diff --git a/packages/cli/src/gemini.tsx b/packages/cli/src/gemini.tsx
index 3efa311c3e..4fed48179a 100644
--- a/packages/cli/src/gemini.tsx
+++ b/packages/cli/src/gemini.tsx
@@ -32,6 +32,10 @@ import {
   runExitCleanup,
   registerTelemetryConfig,
 } from './utils/cleanup.js';
+import {
+  cleanupToolOutputFiles,
+  cleanupExpiredSessions,
+} from './utils/sessionCleanup.js';
 import {
   type Config,
   type ResumedSessionData,
@@ -71,7 +75,6 @@ import {
 } from './core/initializer.js';
 import { validateAuthMethod } from './config/auth.js';
 import { runZedIntegration } from './zed-integration/zedIntegration.js';
-import { cleanupExpiredSessions } from './utils/sessionCleanup.js';
 import { validateNonInteractiveAuth } from './validateNonInterActiveAuth.js';
 import { checkForUpdates } from './ui/utils/updateCheck.js';
 import { handleAutoUpdate } from './utils/handleAutoUpdate.js';
@@ -320,7 +323,10 @@ export async function main() {
     );
   });
 
-  await cleanupCheckpoints();
+  await Promise.all([
+    cleanupCheckpoints(),
+    cleanupToolOutputFiles(settings.merged),
+  ]);
 
   const parseArgsHandle = startupProfiler.start('parse_arguments');
   const argv = await parseArguments(settings.merged);
diff --git a/packages/cli/src/utils/sessionCleanup.test.ts b/packages/cli/src/utils/sessionCleanup.test.ts
index e59ad4baf8..cc775d01c9 100644
--- a/packages/cli/src/utils/sessionCleanup.test.ts
+++ b/packages/cli/src/utils/sessionCleanup.test.ts
@@ -17,11 +17,24 @@ import { cleanupExpiredSessions } from './sessionCleanup.js';
 import { type SessionInfo, getAllSessionFiles } from './sessionUtils.js';
 
 // Mock the fs module
-vi.mock('fs/promises');
+vi.mock('node:fs/promises');
 vi.mock('./sessionUtils.js', () => ({
   getAllSessionFiles: vi.fn(),
 }));
 
+vi.mock('@google/gemini-cli-core', async (importOriginal) => {
+  const actual =
+    await importOriginal<typeof import('@google/gemini-cli-core')>();
+  return {
+    ...actual,
+    Storage: class MockStorage {
+      getProjectTempDir() {
+        return '/tmp/test-project';
+      }
+    },
+  };
+});
+
 const mockFs = vi.mocked(fs);
 const mockGetAllSessionFiles = vi.mocked(getAllSessionFiles);
 
diff --git a/packages/cli/src/utils/sessionCleanup.ts b/packages/cli/src/utils/sessionCleanup.ts
index 50b788d215..976aea43a8 100644
--- a/packages/cli/src/utils/sessionCleanup.ts
+++ b/packages/cli/src/utils/sessionCleanup.ts
@@ -6,7 +6,12 @@
 
 import * as fs from 'node:fs/promises';
 import * as path from 'node:path';
-import { debugLogger, type Config } from '@google/gemini-cli-core';
+import {
+  debugLogger,
+  Storage,
+  TOOL_OUTPUT_DIR,
+  type Config,
+} from '@google/gemini-cli-core';
 import type { Settings, SessionRetentionSettings } from '../config/settings.js';
 import { getAllSessionFiles, type SessionFileEntry } from './sessionUtils.js';
 
