diff --git a/app/backend/main.py b/app/backend/main.py
index 76944324..4b3724e5 100644
--- a/app/backend/main.py
+++ b/app/backend/main.py
@@ -82,7 +82,6 @@ async def stream_chat(request: Request) -> Response:
 
     # Restore session state from incoming AG-UI state (look under namespaced key)
     initial_qa_history: list[QAResponse] = []
-    background_context: str | None = None
     session_id: str | None = None
     state = getattr(run_input, "state", None)
     if state:
@@ -91,7 +90,6 @@ async def stream_chat(request: Request) -> Response:
             initial_qa_history = [
                 QAResponse(**qa) for qa in chat_state.get("qa_history", [])
             ]
-        background_context = chat_state.get("background_context")
         session_id = chat_state.get("session_id")
 
     # Determine session_id: prefer state, fall back to thread_id, generate UUID if neither
@@ -105,8 +103,6 @@ async def stream_chat(request: Request) -> Response:
         session_state=ChatSessionState(
             session_id=session_id,
             qa_history=initial_qa_history,
-            background_context=background_context,
-            # session_context intentionally NOT set - agent will fetch from cache
         ),
         state_key=AGUI_STATE_KEY,
     )
diff --git a/app/frontend/components/Chat.tsx b/app/frontend/components/Chat.tsx
index 317394f5..247ce0f5 100644
--- a/app/frontend/components/Chat.tsx
+++ b/app/frontend/components/Chat.tsx
@@ -7,12 +7,11 @@ import {
 	useCopilotAction,
 } from "@copilotkit/react-core";
 import { CopilotChat } from "@copilotkit/react-ui";
-import { useCallback, useEffect, useState } from "react";
+import { useState } from "react";
 import "@copilotkit/react-ui/styles.css";
 import CitationBlock from "./CitationBlock";
 import ContextPanel from "./ContextPanel";
 import DbInfo from "./DbInfo";
-import SettingsPanel, { STORAGE_KEY } from "./SettingsPanel";
 
 // Must match AGUI_STATE_KEY from haiku.rag.agents.chat
 const AGUI_STATE_KEY = "haiku.rag.chat";
@@ -44,7 +43,6 @@ interface ChatSessionState {
 	session_id: string;
 	citations: Citation[];
 	qa_history: QAResponse[];
-	background_context: string | null;
 	session_context: SessionContext | null;
 }
 
@@ -141,24 +139,6 @@ function FileIcon() {
 	);
 }
 
-function SettingsIcon() {
-	return (
-		<svg
-			width="18"
-			height="18"
-			viewBox="0 0 24 24"
-			fill="none"
-			stroke="currentColor"
-			strokeWidth="2"
-			strokeLinecap="round"
-			strokeLinejoin="round"
-		>
-			<path d="M12.22 2h-.44a2 2 0 0 0-2 2v.18a2 2 0 0 1-1 1.73l-.43.25a2 2 0 0 1-2 0l-.15-.08a2 2 0 0 0-2.73.73l-.22.38a2 2 0 0 0 .73 2.73l.15.1a2 2 0 0 1 1 1.72v.51a2 2 0 0 1-1 1.74l-.15.09a2 2 0 0 0-.73 2.73l.22.38a2 2 0 0 0 2.73.73l.15-.08a2 2 0 0 1 2 0l.43.25a2 2 0 0 1 1 1.73V20a2 2 0 0 0 2 2h.44a2 2 0 0 0 2-2v-.18a2 2 0 0 1 1-1.73l.43-.25a2 2 0 0 1 2 0l.15.08a2 2 0 0 0 2.73-.73l.22-.39a2 2 0 0 0-.73-2.73l-.15-.08a2 2 0 0 1-1-1.74v-.5a2 2 0 0 1 1-1.74l.15-.09a2 2 0 0 0 .73-2.73l-.22-.38a2 2 0 0 0-2.73-.73l-.15.08a2 2 0 0 1-2 0l-.43-.25a2 2 0 0 1-1-1.73V4a2 2 0 0 0-2-2z" />
-			<circle cx="12" cy="12" r="3" />
-		</svg>
-	);
-}
-
 function BrainIcon() {
 	return (
 		<svg
@@ -389,28 +369,9 @@ function ToolCallIndicator({
 	);
 }
 
-function ChatContentInner({
-	backgroundContext,
-	setBackgroundContext,
-}: {
-	backgroundContext: string;
-	setBackgroundContext: (value: string) => void;
-}) {
-	const [settingsOpen, setSettingsOpen] = useState(false);
+function ChatContentInner() {
 	const [contextOpen, setContextOpen] = useState(false);
 
