diff --git a/crates/agent_ui/src/agent_panel.rs b/crates/agent_ui/src/agent_panel.rs
index 4fb5acc10b32f7bd9aa324deb8a981aedeff6dcb..91b8f29638f12aaef4f7da22646b8d84dd84657a 100644
--- a/crates/agent_ui/src/agent_panel.rs
+++ b/crates/agent_ui/src/agent_panel.rs
@@ -1496,6 +1496,10 @@ impl AgentPanel {
                 {
                     update_settings_file(self.fs.clone(), cx, move |settings, _| {
                         let provider = model.provider_id().0.to_string();
+                        let enable_thinking = model.supports_thinking();
+                        let effort = model
+                            .default_effort_level()
+                            .map(|effort| effort.value.to_string());
                         let model = model.id().0.to_string();
                         settings
                             .agent
@@ -1503,8 +1507,8 @@ impl AgentPanel {
                             .set_model(LanguageModelSelection {
                                 provider: LanguageModelProviderSetting(provider),
                                 model,
-                                enable_thinking: false,
-                                effort: None,
+                                enable_thinking,
+                                effort,
                             })
                     });
                 }
diff --git a/crates/language_models/src/provider/anthropic.rs b/crates/language_models/src/provider/anthropic.rs
index 61060a093aff9f69b19c9696d85debb82bc068ca..a4694beb78744bdca8ee05fb6abd3344163e830f 100644
--- a/crates/language_models/src/provider/anthropic.rs
+++ b/crates/language_models/src/provider/anthropic.rs
@@ -515,6 +515,10 @@ impl LanguageModel for AnthropicModel {
         }
     }
 
+    fn supports_thinking(&self) -> bool {
+        matches!(self.model.mode(), AnthropicModelMode::Thinking { .. })
+    }
+
     fn telemetry_id(&self) -> String {
         format!("anthropic/{}", self.model.id())
     }
diff --git a/crates/language_models/src/provider/bedrock.rs b/crates/language_models/src/provider/bedrock.rs
index 1e6596fa318115d40bab2d6151f1ae51d8be537b..0f6a3cc152ae229eb2770057b5249e9bac80614d 100644
--- a/crates/language_models/src/provider/bedrock.rs
+++ b/crates/language_models/src/provider/bedrock.rs
@@ -640,6 +640,13 @@ impl LanguageModel for BedrockModel {
         self.model.supports_images()
     }
 
+    fn supports_thinking(&self) -> bool {
+        matches!(
+            self.model.mode(),
+            BedrockModelMode::Thinking { .. } | BedrockModelMode::AdaptiveThinking { .. }
+        )
+    }
+
     fn supports_tool_choice(&self, choice: LanguageModelToolChoice) -> bool {
         match choice {
             LanguageModelToolChoice::Auto | LanguageModelToolChoice::Any => {
diff --git a/crates/language_models/src/provider/google.rs b/crates/language_models/src/provider/google.rs
index af91c9613ef2a9fbbf720480a0b526ef650f61d4..334a5cbe64e6cdefbaa7c15c309ca4632109e323 100644
--- a/crates/language_models/src/provider/google.rs
+++ b/crates/language_models/src/provider/google.rs
@@ -283,6 +283,10 @@ impl LanguageModel for GoogleLanguageModel {
         self.model.supports_images()
     }
 
+    fn supports_thinking(&self) -> bool {
+        matches!(self.model.mode(), GoogleModelMode::Thinking { .. })
+    }
+
     fn supports_tool_choice(&self, choice: LanguageModelToolChoice) -> bool {
         match choice {
             LanguageModelToolChoice::Auto
diff --git a/crates/language_models/src/provider/ollama.rs b/crates/language_models/src/provider/ollama.rs
index 27aa00c3f003cd002263875042ab50cf53417d43..b087d4886f2aad0c003a3da68f9a02bbbb6e9865 100644
--- a/crates/language_models/src/provider/ollama.rs
+++ b/crates/language_models/src/provider/ollama.rs
@@ -443,6 +443,10 @@ impl LanguageModel for OllamaLanguageModel {
         self.model.supports_vision.unwrap_or(false)
     }
 
+    fn supports_thinking(&self) -> bool {
+        self.model.supports_thinking.unwrap_or(false)
+    }
+
     fn supports_tool_choice(&self, choice: LanguageModelToolChoice) -> bool {
         match choice {
             LanguageModelToolChoice::Auto => false,
diff --git a/crates/language_models/src/provider/open_ai.rs b/crates/language_models/src/provider/open_ai.rs
index a98dda194752dc74d896e3b76118453aa96e08a9..1de907004b897337ef3a99102ca34ea3f388ee87 100644
--- a/crates/language_models/src/provider/open_ai.rs
+++ b/crates/language_models/src/provider/open_ai.rs
@@ -327,6 +327,10 @@ impl LanguageModel for OpenAiLanguageModel {
         }
     }
 
+    fn supports_thinking(&self) -> bool {
+        self.model.reasoning_effort().is_some()
+    }
+
     fn supports_split_token_display(&self) -> bool {
         true
     }
diff --git a/crates/language_models/src/provider/open_router.rs b/crates/language_models/src/provider/open_router.rs
index 1311471c534e8fef7f1739567b5a01133e02b1d0..a044c7c25d7858f69dc8c4ac9fa0c8bda73f6e91 100644
--- a/crates/language_models/src/provider/open_router.rs
+++ b/crates/language_models/src/provider/open_router.rs
@@ -314,6 +314,10 @@ impl LanguageModel for OpenRouterLanguageModel {
         self.model.supports_tool_calls()
     }
 
+    fn supports_thinking(&self) -> bool {
+        matches!(self.model.mode, OpenRouterModelMode::Thinking { .. })
+    }
+
     fn tool_input_format(&self) -> LanguageModelToolSchemaFormat {
         let model_id = self.model.id().trim().to_lowercase();
         if model_id.contains("gemini") || model_id.contains("grok") {