));
+    const onRetry = vi.fn();
+
+    await expect(
+      withRetry(fn, {
+        baseDelayMs: 100,
+        onRetry,
+        isRetryable: () => false,
+      }),
+    ).rejects.toThrow("custom-retryable");
+
+    expect(fn).toHaveBeenCalledTimes(1);
+    expect(onRetry).not.toHaveBeenCalled();
+  });
+
+  it("handles simulated 5xx errors correctly", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new ServiceUnavailableError("502 Bad Gateway", 502))
+      .mockRejectedValueOnce(new ServiceUnavailableError("503 Service Unavailable", 503))
+      .mockResolvedValueOnce("recovered");
+
+    const onRetry = vi.fn();
+    const promise = withRetry(fn, {
+      maxRetries: 3,
+      baseDelayMs: 100,
+      maxDelayMs: 5000,
+      jitter: "none",
+      onRetry,
+    });
+
+    await vi.advanceTimersByTimeAsync(200);   // 1st delay: 100ms
+    await vi.advanceTimersByTimeAsync(400);   // 2nd delay: 200ms
+    const result = await promise;
+
+    expect(result).toBe("recovered");
+    expect(fn).toHaveBeenCalledTimes(3);
+    expect(onRetry).toHaveBeenCalledTimes(2);
+
+    // Verify the errors carry status codes
+    const retryCalls = onRetry.mock.calls;
+    expect((retryCalls[0][2] as ServiceUnavailableError).statusCode).toBe(502);
+    expect((retryCalls[1][2] as ServiceUnavailableError).statusCode).toBe(503);
+  });
+
+  it("handles simulated timeout errors correctly", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new TimeoutError("request timed out", 5000))
+      .mockResolvedValueOnce("ok");
+
+    const promise = withRetry(fn, {
+      baseDelayMs: 100,
+      maxDelayMs: 1000,
+      jitter: "none",
+    });
+
+    await vi.advanceTimersByTimeAsync(200);
+    const result = await promise;
+
+    expect(result).toBe("ok");
+    expect(fn).toHaveBeenCalledTimes(2);
+  });
+
+  it("non-retryable errors fail fast without blocking", async () => {
+    const fn = vi.fn().mockRejectedValue(new ValidationError("invalid schema"));
+    const onRetry = vi.fn();
+
+    const start = Date.now();
+    await expect(
+      withRetry(fn, { baseDelayMs: 10000, onRetry }),
+    ).rejects.toThrow("invalid schema");
+
+    // Should resolve immediately — no sleep for non-retryable errors
+    // (fake timers don't advance real Date.now, but fn call count proves it)
+    expect(fn).toHaveBeenCalledTimes(1);
+    expect(onRetry).not.toHaveBeenCalled();
+  });
+
+  it("handles non-Error thrown values", async () => {
+    const fn = vi.fn().mockRejectedValue("string error");
+    const onRetry = vi.fn();
+
+    await expect(
+      withRetry(fn, { baseDelayMs: 100, onRetry }),
+    ).rejects.toThrow("string error");
+
+    expect(fn).toHaveBeenCalledTimes(1);
+    expect(onRetry).not.toHaveBeenCalled();
+  });
+
+  it("uses default options when none provided", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new NetworkError("net"))
+      .mockResolvedValueOnce("ok");
+
+    const promise = withRetry(fn);
+    // Default baseDelayMs=1000, jitter="full" → delay is random in [0,1000]
+    await vi.advanceTimersByTimeAsync(2000);
+    const result = await promise;
+    expect(result).toBe("ok");
+  });
+
+  it("respects per-attempt timeout", async () => {
+    // Simulate a slow operation that exceeds the per-attempt timeout.
+    // On first call, fn returns a promise that never settles (simulating a hang).
+    // On second call (after retry), fn resolves successfully.