-	const handleSaveContext = useCallback(
-		(value: string) => {
-			setBackgroundContext(value);
-			if (value) {
-				localStorage.setItem(STORAGE_KEY, value);
-			} else {
-				localStorage.removeItem(STORAGE_KEY);
-			}
-		},
-		[setBackgroundContext],
-	);
-
 	const { state: agentState } = useCoAgent<AgentState>({
 		name: "chat_agent",
 		initialState: {
@@ -418,7 +379,6 @@ function ChatContentInner({
 				session_id: "",
 				citations: [],
 				qa_history: [],
-				background_context: backgroundContext || null,
 				session_context: null,
 			},
 		},
@@ -566,19 +526,6 @@ function ChatContentInner({
 							<BrainIcon />
 							Memory
 						</button>
-						<button
-							type="button"
-							className={`header-btn ${backgroundContext ? "has-content" : ""}`}
-							onClick={() => setSettingsOpen(true)}
-							title={
-								backgroundContext
-									? "Background context is set"
-									: "Set background context"
-							}
-						>
-							<SettingsIcon />
-							Settings
-						</button>
 					</div>
 					<div className="chat-content">
 						<CopilotChat
@@ -592,12 +539,6 @@ function ChatContentInner({
 					<DbInfo />
 				</div>
 			</div>
-			<SettingsPanel
-				isOpen={settingsOpen}
-				onClose={() => setSettingsOpen(false)}
-				onSave={handleSaveContext}
-				currentValue={backgroundContext}
-			/>
 			<ContextPanel
 				isOpen={contextOpen}
 				onClose={() => setContextOpen(false)}
@@ -608,25 +549,7 @@ function ChatContentInner({
 }
 
 function ChatContent() {
-	const [backgroundContext, setBackgroundContext] = useState<string | null>(
-		null,
-	);
-
-	useEffect(() => {
-		const stored = localStorage.getItem(STORAGE_KEY);
-		setBackgroundContext(stored || "");
-	}, []);
-
-	if (backgroundContext === null) {
-		return null;
-	}
-
-	return (
-		<ChatContentInner
-			backgroundContext={backgroundContext}
-			setBackgroundContext={setBackgroundContext}
-		/>
-	);
+	return <ChatContentInner />;
 }
 
 export default function Chat() {
diff --git a/app/frontend/components/SettingsPanel.tsx b/app/frontend/components/SettingsPanel.tsx
deleted file mode 100644
index 0e3c53ed..00000000
--- a/app/frontend/components/SettingsPanel.tsx
+++ /dev/null
@@ -1,188 +0,0 @@
-"use client";
-
-import { useCallback, useEffect, useId, useState } from "react";
-
-const STORAGE_KEY = "haiku.rag.settings.background_context";
-
-interface SettingsPanelProps {
-	isOpen: boolean;
-	onClose: () => void;
-	onSave: (backgroundContext: string) => void;
-	currentValue: string;
-}
-
-export default function SettingsPanel({
-	isOpen,
-	onClose,
-	onSave,
-	currentValue,
-}: SettingsPanelProps) {
-	const [value, setValue] = useState(currentValue);
-	const titleId = useId();
-
-	useEffect(() => {
-		if (isOpen) {
-			setValue(currentValue);
-		}
-	}, [isOpen, currentValue]);
-
-	const handleSave = useCallback(() => {
-		onSave(value);
-		onClose();
-	}, [value, onSave, onClose]);
-
-	const handleKeyDown = useCallback(
-		(e: React.KeyboardEvent) => {
-			if (e.key === "Escape") {
-				onClose();
-			}
-		},
-		[onClose],
-	);
-
-	if (!isOpen) {
-		return null;
-	}
-
-	return (
-		<>
-			<style>{`
-				.settings-modal-overlay {
-					position: fixed;
-					top: 0;
-					left: 0;
-					right: 0;
-					bottom: 0;
-					background: rgba(0, 0, 0, 0.5);
-					display: flex;
-					align-items: center;
-					justify-content: center;
-					z-index: 1000;
-				}
-				.settings-modal {
-					background: white;
-					border-radius: 12px;
-					padding: 1.5rem;
-					width: 90%;
-					max-width: 600px;
-					max-height: 80vh;
-					overflow: auto;
-					position: relative;
-					box-shadow: 0 20px 25px -5px rgba(0, 0, 0, 0.1), 0 10px 10px -5px rgba(0, 0, 0, 0.04);
-				}
-				.settings-modal-title {
-					margin: 0 0 0.5rem 0;
-					font-size: 1.25rem;
-					font-weight: 600;
-					color: #1e293b;
-				}
-				.settings-modal-description {
-					margin: 0 0 1rem 0;
-					font-size: 0.875rem;
-					color: #64748b;
-					line-height: 1.5;
-				}
-				.settings-textarea {
-					width: 100%;
-					min-height: 150px;
-					padding: 0.75rem;
-					border: 1px solid #e2e8f0;
-					border-radius: 8px;
-					font-size: 0.875rem;
-					font-family: inherit;
-					resize: vertical;
-					color: #334155;
-					line-height: 1.5;
-				}
-				.settings-textarea:focus {
-					outline: none;
-					border-color: #3b82f6;
-					box-shadow: 0 0 0 3px rgba(59, 130, 246, 0.1);
-				}
-				.settings-textarea::placeholder {
-					color: #94a3b8;
-				}
-				.settings-modal-actions {
-					display: flex;
-					justify-content: flex-end;
-					gap: 0.75rem;
-					margin-top: 1.25rem;
-				}
-				.settings-btn {
-					padding: 0.5rem 1rem;
-					font-size: 0.875rem;
-					font-weight: 500;
-					border-radius: 6px;
-					cursor: pointer;
-					transition: all 0.15s;
-				}
-				.settings-btn-cancel {
-					background: white;
-					color: #475569;
-					border: 1px solid #e2e8f0;
-				}
-				.settings-btn-cancel:hover {
-					background: #f8fafc;
-					border-color: #cbd5e1;
-				}
-				.settings-btn-save {
-					background: #3b82f6;
-					color: white;
-					border: none;
-				}
-				.settings-btn-save:hover {
-					background: #2563eb;
-				}
-			`}</style>
-			<div
-				className="settings-modal-overlay"
-				onClick={onClose}
-				onKeyDown={handleKeyDown}
-				role="dialog"
-				aria-modal="true"
-				aria-labelledby={titleId}
-			>
-				{/* biome-ignore lint/a11y/noStaticElementInteractions: modal content wrapper */}
-				<div
-					className="settings-modal"
-					onClick={(e) => e.stopPropagation()}
-					onKeyDown={(e) => e.stopPropagation()}
-				>
-					<h2 id={titleId} className="settings-modal-title">
-						Background Context
-					</h2>
-					<p className="settings-modal-description">
-						Provide background information that will be used throughout your
-						conversation. This helps the assistant understand domain-specific
-						context, terminology, or any relevant details about your questions.
-					</p>
-					<textarea
-						className="settings-textarea"
-						value={value}
-						onChange={(e) => setValue(e.target.value)}
-						placeholder="e.g., Focus on Python programming concepts and best practices..."
-						autoFocus
-					/>
-					<div className="settings-modal-actions">
-						<button
-							type="button"
-							className="settings-btn settings-btn-cancel"
-							onClick={onClose}
-						>
-							Cancel
-						</button>
-						<button
-							type="button"
-							className="settings-btn settings-btn-save"
-							onClick={handleSave}
-						>
-							Save
-						</button>
-					</div>
-				</div>
-			</div>
-		</>
-	);
-}
-
-export { STORAGE_KEY };
diff --git a/docs/agents.md b/docs/agents.md
index cc1ada85..069c0c7d 100644
--- a/docs/agents.md
+++ b/docs/agents.md
@@ -103,8 +103,7 @@ The `ChatSessionState` maintains:
 
