diff --git a/CONTRIBUTING.md b/CONTRIBUTING.md
index 433f10d1f..cd4922875 100644
--- a/CONTRIBUTING.md
+++ b/CONTRIBUTING.md
@@ -155,7 +155,7 @@ hermes-agent/
 │   ├── skill_tools.py            # Skill search, load, manage
 │   └── environments/             # Terminal execution backends
 │       ├── base.py                   # BaseEnvironment ABC
-│       ├── local.py, docker.py, ssh.py, singularity.py, modal.py
+│       ├── local.py, docker.py, ssh.py, singularity.py, modal.py, daytona.py
 │
 ├── gateway/                  # Messaging gateway
 │   ├── run.py                    # GatewayRunner — platform lifecycle, message routing, cron
diff --git a/README.md b/README.md
index d19f455b3..831c40bb8 100644
--- a/README.md
+++ b/README.md
@@ -21,7 +21,7 @@ Use any model you want — [Nous Portal](https://portal.nousresearch.com), [Open
 <tr><td><b>Grows the longer it runs</b></td><td>Persistent memory across sessions. When it solves a hard problem, it writes a skill document for next time. Skills are searchable, shareable, and compatible with the <a href="https://agentskills.io">agentskills.io</a> open standard.</td></tr>
 <tr><td><b>Scheduled automations</b></td><td>Built-in cron scheduler with delivery to any platform. Daily reports, nightly backups, weekly audits — all in natural language, running unattended.</td></tr>
 <tr><td><b>Delegates and parallelizes</b></td><td>Spawn isolated subagents for parallel workstreams. Write Python scripts that call tools via RPC, collapsing multi-step pipelines into zero-context-cost turns.</td></tr>
-<tr><td><b>Real sandboxing</b></td><td>Five terminal backends — local, Docker, SSH, Singularity, and Modal — with persistent workspaces and container security hardening.</td></tr>
+<tr><td><b>Real sandboxing</b></td><td>Six terminal backends — local, Docker, SSH, Singularity, Modal, and Daytona — with persistent workspaces and container security hardening.</td></tr>
 <tr><td><b>Research-ready</b></td><td>Batch trajectory generation, Atropos RL environments, trajectory compression for training the next generation of tool-calling models.</td></tr>
 </table>
 
diff --git a/cli-config.yaml.example b/cli-config.yaml.example
index 0ca406358..c9d2c2e50 100644
--- a/cli-config.yaml.example
+++ b/cli-config.yaml.example
@@ -116,8 +116,23 @@ terminal:
 #   timeout: 180
 #   lifetime_seconds: 300
 #   modal_image: "nikolaik/python-nodejs:python3.11-nodejs20"
+
+# -----------------------------------------------------------------------------
+# OPTION 6: Daytona cloud execution
+# Commands run in Daytona cloud sandboxes
+# Great for: Cloud dev environments, persistent workspaces, team collaboration
+# Requires: pip install daytona, DAYTONA_API_KEY env var
+# -----------------------------------------------------------------------------
+# terminal:
+#   backend: "daytona"
+#   cwd: "~"
+#   timeout: 180
+#   lifetime_seconds: 300
+#   daytona_image: "nikolaik/python-nodejs:python3.11-nodejs20"
+#   container_disk: 10240          # Daytona max is 10GB per sandbox
+
 #
-# --- Container resource limits (docker, singularity, modal -- ignored for local/ssh) ---
+# --- Container resource limits (docker, singularity, modal, daytona -- ignored for local/ssh) ---
 # These settings apply to all container backends. They control the resources
 # allocated to the sandbox and whether its filesystem persists across sessions.
   container_cpu: 1              # CPU cores
diff --git a/cli.py b/cli.py
index 5aa87d413..850db4102 100755
--- a/cli.py
+++ b/cli.py
@@ -158,6 +158,7 @@ def load_cli_config() -> Dict[str, Any]:
             "docker_image": "python:3.11",
             "singularity_image": "docker://python:3.11",
             "modal_image": "python:3.11",
+            "daytona_image": "nikolaik/python-nodejs:python3.11-nodejs20",
         },
         "browser": {
             "inactivity_timeout": 120,  # Auto-cleanup inactive browser sessions after 2 min
@@ -284,12 +285,13 @@ def load_cli_config() -> Dict[str, Any]:
         "docker_image": "TERMINAL_DOCKER_IMAGE",
         "singularity_image": "TERMINAL_SINGULARITY_IMAGE",
         "modal_image": "TERMINAL_MODAL_IMAGE",
+        "daytona_image": "TERMINAL_DAYTONA_IMAGE",
         # SSH config
         "ssh_host": "TERMINAL_SSH_HOST",
         "ssh_user": "TERMINAL_SSH_USER",
         "ssh_port": "TERMINAL_SSH_PORT",
         "ssh_key": "TERMINAL_SSH_KEY",
-        # Container resource config (docker, singularity, modal -- ignored for local/ssh)
+        # Container resource config (docker, singularity, modal, daytona -- ignored for local/ssh)
         "container_cpu": "TERMINAL_CONTAINER_CPU",
         "container_memory": "TERMINAL_CONTAINER_MEMORY",
         "container_disk": "TERMINAL_CONTAINER_DISK",
diff --git a/gateway/run.py b/gateway/run.py
index 3af04f1ea..44ac37507 100644
--- a/gateway/run.py
+++ b/gateway/run.py
@@ -66,6 +66,7 @@ if _config_path.exists():
                 "docker_image": "TERMINAL_DOCKER_IMAGE",
                 "singularity_image": "TERMINAL_SINGULARITY_IMAGE",
                 "modal_image": "TERMINAL_MODAL_IMAGE",
+                "daytona_image": "TERMINAL_DAYTONA_IMAGE",
                 "ssh_host": "TERMINAL_SSH_HOST",
                 "ssh_user": "TERMINAL_SSH_USER",
                 "ssh_port": "TERMINAL_SSH_PORT",
diff --git a/hermes_cli/config.py b/hermes_cli/config.py
index 7e444cb9a..042a4ad28 100644
--- a/hermes_cli/config.py
+++ b/hermes_cli/config.py
@@ -71,7 +71,8 @@ DEFAULT_CONFIG = {
         "docker_image": "nikolaik/python-nodejs:python3.11-nodejs20",
         "singularity_image": "docker://nikolaik/python-nodejs:python3.11-nodejs20",
         "modal_image": "nikolaik/python-nodejs:python3.11-nodejs20",
-        # Container resource limits (docker, singularity, modal — ignored for local/ssh)
+        "daytona_image": "nikolaik/python-nodejs:python3.11-nodejs20",
+        # Container resource limits (docker, singularity, modal, daytona — ignored for local/ssh)
         "container_cpu": 1,
         "container_memory": 5120,       # MB (default 5GB)
         "container_disk": 51200,        # MB (default 50GB)
@@ -761,6 +762,10 @@ def show_config():
         print(f"  Modal image:  {terminal.get('modal_image', 'python:3.11')}")
         modal_token = get_env_value('MODAL_TOKEN_ID')
         print(f"  Modal token:  {'configured' if modal_token else '(not set)'}")
+    elif terminal.get('backend') == 'daytona':
+        print(f"  Daytona image: {terminal.get('daytona_image', 'nikolaik/python-nodejs:python3.11-nodejs20')}")
+        daytona_key = get_env_value('DAYTONA_API_KEY')
+        print(f"  API key:      {'configured' if daytona_key else '(not set)'}")
     elif terminal.get('backend') == 'ssh':
         ssh_host = get_env_value('TERMINAL_SSH_HOST')
         ssh_user = get_env_value('TERMINAL_SSH_USER')
@@ -886,6 +891,7 @@ def set_config_value(key: str, value: str):
         "terminal.docker_image": "TERMINAL_DOCKER_IMAGE",
         "terminal.singularity_image": "TERMINAL_SINGULARITY_IMAGE",
         "terminal.modal_image": "TERMINAL_MODAL_IMAGE",
+        "terminal.daytona_image": "TERMINAL_DAYTONA_IMAGE",
         "terminal.cwd": "TERMINAL_CWD",
         "terminal.timeout": "TERMINAL_TIMEOUT",
     }
diff --git a/hermes_cli/doctor.py b/hermes_cli/doctor.py
index 031c6eaf8..36795c016 100644
--- a/hermes_cli/doctor.py
+++ b/hermes_cli/doctor.py
@@ -355,6 +355,21 @@ def run_doctor(args):
             check_fail("TERMINAL_SSH_HOST not set", "(required for TERMINAL_ENV=ssh)")
             issues.append("Set TERMINAL_SSH_HOST in .env")
     