@@ -309,3 +314,148 @@ function validateRetentionConfig(
 
   return null;
 }
+
+/**
+ * Result of tool output cleanup operation
+ */
+export interface ToolOutputCleanupResult {
+  disabled: boolean;
+  scanned: number;
+  deleted: number;
+  failed: number;
+}
+
+/**
+ * Cleans up tool output files based on age and count limits.
+ * Uses the same retention settings as session cleanup.
+ */
+export async function cleanupToolOutputFiles(
+  settings: Settings,
+  debugMode: boolean = false,
+  projectTempDir?: string,
+): Promise<ToolOutputCleanupResult> {
+  const result: ToolOutputCleanupResult = {
+    disabled: false,
+    scanned: 0,
+    deleted: 0,
+    failed: 0,
+  };
+
+  try {
+    // Early exit if cleanup is disabled
+    if (!settings.general?.sessionRetention?.enabled) {
+      return { ...result, disabled: true };
+    }
+
+    const retentionConfig = settings.general.sessionRetention;
+    const tempDir =
+      projectTempDir ?? new Storage(process.cwd()).getProjectTempDir();
+    const toolOutputDir = path.join(tempDir, TOOL_OUTPUT_DIR);
+
+    // Check if directory exists
+    try {
+      await fs.access(toolOutputDir);
+    } catch {
+      // Directory doesn't exist, nothing to clean up
+      return result;
+    }
+
+    // Get all files in the tool_output directory
+    const entries = await fs.readdir(toolOutputDir, { withFileTypes: true });
+    const files = entries.filter((e) => e.isFile());
+    result.scanned = files.length;
+
+    if (files.length === 0) {
+      return result;
+    }
+
+    // Get file stats for age-based cleanup (parallel for better performance)
+    const fileStatsResults = await Promise.all(
+      files.map(async (file) => {
+        try {
+          const filePath = path.join(toolOutputDir, file.name);
+          const stat = await fs.stat(filePath);
+          return { name: file.name, mtime: stat.mtime };
+        } catch (error) {
+          debugLogger.debug(
+            `Failed to stat file ${file.name}: ${error instanceof Error ? error.message : 'Unknown error'}`,
+          );
+          return null;
+        }
+      }),
+    );
+    const fileStats = fileStatsResults.filter(
+      (f): f is { name: string; mtime: Date } => f !== null,
+    );
+
+    // Sort by mtime (oldest first)
+    fileStats.sort((a, b) => a.mtime.getTime() - b.mtime.getTime());
+
+    const now = new Date();
+    const filesToDelete: string[] = [];
+
+    // Age-based cleanup: delete files older than maxAge
+    if (retentionConfig.maxAge) {
+      try {
+        const maxAgeMs = parseRetentionPeriod(retentionConfig.maxAge);
+        const cutoffDate = new Date(now.getTime() - maxAgeMs);
+
+        for (const file of fileStats) {
+          if (file.mtime < cutoffDate) {
+            filesToDelete.push(file.name);
+          }
+        }
+      } catch (error) {
+        debugLogger.debug(
+          `Invalid maxAge format, skipping age-based cleanup: ${error instanceof Error ? error.message : 'Unknown error'}`,
+        );
+      }
+    }
+
+    // Count-based cleanup: after age-based cleanup, if we still have more files
+    // than maxCount, delete the oldest ones to bring the count down.
+    // This ensures we keep at most maxCount files, preferring newer ones.
+    if (retentionConfig.maxCount !== undefined) {
+      // Filter out files already marked for deletion by age-based cleanup
+      const remainingFiles = fileStats.filter(
+        (f) => !filesToDelete.includes(f.name),
+      );
+      if (remainingFiles.length > retentionConfig.maxCount) {
+        // Calculate how many excess files need to be deleted
+        const excessCount = remainingFiles.length - retentionConfig.maxCount;
+        // remainingFiles is already sorted oldest first, so delete from the start
+        for (let i = 0; i < excessCount; i++) {
+          filesToDelete.push(remainingFiles[i].name);
+        }
+      }
+    }
+
+    // Delete the files
+    for (const fileName of filesToDelete) {
+      try {
+        const filePath = path.join(toolOutputDir, fileName);