 - `session_id` — Unique identifier for the session
 - `qa_history` — List of previous Q/A pairs (FIFO, max 50)
-- `background_context` — Optional background context for the conversation
-- `embedding_cache` — Cached embeddings for semantic ranking
+- `session_context` — Automatically maintained session context summary
 
 Q/A history is used to:
 
@@ -112,19 +111,6 @@ Q/A history is used to:
 2. Avoid repeating previous answers
 3. Enable semantic ranking of relevant past answers
 
-### Background Context
-
-You can provide background context that persists throughout the conversation:
-
-```python
-session = ChatSessionState(
-    background_context="Focus on Python programming concepts and best practices."
-)
-deps = ChatDeps(client=client, config=config, session_state=session)
-```
-
-The context is included in the agent's system prompt and passed to the research graph when answering questions.
-
 ### AG-UI Integration
 
 When using the chat agent with AG-UI streaming, state is emitted under a namespaced key to avoid conflicts with other agents:
@@ -230,18 +216,6 @@ async with HaikuRAG(path_to_db) as client:
     print(report.executive_summary)
 ```
 
-**With background context:**
-
-```python
-context = ResearchContext(
-    original_question="What are the safety protocols?",
-    background_context="Industrial manufacturing and workplace safety domain."
-)
-state = ResearchState.from_config(context=context, config=Config)
-```
-
-The `background_context` provides domain background that helps the planning and synthesis agents understand the context of the research question.
-
 **With custom config:**
 
 ```python
diff --git a/haiku_rag_slim/haiku/rag/agents/chat/agent.py b/haiku_rag_slim/haiku/rag/agents/chat/agent.py
index f109e727..f039a663 100644
--- a/haiku_rag_slim/haiku/rag/agents/chat/agent.py
+++ b/haiku_rag_slim/haiku/rag/agents/chat/agent.py
@@ -57,13 +57,6 @@ def create_chat_agent(config: AppConfig) -> Agent[ChatDeps, str]:
         retries=3,
     )
 
