diff --git a/backend/app/gateway/auth/config.py b/backend/app/gateway/auth/config.py
index 01f0870fd..4734f0897 100644
--- a/backend/app/gateway/auth/config.py
+++ b/backend/app/gateway/auth/config.py
@@ -4,11 +4,8 @@ import logging
 import os
 import secrets
 
-from dotenv import load_dotenv
 from pydantic import BaseModel, Field
 
-load_dotenv()
-
 logger = logging.getLogger(__name__)
 
 
@@ -37,6 +34,9 @@ def get_auth_config() -> AuthConfig:
     """Get the global AuthConfig instance. Parses from env on first call."""
     global _auth_config
     if _auth_config is None:
+        from dotenv import load_dotenv
+
+        load_dotenv()
         jwt_secret = os.environ.get("AUTH_JWT_SECRET")
         if not jwt_secret:
             jwt_secret = secrets.token_urlsafe(32)
diff --git a/backend/app/gateway/auth/local_provider.py b/backend/app/gateway/auth/local_provider.py
index 8bfd15e59..fee810ad1 100644
--- a/backend/app/gateway/auth/local_provider.py
+++ b/backend/app/gateway/auth/local_provider.py
@@ -1,10 +1,14 @@
 """Local email/password authentication provider."""
 
+import logging
+
 from app.gateway.auth.models import User
-from app.gateway.auth.password import hash_password_async, verify_password_async
+from app.gateway.auth.password import hash_password_async, needs_rehash, verify_password_async
 from app.gateway.auth.providers import AuthProvider
 from app.gateway.auth.repositories.base import UserRepository
 
+logger = logging.getLogger(__name__)
+
 
 class LocalAuthProvider(AuthProvider):
     """Email/password authentication provider using local database."""
@@ -43,6 +47,15 @@ class LocalAuthProvider(AuthProvider):
         if not await verify_password_async(password, user.password_hash):
             return None
 
+        if needs_rehash(user.password_hash):
+            try:
+                user.password_hash = await hash_password_async(password)
+                await self._repo.update_user(user)
+            except Exception:
+                # Rehash is an opportunistic upgrade; a transient DB error must not
+                # prevent an otherwise-valid login from succeeding.
+                logger.warning("Failed to rehash password for user %s; login will still succeed", user.email, exc_info=True)
+
         return user
 
     async def get_user(self, user_id: str) -> User | None:
diff --git a/backend/app/gateway/auth/password.py b/backend/app/gateway/auth/password.py
index 588b7a643..551c1134e 100644
--- a/backend/app/gateway/auth/password.py
+++ b/backend/app/gateway/auth/password.py
@@ -1,18 +1,66 @@
-"""Password hashing utilities using bcrypt directly."""
+"""Password hashing utilities with versioned hash format.
+
+Hash format: ``$dfv<N>$<bcrypt_hash>`` where ``<N>`` is the version.
+
+- **v1** (legacy): ``bcrypt(password)`` — plain bcrypt, susceptible to
+  72-byte silent truncation.
+- **v2** (current): ``bcrypt(b64(sha256(password)))`` — SHA-256 pre-hash
+  avoids the 72-byte truncation limit so the full password contributes
+  to the hash.
+
+Verification auto-detects the version and falls back to v1 for hashes
+without a prefix, so existing deployments upgrade transparently on next
+login.
+"""
 
 import asyncio
+import base64
+import hashlib
 
 import bcrypt
 
+_CURRENT_VERSION = 2
+_PREFIX_V2 = "$dfv2$"
+_PREFIX_V1 = "$dfv1$"
+
+
+def _pre_hash_v2(password: str) -> bytes:
+    """SHA-256 pre-hash to bypass bcrypt's 72-byte limit."""
+    return base64.b64encode(hashlib.sha256(password.encode("utf-8")).digest())
+
 
 def hash_password(password: str) -> str:
-    """Hash a password using bcrypt."""
-    return bcrypt.hashpw(password.encode("utf-8"), bcrypt.gensalt()).decode("utf-8")
+    """Hash a password (current version: v2 — SHA-256 + bcrypt)."""
+    raw = bcrypt.hashpw(_pre_hash_v2(password), bcrypt.gensalt()).decode("utf-8")
+    return f"{_PREFIX_V2}{raw}"
 