+    # Daytona (if using daytona backend)
+    if terminal_env == "daytona":
+        daytona_key = os.getenv("DAYTONA_API_KEY")
+        if daytona_key:
+            check_ok("Daytona API key", "(configured)")
+        else:
+            check_fail("DAYTONA_API_KEY not set", "(required for TERMINAL_ENV=daytona)")
+            issues.append("Set DAYTONA_API_KEY environment variable")
+        try:
+            from daytona import Daytona
+            check_ok("daytona SDK", "(installed)")
+        except ImportError:
+            check_fail("daytona SDK not installed", "(pip install daytona)")
+            issues.append("Install daytona SDK: pip install daytona")
+
     # Node.js + agent-browser (for browser automation tools)
     if shutil.which("node"):
         check_ok("Node.js")
diff --git a/hermes_cli/setup.py b/hermes_cli/setup.py
index 8a1dc78d1..a312a20fd 100644
--- a/hermes_cli/setup.py
+++ b/hermes_cli/setup.py
@@ -980,19 +980,20 @@ def run_setup_wizard(args):
     
     terminal_choices.extend([
         "Modal (cloud execution, GPU access, serverless)",
+        "Daytona (cloud sandboxes, persistent workspaces)",
         "SSH (run commands on a remote server)",
         f"Keep current ({current_backend})"
     ])
     
     # Build index map based on available choices
     if is_linux:
-        backend_to_idx = {'local': 0, 'docker': 1, 'singularity': 2, 'modal': 3, 'ssh': 4}
-        idx_to_backend = {0: 'local', 1: 'docker', 2: 'singularity', 3: 'modal', 4: 'ssh'}
-        keep_current_idx = 5
+        backend_to_idx = {'local': 0, 'docker': 1, 'singularity': 2, 'modal': 3, 'daytona': 4, 'ssh': 5}
+        idx_to_backend = {0: 'local', 1: 'docker', 2: 'singularity', 3: 'modal', 4: 'daytona', 5: 'ssh'}
+        keep_current_idx = 6
     else:
-        backend_to_idx = {'local': 0, 'docker': 1, 'modal': 2, 'ssh': 3}
-        idx_to_backend = {0: 'local', 1: 'docker', 2: 'modal', 3: 'ssh'}
-        keep_current_idx = 4
+        backend_to_idx = {'local': 0, 'docker': 1, 'modal': 2, 'daytona': 3, 'ssh': 4}
+        idx_to_backend = {0: 'local', 1: 'docker', 2: 'modal', 3: 'daytona', 4: 'ssh'}
+        keep_current_idx = 5
         if current_backend == 'singularity':
             print_warning("Singularity is only available on Linux - please select a different backend")
     
@@ -1067,7 +1068,7 @@ def run_setup_wizard(args):
         
         print()
         print_info("Note: Container resource settings (CPU, memory, disk, persistence)")
-        print_info("are in your config but only apply to Docker/Singularity/Modal backends.")
+        print_info("are in your config but only apply to Docker/Singularity/Modal/Daytona backends.")
 
         if prompt_yes_no("  Enable sudo support? (allows agent to run sudo commands)", False):
             print_warning("  SECURITY WARNING: Sudo password will be stored in plaintext")
@@ -1151,7 +1152,52 @@ def run_setup_wizard(args):
         
         _prompt_container_resources(config)
         print_success("Terminal set to Modal")
-    
+
+    elif selected_backend == 'daytona':
+        config.setdefault('terminal', {})['backend'] = 'daytona'
+        default_daytona = config.get('terminal', {}).get('daytona_image', 'nikolaik/python-nodejs:python3.11-nodejs20')
+        print_info("Daytona Cloud Configuration:")
+        print_info("Get your API key at: https://app.daytona.io/dashboard/keys")
+
+        # Check if daytona SDK is installed
+        try:
+            from daytona import Daytona
+            print_info("daytona SDK: installed ✓")
+        except ImportError:
+            print_info("Installing required package: daytona...")
+            import subprocess
+            import shutil
+            uv_bin = shutil.which("uv")
+            if uv_bin:
+                result = subprocess.run(
+                    [uv_bin, "pip", "install", "daytona"],
+                    capture_output=True, text=True
+                )
+            else:
+                result = subprocess.run(
+                    [sys.executable, "-m", "pip", "install", "daytona"],
+                    capture_output=True, text=True
+                )
+            if result.returncode == 0:
+                print_success("daytona SDK installed")
+            else:
+                print_warning("Failed to install daytona SDK — install manually:")
+                print_info('  pip install daytona')
+
+        daytona_image = prompt("  Container image", default_daytona)
+        config['terminal']['daytona_image'] = daytona_image
+
+        current_key = get_env_value('DAYTONA_API_KEY')
+        if current_key:
+            print_info(f"  API Key: {current_key[:8]}... (configured)")
+
+        api_key = prompt("  Daytona API key", current_key or "", password=True)
+        if api_key:
+            save_env_value("DAYTONA_API_KEY", api_key)
+
+        _prompt_container_resources(config)
+        print_success("Terminal set to Daytona")
+
     elif selected_backend == 'ssh':
         config.setdefault('terminal', {})['backend'] = 'ssh'
         print_info("SSH Remote Execution Configuration:")
@@ -1181,7 +1227,7 @@ def run_setup_wizard(args):
         
         print()
         print_info("Note: Container resource settings (CPU, memory, disk, persistence)")
-        print_info("are in your config but only apply to Docker/Singularity/Modal backends.")
+        print_info("are in your config but only apply to Docker/Singularity/Modal/Daytona backends.")
         print_success("Terminal set to SSH")
     # else: Keep current (selected_backend is None)
     
