diff --git a/registry/coder-labs/modules/gemini/README.md b/registry/coder-labs/modules/gemini/README.md
index d0a113a02..7244eb10b 100644
--- a/registry/coder-labs/modules/gemini/README.md
+++ b/registry/coder-labs/modules/gemini/README.md
@@ -13,9 +13,9 @@ Run [Gemini CLI](https://github.com/google-gemini/gemini-cli) in your workspace
 ```tf
 module "gemini" {
   source   = "registry.coder.com/coder-labs/gemini/coder"
-  version  = "3.0.0"
+  version  = "3.0.1"
   agent_id = coder_agent.main.id
-  folder   = "/home/coder/project"
+  folder   = "/home/coder"
 }
 ```
 
@@ -46,10 +46,10 @@ variable "gemini_api_key" {
 
 module "gemini" {
   source         = "registry.coder.com/coder-labs/gemini/coder"
-  version        = "3.0.0"
+  version        = "3.0.1"
   agent_id       = coder_agent.main.id
   gemini_api_key = var.gemini_api_key
-  folder         = "/home/coder/project"
+  folder         = "/home/coder"
 }
 ```
 
@@ -57,7 +57,7 @@ This basic setup will:
 
 - Install Gemini CLI in the workspace
 - Configure authentication with your API key
-- Set Gemini to run in `/home/coder/project` directory
+- Set Gemini to run in `/home/coder` directory
 - Enable interactive use from the terminal
 - Set up MCP server integration for task reporting
 
@@ -94,11 +94,11 @@ data "coder_parameter" "ai_prompt" {
 module "gemini" {
   count                = data.coder_workspace.me.start_count
   source               = "registry.coder.com/coder-labs/gemini/coder"
-  version              = "3.0.0"
+  version              = "3.0.1"
   agent_id             = coder_agent.main.id
   gemini_api_key       = var.gemini_api_key
   gemini_model         = "gemini-2.5-flash"
-  folder               = "/home/coder/project"
+  folder               = "/home/coder"
   task_prompt          = data.coder_parameter.ai_prompt.value
   enable_yolo_mode     = true # Auto-approve all tool calls for automation
   gemini_system_prompt = <<-EOT
@@ -111,6 +111,23 @@ module "gemini" {
 > [!WARNING]
 > YOLO mode automatically approves all tool calls without user confirmation. The agent has access to your machine's file system and terminal. Only enable in trusted, isolated environments.
 
+### Session Resumption Behavior
+
+By default, Gemini CLI automatically resumes existing conversations when your workspace restarts. Sessions are tracked per workspace directory, so conversations continue where you left off. If no session exists (first start), your `ai_prompt` will run normally. To disable this behavior and always start fresh, set `continue = false`
+
+## State Persistence
+
+AgentAPI can save and restore its conversation state to disk across workspace restarts. This complements `continue` (which resumes the Gemini CLI session) by also preserving the AgentAPI-level context. Enabled by default, requires agentapi >= v0.12.0 (older versions skip it with a warning).
+
+To disable:
+
+```tf
+module "gemini" {
+  # ... other config
+  enable_state_persistence = false
+}
+```
+
 ### Using Vertex AI (Enterprise)
 
 For enterprise users who prefer Google's Vertex AI platform:
@@ -118,10 +135,10 @@ For enterprise users who prefer Google's Vertex AI platform:
 ```tf
 module "gemini" {
   source         = "registry.coder.com/coder-labs/gemini/coder"
-  version        = "3.0.0"
+  version        = "3.0.1"
   agent_id       = coder_agent.main.id
   gemini_api_key = var.gemini_api_key
-  folder         = "/home/coder/project"
+  folder         = "/home/coder"
   use_vertexai   = true
 }
 ```
diff --git a/registry/coder-labs/modules/gemini/main.tf b/registry/coder-labs/modules/gemini/main.tf
index dbc81bc79..7e29bd559 100644
--- a/registry/coder-labs/modules/gemini/main.tf
+++ b/registry/coder-labs/modules/gemini/main.tf
@@ -78,10 +78,16 @@ variable "install_agentapi" {
   default     = true
 }
 
+variable "continue" {
+  type        = bool
+  description = "Automatically continue existing sessions on workspace restart. When true, resumes existing conversation if found, otherwise runs prompt or starts new session. When false, always starts fresh (ignores existing sessions)."
+  default     = true
+}
+
 variable "agentapi_version" {
   type        = string
   description = "The version of AgentAPI to install."