 
 def verify_password(plain_password: str, hashed_password: str) -> bool:
-    """Verify a password against its hash."""
-    return bcrypt.checkpw(plain_password.encode("utf-8"), hashed_password.encode("utf-8"))
+    """Verify a password, auto-detecting the hash version.
+
+    Accepts v2 (``$dfv2$…``), v1 (``$dfv1$…``), and bare bcrypt hashes
+    (treated as v1 for backward compatibility with pre-versioning data).
+    """
+    try:
+        if hashed_password.startswith(_PREFIX_V2):
+            bcrypt_hash = hashed_password[len(_PREFIX_V2) :]
+            return bcrypt.checkpw(_pre_hash_v2(plain_password), bcrypt_hash.encode("utf-8"))
+
+        if hashed_password.startswith(_PREFIX_V1):
+            bcrypt_hash = hashed_password[len(_PREFIX_V1) :]
+        else:
+            bcrypt_hash = hashed_password
+
+        return bcrypt.checkpw(plain_password.encode("utf-8"), bcrypt_hash.encode("utf-8"))
+    except ValueError:
+        # bcrypt raises ValueError for malformed or corrupt hashes (e.g., invalid salt).
+        # Fail closed rather than crashing the request.
+        return False
+
+
+def needs_rehash(hashed_password: str) -> bool:
+    """Return True if the hash uses an older version and should be rehashed."""
+    return not hashed_password.startswith(_PREFIX_V2)
 
 
 async def hash_password_async(password: str) -> str:
diff --git a/backend/app/gateway/authz.py b/backend/app/gateway/authz.py
index 837c66fe2..c7cf63858 100644
--- a/backend/app/gateway/authz.py
+++ b/backend/app/gateway/authz.py
@@ -145,7 +145,11 @@ async def _authenticate(request: Request) -> AuthContext:
 
 
 def require_auth[**P, T](func: Callable[P, T]) -> Callable[P, T]:
-    """Decorator that authenticates the request and sets AuthContext.
+    """Decorator that authenticates the request and enforces authentication.
+
+    Independently raises HTTP 401 for unauthenticated requests, regardless of
+    whether ``AuthMiddleware`` is present in the ASGI stack. Sets the resolved
+    ``AuthContext`` on ``request.state.auth`` for downstream handlers.
 
     Must be placed ABOVE other decorators (executes after them).
 
@@ -158,7 +162,8 @@ def require_auth[**P, T](func: Callable[P, T]) -> Callable[P, T]:
             ...
 
     Raises:
-        ValueError: If 'request' parameter is missing
+        HTTPException: 401 if the request is unauthenticated.
+        ValueError: If 'request' parameter is missing.
     """
 
     @functools.wraps(func)
@@ -181,6 +186,9 @@ def require_auth[**P, T](func: Callable[P, T]) -> Callable[P, T]:
         auth_context = await _authenticate(request)
         request.state.auth = auth_context
 
+        if not auth_context.is_authenticated:
+            raise HTTPException(status_code=401, detail="Authentication required")
+
         return await func(*args, **kwargs)
 
     return wrapper
diff --git a/backend/app/gateway/langgraph_auth.py b/backend/app/gateway/langgraph_auth.py
index 06074b9b8..38e020150 100644
--- a/backend/app/gateway/langgraph_auth.py
+++ b/backend/app/gateway/langgraph_auth.py
@@ -73,7 +73,7 @@ async def authenticate(request):
     if isinstance(payload, TokenError):
         raise Auth.exceptions.HTTPException(
             status_code=401,
-            detail=f"Token error: {payload.value}",
+            detail="Invalid token",
         )
 
     user = await get_local_provider().get_user(payload.sub)
diff --git a/backend/app/gateway/routers/auth.py b/backend/app/gateway/routers/auth.py
index 44b996331..3a41e13eb 100644
--- a/backend/app/gateway/routers/auth.py
+++ b/backend/app/gateway/routers/auth.py
@@ -146,7 +146,13 @@ def _set_session_cookie(response: Response, token: str, request: Request) -> Non
 
 
 # ── Rate Limiting ────────────────────────────────────────────────────────
-# In-process dict — not shared across workers. Sufficient for single-worker deployments.
+# In-process dict — not shared across workers.
+#
+# **Limitation**: with multi-worker deployments (e.g., gunicorn -w N), each
+# worker maintains its own lockout table, so an attacker effectively gets
+# N × _MAX_LOGIN_ATTEMPTS guesses before being locked out everywhere. For
+# production multi-worker setups, replace this with a shared store (Redis,
+# database-backed counter) to enforce a true per-IP limit.
 