-    @agent.system_prompt
-    async def add_background_context(ctx: RunContext[ChatDeps]) -> str:
-        """Add background_context to system prompt when available."""
-        if ctx.deps.session_state and ctx.deps.session_state.background_context:
-            return f"\nBACKGROUND CONTEXT:\n{ctx.deps.session_state.background_context}"
-        return ""
-
     @agent.tool
     async def search(
         ctx: RunContext[ChatDeps],
@@ -117,11 +110,6 @@ def create_chat_agent(config: AppConfig) -> Agent[ChatDeps, str]:
             qa_history=(
                 ctx.deps.session_state.qa_history if ctx.deps.session_state else []
             ),
-            background_context=(
-                ctx.deps.session_state.background_context
-                if ctx.deps.session_state
-                else None
-            ),
             session_context=get_cached_session_context(session_id)
             if session_id
             else None,
@@ -177,27 +165,19 @@ def create_chat_agent(config: AppConfig) -> Agent[ChatDeps, str]:
 
         # Build and run the conversational research graph
         graph = build_conversational_graph(config=ctx.deps.config)
-
-        # Determine context strategy:
-        # 1. Read from server cache (ignoring client state)
-        # 2. Fall back to explicit background_context (first request)
-        background_context: str | None = None
         session_id = ctx.deps.session_state.session_id if ctx.deps.session_state else ""
-        if ctx.deps.session_state:
-            cached_context = (
-                get_cached_session_context(session_id) if session_id else None
-            )
 
-            if cached_context and cached_context.summary:
-                # Use cached SessionContext from previous summarization
-                background_context = cached_context.render_markdown()
-            elif ctx.deps.session_state.background_context:
-                # Fall back to explicit background_context (first request)
-                background_context = ctx.deps.session_state.background_context
+        # Get session context from server cache for planning
+        cached_context = get_cached_session_context(session_id) if session_id else None
+        session_context = (
+            cached_context.render_markdown()
+            if cached_context and cached_context.summary
+            else None
+        )
 
         context = ResearchContext(
             original_question=question,
-            background_context=background_context,
+            session_context=session_context,
         )
         state = ResearchState(
             context=context,
@@ -264,11 +244,6 @@ def create_chat_agent(config: AppConfig) -> Agent[ChatDeps, str]:
             qa_history=(
                 ctx.deps.session_state.qa_history if ctx.deps.session_state else []
             ),
-            background_context=(
-                ctx.deps.session_state.background_context
-                if ctx.deps.session_state
-                else None
-            ),
             session_context=get_cached_session_context(session_id)
             if session_id
             else None,
diff --git a/haiku_rag_slim/haiku/rag/agents/chat/context.py b/haiku_rag_slim/haiku/rag/agents/chat/context.py
index 42b7ce3a..a56f1aa8 100644
--- a/haiku_rag_slim/haiku/rag/agents/chat/context.py
+++ b/haiku_rag_slim/haiku/rag/agents/chat/context.py
@@ -53,8 +53,8 @@ async def summarize_session(
     Args:
         qa_history: List of Q&A pairs from the conversation.
         config: AppConfig for model selection.
-        current_context: Previous context to incorporate (background_context or
-            previous session_context.summary). The summarizer will build upon this.
+        current_context: Previous session_context.summary to incorporate.
+            The summarizer will build upon this.
 
     Returns:
         Markdown summary of the conversation history.
@@ -89,14 +89,10 @@ async def update_session_context(
         config: AppConfig for model selection.
         session_state: The session state to update.
     """
-    # Determine current context to incorporate:
-    # 1. If session_context already exists, use its summary
-    # 2. Otherwise, use background_context (if available)
+    # Use existing session_context summary if available
     current_context: str | None = None
     if session_state.session_context and session_state.session_context.summary:
         current_context = session_state.session_context.summary
-    elif session_state.background_context:
-        current_context = session_state.background_context
 
     summary = await summarize_session(
         qa_history, config, current_context=current_context
diff --git a/haiku_rag_slim/haiku/rag/agents/chat/state.py b/haiku_rag_slim/haiku/rag/agents/chat/state.py
index 456fafa4..bc2508cc 100644
--- a/haiku_rag_slim/haiku/rag/agents/chat/state.py
+++ b/haiku_rag_slim/haiku/rag/agents/chat/state.py
@@ -47,7 +47,6 @@ class ChatSessionState(BaseModel):
     session_id: str = ""
     citations: list[Citation] = []
     qa_history: list[QAResponse] = []
-    background_context: str | None = None
     session_context: SessionContext | None = None
 
 
@@ -97,10 +96,6 @@ class ChatDeps:
                     Citation(**c) if isinstance(c, dict) else c
                     for c in state_data.get("citations", [])
                 ]
-            if "background_context" in state_data:
-                self.session_state.background_context = state_data.get(
-                    "background_context"
-                )
             if state_data.get("session_id"):
                 self.session_state.session_id = state_data["session_id"]
             # NOTE: session_context intentionally NOT updated from client
diff --git a/haiku_rag_slim/haiku/rag/agents/research/dependencies.py b/haiku_rag_slim/haiku/rag/agents/research/dependencies.py
index f45dafcf..bcacbc7b 100644
--- a/haiku_rag_slim/haiku/rag/agents/research/dependencies.py
+++ b/haiku_rag_slim/haiku/rag/agents/research/dependencies.py
@@ -19,9 +19,9 @@ class ResearchContext(BaseModel):
     qa_responses: list[Any] = Field(
         default_factory=list, description="Structured QA pairs used during research"
     )
-    background_context: str | None = Field(
+    session_context: str | None = Field(
         default=None,
-        description="Optional background context provided at session start",
+        description="Session context from previous Q&A summarization",
     )
 
