diff --git a/backend_api_python/app/routes/indicator.py b/backend_api_python/app/routes/indicator.py
index e7f3b3308..0d87adf8f 100644
--- a/backend_api_python/app/routes/indicator.py
+++ b/backend_api_python/app/routes/indicator.py
@@ -1063,13 +1063,12 @@ def _repair_code_via_llm(bad_code: str, validation: Dict[str, Any]) -> str:
         )
 
         content = (content or "").strip()
-        if content.startswith("```python"):
-            content = content[9:]
-        elif content.startswith("```"):
-            content = content[3:]
-        if content.endswith("```"):
-            content = content[:-3]
-        return content.strip() or bad_code
+        # Reuse the hardened stripper: reasoning models prepend <think> prose
+        # and wrap code in fences with surrounding text; the naive startswith/
+        # endswith strip here used to leak both into validation.
+        from app.services.indicator_ai_generation import _strip_code_fences
+
+        return _strip_code_fences(content) or bad_code
 
     def _generate_final_code() -> tuple[str, Dict[str, Any], Dict[str, Any]]:
         try:
diff --git a/backend_api_python/app/services/ai_code_edits.py b/backend_api_python/app/services/ai_code_edits.py
index 4f7294916..fa5bc089d 100644
--- a/backend_api_python/app/services/ai_code_edits.py
+++ b/backend_api_python/app/services/ai_code_edits.py
@@ -37,7 +37,10 @@ def code_edit_user_instruction() -> str:
 def _parse_payload(response: Any) -> dict[str, Any]:
     if isinstance(response, dict):
         return response
-    raw = str(response or "").strip()
+    # Reasoning models prepend <think>...</think> prose; json.loads fails on it.
+    from app.services.llm import strip_think_blocks
+
+    raw = strip_think_blocks(str(response or ""))
     if raw.startswith("```json"):
         raw = raw[7:]
     elif raw.startswith("```"):
diff --git a/backend_api_python/app/services/indicator_ai_generation.py b/backend_api_python/app/services/indicator_ai_generation.py
index 495b7afdf..4b8e2737a 100644
--- a/backend_api_python/app/services/indicator_ai_generation.py
+++ b/backend_api_python/app/services/indicator_ai_generation.py
@@ -4,6 +4,7 @@
 
 import json
 import os
+import re
 from typing import Any, Callable, Dict, List, Mapping
 
 from app.services.ai_code_edits import (
@@ -13,6 +14,7 @@
     code_edit_user_instruction,
 )
 from app.services.ai_copilot_context import fit_messages_to_budget
+from app.services.llm import strip_think_blocks
 
 
 def _context_block(context: Mapping[str, Any]) -> str:
@@ -46,8 +48,19 @@ def _context_block(context: Mapping[str, Any]) -> str:
     )
 
 
+_FENCED_BLOCK_RE = re.compile(r"```(?:python)?\s*\n(.*?)```", re.DOTALL | re.IGNORECASE)
+
+
 def _strip_code_fences(content: Any) -> str:
-    text = str(content or "").strip()
+    text = strip_think_blocks(str(content or ""))
+
+    # Models sometimes add prose or explanation fences around the code. When any
+    # complete fenced block exists, return the last one (the final answer).
+    if "```" in text:
+        blocks = [b.strip() for b in _FENCED_BLOCK_RE.findall(text) if b.strip()]
+        if blocks:
+            return blocks[-1]
+
     if text.startswith("```python"):
         text = text[9:]
     elif text.startswith("```"):
diff --git a/backend_api_python/app/services/llm.py b/backend_api_python/app/services/llm.py
index 3563b4800..2a81db118 100644
--- a/backend_api_python/app/services/llm.py
+++ b/backend_api_python/app/services/llm.py
@@ -6,6 +6,7 @@
 """
 import json
 import os
+import re
 import requests
 from typing import Dict, Any, Optional, List
 from enum import Enum
@@ -17,6 +18,25 @@
 
 logger = get_logger(__name__)
 
+_THINK_BLOCK_RE = re.compile(r"<think>.*?</think>", re.DOTALL | re.IGNORECASE)
+
+
+def strip_think_blocks(text: str) -> str:
+    """Remove reasoning-model <think>...</think> chains of thought.
+
+    Reasoning models (MiniMax-M3, DeepSeek-R1, ...) prepend <think>...</think>
+    prose to code and JSON answers. Downstream parsers (ast.parse, json.loads)
+    fail on it, so every LLM response path must strip it before parsing.
+    An unterminated <think> (truncated response) drops everything from the tag
+    onward: no usable payload survives truncation anyway.
+    """
+    text = str(text or "")
+    text = _THINK_BLOCK_RE.sub("", text)
+    unterminated = text.lower().find("<think>")
+    if unterminated != -1:
+        text = text[:unterminated]
+    return text.strip()
+
 DEFAULT_MAX_TOKENS = 16_384
 
 RETRYABLE_LLM_STATUS_CODES = {408, 409, 425, 429, 500, 502, 503, 504, 529}
@@ -1509,8 +1529,8 @@ def safe_call_llm(self, system_prompt: str, user_prompt: str, default_structure:
                 {"role": "user", "content": user_prompt}
             ], model=model, provider=provider)
             
