agentclientprotocol
diff --git a/src/acp/connection.py b/src/acp/connection.py
@@ -153,7 +153,7 @@ async def send_notification(self, method: str, params: JsonValue | None = None)
     async def _receive_loop(self) -> None:
         try:
             while True:
-                line = await asyncio.wait_for(self._reader.readline(), timeout=self._receive_timeout)
+                line = await self._read_line()
                 if not line:
                     break
                 line = line.strip()
@@ -172,6 +172,24 @@ async def _receive_loop(self) -> None:
             raise RequestError.internal_error({"details": "Agent timeout"}) from None
         self._disconnect()
 
+    async def _read_line(self) -> bytes:
+        chunks: list[bytes] = []
+        try:
+            while True:
+                try:
+                    line = await self._wait_for_reader(self._reader.readuntil(b"\n"))
+                except asyncio.LimitOverrunError as exc:
+                    chunks.append(await self._wait_for_reader(self._reader.readexactly(exc.consumed)))
+                else:
+                    chunks.append(line)
+                    return b"".join(chunks)
+        except asyncio.IncompleteReadError as exc:
+            chunks.append(exc.partial)
+            return b"".join(chunks)
+
+    async def _wait_for_reader(self, awaitable: Awaitable[bytes]) -> bytes:
+        return await asyncio.wait_for(awaitable, timeout=self._receive_timeout)
+
     async def _process_message(self, message: dict[str, Any]) -> None:
         method = message.get("method")
         has_id = "id" in message

diff --git a/tests/real_user/test_stdio_limits.py b/tests/real_user/test_stdio_limits.py
@@ -48,46 +48,62 @@ async def test_spawn_stdio_transport_custom_limit_handles_large_line() -> None:
 async def test_run_agent_stdio_buffer_limit() -> None:
     """Test that run_agent with different buffer limits can handle appropriately sized messages."""
     with tempfile.TemporaryDirectory() as tmpdir:
-        # Test 1: Small buffer (1KB) fails with large message (70KB)
+        # Test 1: Small buffer (1KB) reads a large message (70KB) in chunks
         small_agent = os.path.join(tmpdir, "small_agent.py")
         with open(small_agent, "w") as f:
-            f.write("""
-import asyncio
-from acp.core import run_agent
-from acp.interfaces import Agent
-
-class TestAgent(Agent):
-    async def list_capabilities(self):
-        return {"capabilities": {}}
-
-asyncio.run(run_agent(TestAgent(), stdio_buffer_limit_bytes=1024))
-""")
-
-        # Send a 70KB message - should fail with 1KB buffer
-        large_msg = '{"jsonrpc":"2.0","method":"test","params":{"data":"' + "X" * LARGE_LINE_SIZE + '"}}\n'
+            f.write(
+                textwrap.dedent(
+                    """
+                    import asyncio
+                    from acp.core import run_agent
+                    from acp.interfaces import Agent
+                    from acp.schema import InitializeResponse
+
+                    class TestAgent(Agent):
+                        async def initialize(self, protocol_version, client_capabilities=None, client_info=None, **kwargs):
+                            return InitializeResponse(protocol_version=protocol_version)
+
+                    asyncio.run(run_agent(TestAgent(), stdio_buffer_limit_bytes=1024))
+                    """
+                ).strip()
+            )
+
+        # Send a 70KB message - should be read in chunks despite the 1KB buffer
+        large_msg = (
+            '{"jsonrpc":"2.0","id":1,"method":"initialize","params":{"protocolVersion":1,"_meta":{"data":"'
+            + "X" * LARGE_LINE_SIZE
+            + '"}}}\n'
+        )
         result = subprocess.run(  # noqa: S603
             [sys.executable, small_agent], input=large_msg, capture_output=True, text=True, timeout=2
         )
 
-        # Should have errors in stderr about the buffer limit
-        assert "Error" in result.stderr or result.returncode != 0, (
-            f"Expected error with small buffer, got: {result.stderr}"
-        )
+        assert result.returncode == 0
+        assert "LimitOverrunError" not in result.stderr
+        assert "Separator is found, but chunk is longer than limit" not in result.stderr
+        assert "oversized JSON-RPC frame" not in result.stderr
+        assert '"id":1' in result.stdout
+        assert '"protocolVersion":1' in result.stdout
 
         # Test 2: Large buffer (200KB) succeeds with large message (70KB)
         large_agent = os.path.join(tmpdir, "large_agent.py")
         with open(large_agent, "w") as f:
-            f.write(f"""
-import asyncio
-from acp.core import run_agent
-from acp.interfaces import Agent
-
-class TestAgent(Agent):
-    async def list_capabilities(self):
-        return {{"capabilities": {{}}}}
-
-asyncio.run(run_agent(TestAgent(), stdio_buffer_limit_bytes={LARGE_LINE_SIZE * 3}))
-""")
+            f.write(
+                textwrap.dedent(
+                    f"""
+                    import asyncio
+                    from acp.core import run_agent
+                    from acp.interfaces import Agent
+                    from acp.schema import InitializeResponse
+
+                    class TestAgent(Agent):
+                        async def initialize(self, protocol_version, client_capabilities=None, client_info=None, **kwargs):
+                            return InitializeResponse(protocol_version=protocol_version)
+
+                    asyncio.run(run_agent(TestAgent(), stdio_buffer_limit_bytes={LARGE_LINE_SIZE * 3}))
+                    """
+                ).strip()
+            )
 