 _MAX_LOGIN_ATTEMPTS = 5
 _LOCKOUT_SECONDS = 300  # 5 minutes
@@ -376,9 +382,37 @@ async def get_me(request: Request):
     return UserResponse(id=str(user.id), email=user.email, system_role=user.system_role, needs_setup=user.needs_setup)
 
 
+_SETUP_STATUS_COOLDOWN: dict[str, float] = {}
+_SETUP_STATUS_COOLDOWN_SECONDS = 60
+_MAX_TRACKED_SETUP_STATUS_IPS = 10000
+
+
 @router.get("/setup-status")
-async def setup_status():
+async def setup_status(request: Request):
     """Check if an admin account exists. Returns needs_setup=True when no admin exists."""
+    client_ip = _get_client_ip(request)
+    now = time.time()
+    last_check = _SETUP_STATUS_COOLDOWN.get(client_ip, 0)
+    elapsed = now - last_check
+    if elapsed < _SETUP_STATUS_COOLDOWN_SECONDS:
+        retry_after = max(1, int(_SETUP_STATUS_COOLDOWN_SECONDS - elapsed))
+        raise HTTPException(
+            status_code=status.HTTP_429_TOO_MANY_REQUESTS,
+            detail="Setup status check is rate limited",
+            headers={"Retry-After": str(retry_after)},
+        )
+    # Evict stale entries when dict grows too large to bound memory usage.
+    if len(_SETUP_STATUS_COOLDOWN) >= _MAX_TRACKED_SETUP_STATUS_IPS:
+        cutoff = now - _SETUP_STATUS_COOLDOWN_SECONDS
+        stale = [k for k, t in _SETUP_STATUS_COOLDOWN.items() if t < cutoff]
+        for k in stale:
+            del _SETUP_STATUS_COOLDOWN[k]
+        # If still too large after evicting expired entries, remove oldest half.
+        if len(_SETUP_STATUS_COOLDOWN) >= _MAX_TRACKED_SETUP_STATUS_IPS:
+            by_time = sorted(_SETUP_STATUS_COOLDOWN.items(), key=lambda kv: kv[1])
+            for k, _ in by_time[: len(by_time) // 2]:
+                del _SETUP_STATUS_COOLDOWN[k]
+    _SETUP_STATUS_COOLDOWN[client_ip] = now
     admin_count = await get_local_provider().count_admin_users()
     return {"needs_setup": admin_count == 0}
 
diff --git a/backend/packages/harness/deerflow/runtime/journal.py b/backend/packages/harness/deerflow/runtime/journal.py
index e47bb96e1..688cde200 100644
--- a/backend/packages/harness/deerflow/runtime/journal.py
+++ b/backend/packages/harness/deerflow/runtime/journal.py
@@ -138,10 +138,16 @@ class RunJournal(BaseCallbackHandler):
         # Mark this run_id as seen so on_llm_end knows not to increment again.
         self._cached_prompts[rid] = []
 
-        logger.info(f"on_chat_model_start {run_id}: tags={tags} serialized={serialized} messages={messages}")
+        logger.debug(
+            "on_chat_model_start %s: tags=%s num_batches=%d message_counts=%s",
+            run_id,
+            tags,
+            len(messages),
+            [len(batch) for batch in messages],
+        )
 
         # Capture the first human message sent to any LLM in this run.
-        if not self._first_human_msg and not messages:
+        if not self._first_human_msg and messages:
             for batch in messages.reversed():
                 for m in batch.reversed():
                     if isinstance(m, HumanMessage) and m.name != "summary":
diff --git a/backend/tests/test_auth.py b/backend/tests/test_auth.py
index ea4c5733a..f19c83c7d 100644
--- a/backend/tests/test_auth.py
+++ b/backend/tests/test_auth.py
@@ -4,12 +4,14 @@ from datetime import timedelta
 from unittest.mock import AsyncMock, MagicMock, patch
 from uuid import uuid4
 