-            # Strip markdown fences if present
-            clean_text = response_text.strip()
+            # Strip reasoning-model think prose and markdown fences if present
+            clean_text = strip_think_blocks(response_text)
             if clean_text.startswith("```"):
                 first_newline = clean_text.find("\n")
                 if first_newline != -1:
diff --git a/backend_api_python/tests/test_indicator_ai_generation_strip.py b/backend_api_python/tests/test_indicator_ai_generation_strip.py
new file mode 100644
index 000000000..e07957f05
--- /dev/null
+++ b/backend_api_python/tests/test_indicator_ai_generation_strip.py
@@ -0,0 +1,138 @@
+"""Regression tests for _strip_code_fences.
+
+Reasoning models (MiniMax-M3, DeepSeek-R1, ...) prepend <think>...</think>
+chains of thought, and models often wrap code in markdown fences with
+surrounding prose. Both shapes used to survive stripping and fail the
+ast.parse safety validation with "Unsafe code rejected: Code syntax error".
+"""
+import ast
+
+import pytest
+
+from app.services.indicator_ai_generation import _strip_code_fences
+
+CODE = "def sma(close, n):\n    return close.rolling(window=n).mean()"
+
+
+def assert_valid_python(result: str) -> None:
+    ast.parse(result)
+
+
+def test_plain_code_unchanged():
+    assert _strip_code_fences(CODE) == CODE
+
+
+def test_simple_fence_stripped():
+    assert _strip_code_fences(f"```python\n{CODE}\n```") == CODE
+
+
+def test_bare_fence_stripped():
+    assert _strip_code_fences(f"```\n{CODE}\n```") == CODE
+
+
+def test_think_block_removed():
+    raw = (
+        "<think>The user wants an SMA. I will use pandas rolling.</think>\n\n"
+        f"{CODE}"
+    )
+    result = _strip_code_fences(raw)
+    assert_valid_python(result)
+    assert result == CODE
+
+
+def test_think_block_multiline_removed():
+    raw = (
+        "<think>\nLine one of reasoning.\nLine two.\n</think>\n\n"
+        f"{CODE}"
+    )
+    result = _strip_code_fences(raw)
+    assert_valid_python(result)
+    assert result == CODE
+
+
+def test_think_then_fenced_code():
+    raw = (
+        "<think>Reasoning here.</think>\n\n"
+        f"```python\n{CODE}\n```"
+    )
+    result = _strip_code_fences(raw)
+    assert_valid_python(result)
+    assert result == CODE
+
+
+def test_unterminated_think_block_truncated():
+    raw = f"{CODE}\n\n<think>model output was cut off mid-reasoning"
+    result = _strip_code_fences(raw)
+    assert_valid_python(result)
+    assert result == CODE
+
+
+def test_prose_around_fenced_code_returns_last_block():
+    raw = (
+        "Here is your indicator:\n\n"
+        f"```python\n{CODE}\n```\n\n"
+        "This computes a simple moving average."
+    )
+    result = _strip_code_fences(raw)
+    assert_valid_python(result)
+    assert result == CODE
+
+
+def test_multiple_fences_returns_last_block():
+    draft = "def draft():\n    pass\n"
+    raw = f"```python\n{draft}\n```\n\nRevised:\n\n```python\n{CODE}\n```"
+    result = _strip_code_fences(raw)
+    assert result == CODE
+
+
+def test_empty_and_none_inputs():
+    assert _strip_code_fences(None) == ""
+    assert _strip_code_fences("") == ""
+    assert _strip_code_fences("   ") == ""
+
+
+def test_case_insensitive_think_tag():
+    raw = f"<THINK>reasoning</THINK>\n\n{CODE}"
+    result = _strip_code_fences(raw)
+    assert_valid_python(result)
+    assert result == CODE
+
+
+def test_prose_only_without_fences_is_returned_as_is():
+    # No fenced block and no think tag: behavior is unchanged (the caller's
+    # validation will reject it), we must not silently invent code.
+    raw = "Sorry, I cannot generate that indicator."
+    assert _strip_code_fences(raw) == raw
+
+
+# ---------------------------------------------------------------------------
+# Shared strip_think_blocks helper (app.services.llm)
+# ---------------------------------------------------------------------------
+
+from app.services.llm import strip_think_blocks
+
+
+def test_strip_think_blocks_shared_helper():
+    assert strip_think_blocks("<think>x</think>\n\ncode()") == "code()"
+    assert strip_think_blocks("<THINK>x</THINK>code()") == "code()"
+    assert strip_think_blocks("code()\n<think>truncated") == "code()"
+    assert strip_think_blocks("") == ""
+    assert strip_think_blocks(None) == ""
+    assert strip_think_blocks("no tags here") == "no tags here"
+
+
+# ---------------------------------------------------------------------------
+# Edit-payload JSON parsing must tolerate think prose (app.services.ai_code_edits)
+# ---------------------------------------------------------------------------
+
+from app.services.ai_code_edits import CodeEditError, _parse_payload
+
+
+def test_parse_payload_with_think_prefix():
+    raw = '<think>I will replace the plot line.</think>\n{"operations": []}'
+    assert _parse_payload(raw) == {"operations": []}
+
+
+def test_parse_payload_still_rejects_garbage():
+    with pytest.raises(CodeEditError):
+        _parse_payload("not json at all")