diff --git a/CMakeLists.txt b/CMakeLists.txt
index 4ae8aae..0909832 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -13,11 +13,11 @@ find_package(nlohmann_json CONFIG REQUIRED)
 add_executable(agentforge
     src/main.cpp
     src/agent.cpp
+    src/agent_loop.cpp
     src/ollama_client.cpp
     src/file_tool.cpp
     src/tool_request_parser.cpp
 )
-
 set_target_properties(agentforge PROPERTIES
     CXX_STANDARD 20
     CXX_STANDARD_REQUIRED ON
diff --git a/src/agent_loop.cpp b/src/agent_loop.cpp
new file mode 100644
index 0000000..0f08ab2
--- /dev/null
+++ b/src/agent_loop.cpp
@@ -0,0 +1,113 @@
+#include "agent_loop.hpp"
+
+#include "file_tool.hpp"
+#include "ollama_client.hpp"
+
+#include <nlohmann/json.hpp>
+
+#include <cstddef>
+#include <exception>
+#include <iostream>
+#include <stdexcept>
+#include <string>
+
+AgentLoop::AgentLoop(const OllamaClient& client, const FileTool& file_tool)
+    : client_(client), file_tool_(file_tool) {}
+
+std::string AgentLoop::run(
+    const std::vector<ChatMessage>& history,
+    const std::string& task) const {
+    using nlohmann::json;
+
+    json messages = json::array();
+
+    for (const auto& message : history) {
+        messages.push_back({
+            {"role", message.role},
+            {"content", message.content}
+        });
+    }
+
+    messages.push_back({{"role", "user"}, {"content", task}});
+
+    constexpr std::size_t max_model_steps = 3;
+    constexpr std::size_t max_file_bytes = 4000;
+
+    for (std::size_t step = 0; step < max_model_steps; ++step) {
+        const ModelResponse response = client_.chat_with_tools(messages);
+
+        if (response.tool_calls.empty()) {
+            return response.content;
+        }
+
+        if (step + 1 == max_model_steps) {
+            throw std::runtime_error(
+                "Agent step limit reached before a final answer.");
+        }
+
+        if (response.tool_calls.size() != 1) {
+            throw std::runtime_error(
+                "Expected exactly one tool call.");
+        }
+
+        const json& call = response.tool_calls.at(0);
+
+        if (!call.is_object() ||
+            !call.contains("function") ||
+            !call.at("function").is_object()) {
+            throw std::runtime_error("Invalid tool call.");
+        }
+
+        const json& function = call.at("function");
+
+        if (!function.contains("name") ||
+            function.at("name") != "read_file" ||
+            !function.contains("arguments") ||
+            !function.at("arguments").is_object()) {
+            throw std::runtime_error("Unsupported tool call.");
+        }
+
+        const json& arguments = function.at("arguments");
+
+        if (arguments.size() != 1 ||
+            !arguments.contains("path") ||
+            !arguments.at("path").is_string()) {
+            throw std::runtime_error("Invalid read_file arguments.");
+        }
+
+        const std::string path =
+            arguments.at("path").get<std::string>();
+
+        if (path.empty()) {
+            throw std::runtime_error("read_file path is empty.");
+        }
+
+        messages.push_back({
+            {"role", "assistant"},
+            {"content", response.content},
+            {"tool_calls", response.tool_calls}
+        });
+
+        std::cout << "Using read_file tool...\n" << std::flush;
+
+        std::string tool_result;
+
+        try {
+            tool_result = file_tool_.read(path);
+
+            if (tool_result.size() > max_file_bytes) {
+                tool_result = "File is too large to send to the model.";
+            }
+        } catch (const std::exception& error) {
+            tool_result = std::string("File error: ") + error.what();
+        }
+
+        messages.push_back({
+            {"role", "tool"},
+            {"tool_name", "read_file"},
+            {"content", tool_result}
+        });
+    }
+
+    throw std::runtime_error("Agent step limit reached.");
+}
\ No newline at end of file
diff --git a/src/agent_loop.hpp b/src/agent_loop.hpp
new file mode 100644
index 0000000..9648c54
--- /dev/null
+++ b/src/agent_loop.hpp
@@ -0,0 +1,22 @@
+#pragma once
+
+#include "chat_message.hpp"
+
+#include <string>
+#include <vector>
+
+class FileTool;
+class OllamaClient;
+
+class AgentLoop {
+public:
+    AgentLoop(const OllamaClient& client, const FileTool& file_tool);
+
+    std::string run(
+        const std::vector<ChatMessage>& history,
+        const std::string& task) const;
+
+private:
+    const OllamaClient& client_;
+    const FileTool& file_tool_;
+};
\ No newline at end of file
diff --git a/src/model_response.hpp b/src/model_response.hpp
new file mode 100644
index 0000000..3f06602
--- /dev/null
+++ b/src/model_response.hpp
@@ -0,0 +1,10 @@
+#pragma once
+
+#include <nlohmann/json.hpp>
+
+#include <string>
+
+struct ModelResponse {
+    std::string content;
+    nlohmann::json tool_calls = nlohmann::json::array();
+};
\ No newline at end of file
diff --git a/src/ollama_client.cpp b/src/ollama_client.cpp
index 72beab3..8eded2a 100644
--- a/src/ollama_client.cpp
+++ b/src/ollama_client.cpp
@@ -6,10 +6,12 @@
 #include <cstddef>
 #include <memory>
 #include <stdexcept>
+#include <string>
 
 namespace {
 
-// libcurl calls this function when response data arrives.
+using nlohmann::json;
+
 std::size_t collect_response(char* data, std::size_t size,
                              std::size_t count, void* userdata) noexcept {
     const std::size_t bytes = size * count;
@@ -22,7 +24,6 @@ std::size_t collect_response(char* data, std::size_t size,
     }
 }
 