         # Same message, but with a buffer 3x the size - should handle it
         result = subprocess.run(  # noqa: S603
@@ -98,3 +114,5 @@ async def list_capabilities(self):
         # (it may have other errors from invalid JSON-RPC, but not buffer overrun)
         if "LimitOverrunError" in result.stderr or "buffer" in result.stderr.lower():
             pytest.fail(f"Large buffer still hit limit error: {result.stderr}")
+        assert '"id":1' in result.stdout
+        assert '"protocolVersion":1' in result.stdout
diff --git a/tests/test_connection_recovery.py b/tests/test_connection_recovery.py
@@ -0,0 +1,123 @@
+from __future__ import annotations
+
+import asyncio
+import json
+from typing import Any
+from unittest.mock import AsyncMock, MagicMock
+
+import pytest
+
+from acp.connection import Connection
+from acp.exceptions import RequestError
+
+
+async def _noop_handler(method: str, params: Any, is_notification: bool) -> Any:
+    return None
+
+
+def _make_connection(
+    *,
+    limit: int = 128,
+    receive_timeout: float | None = None,
+) -> tuple[Connection, asyncio.StreamReader]:
+    reader = asyncio.StreamReader(limit=limit)
+    transport = MagicMock()
+    transport.is_closing.return_value = False
+    protocol = AsyncMock()
+    writer = asyncio.StreamWriter(transport, protocol, reader, asyncio.get_running_loop())
+    conn = Connection(_noop_handler, writer, reader, listening=False, receive_timeout=receive_timeout)
+    return conn, reader
+
+
+@pytest.mark.asyncio
+async def test_receive_loop_handles_oversized_frame(caplog: pytest.LogCaptureFixture) -> None:
+    conn, reader = _make_connection(limit=128)
+    processed: list[str] = []
+
+    async def tracking_process(message: dict[str, Any]) -> None:
+        processed.append(message["method"])
+
+    conn._process_message = tracking_process  # type: ignore[method-assign]
+    oversized = {"jsonrpc": "2.0", "method": "too-large", "params": {"data": "X" * 256}}
+    survivor = {"jsonrpc": "2.0", "method": "survivor"}
+    reader.feed_data(json.dumps(oversized).encode() + b"\n" + json.dumps(survivor).encode() + b"\n")
+    reader.feed_eof()
+
+    with caplog.at_level("WARNING"):
+        await conn._receive_loop()
+    await conn.close()
+
+    assert processed == ["too-large", "survivor"]
+    assert "oversized JSON-RPC frame" not in caplog.text
+
+
+@pytest.mark.asyncio
+async def test_receive_loop_handles_consecutive_oversized_frames() -> None:
+    conn, reader = _make_connection(limit=128)
+    processed: list[str] = []
+
+    async def tracking_process(message: dict[str, Any]) -> None:
+        processed.append(message["method"])
+
+    conn._process_message = tracking_process  # type: ignore[method-assign]
+    for index in range(2):
+        oversized = {"jsonrpc": "2.0", "method": f"too-large-{index}", "params": {"data": "Y" * 256}}
+        reader.feed_data(json.dumps(oversized).encode() + b"\n")
+    survivor = {"jsonrpc": "2.0", "method": "survivor"}
+    reader.feed_data(json.dumps(survivor).encode() + b"\n")
+    reader.feed_eof()
+
+    await conn._receive_loop()
+    await conn.close()
+
+    assert processed == ["too-large-0", "too-large-1", "survivor"]
+
+
+@pytest.mark.asyncio
+async def test_receive_loop_handles_eof_during_oversized_frame() -> None:
+    conn, reader = _make_connection(limit=64)
+    reader.feed_data(b"X" * 256)
+    reader.feed_eof()
+
+    await conn._receive_loop()
+    await conn.close()
+
+    assert conn._disconnected is True
+
+
+@pytest.mark.asyncio
+async def test_receive_loop_keeps_timeout_semantics() -> None:
+    conn, _reader = _make_connection(receive_timeout=0.01)
+
+    with pytest.raises(RequestError) as exc_info:
+        await conn._receive_loop()
+    await conn.close()
+
+    exc = exc_info.value
+    assert isinstance(exc, RequestError)
+    assert str(exc) == "Internal error"
+    assert exc.data == {"details": "Agent timeout"}
+
+
+@pytest.mark.asyncio
+async def test_receive_loop_keeps_timeout_semantics_while_reading_oversized_frame() -> None:
+    conn, reader = _make_connection(limit=64, receive_timeout=0.01)
+    reader.feed_data(b"X" * 256)
+
+    with pytest.raises(RequestError) as exc_info:
+        await conn._receive_loop()
+    await conn.close()
+
+    exc = exc_info.value
+    assert isinstance(exc, RequestError)
+    assert exc.data == {"details": "Agent timeout"}
+
+
+@pytest.mark.asyncio
+async def test_receive_loop_does_not_swallow_unrelated_reader_error() -> None:
+    conn, reader = _make_connection()
+    reader.set_exception(ValueError("reader failed"))
+
+    with pytest.raises(ValueError, match="reader failed"):
+        await conn._receive_loop()
+    await conn.close()