+        await fs.unlink(filePath);
+        result.deleted++;
+      } catch (error) {
+        debugLogger.debug(
+          `Failed to delete file ${fileName}: ${error instanceof Error ? error.message : 'Unknown error'}`,
+        );
+        result.failed++;
+      }
+    }
+
+    if (debugMode && result.deleted > 0) {
+      debugLogger.debug(
+        `Tool output cleanup: deleted ${result.deleted}, failed ${result.failed}`,
+      );
+    }
+  } catch (error) {
+    // Global error handler - don't let cleanup failures break startup
+    const errorMessage =
+      error instanceof Error ? error.message : 'Unknown error';
+    debugLogger.warn(`Tool output cleanup failed: ${errorMessage}`);
+    result.failed++;
+  }
+
+  return result;
+}
diff --git a/packages/cli/src/utils/toolOutputCleanup.test.ts b/packages/cli/src/utils/toolOutputCleanup.test.ts
new file mode 100644
index 0000000000..2fc14d6c39
--- /dev/null
+++ b/packages/cli/src/utils/toolOutputCleanup.test.ts
@@ -0,0 +1,285 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest';
+import * as fs from 'node:fs/promises';
+import * as path from 'node:path';
+import * as os from 'node:os';
+import { debugLogger, TOOL_OUTPUT_DIR } from '@google/gemini-cli-core';
+import type { Settings } from '../config/settings.js';
+import { cleanupToolOutputFiles } from './sessionCleanup.js';
+
+describe('Tool Output Cleanup', () => {
+  let testTempDir: string;
+
+  beforeEach(async () => {
+    // Create a unique temp directory for each test
+    testTempDir = await fs.mkdtemp(path.join(os.tmpdir(), 'tool-output-test-'));
+    vi.spyOn(debugLogger, 'error').mockImplementation(() => {});
+    vi.spyOn(debugLogger, 'warn').mockImplementation(() => {});
+    vi.spyOn(debugLogger, 'debug').mockImplementation(() => {});
+  });
+
+  afterEach(async () => {
+    vi.restoreAllMocks();
+    // Clean up the temp directory
+    try {
+      await fs.rm(testTempDir, { recursive: true, force: true });
+    } catch {
+      // Ignore cleanup errors
+    }
+  });
+
+  describe('cleanupToolOutputFiles', () => {
+    it('should return early when cleanup is disabled', async () => {
+      const settings: Settings = {
+        general: { sessionRetention: { enabled: false } },
+      };
+
+      const result = await cleanupToolOutputFiles(settings, false, testTempDir);
+
+      expect(result.disabled).toBe(true);
+      expect(result.scanned).toBe(0);
+      expect(result.deleted).toBe(0);
+      expect(result.failed).toBe(0);
+    });
+
+    it('should return early when sessionRetention is not configured', async () => {
+      const settings: Settings = {};
+
+      const result = await cleanupToolOutputFiles(settings, false, testTempDir);
+
+      expect(result.disabled).toBe(true);
+      expect(result.scanned).toBe(0);
+      expect(result.deleted).toBe(0);
+    });
+
+    it('should return early when tool_output directory does not exist', async () => {
+      const settings: Settings = {
+        general: {
+          sessionRetention: {
+            enabled: true,
+            maxAge: '7d',
+          },
+        },
+      };
+
+      // Don't create the tool_output directory
+      const result = await cleanupToolOutputFiles(settings, false, testTempDir);
+
+      expect(result.disabled).toBe(false);
+      expect(result.scanned).toBe(0);
+      expect(result.deleted).toBe(0);
+      expect(result.failed).toBe(0);
+    });
+
+    it('should delete files older than maxAge', async () => {
+      const settings: Settings = {
+        general: {
+          sessionRetention: {
+            enabled: true,
+            maxAge: '7d',
+          },
+        },
+      };
+
+      // Create tool_output directory and files
+      const toolOutputDir = path.join(testTempDir, TOOL_OUTPUT_DIR);
+      await fs.mkdir(toolOutputDir, { recursive: true });
+
+      const now = Date.now();
+      const fiveDaysAgo = now - 5 * 24 * 60 * 60 * 1000;
+      const tenDaysAgo = now - 10 * 24 * 60 * 60 * 1000;
+
+      // Create files with different ages
