diff --git a/extensions/cli/AGENTS.md b/extensions/cli/AGENTS.md
index 6fe536a4697..8b4455c868c 100644
--- a/extensions/cli/AGENTS.md
+++ b/extensions/cli/AGENTS.md
@@ -46,6 +46,7 @@ This is a CLI tool for Continue Dev that provides an interactive AI-assisted dev
    - Code search functionality
    - Terminal command execution
    - Diff viewing
+   - Subagents for delegating complex multi-step tasks (see [`docs/subagents.md`](./docs/subagents))
    - Exit tool (headless mode only)
 
 6. **MCP Integration** (`src/mcp.ts`): Model Context Protocol service for extended tool capabilities
diff --git a/extensions/cli/docs/subagents.md b/extensions/cli/docs/subagents.md
new file mode 100644
index 00000000000..b75a7dea279
--- /dev/null
+++ b/extensions/cli/docs/subagents.md
@@ -0,0 +1,167 @@
+# Subagents
+
+## Overview
+
+The Subagent tool enables Continue CLI agents to spawn specialized sub-agents to handle complex, multi-step tasks autonomously. This allows for better task parallelization and separation of concerns by delegating specific work to isolated agent sessions.
+
+## Architecture
+
+### Subagent Execution
+
+Subagents run in isolated child sessions with the following characteristics:
+
+- **Isolated System Message**: Each subagent gets its own system prompt combined with the agent-specific instructions
+- **Separate Chat History**: Subagents maintain their own conversation context, independent of the parent agent
+- **Tool Access**: Subagents have access to all standard tools (Read, Write, Edit, etc.) except the Subagent tool itself to prevent recursion
+- **Permission Inheritance**: Subagents inherit tool permissions from the main agent, with all tools currently allowed by default
+
+### Tool Interface
+
+The Subagent tool is a built-in tool available to all agents running in the CLI.
+
+**Tool Name:** `Subagent`
+
+**Parameters:**
+
+- `description` (string, required): A short 3-5 word description of the task
+- `prompt` (string, required): The detailed task for the subagent to perform
+- `subagent_name` (string, required): The type of specialized agent to use (currently only `"general"` is available)
+
+**Example Tool Call:**
+
+```json
+{
+  "name": "Subagent",
+  "parameters": {
+    "description": "Research API patterns",
+    "prompt": "Analyze the codebase and document all REST API endpoints, including their parameters, response formats, and authentication requirements.",
+    "subagent_name": "general"
+  }
+}
+```
+
+## Built-in Agents
+
+### General Agent
+
+The `general` agent is a versatile subagent designed for autonomous execution of multi-step tasks.
+
+**Capabilities:**
+
+- Researching complex questions across multiple files
+- Executing multi-step implementation tasks
+- Performing comprehensive code analysis
+- Working autonomously with minimal guidance
+
+**System Prompt:**
+
+```
+You are a specialized task execution agent.
+
+Your role:
+- Work autonomously to complete the given task
+- Use available tools effectively
+- Provide clear, concise results
+- If you cannot complete the task, explain why clearly
+
+Important:
+- Focus on the specific task at hand
+- Avoid unnecessary explanations or preamble in your final response
+- Return actionable results
+```
+
+## When to Use Subagents
+
+**Good Use Cases:**
+
+- Complex research tasks requiring multiple file reads and searches
+- Multi-step implementation tasks that can be completed independently
+- Tasks that benefit from autonomous execution without back-and-forth
+- Parallelizing independent work items
+
+**Not Recommended For:**
+
+- Simple single-file reads (use the `Read` tool directly)
+- Single search operations (use the `searchCode` tool directly)
+- Tasks that require frequent user input or clarification
+- Trivial operations that don't require multiple steps
+
+## Output Streaming
+
+Subagent execution supports real-time output streaming:
+
+- The subagent's output is streamed back to the parent agent as it executes
+- Long outputs are truncated in the UI (showing the last 20 lines)
+- Tool calls and their results are visible during execution
+- A metadata footer indicates the task status (completed/failed)
+
+**UI Output Format:**
+
+```
+⎿ Subagent output:
+... +50 lines
+<last 20 lines of output>
+
+<task_metadata>
+status: completed
+</task_metadata>
+```
+
+## Implementation Details
+
+### Tool Changes
+
+The introduction of subagents required a modification to the `Tool` interface:
+
+**Before:**
+
+```typescript
+run: (args: any) => Promise<string>;
+```
+
+**After:**
+
+```typescript
+run: (args: any, context?: { toolCallId: string }) => Promise<string>;
+```
+
+The optional `context` parameter provides the `toolCallId` which enables live streaming of subagent output back to the parent agent's chat history.
+
+**Migration Note:** If you have custom tools with strict TypeScript settings, update their signatures to match the new interface. The `context` parameter is optional and can be ignored if streaming is not needed.
+
+## Execution Flow
+
+1. **Tool Call**: Parent agent calls the Subagent tool with description, prompt, and agent type
+2. **Validation**: The system validates the agent type and checks for available models
+3. **Session Creation**: A child session is created with:
+   - The subagent's custom system message
+   - Disabled parent chat history interference
+   - All tools except the Subagent tool itself
+4. **Execution**: The subagent executes autonomously using the provided prompt
+5. **Streaming**: Output streams back to the parent via the `toolCallId`
+6. **Completion**: The final response is returned to the parent agent with status metadata
+7. **Cleanup**: The child session resources are cleaned up, and the parent's system message and chat history state are restored
+
+## Error Handling
+
+Subagent execution includes comprehensive error handling:
+
+- **Validation Errors**: Invalid agent types or missing parameters are caught early
+- **Execution Errors**: Runtime errors are logged and returned with detailed messages
+- **Graceful Degradation**: Failed subagent execution returns an error result without crashing the parent agent
+- **State Restoration**: Original system message and chat history state are always restored, even if the subagent fails
+
+## Future Enhancements
+
+Potential improvements to the subagent system:
+
+- **Custom Agent Types**: Support for specialized agents (e.g., "researcher", "implementer", "reviewer")
+- **Tool Restrictions**: Fine-grained control over which tools each agent type can access
+- **Model Selection**: Allow specifying different models for different agent types
+- **Subagent Chaining**: Enable subagents to spawn their own subagents for hierarchical task decomposition
+- **Result Caching**: Cache subagent results for frequently executed tasks
+- **Parallel Execution**: Run multiple subagents concurrently for independent tasks
+
+---
+
+This document describes the initial subagent implementation. Update it as the feature evolves.