-  default     = "v0.10.0"
+  default     = "v0.12.0"
 }
 
 variable "gemini_model" {
@@ -126,6 +132,12 @@ variable "enable_yolo_mode" {
   default     = false
 }
 
+variable "enable_state_persistence" {
+  type        = bool
+  description = "Enable AgentAPI conversation state persistence across restarts."
+  default     = true
+}
+
 resource "coder_env" "gemini_api_key" {
   agent_id = var.agent_id
   name     = "GEMINI_API_KEY"
@@ -148,21 +160,17 @@ locals {
   base_extensions = <<-EOT
 {
   "coder": {
+    "command": "coder",
     "args": [
       "exp",
       "mcp",
       "server"
     ],
-    "command": "coder",
-    "description": "Report ALL tasks and statuses (in progress, done, failed) you are working on.",
-    "enabled": true,
     "env": {
       "CODER_MCP_APP_STATUS_SLUG": "${local.app_slug}",
       "CODER_MCP_AI_AGENTAPI_URL": "http://localhost:3284"
     },
-    "name": "Coder",
     "timeout": 3000,
-    "type": "stdio",
     "trust": true
   }
 }
@@ -177,23 +185,24 @@ EOT
 
 module "agentapi" {
   source  = "registry.coder.com/coder/agentapi/coder"
-  version = "2.0.0"
-
-  agent_id             = var.agent_id
-  folder               = local.folder
-  web_app_slug         = local.app_slug
-  web_app_order        = var.order
-  web_app_group        = var.group
-  web_app_icon         = var.icon
-  web_app_display_name = "Gemini"
-  cli_app_slug         = "${local.app_slug}-cli"
-  cli_app_display_name = "Gemini CLI"
-  module_dir_name      = local.module_dir_name
-  install_agentapi     = var.install_agentapi
-  agentapi_version     = var.agentapi_version
-  pre_install_script   = var.pre_install_script
-  post_install_script  = var.post_install_script
-  install_script       = <<-EOT
+  version = "2.2.0"
+
+  agent_id                 = var.agent_id
+  folder                   = local.folder
+  web_app_slug             = local.app_slug
+  web_app_order            = var.order
+  web_app_group            = var.group
+  web_app_icon             = var.icon
+  web_app_display_name     = "Gemini"
+  cli_app_slug             = "${local.app_slug}-cli"
+  cli_app_display_name     = "Gemini CLI"
+  module_dir_name          = local.module_dir_name
+  install_agentapi         = var.install_agentapi
+  agentapi_version         = var.agentapi_version
+  enable_state_persistence = var.enable_state_persistence
+  pre_install_script       = var.pre_install_script
+  post_install_script      = var.post_install_script
+  install_script           = <<-EOT
     #!/bin/bash
     set -o errexit
     set -o pipefail
@@ -209,20 +218,21 @@ module "agentapi" {
     GEMINI_SYSTEM_PROMPT='${base64encode(var.gemini_system_prompt)}' \
     /tmp/install.sh
   EOT
-  start_script         = <<-EOT
+  start_script             = <<-EOT
      #!/bin/bash
      set -o errexit
      set -o pipefail
 
      echo -n '${base64encode(local.start_script)}' | base64 -d > /tmp/start.sh
      chmod +x /tmp/start.sh
-     GEMINI_API_KEY='${var.gemini_api_key}' \
-     GOOGLE_API_KEY='${var.gemini_api_key}' \
-     GOOGLE_GENAI_USE_VERTEXAI='${var.use_vertexai}' \
-     GEMINI_YOLO_MODE='${var.enable_yolo_mode}' \
-     GEMINI_MODEL='${var.gemini_model}' \
-     GEMINI_START_DIRECTORY='${var.folder}' \
-     GEMINI_TASK_PROMPT='${var.task_prompt}' \
+     GEMINI_API_KEY='${base64encode(var.gemini_api_key)}' \
+     GOOGLE_API_KEY='${base64encode(var.gemini_api_key)}' \
+     GOOGLE_GENAI_USE_VERTEXAI='${base64encode(var.use_vertexai)}' \
+     GEMINI_YOLO_MODE='${base64encode(var.enable_yolo_mode)}' \
+     GEMINI_MODEL='${base64encode(var.gemini_model)}' \
+     GEMINI_START_DIRECTORY='${base64encode(var.folder)}' \
+     GEMINI_TASK_PROMPT='${base64encode(var.task_prompt)}' \
+     ARG_CONTINUE='${base64encode(var.continue)}' \