@@ -1192,6 +1238,9 @@ def run_setup_wizard(args):
         docker_image = config.get('terminal', {}).get('docker_image')
         if docker_image:
             save_env_value("TERMINAL_DOCKER_IMAGE", docker_image)
+        daytona_image = config.get('terminal', {}).get('daytona_image')
+        if daytona_image:
+            save_env_value("TERMINAL_DAYTONA_IMAGE", daytona_image)
     
     # =========================================================================
     # Step 5: Agent Settings
diff --git a/hermes_cli/status.py b/hermes_cli/status.py
index f1d3a7edf..48c962def 100644
--- a/hermes_cli/status.py
+++ b/hermes_cli/status.py
@@ -163,6 +163,9 @@ def show_status(args):
     elif terminal_env == "docker":
         docker_image = os.getenv("TERMINAL_DOCKER_IMAGE", "python:3.11-slim")
         print(f"  Docker Image: {docker_image}")
+    elif terminal_env == "daytona":
+        daytona_image = os.getenv("TERMINAL_DAYTONA_IMAGE", "nikolaik/python-nodejs:python3.11-nodejs20")
+        print(f"  Daytona Image: {daytona_image}")
     
     sudo_password = os.getenv("SUDO_PASSWORD", "")
     print(f"  Sudo:         {check_mark(bool(sudo_password))} {'enabled' if sudo_password else 'disabled'}")
diff --git a/pyproject.toml b/pyproject.toml
index de4c50ea8..38a6347ac 100644
--- a/pyproject.toml
+++ b/pyproject.toml
@@ -39,6 +39,7 @@ dependencies = [
 