+import bcrypt
 import pytest
 from fastapi import FastAPI, HTTPException
 from fastapi.testclient import TestClient
 
 from app.gateway.auth import create_access_token, decode_token, hash_password, verify_password
 from app.gateway.auth.models import User
+from app.gateway.auth.password import needs_rehash
 from app.gateway.authz import (
     AuthContext,
     Permissions,
@@ -26,6 +28,7 @@ def test_hash_password_and_verify():
     password = "s3cr3tP@ssw0rd!"
     hashed = hash_password(password)
     assert hashed != password
+    assert hashed.startswith("$dfv2$")
     assert verify_password(password, hashed) is True
     assert verify_password("wrongpassword", hashed) is False
 
@@ -47,6 +50,47 @@ def test_verify_password_rejects_empty():
     assert verify_password("", hashed) is False
 
 
+def test_hash_produces_v2_prefix():
+    """hash_password output starts with $dfv2$."""
+    hashed = hash_password("anypassword123")
+    assert hashed.startswith("$dfv2$")
+
+
+def test_verify_v1_prefixed_hash():
+    """verify_password handles $dfv1$ prefixed hashes (plain bcrypt)."""
+    password = "legacyP@ssw0rd"
+    raw_bcrypt = bcrypt.hashpw(password.encode("utf-8"), bcrypt.gensalt()).decode("utf-8")
+    v1_hash = f"$dfv1${raw_bcrypt}"
+    assert verify_password(password, v1_hash) is True
+    assert verify_password("wrong", v1_hash) is False
+
+
+def test_verify_bare_bcrypt_hash():
+    """verify_password handles bare bcrypt hashes (no prefix) as v1."""
+    password = "oldstyleP@ss"
+    raw_bcrypt = bcrypt.hashpw(password.encode("utf-8"), bcrypt.gensalt()).decode("utf-8")
+    assert verify_password(password, raw_bcrypt) is True
+    assert verify_password("wrong", raw_bcrypt) is False
+
+
+def test_needs_rehash_returns_false_for_v2():
+    """v2 hashes do not need rehashing."""
+    hashed = hash_password("something")
+    assert needs_rehash(hashed) is False
+
+
+def test_needs_rehash_returns_true_for_v1():
+    """v1-prefixed hashes need rehashing."""
+    raw = bcrypt.hashpw(b"pw", bcrypt.gensalt()).decode("utf-8")
+    assert needs_rehash(f"$dfv1${raw}") is True
+
+
+def test_needs_rehash_returns_true_for_bare_bcrypt():
+    """Bare bcrypt hashes (no prefix) need rehashing."""
+    raw = bcrypt.hashpw(b"pw", bcrypt.gensalt()).decode("utf-8")
+    assert needs_rehash(raw) is True
+
+
 # ── JWT ─────────────────────────────────────────────────────────────────────
 
 
@@ -166,7 +210,7 @@ def test_get_auth_context_set():
 
 
 def test_require_auth_sets_auth_context():
-    """require_auth sets auth context on request from cookie."""
+    """require_auth rejects unauthenticated requests with 401."""
     from fastapi import Request
 
     app = FastAPI()
@@ -178,10 +222,9 @@ def test_require_auth_sets_auth_context():
         return {"authenticated": ctx.is_authenticated}
 
     with TestClient(app) as client:
-        # No cookie → anonymous
+        # No cookie → 401 (require_auth independently enforces authentication)
         response = client.get("/test")
-        assert response.status_code == 200
-        assert response.json()["authenticated"] is False
+        assert response.status_code == 401
 
 
 def test_require_auth_requires_request_param():
@@ -652,3 +695,57 @@ def test_missing_jwt_secret_generates_ephemeral(monkeypatch, caplog):
 