+    const fn = vi
+      .fn()
+      .mockImplementationOnce(
+        () => new Promise(() => {}), // hangs forever — triggers timeout
+      )
+      .mockResolvedValueOnce("recovered");
+
+    const onRetry = vi.fn();
+    const promise = withRetry(fn, {
+      maxRetries: 1,
+      baseDelayMs: 100,
+      maxDelayMs: 1000,
+      jitter: "none",
+      timeoutMs: 500,
+      onRetry,
+    });
+
+    // Let first attempt timeout (500ms)
+    await vi.advanceTimersByTimeAsync(600);
+    // Let retry backoff pass (100ms)
+    await vi.advanceTimersByTimeAsync(200);
+    // Second attempt resolves immediately (fn is mockResolvedValueOnce)
+
+    const result = await promise;
+    expect(result).toBe("recovered");
+    expect(fn).toHaveBeenCalledTimes(2);
+    expect(onRetry).toHaveBeenCalledTimes(1);
+    // Verify the retry was triggered by a timeout classification
+    const retryErr = onRetry.mock.calls[0][2];
+    expect(retryErr.code).toBe("TIMEOUT");
+  });
+});
+
+describe("withRetryResult", () => {
+  beforeEach(() => vi.useFakeTimers());
+  afterEach(() => vi.useRealTimers());
+
+  it("returns metadata with retry count and elapsed time", async () => {
+    const fn = vi
+      .fn()
+      .mockRejectedValueOnce(new NetworkError("net"))
+      .mockResolvedValueOnce("ok");
+
+    const promise = withRetryResult(fn, {
+      baseDelayMs: 100,
+      maxDelayMs: 1000,
+      jitter: "none",
+    });
+
+    await vi.advanceTimersByTimeAsync(200);
+    const result = await promise;
+
+    expect(result.value).toBe("ok");
+    expect(result.retries).toBe(1);
+    expect(result.elapsedMs).toBeGreaterThanOrEqual(0);
+  });
+
+  it("reports 0 retries on first-attempt success", async () => {
+    const fn = vi.fn().mockResolvedValue("instant");
+    const result = await withRetryResult(fn);
+    expect(result.value).toBe("instant");
+    expect(result.retries).toBe(0);
+  });
+});
diff --git a/packages/engine/src/engine-errors.ts b/packages/engine/src/engine-errors.ts
new file mode 100644
index 0000000000..c5368e3c25
--- /dev/null
+++ b/packages/engine/src/engine-errors.ts
@@ -0,0 +1,269 @@
+/**
+ * Structured Engine Error Types — domain-specific error classes for the Fusion engine.
+ *
+ * These error types replace generic `catch (err)` blocks with typed, classifiable
+ * errors that callers can match on for domain-specific handling (retry, fail-fast,
+ * alerting, etc.).
+ *
+ * ## Hierarchy
+ *
+ * ```
+ * EngineError (base)
+ * ├── TransientError          — temporary, retryable (network blip, 5xx, timeout)
+ * │   ├── NetworkError        — connection refused/reset, DNS failure, socket hang-up
+ * │   ├── ServiceUnavailableError — upstream 5xx, overloaded, maintenance mode
+ * │   └── TimeoutError        — request/operation exceeded deadline
+ * ├── PermanentError         — non-retryable, task-defect or config error
+ * │   ├── ConfigurationError  — bad env, missing keys, invalid settings
+ * │   └── ValidationError     — schema violations, invalid inputs
+ * └── RateLimitError         — quota/rate-limit, needs global pause (not local retry)
+ * ```
+ *
+ * ## Usage
+ *
+ * ```ts
+ * catch (err) {
+ *   if (err instanceof TransientError) {
+ *     // Move task to todo for retry
+ *   } else if (err instanceof RateLimitError) {
+ *     // Trigger global usage-limit pause
+ *   } else if (err instanceof PermanentError) {
+ *     // Mark task as failed
+ *   }
+ * }
+ * ```
+ */
+
+import { isUsageLimitError } from "./usage-limit-detector.js";
+import { isTransientError } from "./transient-error-detector.js";
+
+// ── Base Error ──────────────────────────────────────────────────────────
+
+/**
+ * Base class for all structured engine errors.
+ *
+ * Adds a `code` (machine-readable string) and optional `cause` chain to the
+ * standard Error. Subclasses set `retryable` to indicate whether the operation
+ * should be retried by the caller.
+ */
+export abstract class EngineError extends Error {
+  /** Machine-readable error code for programmatic matching. */
+  public readonly code: string;
+  /** Whether the caller should retry the operation. */
+  public readonly retryable: boolean;
+  /** Optional structured metadata for logging/metrics. */
+  public readonly details?: Record<string, unknown>;
+
+  constructor(
+    message: string,
+    code: string,
+    retryable: boolean,
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, { cause });
+    this.name = this.constructor.name;
+    this.code = code;
+    this.retryable = retryable;
+    this.details = details;
+  }
+}
+
+// ── Transient Errors (retryable) ────────────────────────────────────────
+
+/**
+ * A transient error — the operation failed due to a temporary condition
+ * that is expected to resolve on its own (network blip, brief service
+ * unavailability, timeout). Callers should retry with backoff.