 [project.optional-dependencies]
 modal = ["swe-rex[modal]>=1.4.0"]
+daytona = ["daytona>=0.148.0"]
 dev = ["pytest", "pytest-asyncio"]
 messaging = ["python-telegram-bot>=20.0", "discord.py>=2.0", "aiohttp>=3.9.0", "slack-bolt>=1.18.0", "slack-sdk>=3.27.0"]
 cron = ["croniter"]
@@ -51,6 +52,7 @@ mcp = ["mcp>=1.2.0"]
 homeassistant = ["aiohttp>=3.9.0"]
 all = [
   "hermes-agent[modal]",
+  "hermes-agent[daytona]",
   "hermes-agent[messaging]",
   "hermes-agent[cron]",
   "hermes-agent[cli]",
diff --git a/tests/integration/test_daytona_terminal.py b/tests/integration/test_daytona_terminal.py
new file mode 100644
index 000000000..b8b72fb26
--- /dev/null
+++ b/tests/integration/test_daytona_terminal.py
@@ -0,0 +1,123 @@
+"""Integration tests for the Daytona terminal backend.
+
+Requires DAYTONA_API_KEY to be set. Run with:
+    TERMINAL_ENV=daytona pytest tests/integration/test_daytona_terminal.py -v
+"""
+
+import json
+import os
+import sys
+from pathlib import Path
+
+import pytest
+
+pytestmark = pytest.mark.integration
+
+# Skip entire module if no API key
+if not os.getenv("DAYTONA_API_KEY"):
+    pytest.skip("DAYTONA_API_KEY not set", allow_module_level=True)
+
+# Import terminal_tool via importlib to avoid tools/__init__.py side effects
+import importlib.util
+
+parent_dir = Path(__file__).parent.parent.parent
+sys.path.insert(0, str(parent_dir))
+
+spec = importlib.util.spec_from_file_location(
+    "terminal_tool", parent_dir / "tools" / "terminal_tool.py"
+)
+terminal_module = importlib.util.module_from_spec(spec)
+spec.loader.exec_module(terminal_module)
+
+terminal_tool = terminal_module.terminal_tool
+cleanup_vm = terminal_module.cleanup_vm
+
+
+@pytest.fixture(autouse=True)
+def _force_daytona(monkeypatch):
+    monkeypatch.setenv("TERMINAL_ENV", "daytona")
+    monkeypatch.setenv("TERMINAL_CONTAINER_DISK", "10240")
+    monkeypatch.setenv("TERMINAL_CONTAINER_PERSISTENT", "false")
+
+
+@pytest.fixture()
+def task_id(request):
+    """Provide a unique task_id and clean up the sandbox after the test."""
+    tid = f"daytona_test_{request.node.name}"
+    yield tid
+    cleanup_vm(tid)
+
+
+def _run(command, task_id, **kwargs):
+    result = terminal_tool(command, task_id=task_id, **kwargs)
+    return json.loads(result)
+
+
+class TestDaytonaBasic:
+    def test_echo(self, task_id):
+        r = _run("echo 'Hello from Daytona!'", task_id)
+        assert r["exit_code"] == 0
+        assert "Hello from Daytona!" in r["output"]
+
+    def test_python_version(self, task_id):
+        r = _run("python3 --version", task_id)
+        assert r["exit_code"] == 0
+        assert "Python" in r["output"]
+
+    def test_nonzero_exit(self, task_id):
+        r = _run("exit 42", task_id)
+        assert r["exit_code"] == 42
+
+    def test_os_info(self, task_id):
+        r = _run("uname -a", task_id)
+        assert r["exit_code"] == 0
+        assert "Linux" in r["output"]
+
+
+class TestDaytonaFilesystem:
+    def test_write_and_read_file(self, task_id):
+        _run("echo 'test content' > /tmp/daytona_test.txt", task_id)
+        r = _run("cat /tmp/daytona_test.txt", task_id)
+        assert r["exit_code"] == 0
+        assert "test content" in r["output"]
+
+    def test_persistence_within_session(self, task_id):
+        _run("pip install cowsay 2>/dev/null", task_id, timeout=120)
+        r = _run('python3 -c "import cowsay; print(cowsay.__file__)"', task_id)
+        assert r["exit_code"] == 0
+        assert "cowsay" in r["output"]
+
+
+class TestDaytonaPersistence:
+    def test_filesystem_survives_stop_and_resume(self):
+        """Write a file, stop the sandbox, resume it, assert the file persists."""
+        task = "daytona_test_persist"
+        try:
+            # Enable persistence for this test
+            os.environ["TERMINAL_CONTAINER_PERSISTENT"] = "true"
+
+            # Write a marker file and stop the sandbox
+            _run("echo 'survive' > /tmp/persist_test.txt", task)
+            cleanup_vm(task)  # stops (not deletes) because persistent=true
+
+            # Resume with the same task_id — file should still exist
+            r = _run("cat /tmp/persist_test.txt", task)
+            assert r["exit_code"] == 0
+            assert "survive" in r["output"]
+        finally:
+            # Force-delete so the sandbox doesn't leak
+            os.environ["TERMINAL_CONTAINER_PERSISTENT"] = "false"
+            cleanup_vm(task)
+
+
+class TestDaytonaIsolation:
+    def test_different_tasks_isolated(self):
+        task_a = "daytona_test_iso_a"
+        task_b = "daytona_test_iso_b"
+        try:
+            _run("echo 'secret' > /tmp/isolated.txt", task_a)
+            r = _run("cat /tmp/isolated.txt 2>&1 || echo NOT_FOUND", task_b)
+            assert "secret" not in r["output"] or "NOT_FOUND" in r["output"]
+        finally:
+            cleanup_vm(task_a)
+            cleanup_vm(task_b)
diff --git a/tests/tools/test_daytona_environment.py b/tests/tools/test_daytona_environment.py
new file mode 100644
index 000000000..6d32f7441
--- /dev/null
+++ b/tests/tools/test_daytona_environment.py
@@ -0,0 +1,381 @@
+"""Unit tests for the Daytona cloud sandbox environment backend."""
+
+import threading
+from types import SimpleNamespace
+from unittest.mock import MagicMock, patch, PropertyMock
+
+import pytest
+
+
+# ---------------------------------------------------------------------------
+# Helpers to build mock Daytona SDK objects
+# ---------------------------------------------------------------------------
+
+def _make_exec_response(result="", exit_code=0):
+    return SimpleNamespace(result=result, exit_code=exit_code)
+
+
+def _make_sandbox(sandbox_id="sb-123", state="started"):
+    sb = MagicMock()
+    sb.id = sandbox_id
+    sb.state = state
+    sb.process.exec.return_value = _make_exec_response()
+    return sb
+
+
+def _patch_daytona_imports(monkeypatch):
+    """Patch the daytona SDK so DaytonaEnvironment can be imported without it."""
+    import types as _types
+
+    import enum
+
+    class _SandboxState(str, enum.Enum):
+        STARTED = "started"
+        STOPPED = "stopped"
+        ARCHIVED = "archived"
+        ERROR = "error"
+
+    daytona_mod = _types.ModuleType("daytona")
+    daytona_mod.Daytona = MagicMock
+    daytona_mod.CreateSandboxFromImageParams = MagicMock
+    daytona_mod.DaytonaError = type("DaytonaError", (Exception,), {})
+    daytona_mod.Resources = MagicMock(name="Resources")
+    daytona_mod.SandboxState = _SandboxState
+
+    monkeypatch.setitem(__import__("sys").modules, "daytona", daytona_mod)
+    return daytona_mod
+
+
+# ---------------------------------------------------------------------------
+# Fixtures
+# ---------------------------------------------------------------------------
+
+@pytest.fixture()
+def daytona_sdk(monkeypatch):
+    """Provide a mock daytona SDK module and return it for assertions."""
+    return _patch_daytona_imports(monkeypatch)
+
+
+@pytest.fixture()
+def make_env(daytona_sdk, monkeypatch):
+    """Factory that creates a DaytonaEnvironment with a mocked SDK."""
+    # Prevent is_interrupted from interfering
+    monkeypatch.setattr("tools.interrupt.is_interrupted", lambda: False)
+
+    def _factory(
+        sandbox=None,
+        find_one_side_effect=None,
+        home_dir="/root",
+        persistent=True,
+        **kwargs,
+    ):
+        sandbox = sandbox or _make_sandbox()
+        # Mock the $HOME detection
+        sandbox.process.exec.return_value = _make_exec_response(result=home_dir)
+
+        mock_client = MagicMock()
+        mock_client.create.return_value = sandbox
+
+        if find_one_side_effect is not None:
+            mock_client.find_one.side_effect = find_one_side_effect
+        else:
+            # Default: no existing sandbox found
+            mock_client.find_one.side_effect = daytona_sdk.DaytonaError("not found")
+
+        daytona_sdk.Daytona = MagicMock(return_value=mock_client)
+
+        from tools.environments.daytona import DaytonaEnvironment
+
+        kwargs.setdefault("disk", 10240)
+        env = DaytonaEnvironment(
+            image="test-image:latest",
+            persistent_filesystem=persistent,
+            **kwargs,
+        )
+        env._mock_client = mock_client  # expose for assertions
+        return env
+
+    return _factory
+
+
+# ---------------------------------------------------------------------------
+# Constructor / cwd resolution
+# ---------------------------------------------------------------------------
+
+class TestCwdResolution:
+    def test_default_cwd_resolves_home(self, make_env):
+        env = make_env(home_dir="/home/testuser")
+        assert env.cwd == "/home/testuser"
+
+    def test_tilde_cwd_resolves_home(self, make_env):
+        env = make_env(cwd="~", home_dir="/home/testuser")
+        assert env.cwd == "/home/testuser"
+
+    def test_explicit_cwd_not_overridden(self, make_env):
+        env = make_env(cwd="/workspace", home_dir="/root")
+        assert env.cwd == "/workspace"
+
+    def test_home_detection_failure_keeps_default_cwd(self, make_env):
+        sb = _make_sandbox()
+        sb.process.exec.side_effect = RuntimeError("exec failed")
+        env = make_env(sandbox=sb)
+        assert env.cwd == "/home/daytona"  # keeps constructor default
+
+    def test_empty_home_keeps_default_cwd(self, make_env):
+        env = make_env(home_dir="")
+        assert env.cwd == "/home/daytona"  # keeps constructor default
+
+
+# ---------------------------------------------------------------------------
+# Sandbox persistence / resume
+# ---------------------------------------------------------------------------
+
+class TestPersistence:
+    def test_persistent_resumes_existing_sandbox(self, make_env):
+        existing = _make_sandbox(sandbox_id="sb-existing")