      /tmp/start.sh
    EOT
 }
diff --git a/registry/coder-labs/modules/gemini/main.tftest.hcl b/registry/coder-labs/modules/gemini/main.tftest.hcl
new file mode 100644
index 000000000..7bef07221
--- /dev/null
+++ b/registry/coder-labs/modules/gemini/main.tftest.hcl
@@ -0,0 +1,202 @@
+run "test_gemini_basic" {
+  command = plan
+
+  variables {
+    agent_id = "test-agent-123"
+    folder   = "/home/coder"
+  }
+
+  assert {
+    condition     = var.agent_id == "test-agent-123"
+    error_message = "Agent ID variable should be set correctly"
+  }
+
+  assert {
+    condition     = var.folder == "/home/coder"
+    error_message = "Folder variable should be set correctly"
+  }
+
+  assert {
+    condition     = var.install_gemini == true
+    error_message = "install_gemini should default to true"
+  }
+
+  assert {
+    condition     = var.install_agentapi == true
+    error_message = "install_agentapi should default to true"
+  }
+
+  assert {
+    condition     = var.use_vertexai == false
+    error_message = "use_vertexai should default to false"
+  }
+
+  assert {
+    condition     = var.enable_yolo_mode == false
+    error_message = "enable_yolo_mode should default to false"
+  }
+}
+
+run "test_gemini_with_api_key" {
+  command = plan
+
+  variables {
+    agent_id       = "test-agent-456"
+    folder         = "/home/coder"
+    gemini_api_key = "test-api-key-123"
+  }
+
+  assert {
+    condition     = coder_env.gemini_api_key[0].value == "test-api-key-123"
+    error_message = "Gemini API key value should match the input"
+  }
+}
+
+run "test_gemini_with_custom_options" {
+  command = plan
+
+  variables {
+    agent_id              = "test-agent-789"
+    folder                = "/home/coder/custom"
+    order                 = 5
+    group                 = "development"
+    icon                  = "/icon/custom.svg"
+    gemini_version        = "1.0.0"
+    gemini_model          = "gemini-pro"
+    agentapi_version      = "v0.13.0"
+    continue              = false
+    pre_install_script    = "echo 'Pre-install script'"
+    post_install_script   = "echo 'Post-install script'"
+    task_prompt           = "Automate this task"
+    additional_extensions = "{ \"my-extension\": {} }"
+    gemini_system_prompt  = "Custom system prompt"
+  }
+
+  assert {
+    condition     = var.order == 5
+    error_message = "Order variable should be set to 5"
+  }
+
+  assert {
+    condition     = var.group == "development"
+    error_message = "Group variable should be set to 'development'"
+  }
+
+  assert {
+    condition     = var.icon == "/icon/custom.svg"
+    error_message = "Icon variable should be set to custom icon"
+  }
+
+  assert {
+    condition     = var.gemini_version == "1.0.0"
+    error_message = "Gemini version should be set to '1.0.0'"
+  }
+
+  assert {
+    condition     = var.gemini_model == "gemini-pro"
+    error_message = "Gemini model variable should be set to 'gemini-pro'"
+  }
+
+  assert {
+    condition     = var.agentapi_version == "v0.13.0"
+    error_message = "AgentAPI version should be set to 'v0.13.0'"
+  }
+
+  assert {
+    condition     = var.continue == false
+    error_message = "Continue should be set to false"
+  }
+
+  assert {
+    condition     = var.pre_install_script == "echo 'Pre-install script'"
+    error_message = "Pre-install script should be set correctly"
+  }
+
+  assert {
+    condition     = var.post_install_script == "echo 'Post-install script'"
+    error_message = "Post-install script should be set correctly"
+  }
+
+  assert {
+    condition     = var.task_prompt == "Automate this task"
+    error_message = "Task prompt should be set correctly"
+  }
+
+  assert {
+    condition     = var.additional_extensions == "{ \"my-extension\": {} }"
