diff --git a/.sandcastle/main.ts b/.sandcastle/main.ts
index dc2d6bc..4c4c4d8 100644
--- a/.sandcastle/main.ts
+++ b/.sandcastle/main.ts
@@ -26,7 +26,7 @@ import { createHmac } from "node:crypto";
 import * as https from "node:https";
 import * as http from "node:http";
 import { execFile, spawn } from "node:child_process";
-import { mkdirSync, openSync, closeSync, writeFileSync } from "node:fs";
+import { existsSync, mkdirSync, openSync, closeSync, writeFileSync } from "node:fs";
 import { promisify } from "node:util";
 import { fileURLToPath } from "node:url";
 import { join, dirname } from "node:path";
@@ -58,6 +58,36 @@ export function parseOrchEnv(content: string): Record<string, string> {
   return result;
 }
 
+/**
+ * Decide the DOCKER_HOST the orchestrator's docker CLI should use, to dodge the
+ * docker-outside-of-docker socat proxy.
+ *
+ * The DooD feature fixes socket permissions by fronting the host socket with
+ * `socat UNIX-LISTEN:/var/run/docker.sock ... UNIX-CONNECT:/var/run/docker-host.sock`.
+ * But socat tears down `docker exec`'s *hijacked* bidirectional stream after the
+ * first data burst — and sandcastle streams the agent's stream-json over
+ * `docker exec`. So the agent's init line arrives, then the rest of the turn is
+ * dropped: every iteration is an empty "started → stopped" turn with zero commits
+ * (the close handler's `code ?? 0` even masks it as a clean exit). The feature
+ * also exposes the *real* host socket at docker-host.sock and adds the user to the
+ * docker group, so pointing the CLI straight at it restores streaming.
+ *
+ * Guarded so it is a no-op outside the socat setup — returns undefined (leave
+ * DOCKER_HOST as-is) when the caller already set one, or when the direct socket is
+ * absent. A bare `docker compose up` (no DooD feature, no socat) has no
+ * docker-host.sock and its raw /var/run/docker.sock works natively, so it must be
+ * left untouched. Pure: the decision is returned, not applied, so it's testable
+ * without env/fs side effects.
+ */
+export function resolveDockerHost(
+  currentDockerHost: string | undefined,
+  directSocketExists: boolean,
+): string | undefined {
+  if (currentDockerHost) return undefined; // an explicit choice always wins
+  if (!directSocketExists) return undefined; // no socat proxy in the way
+  return "unix:///var/run/docker-host.sock";
+}
+
 export interface ResolvedCredentials {
   readonly GH_TOKEN: string | undefined;
   readonly GITHUB_TOKEN: string | undefined;
@@ -543,6 +573,17 @@ async function main(): Promise<void> {
     return;
   }
 
+  // Dodge the docker-outside-of-docker socat proxy (see resolveDockerHost): socat
+  // breaks docker exec's streamed output, which sandcastle relies on for the agent
+  // turn — without this every iteration is an empty turn. No-op when socat isn't in
+  // play (bare `docker compose up`, or an explicit DOCKER_HOST). Must run before any
+  // docker call below.
+  const dockerHost = resolveDockerHost(
+    process.env.DOCKER_HOST,
+    existsSync("/var/run/docker-host.sock"),
+  );
+  if (dockerHost) process.env.DOCKER_HOST = dockerHost;
+
   const repo = process.env.AGENTIC_REPO;
   const base = process.env.AGENTIC_BASE_BRANCH ?? "main";
   const repoRoot = process.cwd();
diff --git a/.sandcastle/reduce.test.ts b/.sandcastle/reduce.test.ts
index 5fc9935..7ffbdd2 100644
--- a/.sandcastle/reduce.test.ts
+++ b/.sandcastle/reduce.test.ts
@@ -10,7 +10,7 @@ import { test } from "node:test";
 import assert from "node:assert/strict";
 import { reduce, READY_LABEL, type State, type CiStatus, type Pr } from "./reduce.ts";
 import { parseBlockedBy } from "./issue-source.ts";
-import { sweepOrphanedSandboxes, ensureSandboxNetwork, parseConcurrency, withRetry, resetAgentBranch, refreshBase, validateSignature, classifyDelivery, parseSmeeEvent, parseOrchEnv, resolveCredentials, resolveRunMode } from "./main.ts";
+import { sweepOrphanedSandboxes, ensureSandboxNetwork, parseConcurrency, withRetry, resetAgentBranch, refreshBase, validateSignature, classifyDelivery, parseSmeeEvent, parseOrchEnv, resolveCredentials, resolveRunMode, resolveDockerHost } from "./main.ts";
 import { createHmac } from "node:crypto";
 import { SANDBOX_LABEL, PROJECT_LABEL_KEY, deriveProject } from "./sandbox-runner.ts";
 
@@ -915,6 +915,24 @@ test("resolveCredentials: resolves all four credential keys independently", () =
   assert.equal(creds.CLAUDE_CODE_OAUTH_TOKEN, "cco-orch");
 });
 
+// ─── resolveDockerHost (socat-proxy bypass) ────────────────────────────────────
+
+test("resolveDockerHost: socat present (direct socket exists) → redirect to docker-host.sock", () => {
+  assert.equal(resolveDockerHost(undefined, true), "unix:///var/run/docker-host.sock");
+});
+
+test("resolveDockerHost: no direct socket (bare compose, no socat) → leave DOCKER_HOST untouched", () => {
+  assert.equal(resolveDockerHost(undefined, false), undefined);
+});
+
+test("resolveDockerHost: an explicit DOCKER_HOST always wins, even when the direct socket exists", () => {
+  assert.equal(resolveDockerHost("unix:///custom.sock", true), undefined);
+});
+
+test("resolveDockerHost: explicit DOCKER_HOST with no direct socket is still left untouched", () => {
+  assert.equal(resolveDockerHost("tcp://1.2.3.4:2375", false), undefined);
+});
+
 // ─── resolveRunMode ───────────────────────────────────────────────────────────
 
 test("resolveRunMode: AGENTIC_IN_CONTAINER set → detached", () => {