+ */
+export class TransientError extends EngineError {
+  constructor(
+    message: string,
+    code: string = "TRANSIENT",
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, code, true, details, cause);
+  }
+}
+
+/**
+ * Network-level error — connection refused, DNS resolution failure,
+ * socket hang-up, TLS handshake failure, etc.
+ */
+export class NetworkError extends TransientError {
+  constructor(
+    message: string,
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, "NETWORK", details, cause);
+  }
+}
+
+/**
+ * Upstream service returned a 5xx or is temporarily unavailable
+ * (overloaded, maintenance mode).
+ */
+export class ServiceUnavailableError extends TransientError {
+  /** HTTP status code if available. */
+  public readonly statusCode?: number;
+
+  constructor(
+    message: string,
+    statusCode?: number,
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, "SERVICE_UNAVAILABLE", { ...details, statusCode }, cause);
+    this.statusCode = statusCode;
+  }
+}
+
+/**
+ * Operation or request exceeded its deadline / timeout.
+ */
+export class TimeoutError extends TransientError {
+  /** Configured timeout in milliseconds. */
+  public readonly timeoutMs?: number;
+
+  constructor(
+    message: string,
+    timeoutMs?: number,
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, "TIMEOUT", { ...details, timeoutMs }, cause);
+    this.timeoutMs = timeoutMs;
+  }
+}
+
+// ── Permanent Errors (non-retryable) ────────────────────────────────────
+
+/**
+ * A permanent error — the operation failed due to a defect in the task,
+ * configuration, or input. Retrying will not help.
+ */
+export class PermanentError extends EngineError {
+  constructor(
+    message: string,
+    code: string = "PERMANENT",
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, code, false, details, cause);
+  }
+}
+
+/**
+ * Configuration error — missing env vars, invalid settings, bad keys.
+ */
+export class ConfigurationError extends PermanentError {
+  constructor(
+    message: string,
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, "CONFIGURATION", details, cause);
+  }
+}
+
+/**
+ * Validation error — schema violations, invalid inputs, malformed data.
+ */
+export class ValidationError extends PermanentError {
+  constructor(
+    message: string,
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, "VALIDATION", details, cause);
+  }
+}
+
+// ── Rate Limit Error (special — global pause, not local retry) ──────────
+
+/**
+ * Rate-limit / usage-limit error. Unlike transient errors, these should
+ * NOT be retried locally — instead they trigger a global pause via
+ * UsageLimitPauser so all agents back off simultaneously.
+ */
+export class RateLimitError extends EngineError {
+  /** Suggested retry-after in milliseconds (from Retry-After header or heuristic). */
+  public readonly retryAfterMs?: number;
+
+  constructor(
+    message: string,
+    retryAfterMs?: number,
+    details?: Record<string, unknown>,
+    cause?: Error,
+  ) {
+    super(message, "RATE_LIMIT", false, { ...details, retryAfterMs }, cause);
+    this.retryAfterMs = retryAfterMs;
+  }
+}
+
+// ── Classification helpers ──────────────────────────────────────────────
+
+/**
+ * Classify a raw error into a structured EngineError subtype.
+ *
+ * This bridges the gap between legacy string-based error classification
+ * (transient-error-detector, usage-limit-detector) and the new typed system.
+ * New code should throw typed errors directly; this function upgrades
+ * untyped errors from external libraries.
+ *
+ * @param err - The raw thrown value
+ * @returns A structured EngineError instance
+ */
+export function classifyThrownError(err: unknown): EngineError {
+  // Already structured — return as-is
+  if (err instanceof EngineError) {
+    return err;
+  }
+
+  const message = err instanceof Error ? err.message : String(err ?? "");
+
+  // Rate-limit (triggers global pause)
+  if (isUsageLimitError(message)) {
+    return new RateLimitError(message, undefined, undefined, err instanceof Error ? err : undefined);
+  }
+
+  // Network / connection errors
+  if (/ECONNREFUSED|connection refused|connection reset|socket hang up|EHOSTUNREACH|ENETUNREACH/i.test(message)) {
+    return new NetworkError(message, undefined, err instanceof Error ? err : undefined);
+  }
+
+  // Timeout errors
+  if (/ETIMEDOUT|timeout.*connection|connection.*timeout|deadline exceeded|timed out after \d+ms/i.test(message)) {
+    return new TimeoutError(message, undefined, undefined, err instanceof Error ? err : undefined);
+  }
+
+  // 5xx / service unavailable
+  if (/upstream connect error|disconnect\/reset before headers|remote connection failure|transport failure/i.test(message)) {
+    return new ServiceUnavailableError(message, undefined, undefined, err instanceof Error ? err : undefined);
+  }
+
+  if (/"type":"server_error"|\"code\":\"server_error\"/i.test(message)) {
+    return new ServiceUnavailableError(message, 500, undefined, err instanceof Error ? err : undefined);
+  }
+
+  // Generic transient (WebSocket errors, provider aborts, etc.)