+      const recentFile = path.join(toolOutputDir, 'shell_recent.txt');
+      const oldFile = path.join(toolOutputDir, 'shell_old.txt');
+
+      await fs.writeFile(recentFile, 'recent content');
+      await fs.writeFile(oldFile, 'old content');
+
+      // Set file modification times
+      await fs.utimes(recentFile, fiveDaysAgo / 1000, fiveDaysAgo / 1000);
+      await fs.utimes(oldFile, tenDaysAgo / 1000, tenDaysAgo / 1000);
+
+      const result = await cleanupToolOutputFiles(settings, false, testTempDir);
+
+      expect(result.disabled).toBe(false);
+      expect(result.scanned).toBe(2);
+      expect(result.deleted).toBe(1); // Only the 10-day-old file should be deleted
+      expect(result.failed).toBe(0);
+
+      // Verify the old file was deleted and recent file remains
+      const remainingFiles = await fs.readdir(toolOutputDir);
+      expect(remainingFiles).toContain('shell_recent.txt');
+      expect(remainingFiles).not.toContain('shell_old.txt');
+    });
+
+    it('should delete oldest files when exceeding maxCount', async () => {
+      const settings: Settings = {
+        general: {
+          sessionRetention: {
+            enabled: true,
+            maxCount: 2,
+          },
+        },
+      };
+
+      // Create tool_output directory and files
+      const toolOutputDir = path.join(testTempDir, TOOL_OUTPUT_DIR);
+      await fs.mkdir(toolOutputDir, { recursive: true });
+
+      const now = Date.now();
+      const oneDayAgo = now - 1 * 24 * 60 * 60 * 1000;
+      const twoDaysAgo = now - 2 * 24 * 60 * 60 * 1000;
+      const threeDaysAgo = now - 3 * 24 * 60 * 60 * 1000;
+
+      // Create 3 files with different ages
+      const file1 = path.join(toolOutputDir, 'shell_1.txt');
+      const file2 = path.join(toolOutputDir, 'shell_2.txt');
+      const file3 = path.join(toolOutputDir, 'shell_3.txt');
+
+      await fs.writeFile(file1, 'content 1');
+      await fs.writeFile(file2, 'content 2');
+      await fs.writeFile(file3, 'content 3');
+
+      // Set file modification times (file3 is oldest)
+      await fs.utimes(file1, oneDayAgo / 1000, oneDayAgo / 1000);
+      await fs.utimes(file2, twoDaysAgo / 1000, twoDaysAgo / 1000);
+      await fs.utimes(file3, threeDaysAgo / 1000, threeDaysAgo / 1000);
+
+      const result = await cleanupToolOutputFiles(settings, false, testTempDir);
+
+      expect(result.disabled).toBe(false);
+      expect(result.scanned).toBe(3);
+      expect(result.deleted).toBe(1); // Should delete 1 file to get down to maxCount of 2
+      expect(result.failed).toBe(0);
+
+      // Verify the oldest file was deleted
+      const remainingFiles = await fs.readdir(toolOutputDir);
+      expect(remainingFiles).toHaveLength(2);
+      expect(remainingFiles).not.toContain('shell_3.txt');
+    });
+
+    it('should handle empty directory', async () => {
+      const settings: Settings = {
+        general: {
+          sessionRetention: {
+            enabled: true,
+            maxAge: '7d',
+          },
+        },
+      };
+
+      // Create empty tool_output directory
+      const toolOutputDir = path.join(testTempDir, TOOL_OUTPUT_DIR);
+      await fs.mkdir(toolOutputDir, { recursive: true });
+
+      const result = await cleanupToolOutputFiles(settings, false, testTempDir);
+
+      expect(result.disabled).toBe(false);
+      expect(result.scanned).toBe(0);
+      expect(result.deleted).toBe(0);
+      expect(result.failed).toBe(0);
+    });
+
+    it('should apply both maxAge and maxCount together', async () => {
+      const settings: Settings = {
+        general: {
+          sessionRetention: {
+            enabled: true,
+            maxAge: '3d',
+            maxCount: 2,
+          },
+        },
+      };
+
+      // Create tool_output directory and files
+      const toolOutputDir = path.join(testTempDir, TOOL_OUTPUT_DIR);
+      await fs.mkdir(toolOutputDir, { recursive: true });
+
+      const now = Date.now();
+      const oneDayAgo = now - 1 * 24 * 60 * 60 * 1000;
+      const twoDaysAgo = now - 2 * 24 * 60 * 60 * 1000;
