diff --git a/tests/test_error_classifier.py b/tests/test_error_classifier.py
new file mode 100644
index 000000000..c36eb5474
--- /dev/null
+++ b/tests/test_error_classifier.py
@@ -0,0 +1,55 @@
+"""
+Tests for error classification (#752).
+"""
+
+import pytest
+from tools.error_classifier import classify_error, ErrorCategory, ErrorClassification
+
+
+class TestErrorClassification:
+    def test_timeout_is_retryable(self):
+        err = Exception("Connection timed out")
+        result = classify_error(err)
+        assert result.category == ErrorCategory.RETRYABLE
+        assert result.should_retry is True
+    
+    def test_429_is_retryable(self):
+        err = Exception("Rate limit exceeded")
+        result = classify_error(err, response_code=429)
+        assert result.category == ErrorCategory.RETRYABLE
+        assert result.should_retry is True
+    
+    def test_404_is_permanent(self):
+        err = Exception("Not found")
+        result = classify_error(err, response_code=404)
+        assert result.category == ErrorCategory.PERMANENT
+        assert result.should_retry is False
+    
+    def test_403_is_permanent(self):
+        err = Exception("Forbidden")
+        result = classify_error(err, response_code=403)
+        assert result.category == ErrorCategory.PERMANENT
+        assert result.should_retry is False
+    
+    def test_500_is_retryable(self):
+        err = Exception("Internal server error")
+        result = classify_error(err, response_code=500)
+        assert result.category == ErrorCategory.RETRYABLE
+        assert result.should_retry is True
+    
+    def test_schema_error_is_permanent(self):
+        err = Exception("Schema validation failed")
+        result = classify_error(err)
+        assert result.category == ErrorCategory.PERMANENT
+        assert result.should_retry is False
+    
+    def test_unknown_is_retryable_with_caution(self):
+        err = Exception("Some unknown error")
+        result = classify_error(err)
+        assert result.category == ErrorCategory.UNKNOWN
+        assert result.should_retry is True
+        assert result.max_retries == 1
+
+
+if __name__ == "__main__":
+    pytest.main([__file__])
diff --git a/tools/error_classifier.py b/tools/error_classifier.py
new file mode 100644
index 000000000..d400fb2fa
--- /dev/null
+++ b/tools/error_classifier.py
@@ -0,0 +1,233 @@
+"""
+Tool Error Classification — Retryable vs Permanent.
+
+Classifies tool errors so the agent retries transient errors
+but gives up on permanent ones immediately.
+"""
+
+import logging
+import re
+import time
+from dataclasses import dataclass
+from enum import Enum
+from typing import Optional, Dict, Any
+
+logger = logging.getLogger(__name__)
+
+
+class ErrorCategory(Enum):
+    """Error category classification."""
+    RETRYABLE = "retryable"
+    PERMANENT = "permanent"
+    UNKNOWN = "unknown"
+
+
+@dataclass
+class ErrorClassification:
+    """Result of error classification."""
+    category: ErrorCategory
+    reason: str
+    should_retry: bool
+    max_retries: int
+    backoff_seconds: float
+    error_code: Optional[int] = None
+    error_type: Optional[str] = None
+
+
+# Retryable error patterns
+_RETRYABLE_PATTERNS = [
+    # HTTP status codes
+    (r"\b429\b", "rate limit", 3, 5.0),
+    (r"\b500\b", "server error", 3, 2.0),
+    (r"\b502\b", "bad gateway", 3, 2.0),
+    (r"\b503\b", "service unavailable", 3, 5.0),
+    (r"\b504\b", "gateway timeout", 3, 5.0),
+    
+    # Timeout patterns
+    (r"timeout", "timeout", 3, 2.0),
+    (r"timed out", "timeout", 3, 2.0),
+    (r"TimeoutExpired", "timeout", 3, 2.0),
+    
+    # Connection errors
+    (r"connection refused", "connection refused", 2, 5.0),
+    (r"connection reset", "connection reset", 2, 2.0),
+    (r"network unreachable", "network unreachable", 2, 10.0),
+    (r"DNS", "DNS error", 2, 5.0),
+    
+    # Transient errors
+    (r"temporary", "temporary error", 2, 2.0),
+    (r"transient", "transient error", 2, 2.0),
+    (r"retry", "retryable", 2, 2.0),
+]
+
+# Permanent error patterns
+_PERMANENT_PATTERNS = [
+    # HTTP status codes
+    (r"\b400\b", "bad request", "Invalid request parameters"),
+    (r"\b401\b", "unauthorized", "Authentication failed"),
+    (r"\b403\b", "forbidden", "Access denied"),
+    (r"\b404\b", "not found", "Resource not found"),
+    (r"\b405\b", "method not allowed", "HTTP method not supported"),
+    (r"\b409\b", "conflict", "Resource conflict"),
+    (r"\b422\b", "unprocessable", "Validation error"),
+    
+    # Schema/validation errors
+    (r"schema", "schema error", "Invalid data schema"),
+    (r"validation", "validation error", "Input validation failed"),
+    (r"invalid.*json", "JSON error", "Invalid JSON"),
+    (r"JSONDecodeError", "JSON error", "JSON parsing failed"),
+    
+    # Authentication
+    (r"api.?key", "API key error", "Invalid or missing API key"),
+    (r"token.*expir", "token expired", "Authentication token expired"),
+    (r"permission", "permission error", "Insufficient permissions"),
+    
+    # Not found patterns
+    (r"not found", "not found", "Resource does not exist"),
+    (r"does not exist", "not found", "Resource does not exist"),
+    (r"no such file", "file not found", "File does not exist"),
+    
+    # Quota/billing
+    (r"quota", "quota exceeded", "Usage quota exceeded"),
+    (r"billing", "billing error", "Billing issue"),
+    (r"insufficient.*funds", "billing error", "Insufficient funds"),
+]
+
+
+def classify_error(error: Exception, response_code: Optional[int] = None) -> ErrorClassification:
+    """
+    Classify an error as retryable or permanent.