     def add_qa_response(self, qa: "SearchAnswer") -> None:
diff --git a/haiku_rag_slim/haiku/rag/agents/research/graph.py b/haiku_rag_slim/haiku/rag/agents/research/graph.py
index ce9ce672..feaaea8d 100644
--- a/haiku_rag_slim/haiku/rag/agents/research/graph.py
+++ b/haiku_rag_slim/haiku/rag/agents/research/graph.py
@@ -42,8 +42,8 @@ def format_context_for_prompt(
     """
     context_data: dict[str, object] = {}
 
-    if context.background_context:
-        context_data["background"] = context.background_context
+    if context.session_context:
+        context_data["background"] = context.session_context
 
     context_data["question"] = context.original_question
 
@@ -78,9 +78,9 @@ async def _plan_step_logic(
     """Shared logic for the plan step."""
     model_config = config.research.model
 
-    # Use context-aware prompt if we have existing qa_responses
+    # Use context-aware prompt if we have existing qa_responses or session_context
     has_prior_answers = bool(state.context.qa_responses)
-    has_background = bool(state.context.background_context)
+    has_session_context = bool(state.context.session_context)
     effective_plan_prompt = (
         build_prompt(PLAN_PROMPT_WITH_CONTEXT, config)
         if has_prior_answers
@@ -118,7 +118,7 @@ async def _plan_step_logic(
             f"{context_xml}\n\n"
             f"Main question: {state.context.original_question}"
         )
-    elif has_background:
+    elif has_session_context:
         context_xml = format_context_for_prompt(state.context)
         prompt = (
             f"Plan a focused approach for the main question.\n\n"
diff --git a/haiku_rag_slim/haiku/rag/app.py b/haiku_rag_slim/haiku/rag/app.py
index ece96e40..ef9c471e 100644
--- a/haiku_rag_slim/haiku/rag/app.py
+++ b/haiku_rag_slim/haiku/rag/app.py
@@ -376,7 +376,6 @@ class HaikuRAGApp:
         cite: bool = False,
         deep: bool = False,
         filter: str | None = None,
-        background_context: str | None = None,
     ):
         """Ask a question using the RAG system.
 
@@ -385,7 +384,6 @@ class HaikuRAGApp:
             cite: Include citations in the answer
             deep: Use deep QA mode (multi-step reasoning)
             filter: SQL WHERE clause to filter documents
-            background_context: Optional background context for the question
         """
         async with HaikuRAG(
             db_path=self.db_path,
@@ -396,9 +394,7 @@ class HaikuRAGApp:
             citations = []
             if deep:
                 graph = build_research_graph(config=self.config)
-                context = ResearchContext(
-                    original_question=question, background_context=background_context
-                )
+                context = ResearchContext(original_question=question)
                 state = ResearchState.from_config(
                     context=context,
                     config=self.config,
@@ -427,14 +423,7 @@ class HaikuRAGApp:
                 else:
                     self.console.print("[yellow]No answer generated.[/yellow]")
             else:
-                system_prompt = (
-                    f"BACKGROUND CONTEXT:\n{background_context}"
-                    if background_context
-                    else None
-                )
-                answer, citations = await self.client.ask(
-                    question, system_prompt=system_prompt, filter=filter
-                )
+                answer, citations = await self.client.ask(question, filter=filter)
 
                 self.console.print(f"[bold blue]Question:[/bold blue] {question}")
                 self.console.print()
@@ -448,14 +437,12 @@ class HaikuRAGApp:
         self,
         question: str,
         filter: str | None = None,
-        background_context: str | None = None,
     ):
         """Run research via the pydantic-graph pipeline.
 
         Args:
             question: The research question
             filter: SQL WHERE clause to filter documents
-            background_context: Optional background context for the research
         """
         async with HaikuRAG(
             db_path=self.db_path,
@@ -468,9 +455,7 @@ class HaikuRAGApp:
             self.console.print()
 
             graph = build_research_graph(config=self.config)
-            context = ResearchContext(
-                original_question=question, background_context=background_context
-            )
+            context = ResearchContext(original_question=question)
             state = ResearchState.from_config(context=context, config=self.config)
             state.search_filter = filter
             deps = ResearchDeps(client=client)
diff --git a/haiku_rag_slim/haiku/rag/chat/__init__.py b/haiku_rag_slim/haiku/rag/chat/__init__.py
index 550f42ca..9430f618 100644
--- a/haiku_rag_slim/haiku/rag/chat/__init__.py
+++ b/haiku_rag_slim/haiku/rag/chat/__init__.py
@@ -6,7 +6,6 @@ def run_chat(
     db_path: Path | None = None,
     read_only: bool = False,
     before: datetime | None = None,
-    background_context: str | None = None,
 ) -> None:
     """Run the chat TUI.
 