-// Convert libcurl errors into C++ exceptions.
 void check_curl(CURLcode code) {
     if (code != CURLE_OK) {
         throw std::runtime_error(
@@ -30,24 +31,10 @@ void check_curl(CURLcode code) {
     }
 }
 
-}
-
-std::string OllamaClient::chat(
-    const std::vector<ChatMessage>& messages) const {
-    using nlohmann::json;
-
-    json json_messages = json::array();
-
-    for (const auto& message : messages) {
-        json_messages.push_back({
-            {"role", message.role},
-            {"content", message.content}
-        });
-    }
-
-    const json request = {
+json make_request(const json& messages) {
+    return {
         {"model", "qwen3:1.7b"},
-        {"messages", json_messages},
+        {"messages", messages},
         {"stream", false},
         {"think", false},
         {"options", {
@@ -55,7 +42,9 @@ std::string OllamaClient::chat(
             {"num_predict", 128}
         }}
     };
+}
 
+json send_request(const json& request) {
     const std::string body = request.dump();
     std::string response;
 
@@ -93,7 +82,8 @@ std::string OllamaClient::chat(
 
     if (status != 200) {
         throw std::runtime_error(
-            "Ollama returned HTTP " + std::to_string(status) + ": " + response);
+            "Ollama returned HTTP " + std::to_string(status) + ": " +
+            response);
     }
 
     const json result = json::parse(response);
@@ -102,7 +92,26 @@ std::string OllamaClient::chat(
         throw std::runtime_error("Ollama returned an incomplete response.");
     }
 
-    std::string answer = result.at("message").at("content").get<std::string>();
+    return result;
+}
+
+}  // namespace
+
+std::string OllamaClient::chat(
+    const std::vector<ChatMessage>& messages) const {
+    json json_messages = json::array();
+
+    for (const auto& message : messages) {
+        json_messages.push_back({
+            {"role", message.role},
+            {"content", message.content}
+        });
+    }
+
+    const json result = send_request(make_request(json_messages));
+
+    std::string answer =
+        result.at("message").at("content").get<std::string>();
 
     if (answer.empty()) {
         throw std::runtime_error("Ollama returned an empty answer.");
@@ -113,4 +122,63 @@ std::string OllamaClient::chat(
     }
 
     return answer;
+}
+
+ModelResponse OllamaClient::chat_with_tools(
+    const json& messages) const {
+    if (!messages.is_array()) {
+        throw std::invalid_argument("Messages must be a JSON array.");
+    }
+
+    const json parameters = {
+        {"type", "object"},
+        {"required", json::array({"path"})},
+        {"properties", {{"path", {
+            {"type", "string"},
+            {"description", "Workspace-relative file path"}
+        }}}},
+        {"additionalProperties", false}
+    };
+
+    const json file_tool = {
+        {"type", "function"},
+        {"function", {
+            {"name", "read_file"},
+            {"description", "Read a text file in the project workspace"},
+            {"parameters", parameters}
+        }}
+    };
+
+    json request = make_request(messages);
+    request["tools"] = json::array({file_tool});
+
+    const json result = send_request(request);
+    const json& message = result.at("message");
+
+    ModelResponse reply;
+    reply.content = message.at("content").get<std::string>();
+
+    if (message.contains("tool_calls") &&
+        !message.at("tool_calls").is_null()) {
+        if (!message.at("tool_calls").is_array()) {
+            throw std::runtime_error("Ollama returned invalid tool calls.");
+        }
+
+        reply.tool_calls = message.at("tool_calls");
+    }
+
+    if (reply.content.empty() && reply.tool_calls.empty()) {
+        throw std::runtime_error("Ollama returned an empty response.");
+    }
+
+    if (result.value("done_reason", "") == "length") {
+        if (!reply.tool_calls.empty()) {
+            throw std::runtime_error(
+                "Ollama stopped while generating a tool call.");
+        }
+
+        reply.content += "\n[Response stopped at the output limit.]";
+    }
+
+    return reply;
 }
\ No newline at end of file
diff --git a/src/ollama_client.hpp b/src/ollama_client.hpp
index ab71fe5..6708e13 100644
--- a/src/ollama_client.hpp
+++ b/src/ollama_client.hpp
@@ -1,6 +1,9 @@
 #pragma once
 
 #include "chat_message.hpp"
+#include "model_response.hpp"
+
+#include <nlohmann/json.hpp>
 
 #include <string>
 #include <vector>
@@ -8,4 +11,7 @@
 class OllamaClient {
 public:
     std::string chat(const std::vector<ChatMessage>& messages) const;
+
+    ModelResponse chat_with_tools(
+        const nlohmann::json& messages) const;
 };
\ No newline at end of file