+        existing.process.exec.return_value = _make_exec_response(result="/root")
+        env = make_env(find_one_side_effect=lambda **kw: existing, persistent=True)
+        existing.start.assert_called_once()
+        # Should NOT have called create since find_one succeeded
+        env._mock_client.create.assert_not_called()
+
+    def test_persistent_creates_new_when_none_found(self, make_env, daytona_sdk):
+        env = make_env(
+            find_one_side_effect=daytona_sdk.DaytonaError("not found"),
+            persistent=True,
+        )
+        env._mock_client.create.assert_called_once()
+
+    def test_non_persistent_skips_find_one(self, make_env):
+        env = make_env(persistent=False)
+        env._mock_client.find_one.assert_not_called()
+        env._mock_client.create.assert_called_once()
+
+
+# ---------------------------------------------------------------------------
+# Cleanup
+# ---------------------------------------------------------------------------
+
+class TestCleanup:
+    def test_persistent_cleanup_stops_sandbox(self, make_env):
+        env = make_env(persistent=True)
+        sb = env._sandbox
+        env.cleanup()
+        sb.stop.assert_called_once()
+
+    def test_non_persistent_cleanup_deletes_sandbox(self, make_env):
+        env = make_env(persistent=False)
+        sb = env._sandbox
+        env.cleanup()
+        env._mock_client.delete.assert_called_once_with(sb)
+
+    def test_cleanup_idempotent(self, make_env):
+        env = make_env(persistent=True)
+        env.cleanup()
+        env.cleanup()  # should not raise
+
+    def test_cleanup_swallows_errors(self, make_env):
+        env = make_env(persistent=True)
+        env._sandbox.stop.side_effect = RuntimeError("stop failed")
+        env.cleanup()  # should not raise
+        assert env._sandbox is None
+
+
+# ---------------------------------------------------------------------------
+# Execute
+# ---------------------------------------------------------------------------
+
+class TestExecute:
+    def test_basic_command(self, make_env):
+        sb = _make_sandbox()
+        # First call: $HOME detection; subsequent calls: actual commands
+        sb.process.exec.side_effect = [
+            _make_exec_response(result="/root"),       # $HOME
+            _make_exec_response(result="hello", exit_code=0),  # actual cmd
+        ]
+        sb.state = "started"
+        env = make_env(sandbox=sb)
+
+        result = env.execute("echo hello")
+        assert result["output"] == "hello"
+        assert result["returncode"] == 0
+
+    def test_command_wrapped_with_shell_timeout(self, make_env):
+        sb = _make_sandbox()
+        sb.process.exec.side_effect = [
+            _make_exec_response(result="/root"),
+            _make_exec_response(result="ok", exit_code=0),
+        ]
+        sb.state = "started"
+        env = make_env(sandbox=sb, timeout=42)
+
+        env.execute("echo hello")
+        # The command sent to exec should be wrapped with `timeout N sh -c '...'`
+        call_args = sb.process.exec.call_args_list[-1]
+        cmd = call_args[0][0]
+        assert cmd.startswith("timeout 42 sh -c ")
+        # SDK timeout param should NOT be passed
+        assert "timeout" not in call_args[1]
+
+    def test_timeout_returns_exit_code_124(self, make_env):
+        """Shell timeout utility returns exit code 124."""
+        sb = _make_sandbox()
+        sb.process.exec.side_effect = [
+            _make_exec_response(result="/root"),
+            _make_exec_response(result="", exit_code=124),
+        ]
+        sb.state = "started"
+        env = make_env(sandbox=sb)
+
+        result = env.execute("sleep 300", timeout=5)
+        assert result["returncode"] == 124
+
+    def test_nonzero_exit_code(self, make_env):
+        sb = _make_sandbox()
+        sb.process.exec.side_effect = [
+            _make_exec_response(result="/root"),
+            _make_exec_response(result="not found", exit_code=127),
+        ]
+        sb.state = "started"
+        env = make_env(sandbox=sb)
+
+        result = env.execute("bad_cmd")
+        assert result["returncode"] == 127
+
+    def test_stdin_data_wraps_heredoc(self, make_env):
+        sb = _make_sandbox()
+        sb.process.exec.side_effect = [
+            _make_exec_response(result="/root"),
+            _make_exec_response(result="ok", exit_code=0),
+        ]
+        sb.state = "started"
+        env = make_env(sandbox=sb)
+
+        env.execute("python3", stdin_data="print('hi')")
+        # Check that the command passed to exec contains heredoc markers
+        # (single quotes get shell-escaped by shlex.quote, so check components)
+        call_args = sb.process.exec.call_args_list[-1]
+        cmd = call_args[0][0]
+        assert "HERMES_EOF_" in cmd
+        assert "print" in cmd
+        assert "hi" in cmd
+
+    def test_custom_cwd_passed_through(self, make_env):
+        sb = _make_sandbox()
+        sb.process.exec.side_effect = [
+            _make_exec_response(result="/root"),
+            _make_exec_response(result="/tmp", exit_code=0),
+        ]
+        sb.state = "started"
+        env = make_env(sandbox=sb)
+
+        env.execute("pwd", cwd="/tmp")
+        call_kwargs = sb.process.exec.call_args_list[-1][1]
+        assert call_kwargs["cwd"] == "/tmp"
+
+    def test_daytona_error_triggers_retry(self, make_env, daytona_sdk):
+        sb = _make_sandbox()
+        sb.state = "started"
+        sb.process.exec.side_effect = [
+            _make_exec_response(result="/root"),  # $HOME
+            daytona_sdk.DaytonaError("transient"),  # first attempt fails
+            _make_exec_response(result="ok", exit_code=0),  # retry succeeds
+        ]
+        env = make_env(sandbox=sb)
+
+        result = env.execute("echo retry")
+        assert result["output"] == "ok"
+        assert result["returncode"] == 0
+
+
+# ---------------------------------------------------------------------------
+# Resource conversion
+# ---------------------------------------------------------------------------
+
+class TestResourceConversion:
+    def _get_resources_kwargs(self, daytona_sdk):
+        return daytona_sdk.Resources.call_args.kwargs
+
+    def test_memory_converted_to_gib(self, make_env, daytona_sdk):
+        env = make_env(memory=5120)
+        assert self._get_resources_kwargs(daytona_sdk)["memory"] == 5
+
+    def test_disk_converted_to_gib(self, make_env, daytona_sdk):
+        env = make_env(disk=10240)
+        assert self._get_resources_kwargs(daytona_sdk)["disk"] == 10
+
+    def test_small_values_clamped_to_1(self, make_env, daytona_sdk):
+        env = make_env(memory=100, disk=100)
+        kw = self._get_resources_kwargs(daytona_sdk)
+        assert kw["memory"] == 1
+        assert kw["disk"] == 1
+
+
+# ---------------------------------------------------------------------------
+# Ensure sandbox ready
+# ---------------------------------------------------------------------------
+
+class TestInterrupt:
+    def test_interrupt_stops_sandbox_and_returns_130(self, make_env, monkeypatch):
+        sb = _make_sandbox()
+        sb.state = "started"
+        event = threading.Event()
+        calls = {"n": 0}
+
+        def exec_side_effect(*args, **kwargs):
+            calls["n"] += 1
+            if calls["n"] == 1:
+                return _make_exec_response(result="/root")  # $HOME detection
+            event.wait(timeout=5)  # simulate long-running command
+            return _make_exec_response(result="done", exit_code=0)
+
+        sb.process.exec.side_effect = exec_side_effect
+        env = make_env(sandbox=sb)
+
+        monkeypatch.setattr(
+            "tools.environments.daytona.is_interrupted", lambda: True
+        )
+        try:
+            result = env.execute("sleep 10")
+            assert result["returncode"] == 130
+            sb.stop.assert_called()
+        finally:
+            event.set()
+
+
+# ---------------------------------------------------------------------------
+# Retry exhaustion
+# ---------------------------------------------------------------------------
+
+class TestRetryExhausted:
+    def test_both_attempts_fail(self, make_env, daytona_sdk):
+        sb = _make_sandbox()
+        sb.state = "started"
+        sb.process.exec.side_effect = [
+            _make_exec_response(result="/root"),       # $HOME
+            daytona_sdk.DaytonaError("fail1"),         # first attempt
+            daytona_sdk.DaytonaError("fail2"),         # retry
+        ]
+        env = make_env(sandbox=sb)
+
+        result = env.execute("echo x")
+        assert result["returncode"] == 1
+        assert "Daytona execution error" in result["output"]
+
+
+# ---------------------------------------------------------------------------
+# Ensure sandbox ready
+# ---------------------------------------------------------------------------
+
+class TestEnsureSandboxReady:
+    def test_restarts_stopped_sandbox(self, make_env):
+        env = make_env()
+        env._sandbox.state = "stopped"
+        env._ensure_sandbox_ready()
+        env._sandbox.start.assert_called()
+
+    def test_no_restart_when_running(self, make_env):
+        env = make_env()
+        env._sandbox.state = "started"
+        env._ensure_sandbox_ready()
+        env._sandbox.start.assert_not_called()
diff --git a/tools/approval.py b/tools/approval.py
index f2356533f..cdf19e443 100644
--- a/tools/approval.py
+++ b/tools/approval.py
@@ -247,7 +247,7 @@ def check_dangerous_command(command: str, env_type: str,
     Returns:
         {"approved": True/False, "message": str or None, ...}
     """
-    if env_type in ("docker", "singularity", "modal"):
+    if env_type in ("docker", "singularity", "modal", "daytona"):
         return {"approved": True, "message": None}
 
