diff --git a/packages/engine/src/__tests__/agent-memory-index.test.ts b/packages/engine/src/__tests__/agent-memory-index.test.ts
new file mode 100644
index 000000000..9b7f9cd9a
--- /dev/null
+++ b/packages/engine/src/__tests__/agent-memory-index.test.ts
@@ -0,0 +1,72 @@
+import { mkdtemp, mkdir, rm, writeFile } from "node:fs/promises";
+import { tmpdir } from "node:os";
+import { join } from "node:path";
+import { afterEach, describe, expect, it } from "vitest";
+import { buildMemoryIndex } from "../agent-memory-index.js";
+
+const tempDirs: string[] = [];
+
+afterEach(async () => {
+  await Promise.all(tempDirs.map((dir) => rm(dir, { recursive: true, force: true })));
+  tempDirs.length = 0;
+});
+
+async function setupRoot(): Promise<string> {
+  const dir = await mkdtemp(join(tmpdir(), "fn-memory-index-"));
+  tempDirs.push(dir);
+  return dir;
+}
+
+describe("buildMemoryIndex", () => {
+  it("includes both agent and project sections when both files exist", async () => {
+    const root = await setupRoot();
+    await mkdir(join(root, ".fusion", "agent-memory", "agent-1"), { recursive: true });
+    await mkdir(join(root, ".fusion", "memory"), { recursive: true });
+    await writeFile(join(root, ".fusion", "agent-memory", "agent-1", "MEMORY.md"), "## Habits\n\nAlways test first\n");
+    await writeFile(join(root, ".fusion", "memory", "MEMORY.md"), "## Conventions\n\nUse pnpm\n");
+
+    const result = await buildMemoryIndex({ rootDir: root, agentId: "agent-1" });
+    expect(result).toContain("## Agent Memory Index");
+    expect(result).toContain(".fusion/agent-memory/agent-1/MEMORY.md");
+    expect(result).toContain("\"Habits\" — Always test first");
+    expect(result).toContain("## Project Memory Index");
+    expect(result).toContain("\"Conventions\" — Use pnpm");
+  });
+
+  it("includes only agent section when project memory is missing", async () => {
+    const root = await setupRoot();
+    await mkdir(join(root, ".fusion", "agent-memory", "agent-1"), { recursive: true });
+    await writeFile(join(root, ".fusion", "agent-memory", "agent-1", "MEMORY.md"), "## Preferences\n\nCompact output\n");
+
+    const result = await buildMemoryIndex({ rootDir: root, agentId: "agent-1" });
+    expect(result).toContain("## Agent Memory Index");
+    expect(result).not.toContain("## Project Memory Index");
+  });
+
+  it("returns empty string when files are missing", async () => {
+    const root = await setupRoot();
+    const result = await buildMemoryIndex({ rootDir: root, agentId: "agent-1" });
+    expect(result).toBe("");
+  });
+
+  it("truncates oversized output with ellipsis", async () => {
+    const root = await setupRoot();
+    await mkdir(join(root, ".fusion", "agent-memory", "agent-1"), { recursive: true });
+    await writeFile(
+      join(root, ".fusion", "agent-memory", "agent-1", "MEMORY.md"),
+      Array.from({ length: 200 }, (_, i) => `## Heading ${i}\n\nSummary ${i}\n`).join("\n"),
+    );
+
+    const result = await buildMemoryIndex({ rootDir: root, agentId: "agent-1" });
+    expect(result.endsWith("…")).toBe(true);
+  });
+
+  it("keeps heading without descriptor when body is missing", async () => {
+    const root = await setupRoot();
+    await mkdir(join(root, ".fusion", "agent-memory", "agent-1"), { recursive: true });
+    await writeFile(join(root, ".fusion", "agent-memory", "agent-1", "MEMORY.md"), "## Empty Heading\n\n## Next\n\nline\n");
+
+    const result = await buildMemoryIndex({ rootDir: root, agentId: "agent-1" });
+    expect(result).toContain('  - "Empty Heading"');
+  });
+});
diff --git a/packages/engine/src/agent-memory-index.ts b/packages/engine/src/agent-memory-index.ts
new file mode 100644
index 000000000..173c9dcce
--- /dev/null
+++ b/packages/engine/src/agent-memory-index.ts
@@ -0,0 +1,83 @@
+import { readFile } from "node:fs/promises";
+import { join } from "node:path";
+
+type BuildMemoryIndexInput = {
+  rootDir: string;
+  agentId: string;
+};
+
+type HeadingEntry = {
+  heading: string;
+  summary?: string;
+};
+
+const MAX_INDEX_BYTES = 800;
+
+function clampUtf8(input: string, maxBytes: number): string {
+  if (Buffer.byteLength(input, "utf8") <= maxBytes) return input;
+  let out = "";
+  for (const char of input) {
+    if (Buffer.byteLength(out + char, "utf8") > maxBytes) break;
+    out += char;
+  }
+  return out;
+}
+
+function parseHeadings(content: string): HeadingEntry[] {
+  const lines = content.split(/\r?\n/);
+  const entries: HeadingEntry[] = [];
+
+  for (let i = 0; i < lines.length; i += 1) {
+    const line = lines[i]?.trim() ?? "";
+    if (!line.startsWith("## ")) continue;
+
+    const heading = line.slice(3).trim();
+    if (!heading) continue;
+
+    let summary: string | undefined;
+    for (let j = i + 1; j < lines.length; j += 1) {
+      const candidate = (lines[j] ?? "").trim();
+      if (!candidate) continue;
+      if (candidate.startsWith("## ")) break;
+      summary = candidate;
+      break;
+    }
+    entries.push({ heading, summary });
+  }
+
+  return entries;
+}
+
+async function buildFileSection(sectionHeader: string, displayPath: string, fsPath: string): Promise<string> {
+  try {
+    const content = await readFile(fsPath, "utf-8");
+    const headings = parseHeadings(content);
+    const lines = [sectionHeader, `- ${displayPath}`];
+    for (const entry of headings) {
+      const descriptor = entry.summary ? ` — ${entry.summary}` : "";
+      lines.push(`  - "${entry.heading}"${descriptor}`);
+    }
+    return `${lines.join("\n")}\n`;
+  } catch {
+    return "";
+  }
+}
+
+export async function buildMemoryIndex({ rootDir, agentId }: BuildMemoryIndexInput): Promise<string> {
+  const safeAgentId = agentId.trim().replace(/[^a-zA-Z0-9._-]+/g, "-").replace(/^-+|-+$/g, "") || "agent";
+  const agentDisplayPath = `.fusion/agent-memory/${safeAgentId}/MEMORY.md`;
+  const agentFsPath = join(rootDir, ".fusion", "agent-memory", safeAgentId, "MEMORY.md");
+
+  const projectDisplayPath = ".fusion/memory/MEMORY.md";
+  const projectFsPath = join(rootDir, ".fusion", "memory", "MEMORY.md");
+
+  const [agentSection, projectSection] = await Promise.all([
+    buildFileSection("## Agent Memory Index (use fn_memory_search / fn_memory_get to read)", agentDisplayPath, agentFsPath),
+    buildFileSection("## Project Memory Index", projectDisplayPath, projectFsPath),
+  ]);
+
+  const assembled = [agentSection, projectSection].filter(Boolean).join("\n").trim();
+  if (!assembled) return "";
+  if (Buffer.byteLength(assembled, "utf8") <= MAX_INDEX_BYTES) return assembled;
+  return `${clampUtf8(assembled, MAX_INDEX_BYTES - 1)}…`;
+}