+  if (isTransientError(message)) {
+    return new TransientError(message, "TRANSIENT", undefined, err instanceof Error ? err : undefined);
+  }
+
+  // Default: permanent
+  return new PermanentError(message, "UNKNOWN", undefined, err instanceof Error ? err : undefined);
+}
+
+/**
+ * Type guard: is the error retryable (transient)?
+ */
+export function isRetryableError(err: unknown): err is TransientError {
+  if (err instanceof TransientError) return true;
+  if (err instanceof EngineError) return err.retryable;
+  // Fall back to string-based detection for untyped errors
+  const message = err instanceof Error ? err.message : String(err ?? "");
+  return isTransientError(message);
+}
diff --git a/packages/engine/src/retry-with-backoff.ts b/packages/engine/src/retry-with-backoff.ts
new file mode 100644
index 0000000000..286c28ab51
--- /dev/null
+++ b/packages/engine/src/retry-with-backoff.ts
@@ -0,0 +1,344 @@
+/**
+ * Retry with Exponential Backoff — general-purpose retry wrapper for
+ * transient network and external service failures.
+ *
+ * This extends the retry pattern established in `rate-limit-retry.ts` to
+ * cover ALL transient errors (network blips, 5xx, timeouts, WebSocket drops)
+ * — not just rate-limit / usage-limit errors.
+ *
+ * ## Strategy
+ *
+ * **Backoff:** `delay = min(baseDelayMs × 2^attempt, maxDelayMs)` with
+ * configurable jitter to avoid thundering-herd effects across concurrent agents.
+ *
+ * **Jitter modes:**
+ * - `"full"` (default): `random(0, delay)` — spreads retries uniformly
+ * - `"equal"`: `base + random(0, base)` where `base = delay/2` — tighter clustering
+ * - `"none"`: no jitter — deterministic (useful for tests)
+ *
+ * **Retryable check:** Uses the structured error types from `engine-errors.ts`
+ * when available, falling back to `transient-error-detector.ts` for untyped errors.
+ *
+ * **Abort support:** An optional `AbortSignal` cancels pending retries when a
+ * task is paused, cancelled, or the engine shuts down.
+ *
+ * **Non-blocking:** Backoff sleeps yield to the event loop, never blocking the
+ * main thread.
+ *
+ * @example
+ * ```ts
+ * const result = await withRetry(() => fetchExternalService(url), {
+ *   maxRetries: 3,
+ *   baseDelayMs: 1000,
+ *   maxDelayMs: 30_000,
+ *   timeoutMs: 60_000,
+ *   onRetry: (attempt, delayMs, err) => {
+ *     logger.warn(`Retry ${attempt} after ${delayMs}ms: ${err.message}`);
+ *   },
+ *   signal: abortController.signal,
+ * });
+ * ```
+ */
+
+import { classifyThrownError, isRetryableError, type EngineError } from "./engine-errors.js";
+import { isUsageLimitError } from "./usage-limit-detector.js";
+
+// ── Types ───────────────────────────────────────────────────────────────
+
+/** Jitter strategy for backoff delay randomization. */
+export type JitterStrategy = "full" | "equal" | "none";
+
+/** Configuration for retry behavior. */
+export interface RetryOptions {
+  /** Maximum number of retry attempts before re-throwing (default: 3). */
+  maxRetries?: number;
+  /** Initial backoff delay in milliseconds (default: 1 000 — 1 s). */
+  baseDelayMs?: number;
+  /** Upper bound on backoff delay in milliseconds (default: 30 000 — 30 s). */
+  maxDelayMs?: number;
+  /**
+   * Per-attempt timeout in milliseconds. When set, each call to `fn()` is
+   * wrapped in a deadline. If the deadline fires before `fn()` resolves, a
+   * TimeoutError is thrown (which is retryable). Default: undefined (no timeout).
+   */
+  timeoutMs?: number;
+  /**
+   * Jitter strategy for randomizing backoff delays (default: "full").
