diff --git a/tests/llm/test_utils.py b/tests/llm/test_utils.py
new file mode 100644
index 00000000..3861989e
--- /dev/null
+++ b/tests/llm/test_utils.py
@@ -0,0 +1,173 @@
+import pytest
+
+from strix.llm.utils import (
+    _fix_stopword,
+    _truncate_to_first_function,
+    clean_content,
+    format_tool_call,
+    parse_tool_invocations,
+)
+
+
+class TestParseToolInvocations:
+    """Tests for parse_tool_invocations function."""
+
+    def test_single_function_with_params(self) -> None:
+        content = """<function=test_tool>
+<parameter=arg1>value1</parameter>
+<parameter=arg2>value2</parameter>
+</function>"""
+        result = parse_tool_invocations(content)
+        assert result == [{"toolName": "test_tool", "args": {"arg1": "value1", "arg2": "value2"}}]
+
+    def test_multiple_functions(self) -> None:
+        content = """<function=tool1>
+<parameter=a>1</parameter>
+</function>
+<function=tool2>
+<parameter=b>2</parameter>
+</function>"""
+        result = parse_tool_invocations(content)
+        assert result is not None
+        assert len(result) == 2
+        assert result[0]["toolName"] == "tool1"
+        assert result[1]["toolName"] == "tool2"
+
+    def test_html_entities_unescaped(self) -> None:
+        content = """<function=test>
+<parameter=code>&lt;div&gt;hello&lt;/div&gt;</parameter>
+</function>"""
+        result = parse_tool_invocations(content)
+        assert result is not None
+        assert result[0]["args"]["code"] == "<div>hello</div>"
+
+    def test_empty_content_returns_none(self) -> None:
+        assert parse_tool_invocations("") is None
+
+    def test_no_functions_returns_none(self) -> None:
+        assert parse_tool_invocations("just some text without functions") is None
+
+    def test_function_without_params(self) -> None:
+        content = "<function=no_args></function>"
+        result = parse_tool_invocations(content)
+        assert result == [{"toolName": "no_args", "args": {}}]
+
+    def test_multiline_param_value(self) -> None:
+        content = """<function=write>
+<parameter=content>line 1
+line 2
+line 3</parameter>
+</function>"""
+        result = parse_tool_invocations(content)
+        assert result is not None
+        assert "line 1\nline 2\nline 3" == result[0]["args"]["content"]
+
+    def test_ampersand_entity(self) -> None:
+        content = """<function=test>
+<parameter=query>foo &amp; bar</parameter>
+</function>"""
+        result = parse_tool_invocations(content)
+        assert result is not None
+        assert result[0]["args"]["query"] == "foo & bar"
+
+
+class TestFixStopword:
+    """Tests for _fix_stopword function."""
+
+    def test_complete_function_unchanged(self) -> None:
+        content = "<function=test>\n<parameter=x>1</parameter>\n</function>"
+        assert _fix_stopword(content) == content
+
+    def test_ending_with_incomplete_slash(self) -> None:
+        content = "<function=test>\n<parameter=x>1</parameter>\n</"
+        result = _fix_stopword(content)
+        assert result.endswith("</function>")
+
+    def test_missing_closing_tag(self) -> None:
+        content = "<function=test>\n<parameter=x>1</parameter>"
+        result = _fix_stopword(content)
+        assert result.endswith("</function>")
+
+    def test_multiple_functions_no_fix(self) -> None:
+        content = "<function=a></function><function=b></function>"
+        assert _fix_stopword(content) == content
+
+
+class TestFormatToolCall:
+    """Tests for format_tool_call function."""
+
+    def test_basic_formatting(self) -> None:
+        result = format_tool_call("my_tool", {"arg": "value"})
+        assert "<function=my_tool>" in result
+        assert "<parameter=arg>value</parameter>" in result
+        assert "</function>" in result
+
+    def test_multiple_params(self) -> None:
+        result = format_tool_call("tool", {"a": "1", "b": "2"})
+        assert "<parameter=a>1</parameter>" in result
+        assert "<parameter=b>2</parameter>" in result
+
+    def test_empty_args(self) -> None:
+        result = format_tool_call("empty", {})
+        assert result == "<function=empty>\n</function>"
+
+    def test_preserves_newlines_in_value(self) -> None:
+        result = format_tool_call("tool", {"code": "line1\nline2"})
+        assert "line1\nline2" in result
+
+
+class TestCleanContent:
+    """Tests for clean_content function."""
+
+    def test_remove_function_tags(self) -> None:
+        content = "Hello <function=test><parameter=x>1</parameter></function> World"
+        result = clean_content(content)
+        assert "<function" not in result
+        assert "Hello" in result
+        assert "World" in result
+
+    def test_remove_inter_agent_message(self) -> None:
+        content = "Start <inter_agent_message>hidden</inter_agent_message> End"
+        result = clean_content(content)
+        assert "inter_agent_message" not in result
+        assert "hidden" not in result
+
+    def test_remove_agent_completion_report(self) -> None:
+        content = "Begin <agent_completion_report>done</agent_completion_report> Finish"
+        result = clean_content(content)
+        assert "agent_completion_report" not in result
+        assert "done" not in result
+
+    def test_preserve_normal_content(self) -> None:
+        content = "This is normal text with no special tags."
+        assert clean_content(content) == content
+
+    def test_empty_content(self) -> None:
+        assert clean_content("") == ""
+        assert clean_content(None) == ""  # type: ignore[arg-type]
+
+    def test_collapse_multiple_newlines(self) -> None:
+        content = "line1\n\n\n\nline2"
+        result = clean_content(content)
+        assert "\n\n\n" not in result
+
+
+class TestTruncateToFirstFunction:
+    """Tests for _truncate_to_first_function function."""
+
+    def test_single_function_unchanged(self) -> None:
+        content = "text <function=test></function> more"
+        assert _truncate_to_first_function(content) == content
+
+    def test_multiple_functions_keeps_first(self) -> None:
+        content = "start <function=first></function> middle <function=second></function> end"
+        result = _truncate_to_first_function(content)
+        assert "<function=first>" in result
+        assert "<function=second>" not in result
+
+    def test_no_functions_unchanged(self) -> None:
+        content = "no functions here"
+        assert _truncate_to_first_function(content) == content
+
+    def test_empty_content(self) -> None:
+        assert _truncate_to_first_function("") == ""