@@ -14,7 +13,6 @@ def run_chat(
         db_path: Path to the LanceDB database. If None, uses default from config.
         read_only: Whether to open the database in read-only mode.
         before: Query database as it existed before this datetime.
-        background_context: Optional background context for the conversation.
     """
     try:
         from haiku.rag.chat.app import ChatApp
@@ -33,6 +31,5 @@ def run_chat(
         db_path,
         read_only=read_only,
         before=before,
-        background_context=background_context,
     )
     app.run()
diff --git a/haiku_rag_slim/haiku/rag/chat/app.py b/haiku_rag_slim/haiku/rag/chat/app.py
index 338153ed..64ce2c67 100644
--- a/haiku_rag_slim/haiku/rag/chat/app.py
+++ b/haiku_rag_slim/haiku/rag/chat/app.py
@@ -21,7 +21,6 @@ from haiku.rag.agents.chat.state import (
     AGUI_STATE_KEY,
     ChatDeps,
     ChatSessionState,
-    SessionContext,
 )
 from haiku.rag.agents.research.models import Citation
 from haiku.rag.client import HaikuRAG
@@ -92,13 +91,11 @@ class ChatApp(App):
         db_path: Path,
         read_only: bool = False,
         before: datetime | None = None,
-        background_context: str | None = None,
     ) -> None:
         super().__init__()
         self.db_path = db_path
         self.read_only = read_only
         self.before = before
-        self.background_context = background_context
         self.client: HaikuRAG | None = None
         self.config = get_config()
         self.agent: Agent[ChatDeps, str] | None = None
@@ -129,15 +126,8 @@ class ChatApp(App):
 
         # Create agent and session state
         self.agent = create_chat_agent(self.config)
-        initial_context = (
-            SessionContext(summary=self.background_context, last_updated=datetime.now())
-            if self.background_context
-            else None
-        )
         self.session_state = ChatSessionState(
             session_id=str(uuid.uuid4()),
-            background_context=self.background_context,
-            session_context=initial_context,
         )
 
         # Focus the input field
@@ -283,16 +273,9 @@ class ChatApp(App):
         self._last_citations.clear()
         self._selected_citation_idx = None
         self._message_history.clear()
-        # Reset session state for fresh conversation (preserve background_context)
-        initial_context = (
-            SessionContext(summary=self.background_context, last_updated=datetime.now())
-            if self.background_context
-            else None
-        )
+        # Reset session state for fresh conversation
         self.session_state = ChatSessionState(
             session_id=str(uuid.uuid4()),
-            background_context=self.background_context,
-            session_context=initial_context,
         )
 
     def action_focus_input(self) -> None:
diff --git a/haiku_rag_slim/haiku/rag/cli.py b/haiku_rag_slim/haiku/rag/cli.py
index e99d0982..72b9acaa 100644
--- a/haiku_rag_slim/haiku/rag/cli.py
+++ b/haiku_rag_slim/haiku/rag/cli.py
@@ -352,24 +352,7 @@ def ask(
         "-f",
         help="SQL WHERE clause to filter documents (e.g., \"uri LIKE '%arxiv%'\")",
     ),
-    context: str | None = typer.Option(
-        None,
-        "--context",
-        help="Background context for the question",
-    ),
-    context_file: Path | None = typer.Option(
-        None,
-        "--context-file",
-        help="Path to a file containing background context",
-    ),
 ):
-    # Resolve initial context from flag or file
-    background_context: str | None = None
-    if context_file:
-        background_context = context_file.read_text()
-    elif context:
-        background_context = context
-
     app = create_app(db)
     asyncio.run(
         app.ask(
@@ -377,7 +360,6 @@ def ask(
             cite=cite,
             deep=deep,
             filter=filter,
-            background_context=background_context,
         )
     )
 
@@ -396,30 +378,9 @@ def research(
         "-f",
         help="SQL WHERE clause to filter documents (e.g., \"uri LIKE '%arxiv%'\")",
     ),
-    context: str | None = typer.Option(
-        None,
-        "--context",
-        help="Background context for the research",
-    ),
-    context_file: Path | None = typer.Option(
-        None,
-        "--context-file",
-        help="Path to a file containing background context",
-    ),
 ):
-    # Resolve initial context from flag or file
-    background_context: str | None = None
-    if context_file:
-        background_context = context_file.read_text()
-    elif context:
-        background_context = context
-
     app = create_app(db)
-    asyncio.run(
-        app.research(
-            question=question, filter=filter, background_context=background_context
-        )
-    )
+    asyncio.run(app.research(question=question, filter=filter))
 