     is_dangerous, pattern_key, description = detect_dangerous_command(command)
diff --git a/tools/environments/__init__.py b/tools/environments/__init__.py
index 42b49b6f2..7ffcce1c6 100644
--- a/tools/environments/__init__.py
+++ b/tools/environments/__init__.py
@@ -2,7 +2,7 @@
 
 Each backend provides the same interface (BaseEnvironment ABC) for running
 shell commands in a specific execution context: local, Docker, Singularity,
-SSH, or Modal.
+SSH, Modal, or Daytona.
 
 The terminal_tool.py factory (_create_environment) selects the backend
 based on the TERMINAL_ENV configuration.
diff --git a/tools/environments/daytona.py b/tools/environments/daytona.py
new file mode 100644
index 000000000..c8df198c1
--- /dev/null
+++ b/tools/environments/daytona.py
@@ -0,0 +1,220 @@
+"""Daytona cloud execution environment.
+
+Uses the Daytona Python SDK to run commands in cloud sandboxes.
+Supports persistent sandboxes: when enabled, sandboxes are stopped on cleanup
+and resumed on next creation, preserving the filesystem across sessions.
+"""
+
+import logging
+import math
+import shlex
+import threading
+import uuid
+import warnings
+from typing import Optional
+
+from tools.environments.base import BaseEnvironment
+from tools.interrupt import is_interrupted
+
+logger = logging.getLogger(__name__)
+
+
+class DaytonaEnvironment(BaseEnvironment):
+    """Daytona cloud sandbox execution backend.
+
+    Uses stopped/started sandbox lifecycle for filesystem persistence
+    instead of snapshots, making it faster and stateless on the host.
+    """
+
+    def __init__(
+        self,
+        image: str,
+        cwd: str = "/home/daytona",
+        timeout: int = 60,
+        cpu: int = 1,
+        memory: int = 5120,       # MB (hermes convention)
+        disk: int = 10240,        # MB (Daytona platform max is 10GB)
+        persistent_filesystem: bool = True,
+        task_id: str = "default",
+    ):
+        self._requested_cwd = cwd
+        super().__init__(cwd=cwd, timeout=timeout)
+
+        from daytona import (
+            Daytona,
+            CreateSandboxFromImageParams,
+            DaytonaError,
+            Resources,
+            SandboxState,
+        )
+
+        self._persistent = persistent_filesystem
+        self._task_id = task_id
+        self._SandboxState = SandboxState
+        self._daytona = Daytona()
+        self._sandbox = None
+        self._lock = threading.Lock()
+
+        memory_gib = max(1, math.ceil(memory / 1024))
+        disk_gib = max(1, math.ceil(disk / 1024))
+        if disk_gib > 10:
+            warnings.warn(
+                f"Daytona: requested disk ({disk_gib}GB) exceeds platform limit (10GB). "
+                f"Capping to 10GB. Set container_disk: 10240 in config to silence this.",
+                stacklevel=2,
+            )
+            disk_gib = 10
+        resources = Resources(cpu=cpu, memory=memory_gib, disk=disk_gib)
+
+        labels = {"hermes_task_id": task_id}
+
+        # Try to resume an existing stopped sandbox for this task
+        if self._persistent:
+            try:
+                self._sandbox = self._daytona.find_one(labels=labels)
+                self._sandbox.start()
+                logger.info("Daytona: resumed sandbox %s for task %s",
+                            self._sandbox.id, task_id)
+            except DaytonaError:
+                self._sandbox = None
+            except Exception as e:
+                logger.warning("Daytona: failed to resume sandbox for task %s: %s",
+                               task_id, e)
+                self._sandbox = None
+
+        # Create a fresh sandbox if we don't have one
+        if self._sandbox is None:
+            self._sandbox = self._daytona.create(
+                CreateSandboxFromImageParams(
+                    image=image,
+                    labels=labels,
+                    auto_stop_interval=0,
+                    resources=resources,
+                )
+            )
+            logger.info("Daytona: created sandbox %s for task %s",
+                        self._sandbox.id, task_id)
+
+        # Resolve cwd: detect actual home dir inside the sandbox
+        if self._requested_cwd in ("~", "/home/daytona"):
+            try:
+                home = self._sandbox.process.exec("echo $HOME").result.strip()
+                if home:
+                    self.cwd = home
+            except Exception:
+                pass  # leave cwd as-is; sandbox will use its own default
+            logger.info("Daytona: resolved cwd to %s", self.cwd)
+
+    def _ensure_sandbox_ready(self):
+        """Restart sandbox if it was stopped (e.g., by a previous interrupt)."""
+        self._sandbox.refresh_data()
+        if self._sandbox.state in (self._SandboxState.STOPPED, self._SandboxState.ARCHIVED):
+            self._sandbox.start()
+            logger.info("Daytona: restarted sandbox %s", self._sandbox.id)
+
+    def _exec_in_thread(self, exec_command: str, cwd: Optional[str], timeout: int) -> dict:
+        """Run exec in a background thread with interrupt polling.
+
+        The Daytona SDK's exec(timeout=...) parameter is unreliable (the
+        server-side timeout is not enforced and the SDK has no client-side
+        fallback), so we wrap the command with the shell ``timeout`` utility
+        which reliably kills the process and returns exit code 124.
+        """
+        # Wrap with shell `timeout` to enforce the deadline reliably.
+        # Add a small buffer so the shell timeout fires before any SDK-level
+        # timeout would, giving us a clean exit code 124.
+        timed_command = f"timeout {timeout} sh -c {shlex.quote(exec_command)}"
+
+        result_holder: dict = {"value": None, "error": None}
+
+        def _run():
+            try:
+                response = self._sandbox.process.exec(
+                    timed_command, cwd=cwd,
+                )
+                result_holder["value"] = {
+                    "output": response.result or "",
+                    "returncode": response.exit_code,
+                }
+            except Exception as e:
+                result_holder["error"] = e
+
+        t = threading.Thread(target=_run, daemon=True)
+        t.start()
+        # Wait for timeout + generous buffer for network/SDK overhead
+        deadline = timeout + 10
+        while t.is_alive():
+            t.join(timeout=0.2)
+            deadline -= 0.2
+            if is_interrupted():
+                with self._lock:
+                    try:
+                        self._sandbox.stop()
+                    except Exception:
+                        pass
+                return {
+                    "output": "[Command interrupted - Daytona sandbox stopped]",
+                    "returncode": 130,
+                }
+            if deadline <= 0:
+                # Shell timeout didn't fire and SDK is hung — force stop
+                with self._lock:
+                    try:
+                        self._sandbox.stop()
+                    except Exception:
+                        pass
+                return self._timeout_result(timeout)
+
+        if result_holder["error"]:
+            return {"error": result_holder["error"]}
+        return result_holder["value"]
+
+    def execute(self, command: str, cwd: str = "", *,
+                timeout: Optional[int] = None,
+                stdin_data: Optional[str] = None) -> dict:
+        with self._lock:
+            self._ensure_sandbox_ready()
+
+        if stdin_data is not None:
+            marker = f"HERMES_EOF_{uuid.uuid4().hex[:8]}"
+            while marker in stdin_data:
+                marker = f"HERMES_EOF_{uuid.uuid4().hex[:8]}"
+            command = f"{command} << '{marker}'\n{stdin_data}\n{marker}"
+
+        exec_command = self._prepare_command(command)
+        effective_cwd = cwd or self.cwd or None
+        effective_timeout = timeout or self.timeout
+
+        result = self._exec_in_thread(exec_command, effective_cwd, effective_timeout)
+
+        if "error" in result:
+            from daytona import DaytonaError
+            err = result["error"]
+            if isinstance(err, DaytonaError):
+                with self._lock:
+                    try:
+                        self._ensure_sandbox_ready()
+                    except Exception:
+                        return {"output": f"Daytona execution error: {err}", "returncode": 1}
+                result = self._exec_in_thread(exec_command, effective_cwd, effective_timeout)
+                if "error" not in result:
+                    return result
+            return {"output": f"Daytona execution error: {err}", "returncode": 1}
+
+        return result
+
+    def cleanup(self):
+        with self._lock:
+            if self._sandbox is None:
+                return
+            try:
+                if self._persistent:
+                    self._sandbox.stop()
+                    logger.info("Daytona: stopped sandbox %s (filesystem preserved)",
+                                self._sandbox.id)
+                else:
+                    self._daytona.delete(self._sandbox)
+                    logger.info("Daytona: deleted sandbox %s", self._sandbox.id)
+            except Exception as e:
+                logger.warning("Daytona: cleanup failed: %s", e)
+            self._sandbox = None
diff --git a/tools/file_tools.py b/tools/file_tools.py
index a864f4392..b29d2d274 100644
--- a/tools/file_tools.py
+++ b/tools/file_tools.py
@@ -75,6 +75,8 @@ def _get_file_ops(task_id: str = "default") -> ShellFileOperations:
                 image = overrides.get("singularity_image") or config["singularity_image"]
             elif env_type == "modal":
                 image = overrides.get("modal_image") or config["modal_image"]
+            elif env_type == "daytona":
+                image = overrides.get("daytona_image") or config["daytona_image"]
             else:
                 image = ""
 