+   * - `"full"`: random(0, delay) — best spread, recommended for production
+   * - `"equal"`: base ± random(0, base/2) — tighter clustering
+   * - `"none"`: no jitter — deterministic, useful for tests
+   */
+  jitter?: JitterStrategy;
+  /**
+   * Called before each retry with the attempt number (1-based), the
+   * computed delay, and the error that triggered the retry.
+   */
+  onRetry?: (attempt: number, delayMs: number, error: EngineError) => void;
+  /**
+   * Abort signal that cancels pending retries and re-throws immediately.
+   */
+  signal?: AbortSignal;
+  /**
+   * Custom retryable check. When provided, this function is called instead
+   * of the default `isRetryableError` check. Return `true` to retry, `false`
+   * to re-throw immediately.
+   */
+  isRetryable?: (err: unknown) => boolean;
+}
+
+/** Result of a successful retry operation, including retry metadata. */
+export interface RetryResult<T> {
+  /** The successful return value. */
+  value: T;
+  /** Total number of retries that occurred (0 = succeeded on first attempt). */
+  retries: number;
+  /** Total elapsed time in milliseconds including all backoff sleeps. */
+  elapsedMs: number;
+}
+
+// ── Backoff Calculation ─────────────────────────────────────────────────
+
+/**
+ * Compute the backoff delay for a given attempt with the chosen jitter strategy.
+ *
+ * @param attempt - 0-based attempt index
+ * @param baseDelayMs - Base delay in milliseconds
+ * @param maxDelayMs - Maximum delay cap in milliseconds
+ * @param jitter - Jitter strategy
+ * @returns Delay in milliseconds (always >= 0)
+ */
+export function computeBackoff(
+  attempt: number,
+  baseDelayMs: number,
+  maxDelayMs: number,
+  jitter: JitterStrategy = "full",
+): number {
+  const rawDelay = Math.min(baseDelayMs * 2 ** attempt, maxDelayMs);
+
+  switch (jitter) {
+    case "full":
+      return Math.floor(Math.random() * rawDelay);
+    case "equal": {
+      const half = rawDelay / 2;
+      return Math.floor(half + Math.random() * half);
+    }
+    case "none":
+      return rawDelay;
+  }
+}
+
+// ── Sleep with Abort ────────────────────────────────────────────────────
+
+/**
+ * Sleep for `ms` milliseconds, cancellable via an `AbortSignal`.
+ * Yields to the event loop — never blocks the main thread.
+ */
+export function cancellableSleep(ms: number, signal?: AbortSignal): Promise<void> {
+  return new Promise<void>((resolve, reject) => {
+    if (signal?.aborted) {
+      reject(signal.reason ?? new Error("Aborted"));
+      return;
+    }
+
+    const timer = setTimeout(resolve, ms);
+
+    if (signal) {
+      const onAbort = () => {
+        clearTimeout(timer);
+        reject(signal.reason ?? new Error("Aborted"));
+      };
+      signal.addEventListener("abort", onAbort, { once: true });
+      // Clean up listener when timer fires normally
+      const origResolve = resolve;
+      resolve = () => {
+        signal.removeEventListener("abort", onAbort);
+        origResolve();
+      };
+    }
+  });
+}
+
+// ── Timeout Wrapper ─────────────────────────────────────────────────────
+
+/**
+ * Wrap an async function with a deadline timeout.
+ *
+ * If `fn()` does not settle within `timeoutMs`, the promise is rejected
+ * with a TimeoutError and any underlying resources are cleaned up via
+ * the AbortController.
+ */
+function withTimeout<T>(
+  fn: () => Promise<T>,
+  timeoutMs: number,
+  parentSignal?: AbortSignal,
+): Promise<T> {
+  let settled = false;
+  return new Promise<T>((resolve, reject) => {
+    const ac = new AbortController();
+
+    // Link parent signal — if parent aborts, we abort too
+    const onParentAbort = () => {
+      if (settled) return;
+      settled = true;
+      ac.abort(parentSignal?.reason ?? new Error("Aborted"));
+      reject(parentSignal?.reason ?? new Error("Aborted"));
+    };
+    parentSignal?.addEventListener("abort", onParentAbort, { once: true });
+
+    const timer = setTimeout(() => {
+      if (settled) return;
+      settled = true;
+      ac.abort(new Error(`Operation timed out after ${timeoutMs}ms`));
+      reject(new Error(`Operation timed out after ${timeoutMs}ms`));
+    }, timeoutMs);
+
+    fn()
+      .then((result) => {
+        if (settled) return;
+        settled = true;
+        clearTimeout(timer);
+        parentSignal?.removeEventListener("abort", onParentAbort);
+        resolve(result);
+      })
+      .catch((err: unknown) => {
+        if (settled) return;
+        settled = true;
+        clearTimeout(timer);
+        parentSignal?.removeEventListener("abort", onParentAbort);
+        reject(err);
+      });
+  });
+}
+
+// ── Main Retry Function ─────────────────────────────────────────────────
+
+/**
+ * Wrap an async function with exponential backoff retry for transient errors.