+    error_message = "Additional extensions should be set correctly"
+  }
+
+  assert {
+    condition     = var.gemini_system_prompt == "Custom system prompt"
+    error_message = "Gemini system prompt should be set correctly"
+  }
+}
+
+run "test_gemini_system_prompt" {
+  command = plan
+
+  variables {
+    agent_id             = "test-agent-system-prompt"
+    folder               = "/home/coder/test"
+    gemini_system_prompt = "Custom addition"
+  }
+
+  assert {
+    condition     = trimspace(coder_env.gemini_system_prompt.value) != ""
+    error_message = "System prompt should not be empty"
+  }
+
+  assert {
+    condition     = length(regexall("Custom addition", coder_env.gemini_system_prompt.value)) > 0
+    error_message = "System prompt should have system_prompt variable value"
+  }
+}
+
+run "test_no_api_key_no_env" {
+  command = plan
+
+  variables {
+    agent_id = "test-agent-no-key"
+    folder   = "/home/coder/test"
+  }
+
+  assert {
+    condition     = length(coder_env.gemini_api_key) == 0
+    error_message = "GEMINI_API_KEY should not be created when no API key is provided"
+  }
+
+  assert {
+    condition     = length(coder_env.google_api_key) == 0
+    error_message = "GOOGLE_API_KEY should not be created when no API key is provided"
+  }
+}
+
+run "test_enable_state_persistence_default" {
+  command = plan
+
+  variables {
+    agent_id = "test-agent"
+    workdir  = "/home/coder"
+  }
+
+  assert {
+    condition     = var.enable_state_persistence == true
+    error_message = "enable_state_persistence should default to true"
+  }
+}
+
+run "test_disable_state_persistence" {
+  command = plan
+
+  variables {
+    agent_id                 = "test-agent"
+    workdir                  = "/home/coder"
+    enable_state_persistence = false
+  }
+
+  assert {
+    condition     = var.enable_state_persistence == false
+    error_message = "enable_state_persistence should be false when explicitly disabled"
+  }
+}
diff --git a/registry/coder-labs/modules/gemini/scripts/install.sh b/registry/coder-labs/modules/gemini/scripts/install.sh
index 7b70a6af4..c62f48181 100644
--- a/registry/coder-labs/modules/gemini/scripts/install.sh
+++ b/registry/coder-labs/modules/gemini/scripts/install.sh
@@ -1,6 +1,5 @@
 #!/bin/bash
 
-BOLD='\033[0;1m'
 source "$HOME"/.bashrc
 command_exists() {
   command -v "$1" > /dev/null 2>&1
@@ -40,7 +39,7 @@ function install_gemini() {
   if [ "${ARG_INSTALL}" = "true" ]; then
     check_dependencies
 
-    printf "%s Installing Gemini CLI\n" "${BOLD}"
+    printf "Installing Gemini CLI\n"
 
     NPM_GLOBAL_PREFIX="${HOME}/.npm-global"
     if [ ! -d "$NPM_GLOBAL_PREFIX" ]; then
@@ -61,7 +60,7 @@ function install_gemini() {
       echo 'export PATH="$HOME/.npm-global/bin:$PATH"' >> "$HOME/.bashrc"
     fi
 
-    printf "%s Successfully installed Gemini CLI. Version: %s\n" "${BOLD}" "$(gemini --version)"
+    printf "Successfully installed Gemini CLI. Version: %s\n" "$(gemini --version)"
   fi
 }
 
@@ -140,13 +139,8 @@ function add_system_prompt_if_exists() {
   fi
 }
 
-function configure_mcp() {
-  export CODER_MCP_APP_STATUS_SLUG="gemini"
-  export CODER_MCP_AI_AGENTAPI_URL="http://localhost:3284"
-  coder exp mcp configure gemini "${GEMINI_START_DIRECTORY}"
-}
+
 
 install_gemini
 populate_settings_json
 add_system_prompt_if_exists
-configure_mcp
diff --git a/registry/coder-labs/modules/gemini/scripts/start.sh b/registry/coder-labs/modules/gemini/scripts/start.sh
index eed550907..067a3e17c 100644
--- a/registry/coder-labs/modules/gemini/scripts/start.sh
+++ b/registry/coder-labs/modules/gemini/scripts/start.sh
@@ -4,6 +4,19 @@ set -o pipefail
 
 source "$HOME"/.bashrc
 
+set -o nounset
+
+GEMINI_API_KEY=$(echo -n "$GEMINI_API_KEY" | base64 -d)