 
 @_cli.command("settings", help="Display current configuration settings")
@@ -632,34 +593,16 @@ def chat(
         "--db",
         help="Path to the LanceDB database file",
     ),
-    context: str | None = typer.Option(
-        None,
-        "--context",
-        help="Initial context/background information for the conversation",
-    ),
-    context_file: Path | None = typer.Option(
-        None,
-        "--context-file",
-        help="Path to a file containing initial context",
-    ),
 ):
     """Launch the chat TUI for conversational RAG."""
     from haiku.rag.chat import run_chat
 
     db_path = db if db else get_config().storage.data_dir / "haiku.rag.lancedb"
 
-    # Resolve initial context from flag or file
-    background_context: str | None = None
-    if context_file:
-        background_context = context_file.read_text()
-    elif context:
-        background_context = context
-
     run_chat(
         db_path,
         read_only=_read_only,
         before=_before,
-        background_context=background_context,
     )
 
 
diff --git a/tests/agents/chat/test_chat_agent.py b/tests/agents/chat/test_chat_agent.py
index ab89a6e2..79f0275d 100644
--- a/tests/agents/chat/test_chat_agent.py
+++ b/tests/agents/chat/test_chat_agent.py
@@ -76,18 +76,6 @@ def test_chat_session_state():
     assert state.qa_history == []
 
 
-def test_chat_agent_has_dynamic_system_prompt():
-    """Test that chat agent registers a dynamic system prompt for background_context."""
-    agent = create_chat_agent(Config)
-    # The agent should have at least one system prompt function registered
-    # (the add_background_context function)
-    system_prompt_functions = getattr(agent, "_system_prompt_functions")
-    assert len(system_prompt_functions) >= 1
-    # Verify it's the add_background_context function
-    func_names = [r.function.__name__ for r in system_prompt_functions]
-    assert "add_background_context" in func_names
-
-
 def test_citation():
     """Test Citation model."""
     citation = Citation(
diff --git a/tests/agents/chat/test_context.py b/tests/agents/chat/test_context.py
index 496cac8a..4819957c 100644
--- a/tests/agents/chat/test_context.py
+++ b/tests/agents/chat/test_context.py
@@ -186,7 +186,7 @@ class TestSummarizeSession:
             )
         ]
 
-        # Provide current_context (e.g., background_context or previous summary)
+        # Provide current_context (e.g., previous summary)
         current_context = "Focus on Python APIs. User is building a web application."
 
         result = await summarize_session(
@@ -362,6 +362,7 @@ class TestSessionContextCache:
         cached = get_cached_session_context("cache-test-session")
         assert cached is not None
         assert cached.summary == "Mocked summary"
+        assert session_state.session_context is not None
         assert cached.summary == session_state.session_context.summary
 
     @pytest.mark.asyncio
diff --git a/tests/agents/chat/test_state.py b/tests/agents/chat/test_state.py
index 3fa0277b..db315fae 100644
--- a/tests/agents/chat/test_state.py
+++ b/tests/agents/chat/test_state.py
@@ -34,25 +34,6 @@ def test_max_qa_history_constant():
     assert MAX_QA_HISTORY == 50
 
 
-def test_chat_session_state_background_context():
-    """Test ChatSessionState accepts background_context."""
-    from haiku.rag.agents.chat.state import ChatSessionState
-
-    state = ChatSessionState(
-        session_id="test-session",
-        background_context="This is background knowledge about the topic.",
-    )
-    assert state.background_context == "This is background knowledge about the topic."
-
-
-def test_chat_session_state_background_context_defaults_to_none():
-    """Test ChatSessionState background_context defaults to None."""
-    from haiku.rag.agents.chat.state import ChatSessionState
-
-    state = ChatSessionState(session_id="test-session")
-    assert state.background_context is None
-
-
 def test_chat_deps_state_getter_returns_namespaced_state():
     """Test ChatDeps.state getter returns state under namespaced key."""
     from unittest.mock import MagicMock
@@ -67,7 +48,6 @@ def test_chat_deps_state_getter_returns_namespaced_state():
         qa_history=[
             QAResponse(question="Q1", answer="A1", confidence=0.9),
         ],
-        background_context="Background info",
     )
 
     deps = ChatDeps(
@@ -83,7 +63,6 @@ def test_chat_deps_state_getter_returns_namespaced_state():
     assert state[AGUI_STATE_KEY]["session_id"] == "test-123"
     assert len(state[AGUI_STATE_KEY]["qa_history"]) == 1
     assert state[AGUI_STATE_KEY]["qa_history"][0]["question"] == "Q1"
-    assert state[AGUI_STATE_KEY]["background_context"] == "Background info"
 
 
 def test_chat_deps_state_getter_without_namespace():
@@ -152,7 +131,6 @@ def test_chat_deps_state_setter_updates_from_namespaced_state():
                 {"question": "Q1", "answer": "A1", "confidence": 0.9, "citations": []}
             ],
             "citations": [],
-            "background_context": "New context",
         }
     }
 
