diff --git a/hive-matrix-mcp/src/handlers.rs b/hive-matrix-mcp/src/handlers.rs
index ab0b96c4..07b9a2dc 100644
--- a/hive-matrix-mcp/src/handlers.rs
+++ b/hive-matrix-mcp/src/handlers.rs
@@ -63,6 +63,11 @@ pub struct TimelineEvent {
     /// (text / notice / emote); empty for events without a textual
     /// body (state changes, reactions, etc.).
     pub body: String,
+    /// Event id of the message this replies to (`m.relates_to` →
+    /// `m.in_reply_to`), including the reply fallback a thread message
+    /// carries. `None` for top-level (non-reply) messages.
+    #[serde(skip_serializing_if = "Option::is_none")]
+    pub in_reply_to_event_id: Option<String>,
 }
 
 /// Resolve a room reference (id `!abc:server` OR alias `#name:server`)
@@ -143,6 +148,23 @@ fn extract_body_sync(event: &matrix_sdk::ruma::events::AnySyncTimelineEvent) ->
     }
 }
 
+/// Extract the event id this message replies to, from its `m.relates_to`.
+/// Handles both a direct `m.in_reply_to` reply and the reply fallback a
+/// thread message carries. Returns `None` for non-reply messages and for
+/// non-`m.room.message` events.
+fn extract_in_reply_to(event: &matrix_sdk::ruma::events::AnySyncTimelineEvent) -> Option<String> {
+    use matrix_sdk::ruma::events::room::message::Relation;
+    use matrix_sdk::ruma::events::{AnySyncMessageLikeEvent, AnySyncTimelineEvent};
+    let AnySyncTimelineEvent::MessageLike(AnySyncMessageLikeEvent::RoomMessage(ev)) = event else {
+        return None;
+    };
+    match ev.as_original()?.content.relates_to.as_ref()? {
+        Relation::Reply { in_reply_to } => Some(in_reply_to.event_id.to_string()),
+        Relation::Thread(thread) => thread.in_reply_to.as_ref().map(|r| r.event_id.to_string()),
+        _ => None,
+    }
+}
+
 /// Human-facing label for a room: its canonical alias when set,
 /// otherwise the raw room id. Used wherever a room is named in
 /// agent-facing text (wake bodies, loose-ends, the unread guard).
@@ -615,13 +637,16 @@ pub async fn read_room(client: &Client, room_ref: &str, limit: Option<usize>) ->
     let mut opts = MessagesOptions::backward();
     opts.limit = matrix_sdk::ruma::UInt::from(limit_val);
     // room.messages() transparently decrypts events in encrypted rooms.
-    // UTD (unable to decrypt) events surface via `ev.kind.is_utd()` and
-    // get a sentinel body so claude knows decryption failed rather than
-    // seeing the raw encrypted blob.
+    // UTD (unable to decrypt) events surface via `ev.kind.is_utd()`, but
+    // that flag can transiently fire in a NON-encrypted room when the SDK
+    // hasn't finished reclassifying a freshly-synced `m.room.encrypted`
+    // cache row — so gate the sentinel on the room actually being
+    // encrypted to avoid a false `[unable to decrypt]` on plaintext.
     let msgs = match room.messages(opts).await {
         Ok(m) => m,
         Err(e) => return DaemonResponse::error(format!("messages: {e}")),
     };
+    let is_encrypted = room.encryption_state().is_encrypted();
     let events: Vec<TimelineEvent> = msgs
         .chunk
         .iter()
@@ -631,7 +656,7 @@ pub async fn read_room(client: &Client, room_ref: &str, limit: Option<usize>) ->
             let sender = parsed.sender().to_string();
             let origin_server_ts: i64 = parsed.origin_server_ts().0.into();
             let event_type = parsed.event_type().to_string();
-            let body = if ev.kind.is_utd() {
+            let body = if is_encrypted && ev.kind.is_utd() {
                 "[unable to decrypt]".to_owned()
             } else {
                 extract_body_sync(&parsed)
@@ -642,6 +667,7 @@ pub async fn read_room(client: &Client, room_ref: &str, limit: Option<usize>) ->
                 origin_server_ts,
                 event_type,
                 body,
+                in_reply_to_event_id: extract_in_reply_to(&parsed),
             })
         })
         .collect();