+GOOGLE_API_KEY=$(echo -n "$GOOGLE_API_KEY" | base64 -d)
+GOOGLE_GENAI_USE_VERTEXAI=$(echo -n "$GOOGLE_GENAI_USE_VERTEXAI" | base64 -d)
+GEMINI_YOLO_MODE=$(echo -n "$GEMINI_YOLO_MODE" | base64 -d)
+GEMINI_MODEL=$(echo -n "$GEMINI_MODEL" | base64 -d)
+GEMINI_START_DIRECTORY=$(echo -n "$GEMINI_START_DIRECTORY" | base64 -d)
+GEMINI_TASK_PROMPT=$(echo -n "$GEMINI_TASK_PROMPT" | base64 -d)
+ARG_CONTINUE=$(echo -n "$ARG_CONTINUE" | base64 -d)
+
+set +o nounset
+
 command_exists() {
   command -v "$1" > /dev/null 2>&1
 }
@@ -14,7 +27,7 @@ else
   export PATH="$HOME/.npm-global/bin:$PATH"
 fi
 
-printf "Version: %s\n" "$(gemini --version)"
+printf "Gemini CLI Version: %s\n" "$(gemini --version)"
 
 MODULE_DIR="$HOME/.gemini-module"
 mkdir -p "$MODULE_DIR"
@@ -44,22 +57,6 @@ else
   }
 fi
 
-if [ -n "$GEMINI_TASK_PROMPT" ]; then
-  printf "Running automated task: %s\n" "$GEMINI_TASK_PROMPT"
-  PROMPT="Every step of the way, report tasks to Coder with proper descriptions and statuses. Your task at hand: $GEMINI_TASK_PROMPT"
-  PROMPT_FILE="$MODULE_DIR/prompt.txt"
-  echo -n "$PROMPT" > "$PROMPT_FILE"
-  GEMINI_ARGS=(--prompt-interactive "$PROMPT")
-else
-  printf "Starting Gemini CLI in interactive mode.\n"
-  GEMINI_ARGS=()
-fi
-
-if [ -n "$GEMINI_YOLO_MODE" ] && [ "$GEMINI_YOLO_MODE" = "true" ]; then
-  printf "YOLO mode enabled - will auto-approve all tool calls\n"
-  GEMINI_ARGS+=(--yolo)
-fi
-
 if [ -n "$GEMINI_API_KEY" ] || [ -n "$GOOGLE_API_KEY" ]; then
   if [ -n "$GOOGLE_GENAI_USE_VERTEXAI" ] && [ "$GOOGLE_GENAI_USE_VERTEXAI" = "true" ]; then
     printf "Using Vertex AI with API key\n"
@@ -70,5 +67,51 @@ else
   printf "No API key provided (neither GEMINI_API_KEY nor GOOGLE_API_KEY)\n"
 fi
 
-agentapi server --term-width 67 --term-height 1190 -- \
+GEMINI_ARGS=()
+configure_gemini() {
+  if [ "$ARG_CONTINUE" = "true" ]; then
+    SESSION_FOLDER_NAME=$(basename "${GEMINI_START_DIRECTORY}")
+    if [ -d "$GEMINI_START_DIRECTORY/.gemini/tmp/$SESSION_FOLDER_NAME/chats/" ]; then
+      printf "Existing Gemini chats detected. Starting Gemini CLI in interactive mode with existing chats.\n"
+      GEMINI_ARGS+=(--resume)
+    else
+      printf "No existing Gemini chats found. Starting Gemini CLI in interactive mode.\n"
+      if [ -n "$GEMINI_TASK_PROMPT" ]; then
+        printf "Running automated task: %s\n" "$GEMINI_TASK_PROMPT"
+        PROMPT="Every step of the way, report tasks to Coder with proper descriptions and statuses. Your task at hand: $GEMINI_TASK_PROMPT"
+        PROMPT_FILE="$MODULE_DIR/prompt.txt"
+        echo -n "$PROMPT" > "$PROMPT_FILE"
+        GEMINI_ARGS+=(--prompt-interactive "$PROMPT")
+      else
+        printf "Starting Gemini CLI in interactive mode.\n"
+        GEMINI_ARGS+=()
+      fi
+    fi
+  else
+    printf "Continue disabled, starting fresh Gemini CLI session\n"
+    if [ -n "$GEMINI_TASK_PROMPT" ]; then
+      printf "Running automated task: %s\n" "$GEMINI_TASK_PROMPT"
+      PROMPT="Every step of the way, report tasks to Coder with proper descriptions and statuses. Your task at hand: $GEMINI_TASK_PROMPT"
+      PROMPT_FILE="$MODULE_DIR/prompt.txt"
+      echo -n "$PROMPT" > "$PROMPT_FILE"
+      GEMINI_ARGS+=(--prompt-interactive "$PROMPT")
+    else
+      printf "Starting Gemini CLI in interactive mode.\n"
+      GEMINI_ARGS+=()
+    fi
+  fi
+
+  if [ -n "$GEMINI_MODEL" ]; then
+    GEMINI_ARGS+=(--model "$GEMINI_MODEL")
+  fi
+
+  if [ -n "$GEMINI_YOLO_MODE" ] && [ "$GEMINI_YOLO_MODE" = "true" ]; then
+    printf "YOLO mode enabled - will auto-approve all tool calls\n"
+    GEMINI_ARGS+=(--approval-mode=yolo)
+  fi
+}
+
+configure_gemini 
+
+agentapi server --type gemini --term-width 67 --term-height 1190 -- \
   bash -c "$(printf '%q ' gemini "${GEMINI_ARGS[@]}")"