@@ -82,7 +84,7 @@ def _get_file_ops(task_id: str = "default") -> ShellFileOperations:
             logger.info("Creating new %s environment for task %s...", env_type, task_id[:8])
 
             container_config = None
-            if env_type in ("docker", "singularity", "modal"):
+            if env_type in ("docker", "singularity", "modal", "daytona"):
                 container_config = {
                     "container_cpu": config.get("container_cpu", 1),
                     "container_memory": config.get("container_memory", 5120),
diff --git a/tools/terminal_tool.py b/tools/terminal_tool.py
index 096ac207f..e123262c5 100644
--- a/tools/terminal_tool.py
+++ b/tools/terminal_tool.py
@@ -423,7 +423,7 @@ def _get_env_config() -> Dict[str, Any]:
     # catches the case where cli.py (or .env) leaked the host's CWD.
     # SSH is excluded since /home/ paths are valid on remote machines.
     cwd = os.getenv("TERMINAL_CWD", default_cwd)
-    if env_type in ("modal", "docker", "singularity") and cwd:
+    if env_type in ("modal", "docker", "singularity", "daytona") and cwd:
         host_prefixes = ("/Users/", "C:\\", "C:/")
         if any(cwd.startswith(p) for p in host_prefixes) and cwd != default_cwd:
             logger.info("Ignoring TERMINAL_CWD=%r for %s backend "
@@ -436,6 +436,7 @@ def _get_env_config() -> Dict[str, Any]:
         "docker_image": os.getenv("TERMINAL_DOCKER_IMAGE", default_image),
         "singularity_image": os.getenv("TERMINAL_SINGULARITY_IMAGE", f"docker://{default_image}"),
         "modal_image": os.getenv("TERMINAL_MODAL_IMAGE", default_image),
+        "daytona_image": os.getenv("TERMINAL_DAYTONA_IMAGE", default_image),
         "cwd": cwd,
         "timeout": int(os.getenv("TERMINAL_TIMEOUT", "180")),
         "lifetime_seconds": int(os.getenv("TERMINAL_LIFETIME_SECONDS", "300")),
@@ -444,7 +445,7 @@ def _get_env_config() -> Dict[str, Any]:
         "ssh_user": os.getenv("TERMINAL_SSH_USER", ""),
         "ssh_port": int(os.getenv("TERMINAL_SSH_PORT", "22")),
         "ssh_key": os.getenv("TERMINAL_SSH_KEY", ""),
-        # Container resource config (applies to docker, singularity, modal -- ignored for local/ssh)
+        # Container resource config (applies to docker, singularity, modal, daytona -- ignored for local/ssh)
         "container_cpu": float(os.getenv("TERMINAL_CONTAINER_CPU", "1")),
         "container_memory": int(os.getenv("TERMINAL_CONTAINER_MEMORY", "5120")),     # MB (default 5GB)
         "container_disk": int(os.getenv("TERMINAL_CONTAINER_DISK", "51200")),        # MB (default 50GB)
@@ -460,7 +461,7 @@ def _create_environment(env_type: str, image: str, cwd: str, timeout: int,
     Create an execution environment from mini-swe-agent.
     
     Args:
-        env_type: One of "local", "docker", "singularity", "modal", "ssh"
+        env_type: One of "local", "docker", "singularity", "modal", "daytona", "ssh"
         image: Docker/Singularity/Modal image name (ignored for local/ssh)
         cwd: Working directory
         timeout: Default command timeout
@@ -511,6 +512,15 @@ def _create_environment(env_type: str, image: str, cwd: str, timeout: int,
             persistent_filesystem=persistent, task_id=task_id,
         )
     
+    elif env_type == "daytona":
+        # Lazy import so daytona SDK is only required when backend is selected.
+        from tools.environments.daytona import DaytonaEnvironment as _DaytonaEnvironment
+        return _DaytonaEnvironment(
+            image=image, cwd=cwd, timeout=timeout,
+            cpu=int(cpu), memory=memory, disk=disk,
+            persistent_filesystem=persistent, task_id=task_id,
+        )
+
     elif env_type == "ssh":
         if not ssh_config or not ssh_config.get("host") or not ssh_config.get("user"):
             raise ValueError("SSH environment requires ssh_host and ssh_user to be configured")
@@ -522,9 +532,9 @@ def _create_environment(env_type: str, image: str, cwd: str, timeout: int,
             cwd=cwd,
             timeout=timeout,
         )
-    
+
     else:
-        raise ValueError(f"Unknown environment type: {env_type}. Use 'local', 'docker', 'singularity', 'modal', or 'ssh'")
+        raise ValueError(f"Unknown environment type: {env_type}. Use 'local', 'docker', 'singularity', 'modal', 'daytona', or 'ssh'")
 
 
 def _cleanup_inactive_envs(lifetime_seconds: int = 300):
@@ -799,9 +809,11 @@ def terminal_tool(
             image = overrides.get("singularity_image") or config["singularity_image"]
         elif env_type == "modal":
             image = overrides.get("modal_image") or config["modal_image"]
+        elif env_type == "daytona":
+            image = overrides.get("daytona_image") or config["daytona_image"]
         else:
             image = ""
-        
+
         cwd = overrides.get("cwd") or config["cwd"]
         default_timeout = config["timeout"]
         effective_timeout = timeout or default_timeout
@@ -851,7 +863,7 @@ def terminal_tool(
                             }
 