+      const twoAndHalfDaysAgo = now - 2.5 * 24 * 60 * 60 * 1000;
+      const fiveDaysAgo = now - 5 * 24 * 60 * 60 * 1000;
+      const tenDaysAgo = now - 10 * 24 * 60 * 60 * 1000;
+
+      // Create 5 files with different ages
+      const file1 = path.join(toolOutputDir, 'shell_1.txt'); // 1 day old - keep
+      const file2 = path.join(toolOutputDir, 'shell_2.txt'); // 2 days old - keep
+      const file3 = path.join(toolOutputDir, 'shell_3.txt'); // 2.5 days old - delete by count
+      const file4 = path.join(toolOutputDir, 'shell_4.txt'); // 5 days old - delete by age
+      const file5 = path.join(toolOutputDir, 'shell_5.txt'); // 10 days old - delete by age
+
+      await fs.writeFile(file1, 'content 1');
+      await fs.writeFile(file2, 'content 2');
+      await fs.writeFile(file3, 'content 3');
+      await fs.writeFile(file4, 'content 4');
+      await fs.writeFile(file5, 'content 5');
+
+      // Set file modification times
+      await fs.utimes(file1, oneDayAgo / 1000, oneDayAgo / 1000);
+      await fs.utimes(file2, twoDaysAgo / 1000, twoDaysAgo / 1000);
+      await fs.utimes(
+        file3,
+        twoAndHalfDaysAgo / 1000,
+        twoAndHalfDaysAgo / 1000,
+      );
+      await fs.utimes(file4, fiveDaysAgo / 1000, fiveDaysAgo / 1000);
+      await fs.utimes(file5, tenDaysAgo / 1000, tenDaysAgo / 1000);
+
+      const result = await cleanupToolOutputFiles(settings, false, testTempDir);
+
+      expect(result.disabled).toBe(false);
+      expect(result.scanned).toBe(5);
+      // file4 and file5 deleted by maxAge, file3 deleted by maxCount
+      expect(result.deleted).toBe(3);
+      expect(result.failed).toBe(0);
+
+      // Verify only the 2 newest files remain
+      const remainingFiles = await fs.readdir(toolOutputDir);
+      expect(remainingFiles).toHaveLength(2);
+      expect(remainingFiles).toContain('shell_1.txt');
+      expect(remainingFiles).toContain('shell_2.txt');
+      expect(remainingFiles).not.toContain('shell_3.txt');
+      expect(remainingFiles).not.toContain('shell_4.txt');
+      expect(remainingFiles).not.toContain('shell_5.txt');
+    });
+
+    it('should log debug information when enabled', async () => {
+      const settings: Settings = {
+        general: {
+          sessionRetention: {
+            enabled: true,
+            maxAge: '1d',
+          },
+        },
+      };
+
+      // Create tool_output directory and an old file
+      const toolOutputDir = path.join(testTempDir, TOOL_OUTPUT_DIR);
+      await fs.mkdir(toolOutputDir, { recursive: true });
+
+      const tenDaysAgo = Date.now() - 10 * 24 * 60 * 60 * 1000;
+      const oldFile = path.join(toolOutputDir, 'shell_old.txt');
+      await fs.writeFile(oldFile, 'old content');
+      await fs.utimes(oldFile, tenDaysAgo / 1000, tenDaysAgo / 1000);
+
+      const debugSpy = vi
+        .spyOn(debugLogger, 'debug')
+        .mockImplementation(() => {});
+
+      await cleanupToolOutputFiles(settings, true, testTempDir);
+
+      expect(debugSpy).toHaveBeenCalledWith(
+        expect.stringContaining('Tool output cleanup: deleted'),
+      );
+
+      debugSpy.mockRestore();
+    });
+  });
+});
diff --git a/packages/core/src/services/chatCompressionService.test.ts b/packages/core/src/services/chatCompressionService.test.ts
index 10d0ad0fce..ced00e1537 100644
--- a/packages/core/src/services/chatCompressionService.test.ts
+++ b/packages/core/src/services/chatCompressionService.test.ts
@@ -16,6 +16,7 @@ import type { BaseLlmClient } from '../core/baseLlmClient.js';
 import type { GeminiChat } from '../core/geminiChat.js';
 import type { Config } from '../config/config.js';
 import * as fileUtils from '../utils/fileUtils.js';
+import { TOOL_OUTPUT_DIR } from '../utils/fileUtils.js';
 import { getInitialChatHistory } from '../utils/environmentContext.js';
 import * as tokenCalculation from '../utils/tokenCalculation.js';
 import { tokenLimit } from '../core/tokenLimits.js';
@@ -510,8 +511,9 @@ describe('ChatCompressionService', () => {
         'Output too large.',
       );
 
