diff --git a/tests/agents/test_dynamic_prompting.py b/tests/agents/test_dynamic_prompting.py
new file mode 100644
index 000000000..d9048cec1
--- /dev/null
+++ b/tests/agents/test_dynamic_prompting.py
@@ -0,0 +1,159 @@
+"""Unit tests for the parsing and prompt-shrinking logic of dynamic_prompting."""
+
+import pytest
+
+from agentlab.agents import dynamic_prompting as dp
+from agentlab.llm.llm_utils import ParseError
+
+
+class StubActionSet:
+    """Minimal action set recording calls to to_python_code."""
+
+    def __init__(self, raise_on_code=False):
+        self.raise_on_code = raise_on_code
+        self.calls = []
+
+    def describe(self, with_long_description=True, with_examples=True):
+        return "stub action space\n"
+
+    def example_action(self, abstract=False):
+        return "click('a324')"
+
+    def to_python_code(self, action):
+        self.calls.append(action)
+        if self.raise_on_code:
+            raise ValueError("invalid action")
+        return action
+
+
+def make_action_prompt(is_strict=False, raise_on_code=False):
+    action_set = StubActionSet(raise_on_code=raise_on_code)
+    action_flags = dp.ActionFlags(is_strict=is_strict)
+    return dp.ActionPrompt(action_set=action_set, action_flags=action_flags), action_set
+
+
+def test_parse_answer_extracts_action():
+    prompt, action_set = make_action_prompt()
+    ans_dict = prompt._parse_answer("blah\n<action>\nclick('a324')\n</action>\n")
+    assert ans_dict["action"] == "click('a324')"
+    assert action_set.calls == ["click('a324')"]
+
+
+def test_parse_answer_merges_multiple_actions():
+    prompt, _ = make_action_prompt()
+    ans_dict = prompt._parse_answer("<action>click('1')</action><action>click('2')</action>")
+    assert ans_dict["action"] == "click('1')\nclick('2')"
+
+
+def test_parse_answer_strict_reraises_parse_error():
+    prompt, action_set = make_action_prompt(is_strict=True)
+    with pytest.raises(ParseError):
+        prompt._parse_answer("```python\nclick('a324')\n```")
+    assert action_set.calls == []
+
+
+def test_parse_answer_falls_back_to_code_blocks():
+    prompt, action_set = make_action_prompt(is_strict=False)
+    ans_dict = prompt._parse_answer("```python\nclick('1')\n```\nand\n```\nclick('2')\n```")
+    assert ans_dict["action"] == "click('1')\nclick('2')"
+    assert "parse_error" in ans_dict
+    assert action_set.calls == ["click('1')\nclick('2')"]
+
+
+def test_parse_answer_raises_when_no_code_block():
+    prompt, _ = make_action_prompt(is_strict=False)
+    with pytest.raises(ParseError):
+        prompt._parse_answer("I have no idea what to do.")
+
+
+def test_parse_answer_none_sentinel():
+    prompt, action_set = make_action_prompt()
+    ans_dict = prompt._parse_answer("<action>None</action>")
+    assert ans_dict["action"] is None
+    assert action_set.calls == []
+
+
+def test_parse_answer_raises_when_action_is_invalid():
+    prompt, _ = make_action_prompt(raise_on_code=True)
+    with pytest.raises(ParseError):
+        prompt._parse_answer("<action>not_an_action()</action>")
+
+
+class LineTrunkater(dp.Trunkater):
+    def __init__(self, n_lines=10, visible=True, **kwargs):
+        super().__init__(visible=visible, **kwargs)
+        self._prompt = "\n".join(f"line {i}" for i in range(n_lines))
+
+
+def test_trunkater_waits_for_start_iteration():
+    trunkater = LineTrunkater(n_lines=10, shrink_speed=0.3, start_trunkate_iteration=2)
+    original = trunkater.prompt
+
+    trunkater.shrink()
+    trunkater.shrink()
+    assert trunkater.prompt == original
+    assert trunkater.deleted_lines == 0
+
+    trunkater.shrink()
+    assert trunkater.deleted_lines == 3
+    assert trunkater.prompt.splitlines()[:7] == original.splitlines()[:7]
+    assert "Deleted 3 lines" in trunkater.prompt
+
+
+def test_trunkater_accumulates_deleted_lines():
+    trunkater = LineTrunkater(n_lines=10, shrink_speed=0.5, start_trunkate_iteration=0)
+    trunkater.shrink()
+    assert trunkater.deleted_lines == 5
+    trunkater.shrink()
+    # 5 content lines + the note line, half of which are deleted
+    assert trunkater.deleted_lines == 8
+
+
+def test_trunkater_does_not_shrink_when_hidden():
+    trunkater = LineTrunkater(n_lines=10, visible=False, start_trunkate_iteration=0)
+    trunkater.shrink()
+    assert trunkater.deleted_lines == 0
+    assert trunkater.prompt == ""
+    assert trunkater.shrink_calls == 1
+
+
+@pytest.fixture
+def word_count_tokens(monkeypatch):
+    """Replace the tokenizer by a word counter, to keep the test offline and readable."""
+
+    def count(text, model=None):
+        return len(text.split())
+
+    monkeypatch.setattr(dp, "count_tokens", count)
+    return count
+
+
+def test_fit_tokens_without_max_tokens_does_not_shrink(word_count_tokens):
+    trunkater = LineTrunkater(n_lines=10, start_trunkate_iteration=0)
+    prompt = dp.fit_tokens(trunkater, max_prompt_tokens=None)
+    assert prompt == trunkater.prompt
+    assert trunkater.shrink_calls == 0
+
+
+def test_fit_tokens_returns_early_when_prompt_fits(word_count_tokens):
+    trunkater = LineTrunkater(n_lines=10, start_trunkate_iteration=0)
+    prompt = dp.fit_tokens(
+        trunkater,
+        max_prompt_tokens=word_count_tokens(trunkater.prompt),
+        additional_prompts=[],
+    )
+    assert prompt == trunkater.prompt
+    assert trunkater.shrink_calls == 0
+
+
+def test_fit_tokens_accounts_for_additional_prompts(word_count_tokens):
+    trunkater = LineTrunkater(n_lines=10, start_trunkate_iteration=0)
+    additional = "some system prompt"
+    # one token short of fitting once the additional prompt (+1) is subtracted
+    budget = word_count_tokens(trunkater.prompt) + word_count_tokens(additional)
+    prompt = dp.fit_tokens(
+        trunkater, max_prompt_tokens=budget, additional_prompts=additional, max_iterations=3
+    )
+    # the additional prompt eats into the budget, forcing at least one shrink
+    assert trunkater.shrink_calls > 0
+    assert word_count_tokens(prompt) <= budget - word_count_tokens(additional) - 1