diff --git a/crates/ai/src/cli_agents/adapters.rs b/crates/ai/src/cli_agents/adapters.rs
index 1f0e5c1e..8875bd3d 100644
--- a/crates/ai/src/cli_agents/adapters.rs
+++ b/crates/ai/src/cli_agents/adapters.rs
@@ -254,7 +254,8 @@ impl AgentAdapter for ClaudeCode {
                 }
                 if v.get("is_error").and_then(Value::as_bool).unwrap_or(false) {
                     let why = if s("result").is_empty() { s("subtype") } else { s("result") };
-                    out.push(AgentEvent::Error { message: format!("Claude Code stopped: {why}"), remediation: sign_in_hint(&why), log: None });
+                    let (message, remediation) = claude_code_failure(&why);
+                    out.push(AgentEvent::Error { message, remediation, log: None });
                 }
             }
             _ => {}
diff --git a/crates/ai/src/cli_agents/mod.rs b/crates/ai/src/cli_agents/mod.rs
index 456d7026..1f5caec7 100644
--- a/crates/ai/src/cli_agents/mod.rs
+++ b/crates/ai/src/cli_agents/mod.rs
@@ -155,6 +155,25 @@ pub fn sign_in_hint(message: &str) -> Option<String> {
         .then(|| "Sign in to Claude Code: open a terminal and run `claude auth login` (or start `claude` and type /login), then try again.".to_string())
 }
 
+/// Words in an API's answer when the installed Claude Code is older than the model it was asked
+/// to use (#165).
+pub const TOO_OLD_FOR_MODEL: &str = "does not support this model";
+
+/// Claude Code's failure in plain words, and its fix when the person can make one: a version too
+/// old for the model (#165), or a sign-in.
+pub fn claude_code_failure(why: &str) -> (String, Option<String>) {
+    if why.to_ascii_lowercase().contains(TOO_OLD_FOR_MODEL) {
+        return (
+            format!("Claude Code is too old for the model it was asked to use ({}).", why.chars().take(200).collect::<String>()),
+            Some(
+                "Update the `claude` command-line tool, which is installed and updated apart from the Claude desktop app: open a terminal and run `claude update`, then try again. Or choose another model for Claude Code in Settings → AI."
+                    .into(),
+            ),
+        );
+    }
+    (format!("Claude Code stopped: {why}"), sign_in_hint(why))
+}
+
 /// Variables a Claude Code session sets for its own child processes. When Craft Anything itself
 /// runs inside such a session, they'd make the person's `claude` act as part of that session
 /// instead of as their own install, so they're removed. The person's own settings (provider
@@ -825,6 +844,14 @@ mod tests {
             other => panic!("{other:?}"),
         }
         assert!(sign_in_hint("rate limited").is_none());
+        // #165: an install too old for the model says so, and how to update it.
+        let raw =
+            r#"API Error: 400 {"type":"error","error":{"type":"invalid_request_error","message":"Claude Code 2.1.81 does not support this model; version 2"}}"#;
+        let (message, fix) = claude_code_failure(raw);
+        assert!(message.starts_with("Claude Code is too old for the model it was asked to use") && message.contains("2.1.81"), "{message}");
+        let fix = fix.unwrap_or_default();
+        assert!(fix.contains("claude update") && fix.contains("desktop app") && fix.contains("Settings → AI"), "{fix}");
+        assert_eq!(claude_code_failure("rate limited"), ("Claude Code stopped: rate limited".to_string(), None));
     }
 
     #[test]
diff --git a/crates/ai/src/rebuild/mod.rs b/crates/ai/src/rebuild/mod.rs
index e41a9ada..09154da4 100644
--- a/crates/ai/src/rebuild/mod.rs
+++ b/crates/ai/src/rebuild/mod.rs
@@ -921,10 +921,12 @@ pub fn builder_backend(cfg: &crate::AiConfig, named: Option<&str>) -> Result<cra
 }
 
 /// Whether a failed builder turn is worth resuming, rather than needing the person (sign-in,
-/// credit, a missing or broken install).
+/// credit, a missing, broken or too old install).
 fn worth_retrying(message: &str) -> bool {
     let m = message.to_ascii_lowercase();
-    !["sign in", "log in", "login", "logged in", "auth", "credit", "billing", "usage limit", "not installed", "install "].iter().any(|k| m.contains(k))
+    !["sign in", "log in", "login", "logged in", "auth", "credit", "billing", "usage limit", "not installed", "install ", crate::cli_agents::TOO_OLD_FOR_MODEL]
+        .iter()
+        .any(|k| m.contains(k))
 }
 
 /// The longest wait a service's "retry in …" is followed for.
diff --git a/crates/ai/src/rebuild/tests.rs b/crates/ai/src/rebuild/tests.rs
index 69698f3a..ec9109d7 100644
--- a/crates/ai/src/rebuild/tests.rs
+++ b/crates/ai/src/rebuild/tests.rs
@@ -325,9 +325,13 @@ fn a_cut_off_turn_is_resumed_unless_the_person_must_act() {
     for resumable in ["Claude Code took longer than 86400 s and was stopped.", "API Error: 529 overloaded", "connection reset by peer"] {
         assert!(worth_retrying(resumable), "{resumable}");
     }
-    for needs_you in
-        ["Not logged in. Please run /login", "Your credit balance is too low", "Claude Code is not installed", "Invalid API key · Please run /login"]
-    {
+    for needs_you in [
+        "Not logged in. Please run /login",
+        "Your credit balance is too low",
+        "Claude Code is not installed",
+        "Invalid API key · Please run /login",
+        "Claude Code 2.1.81 does not support this model",
+    ] {
         assert!(!worth_retrying(needs_you), "{needs_you}");
     }
     assert_eq!(RunOptions::default().max_rounds, 6, "room to keep fixing until it works");