diff --git a/ai/learnings/ERRORS.md b/ai/learnings/ERRORS.md
index f5967063..2e5a508a 100644
--- a/ai/learnings/ERRORS.md
+++ b/ai/learnings/ERRORS.md
@@ -66,3 +66,37 @@ needs an import attribute of "type: json"
 - Resolution: 2026-06-10 — both fixes applied
 
 ---
+
+## [ERR-20260628-001] SSE trace events pollute OpenAI-compatible streaming output
+
+**Logged**: 2026-06-28T00:31:00Z
+**Priority**: high
+**Status**: resolved (PR pending — issue #110)
+
+### Summary
+Routerly's `emit()` in `packages/service/src/routes/openai.ts` unconditionally wrote
+`{"type":"trace",...}` SSE frames into the wire stream, breaking strict
+OpenAI-compatible clients (`@ai-sdk/openai-compatible`, openai strict mode, etc.)
+that validate the first `data:` line as a `ChatCompletionChunk` with a `choices[]`
+array. The `x-routerly-no-trace` request header was documented but not honoured.
+
+### Root cause
+`emit()` (line ~230) called `reply.raw.write(...)` directly with no header check.
+The `x-routerly-no-trace` header existed in the docs but was never read from
+`request.headers`.
+
+### Fix
+Read the header near the other header reads (line ~120) and gate the `reply.raw.write`
+call. Trace entries are still recorded in the in-memory trace store via
+`appendTrace(traceId, [entry])` so the dashboard / debug surface is unaffected.
+
+### Regression coverage
+- `it('suppresses trace events from SSE stream when x-routerly-no-trace: 1 is sent')`
+- `it('emits trace events on SSE stream when x-routerly-no-trace header is absent')`
+Both tests use the all-candidates-exhausted path which calls `emit()` directly
+from the route handler, guaranteeing a trace event hits the wire.
+
+### Lesson
+When a header is documented as a feature, the implementation must read it. Add a
+failing test that exercises the documented behaviour BEFORE adding the
+implementation, so the missing wire-up is caught at the same time as the bug.
diff --git a/packages/service/src/routes/openai.test.ts b/packages/service/src/routes/openai.test.ts
index 0fce79e2..7c5b87a2 100644
--- a/packages/service/src/routes/openai.test.ts
+++ b/packages/service/src/routes/openai.test.ts
@@ -343,6 +343,45 @@ describe('POST /v1/chat/completions — streaming', () => {
     expect(res.body).toContain('[DONE]')
     expect(mockLlmStream).toHaveBeenCalledTimes(2)
   })
+
+  it('suppresses trace events from SSE stream when x-routerly-no-trace: 1 is sent', async () => {
+    // All-candidates-exhausted path triggers emit() directly via the route handler
+    // (line ~320), guaranteeing the SSE wire contains a {"type":"trace"} event
+    // unless the header gates it.
+    mockRouteRequest.mockResolvedValue({ models: [{ model: 'openai/gpt-4o', weight: 1 }], trace: [] })
+    mockReadConfig.mockResolvedValue([testModel])
+    mockLlmStream.mockRejectedValue(new Error('upstream failed'))
+
+    const app = await buildApp()
+    const res = await app.inject({
+      method: 'POST', url: '/v1/chat/completions',
+      headers: { 'content-type': 'application/json', 'x-routerly-no-trace': '1' },
+      payload: JSON.stringify({ model: 'gpt-4o', stream: true, messages: [{ role: 'user', content: 'Hi' }] }),
+    })
+    await app.close()
+
+    expect(res.body).not.toContain('"type":"trace"')
+    expect(res.body).toContain('[DONE]')
+  })
+
+  it('emits trace events on SSE stream when x-routerly-no-trace header is absent', async () => {
+    // Companion test: confirms traces ARE written to the wire by default
+    // (sanity-check that suppressTrace is the only thing keeping them out).
+    mockRouteRequest.mockResolvedValue({ models: [{ model: 'openai/gpt-4o', weight: 1 }], trace: [] })
+    mockReadConfig.mockResolvedValue([testModel])
+    mockLlmStream.mockRejectedValue(new Error('upstream failed'))
+
+    const app = await buildApp()
+    const res = await app.inject({
+      method: 'POST', url: '/v1/chat/completions',
+      headers: { 'content-type': 'application/json' },
+      payload: JSON.stringify({ model: 'gpt-4o', stream: true, messages: [{ role: 'user', content: 'Hi' }] }),
+    })
+    await app.close()
+
+    expect(res.body).toContain('"type":"trace"')
+    expect(res.body).toContain('[DONE]')
+  })
 })
 
 // ─── POST /v1/responses ───────────────────────────────────────────────────────
diff --git a/packages/service/src/routes/openai.ts b/packages/service/src/routes/openai.ts
index 12b7566f..3e7386ce 100644
--- a/packages/service/src/routes/openai.ts
+++ b/packages/service/src/routes/openai.ts
@@ -117,6 +117,7 @@ export const openaiRoutes: FastifyPluginAsync = async (fastify) => {
     const traceId = randomUUID();
     setTrace(traceId, []);
     const conversationId = (request.headers['x-routerly-conversation-id'] as string | undefined) || undefined;
+    const suppressTrace = (request.headers['x-routerly-no-trace'] as string | undefined) === '1';
     const isMemoryEnabled = (project.policies ?? []).some(
       (p: any) => p.type === 'llm' && p.enabled && p.config?.memory === true,
     );
@@ -227,7 +228,9 @@ export const openaiRoutes: FastifyPluginAsync = async (fastify) => {
 
       const emit = (entry: TraceEntry) => {
         appendTrace(traceId, [entry]);
-        reply.raw.write(`data: ${JSON.stringify({ type: 'trace', entry })}\n\n`);
+        if (!suppressTrace) {
+          reply.raw.write(`data: ${JSON.stringify({ type: 'trace', entry })}\n\n`);
+        }
       };
 
       let sortedCandidates: Array<{ model: string; weight: number }>;