     # Cleanup
     config_module._auth_config = None
+
+
+# ── Auto-rehash on login ──────────────────────────────────────────────────
+
+
+def test_authenticate_auto_rehashes_legacy_hash():
+    """authenticate() upgrades a bare bcrypt hash to v2 on successful login."""
+    import asyncio
+
+    from app.gateway.auth.local_provider import LocalAuthProvider
+
+    password = "rehashTest123"
+
+    user = User(
+        id=uuid4(),
+        email="rehash@test.com",
+        password_hash=bcrypt.hashpw(password.encode("utf-8"), bcrypt.gensalt()).decode("utf-8"),
+    )
+
+    mock_repo = MagicMock()
+    mock_repo.get_user_by_email = AsyncMock(return_value=user)
+    mock_repo.update_user = AsyncMock(return_value=user)
+
+    provider = LocalAuthProvider(mock_repo)
+
+    result = asyncio.run(provider.authenticate({"email": "rehash@test.com", "password": password}))
+    assert result is not None
+    assert result.password_hash.startswith("$dfv2$")
+    mock_repo.update_user.assert_called_once()
+
+
+def test_authenticate_skips_rehash_for_v2_hash():
+    """authenticate() does NOT rehash when the stored hash is already v2."""
+    import asyncio
+
+    from app.gateway.auth.local_provider import LocalAuthProvider
+
+    password = "alreadyv2Pass!"
+
+    user = User(
+        id=uuid4(),
+        email="v2@test.com",
+        password_hash=hash_password(password),
+    )
+
+    mock_repo = MagicMock()
+    mock_repo.get_user_by_email = AsyncMock(return_value=user)
+    mock_repo.update_user = AsyncMock(return_value=user)
+
+    provider = LocalAuthProvider(mock_repo)
+
+    result = asyncio.run(provider.authenticate({"email": "v2@test.com", "password": password}))
+    assert result is not None
+    mock_repo.update_user.assert_not_called()
diff --git a/backend/tests/test_initialize_admin.py b/backend/tests/test_initialize_admin.py
index 17bfaf0b6..26b2ec6b2 100644
--- a/backend/tests/test_initialize_admin.py
+++ b/backend/tests/test_initialize_admin.py
@@ -22,6 +22,7 @@ _TEST_SECRET = "test-secret-key-initialize-admin-min-32"
 def _setup_auth(tmp_path):
     """Fresh SQLite engine + auth config per test."""
     from app.gateway import deps
+    from app.gateway.routers.auth import _SETUP_STATUS_COOLDOWN
     from deerflow.persistence.engine import close_engine, init_engine
 
     set_auth_config(AuthConfig(jwt_secret=_TEST_SECRET))
@@ -29,11 +30,13 @@ def _setup_auth(tmp_path):
     asyncio.run(init_engine("sqlite", url=url, sqlite_dir=str(tmp_path)))
     deps._cached_local_provider = None
     deps._cached_repo = None
+    _SETUP_STATUS_COOLDOWN.clear()
     try:
         yield
     finally:
         deps._cached_local_provider = None
         deps._cached_repo = None
+        _SETUP_STATUS_COOLDOWN.clear()
         asyncio.run(close_engine())
 
 
@@ -163,3 +166,17 @@ def test_setup_status_false_when_only_regular_user_exists(client):
     resp = client.get("/api/v1/auth/setup-status")
     assert resp.status_code == 200
     assert resp.json()["needs_setup"] is True
+
+
+def test_setup_status_rate_limited_on_second_call(client):
+    """Second /setup-status call within the cooldown window returns 429 with Retry-After."""
+    # First call succeeds.
+    resp1 = client.get("/api/v1/auth/setup-status")
+    assert resp1.status_code == 200
+
+    # Immediate second call is rate-limited.
+    resp2 = client.get("/api/v1/auth/setup-status")
+    assert resp2.status_code == 429
+    assert "Retry-After" in resp2.headers
+    retry_after = int(resp2.headers["Retry-After"])
+    assert 1 <= retry_after <= 60
diff --git a/backend/tests/test_langgraph_auth.py b/backend/tests/test_langgraph_auth.py
index 52d215751..d2ee81051 100644
--- a/backend/tests/test_langgraph_auth.py
+++ b/backend/tests/test_langgraph_auth.py
@@ -63,7 +63,7 @@ def test_invalid_jwt_raises_401():
     with pytest.raises(Auth.exceptions.HTTPException) as exc:
         asyncio.run(authenticate(_req({"access_token": "garbage"})))
     assert exc.value.status_code == 401
-    assert "Token error" in str(exc.value.detail)
+    assert "Invalid token" in str(exc.value.detail)
 
 
 def test_expired_jwt_raises_401():
@@ -295,7 +295,7 @@ def test_csrf_post_matching_token_proceeds_to_jwt():
         )
     # Past CSRF, rejected by JWT decode
     assert exc.value.status_code == 401
-    assert "Token error" in str(exc.value.detail)
+    assert "Invalid token" in str(exc.value.detail)
 
 
 def test_csrf_put_requires_token():