                         container_config = None
-                        if env_type in ("docker", "singularity", "modal"):
+                        if env_type in ("docker", "singularity", "modal", "daytona"):
                             container_config = {
                                 "container_cpu": config.get("container_cpu", 1),
                                 "container_memory": config.get("container_memory", 5120),
@@ -1090,6 +1102,9 @@ def check_terminal_requirements() -> bool:
             from minisweagent.environments.extra.swerex_modal import SwerexModalEnvironment
             # Check for modal token
             return os.getenv("MODAL_TOKEN_ID") is not None or Path.home().joinpath(".modal.toml").exists()
+        elif env_type == "daytona":
+            from daytona import Daytona
+            return os.getenv("DAYTONA_API_KEY") is not None
         else:
             return False
     except Exception as e:
@@ -1128,10 +1143,11 @@ if __name__ == "__main__":
 
     print("\nEnvironment Variables:")
     default_img = "nikolaik/python-nodejs:python3.11-nodejs20"
-    print(f"  TERMINAL_ENV: {os.getenv('TERMINAL_ENV', 'local')} (local/docker/singularity/modal/ssh)")
+    print(f"  TERMINAL_ENV: {os.getenv('TERMINAL_ENV', 'local')} (local/docker/singularity/modal/daytona/ssh)")
     print(f"  TERMINAL_DOCKER_IMAGE: {os.getenv('TERMINAL_DOCKER_IMAGE', default_img)}")
     print(f"  TERMINAL_SINGULARITY_IMAGE: {os.getenv('TERMINAL_SINGULARITY_IMAGE', f'docker://{default_img}')}")
     print(f"  TERMINAL_MODAL_IMAGE: {os.getenv('TERMINAL_MODAL_IMAGE', default_img)}")
+    print(f"  TERMINAL_DAYTONA_IMAGE: {os.getenv('TERMINAL_DAYTONA_IMAGE', default_img)}")
     print(f"  TERMINAL_CWD: {os.getenv('TERMINAL_CWD', os.getcwd())}")
     print(f"  TERMINAL_SANDBOX_DIR: {os.getenv('TERMINAL_SANDBOX_DIR', '~/.hermes/sandboxes')}")
     print(f"  TERMINAL_TIMEOUT: {os.getenv('TERMINAL_TIMEOUT', '60')}")
diff --git a/website/docs/developer-guide/architecture.md b/website/docs/developer-guide/architecture.md
index b8ae1fc14..ef5bd9d63 100644
--- a/website/docs/developer-guide/architecture.md
+++ b/website/docs/developer-guide/architecture.md
@@ -55,7 +55,7 @@ hermes-agent/
 │   ├── skill_manager_tool.py      # Skill management
 │   └── environments/             # Terminal execution backends
 │       ├── base.py                   # BaseEnvironment ABC
-│       ├── local.py, docker.py, ssh.py, singularity.py, modal.py
+│       ├── local.py, docker.py, ssh.py, singularity.py, modal.py, daytona.py
 │
 ├── gateway/                  # Messaging gateway
 │   ├── run.py                    # GatewayRunner — platform lifecycle, message routing
diff --git a/website/docs/index.md b/website/docs/index.md
index 7a5a3ad3d..6849e3ad3 100644
--- a/website/docs/index.md
+++ b/website/docs/index.md
@@ -42,7 +42,7 @@ It's not a coding copilot tethered to an IDE or a chatbot wrapper around a singl
 - **Grows the longer it runs** — Persistent memory and self-created skills
 - **Scheduled automations** — Built-in cron with delivery to any platform
 - **Delegates & parallelizes** — Spawn isolated subagents for parallel workstreams
-- **Real sandboxing** — 5 terminal backends: local, Docker, SSH, Singularity, Modal
+- **Real sandboxing** — 6 terminal backends: local, Docker, SSH, Singularity, Modal, Daytona
 - **Full web control** — Search, extract, browse, vision, image generation, TTS
 - **MCP support** — Connect to any MCP server for extended tool capabilities
 - **Research-ready** — Batch processing, trajectory export, RL training integration
diff --git a/website/docs/reference/environment-variables.md b/website/docs/reference/environment-variables.md
index 7273d57d2..022380fa7 100644
--- a/website/docs/reference/environment-variables.md
+++ b/website/docs/reference/environment-variables.md
@@ -49,7 +49,7 @@ All variables go in `~/.hermes/.env`. You can also set them with `hermes config
 
 | Variable | Description |
 |----------|-------------|
-| `TERMINAL_ENV` | Backend: `local`, `docker`, `ssh`, `singularity`, `modal` |
+| `TERMINAL_ENV` | Backend: `local`, `docker`, `ssh`, `singularity`, `modal`, `daytona` |
 | `TERMINAL_DOCKER_IMAGE` | Docker image (default: `python:3.11`) |
 | `TERMINAL_DOCKER_VOLUMES` | Additional Docker volume mounts (comma-separated `host:container` pairs) |
 | `TERMINAL_SINGULARITY_IMAGE` | Singularity image or `.sif` path |
diff --git a/website/docs/user-guide/configuration.md b/website/docs/user-guide/configuration.md
index 6c38a3e81..fffe620ca 100644
--- a/website/docs/user-guide/configuration.md
+++ b/website/docs/user-guide/configuration.md
@@ -133,7 +133,7 @@ Configure which environment the agent uses for terminal commands:
 
 ```yaml
 terminal:
-  backend: local    # or: docker, ssh, singularity, modal
+  backend: local    # or: docker, ssh, singularity, modal, daytona
   cwd: "."          # Working directory ("." = current dir)
   timeout: 180      # Command timeout in seconds
 ```
diff --git a/website/docs/user-guide/features/tools.md b/website/docs/user-guide/features/tools.md
index 5ad1d8d8f..1f1036fb5 100644
--- a/website/docs/user-guide/features/tools.md
+++ b/website/docs/user-guide/features/tools.md
@@ -62,7 +62,7 @@ The terminal tool can execute commands in different environments:
 ```yaml
 # In ~/.hermes/config.yaml
 terminal:
-  backend: local    # or: docker, ssh, singularity, modal
+  backend: local    # or: docker, ssh, singularity, modal, daytona
   cwd: "."          # Working directory
   timeout: 180      # Command timeout in seconds
 ```