-      // Verify a file was actually created
-      const files = fs.readdirSync(testTempDir);
+      // Verify a file was actually created in the tool_output subdirectory
+      const toolOutputDir = path.join(testTempDir, TOOL_OUTPUT_DIR);
+      const files = fs.readdirSync(toolOutputDir);
       expect(files.length).toBeGreaterThan(0);
       expect(files[0]).toMatch(/grep_.*\.txt/);
     });
diff --git a/packages/core/src/utils/fileUtils.test.ts b/packages/core/src/utils/fileUtils.test.ts
index eb2ecd0e97..a0f3ac754c 100644
--- a/packages/core/src/utils/fileUtils.test.ts
+++ b/packages/core/src/utils/fileUtils.test.ts
@@ -1076,7 +1076,11 @@ describe('fileUtils', () => {
         tempRootDir,
       );
 
-      const expectedOutputFile = path.join(tempRootDir, 'shell_123.txt');
+      const expectedOutputFile = path.join(
+        tempRootDir,
+        'tool_output',
+        'shell_123.txt',
+      );
       expect(result.outputFile).toBe(expectedOutputFile);
       expect(result.totalLines).toBe(1);
 
@@ -1102,6 +1106,7 @@ describe('fileUtils', () => {
       // ../../dangerous/tool -> ______dangerous_tool
       const expectedOutputFile = path.join(
         tempRootDir,
+        'tool_output',
         '______dangerous_tool_1.txt',
       );
       expect(result.outputFile).toBe(expectedOutputFile);
@@ -1122,6 +1127,7 @@ describe('fileUtils', () => {
       // ../../etc/passwd -> ______etc_passwd
       const expectedOutputFile = path.join(
         tempRootDir,
+        'tool_output',
         'shell_______etc_passwd.txt',
       );
       expect(result.outputFile).toBe(expectedOutputFile);
diff --git a/packages/core/src/utils/fileUtils.ts b/packages/core/src/utils/fileUtils.ts
index 5155cad51a..49c0a497fe 100644
--- a/packages/core/src/utils/fileUtils.ts
+++ b/packages/core/src/utils/fileUtils.ts
@@ -566,6 +566,8 @@ ${processedLines.join('\n')}`;
 /**
  * Saves tool output to a temporary file for later retrieval.
  */
+export const TOOL_OUTPUT_DIR = 'tool_output';
+
 export async function saveTruncatedToolOutput(
   content: string,
   toolName: string,
@@ -578,8 +580,10 @@ export async function saveTruncatedToolOutput(
     .replace(/[^a-z0-9]/gi, '_')
     .toLowerCase();
   const fileName = `${safeToolName}_${safeId}.txt`;
-  const outputFile = path.join(projectTempDir, fileName);
+  const toolOutputDir = path.join(projectTempDir, TOOL_OUTPUT_DIR);
+  const outputFile = path.join(toolOutputDir, fileName);
 
+  await fsPromises.mkdir(toolOutputDir, { recursive: true });
   await fsPromises.writeFile(outputFile, content);
 
   const lines = content.split('\n');