+ *
+ * The wrapper calls `fn()`. If it throws a retryable error (transient network
+ * or service errors), it sleeps with exponential backoff and retries up to
+ * `maxRetries` times. Non-retryable errors are re-thrown immediately.
+ *
+ * Rate-limit / usage-limit errors are NEVER retried by this function — they
+ * should be handled by `withRateLimitRetry` or trigger a global pause.
+ *
+ * After all retries are exhausted, the original error is thrown.
+ *
+ * @param fn - The async function to execute
+ * @param options - Retry configuration
+ * @returns The return value of `fn()`
+ */
+export async function withRetry<T>(
+  fn: () => Promise<T>,
+  options: RetryOptions = {},
+): Promise<T> {
+  const {
+    maxRetries = 3,
+    baseDelayMs = 1_000,
+    maxDelayMs = 30_000,
+    timeoutMs,
+    jitter = "full",
+    onRetry,
+    signal,
+    isRetryable: customIsRetryable,
+  } = options;
+
+  const startTime = Date.now();
+  let lastError: EngineError | undefined;
+  let retryCount = 0;
+
+  for (let attempt = 0; attempt <= maxRetries; attempt++) {
+    // Check abort before each attempt
+    if (signal?.aborted) {
+      throw lastError ?? new Error("Aborted before first attempt");
+    }
+
+    try {
+      // Wrap with timeout if configured
+      const result = timeoutMs
+        ? await withTimeout(fn, timeoutMs, signal)
+        : await fn();
+      return result;
+    } catch (err: unknown) {
+      // Classify the error into a structured type
+      const classified = classifyThrownError(err);
+
+      // Rate-limit errors: never retry locally — re-throw immediately
+      if (isUsageLimitError(classified.message)) {
+        throw classified;
+      }
+
+      // Use custom retryable check if provided, otherwise use default
+      const shouldRetry = customIsRetryable
+        ? customIsRetryable(err)
+        : isRetryableError(classified);
+
+      // Non-retryable error: re-throw immediately
+      if (!shouldRetry) {
+        throw classified;
+      }
+
+      lastError = classified;
+
+      // All retries exhausted — throw the last error
+      if (attempt >= maxRetries) {
+        throw lastError;
+      }
+
+      // Check abort before sleeping
+      if (signal?.aborted) {
+        throw lastError;
+      }
+
+      // Compute backoff delay
+      const delay = computeBackoff(attempt, baseDelayMs, maxDelayMs, jitter);
+
+      onRetry?.(attempt + 1, delay, classified);
+
+      // Sleep with cancellation support
+      await cancellableSleep(delay, signal);
+
+      retryCount++;
+    }
+  }
+
+  // Unreachable, but satisfies TypeScript
+  throw lastError ?? new Error("withRetry: unexpected state");
+}
+
+/**
+ * Wrap an async function with retry and return extended metadata.
+ *
+ * Same as `withRetry` but returns a `RetryResult<T>` with the value plus
+ * retry count and elapsed time — useful for logging and metrics.
+ *
+ * @param fn - The async function to execute
+ * @param options - Retry configuration
+ * @returns A `RetryResult<T>` with value and retry metadata
+ */
+export async function withRetryResult<T>(
+  fn: () => Promise<T>,
+  options: RetryOptions = {},
+): Promise<RetryResult<T>> {
+  const startTime = Date.now();
+  let retries = 0;
+
+  const result = await withRetry<T>(async () => {
+    if (retries > 0) {
+      // We're in a retry — count it
+    }
+    return fn();
+  }, {
+    ...options,
+    onRetry: (attempt, delayMs, err) => {
+      retries = attempt;
+      options.onRetry?.(attempt, delayMs, err);
+    },
+  });
+
+  return {
+    value: result,
+    retries,
+    elapsedMs: Date.now() - startTime,
+  };
+}