@@ -162,7 +140,6 @@ def test_chat_deps_state_setter_updates_from_namespaced_state():
     assert deps.session_state.session_id == "updated-123"
     assert len(deps.session_state.qa_history) == 1
     assert deps.session_state.qa_history[0].question == "Q1"
-    assert deps.session_state.background_context == "New context"
 
 
 def test_chat_deps_state_setter_handles_none():
@@ -242,7 +219,6 @@ def test_chat_deps_state_setter_with_citation_dicts():
                     "content": "Test content",
                 }
             ],
-            "background_context": None,
         }
     }
 
diff --git a/tests/agents/research/test_research_graph.py b/tests/agents/research/test_research_graph.py
index 24179e7d..74b0ef84 100644
--- a/tests/agents/research/test_research_graph.py
+++ b/tests/agents/research/test_research_graph.py
@@ -46,65 +46,6 @@ async def test_graph_end_to_end(allow_model_requests, temp_db_path, qa_corpus):
     client.close()
 
 
-def test_research_context_background_context():
-    """Test ResearchContext accepts background_context."""
-    context = ResearchContext(
-        original_question="What is X?",
-        background_context="Background: X is a concept in domain Y.",
-    )
-    assert context.background_context == "Background: X is a concept in domain Y."
-
-
-def test_research_context_background_context_defaults_to_none():
-    """Test ResearchContext background_context defaults to None."""
-    context = ResearchContext(original_question="What is X?")
-    assert context.background_context is None
-
-
-def test_format_context_for_prompt_includes_background():
-    """Test format_context_for_prompt includes background in output."""
-    from haiku.rag.agents.research.graph import format_context_for_prompt
-
-    context = ResearchContext(
-        original_question="What is X?",
-        background_context="X is a concept in domain Y.",
-    )
-    result = format_context_for_prompt(context)
-    assert "X is a concept in domain Y." in result
-    assert "<background>" in result
-
-
-def test_format_context_for_prompt_excludes_background_when_none():
-    """Test format_context_for_prompt excludes background when None."""
-    from haiku.rag.agents.research.graph import format_context_for_prompt
-
-    context = ResearchContext(original_question="What is X?")
-    result = format_context_for_prompt(context)
-    assert "<background>" not in result
-
-
-def test_format_context_for_prompt_without_pending_includes_background():
-    """Test format_context_for_prompt with include_pending_questions=False includes background."""
-    from haiku.rag.agents.research.graph import format_context_for_prompt
-
-    context = ResearchContext(
-        original_question="What is X?",
-        background_context="X is a concept in domain Y.",
-    )
-    result = format_context_for_prompt(context, include_pending_questions=False)
-    assert "X is a concept in domain Y." in result
-    assert "<background>" in result
-
-
-def test_format_context_for_prompt_without_pending_excludes_background_when_none():
-    """Test format_context_for_prompt with include_pending_questions=False excludes background when None."""
-    from haiku.rag.agents.research.graph import format_context_for_prompt
-
-    context = ResearchContext(original_question="What is X?")
-    result = format_context_for_prompt(context, include_pending_questions=False)
-    assert "<background>" not in result
-
-
 def test_research_plan_allows_empty_sub_questions():
     """Test ResearchPlan accepts empty sub_questions when context is sufficient."""
     from haiku.rag.agents.research.models import ResearchPlan
diff --git a/tests/test_app.py b/tests/test_app.py
index f697afdf..92c5db2c 100644
--- a/tests/test_app.py
+++ b/tests/test_app.py
@@ -304,9 +304,7 @@ async def test_ask_without_cite(app: HaikuRAGApp, monkeypatch):
     with patch("haiku.rag.app.HaikuRAG", return_value=mock_client):
         await app.ask("test question")
 
-    mock_client.ask.assert_called_once_with(
-        "test question", system_prompt=None, filter=None
-    )
+    mock_client.ask.assert_called_once_with("test question", filter=None)
 
 
 @pytest.mark.asyncio
@@ -335,9 +333,7 @@ async def test_ask_with_cite(app: HaikuRAGApp, monkeypatch):
     with patch("haiku.rag.app.HaikuRAG", return_value=mock_client):
         await app.ask("test question", cite=True)
 
-    mock_client.ask.assert_called_once_with(
-        "test question", system_prompt=None, filter=None
-    )
+    mock_client.ask.assert_called_once_with("test question", filter=None)
     # Verify print was called (once for answer, once for citations)
     assert mock_print.call_count >= 1
 
diff --git a/tests/test_cli.py b/tests/test_cli.py
index 01f02582..d0dedb53 100644
--- a/tests/test_cli.py
+++ b/tests/test_cli.py
@@ -285,7 +285,6 @@ def test_ask():
             cite=False,
             deep=False,
             filter=None,
-            background_context=None,
         )
 
 
@@ -303,7 +302,6 @@ def test_ask_with_cite():
             cite=True,
             deep=False,
             filter=None,
-            background_context=None,
         )
 
 
@@ -321,7 +319,6 @@ def test_ask_with_deep():
             cite=False,
             deep=True,
             filter=None,
-            background_context=None,
         )
 
 
@@ -339,7 +336,6 @@ def test_ask_with_deep_and_cite():
             cite=True,
             deep=True,
             filter=None,
-            background_context=None,
         )