+    
+    Args:
+        error: The exception that occurred
+        response_code: HTTP response code if available
+        
+    Returns:
+        ErrorClassification with retry guidance
+    """
+    error_str = str(error).lower()
+    error_type = type(error).__name__
+    
+    # Check response code first
+    if response_code:
+        if response_code in (429, 500, 502, 503, 504):
+            return ErrorClassification(
+                category=ErrorCategory.RETRYABLE,
+                reason=f"HTTP {response_code} - transient server error",
+                should_retry=True,
+                max_retries=3,
+                backoff_seconds=5.0 if response_code == 429 else 2.0,
+                error_code=response_code,
+                error_type=error_type,
+            )
+        elif response_code in (400, 401, 403, 404, 405, 409, 422):
+            return ErrorClassification(
+                category=ErrorCategory.PERMANENT,
+                reason=f"HTTP {response_code} - client error",
+                should_retry=False,
+                max_retries=0,
+                backoff_seconds=0,
+                error_code=response_code,
+                error_type=error_type,
+            )
+    
+    # Check retryable patterns
+    for pattern, reason, max_retries, backoff in _RETRYABLE_PATTERNS:
+        if re.search(pattern, error_str, re.IGNORECASE):
+            return ErrorClassification(
+                category=ErrorCategory.RETRYABLE,
+                reason=reason,
+                should_retry=True,
+                max_retries=max_retries,
+                backoff_seconds=backoff,
+                error_type=error_type,
+            )
+    
+    # Check permanent patterns
+    for pattern, error_code, reason in _PERMANENT_PATTERNS:
+        if re.search(pattern, error_str, re.IGNORECASE):
+            return ErrorClassification(
+                category=ErrorCategory.PERMANENT,
+                reason=reason,
+                should_retry=False,
+                max_retries=0,
+                backoff_seconds=0,
+                error_type=error_type,
+            )
+    
+    # Default: unknown, treat as retryable with caution
+    return ErrorClassification(
+        category=ErrorCategory.UNKNOWN,
+        reason=f"Unknown error type: {error_type}",
+        should_retry=True,
+        max_retries=1,
+        backoff_seconds=1.0,
+        error_type=error_type,
+    )
+
+
+def execute_with_retry(
+    func,
+    *args,
+    max_retries: int = 3,
+    backoff_base: float = 1.0,
+    **kwargs,
+) -> Any:
+    """
+    Execute a function with automatic retry on retryable errors.
+    
+    Args:
+        func: Function to execute
+        *args: Function arguments
+        max_retries: Maximum retry attempts
+        backoff_base: Base backoff time in seconds
+        **kwargs: Function keyword arguments
+        
+    Returns:
+        Function result
+        
+    Raises:
+        Exception: If permanent error or max retries exceeded
+    """
+    last_error = None
+    
+    for attempt in range(max_retries + 1):
+        try:
+            return func(*args, **kwargs)
+        except Exception as e:
+            last_error = e
+            
+            # Classify the error
+            classification = classify_error(e)
+            
+            logger.info(
+                "Attempt %d/%d failed: %s (%s, retryable: %s)",
+                attempt + 1, max_retries + 1,
+                classification.reason,
+                classification.category.value,
+                classification.should_retry,
+            )
+            
+            # If permanent error, fail immediately
+            if not classification.should_retry:
+                logger.error("Permanent error: %s", classification.reason)
+                raise
+            
+            # If this was the last attempt, raise
+            if attempt >= max_retries:
+                logger.error("Max retries (%d) exceeded", max_retries)
+                raise
+            
+            # Calculate backoff with exponential increase
+            backoff = backoff_base * (2 ** attempt)
+            logger.info("Retrying in %.1fs...", backoff)
+            time.sleep(backoff)
+    
+    # Should not reach here, but just in case
+    raise last_error
+
+
+def format_error_report(classification: ErrorClassification) -> str:
+    """Format error classification as a report string."""
+    icon = "🔄" if classification.should_retry else "❌"
+    return f"{icon} {classification.category.value}: {classification.reason}"