diff --git a/packages/@n8n/agents/src/runtime/__tests__/message-list.test.ts b/packages/@n8n/agents/src/runtime/__tests__/message-list.test.ts
index 8f2fb1f3f8e..87415dc77fb 100644
--- a/packages/@n8n/agents/src/runtime/__tests__/message-list.test.ts
+++ b/packages/@n8n/agents/src/runtime/__tests__/message-list.test.ts
@@ -143,17 +143,17 @@ describe('AgentMessageList — forLlm observation memory', () => {
 	it('injects the rendered observation log into the system prompt', () => {
 		const list = new AgentMessageList();
 		list.observationLogMemory = [
-			'## Memory',
-			'',
+			'<observations>',
 			'The following is your memory of this conversation.',
 			'',
 			'* CRITICAL (14:30) User wants the SDK to stay unopinionated.',
+			'</observations>',
 		].join('\n');
 
 		const prompt = systemContent(list);
 
 		expect(prompt).toContain('Base instructions');
-		expect(prompt).toContain('## Memory');
+		expect(prompt).toContain('<observations>');
 		expect(prompt).toContain('* CRITICAL (14:30) User wants the SDK to stay unopinionated.');
 	});
 
diff --git a/packages/@n8n/agents/src/runtime/__tests__/observation-log-observer.test.ts b/packages/@n8n/agents/src/runtime/__tests__/observation-log-observer.test.ts
index 7197180a02a..301bd8a591f 100644
--- a/packages/@n8n/agents/src/runtime/__tests__/observation-log-observer.test.ts
+++ b/packages/@n8n/agents/src/runtime/__tests__/observation-log-observer.test.ts
@@ -69,7 +69,7 @@ describe('observation-log observer defaults', () => {
 			transcriptTokenCount: 42,
 			observationLogTail: [],
 			renderedObservationLogTail:
-				'## Memory\n\n* CRITICAL (14:28) User is rebuilding observational memory.',
+				'<observations>\n* CRITICAL (14:28) User is rebuilding observational memory.\n</observations>',
 		});
 
 		expect(prompt).toContain('Current timestamp: 2026-05-12T14:30:00.000Z');
diff --git a/packages/@n8n/agents/src/runtime/__tests__/observation-log-renderer.test.ts b/packages/@n8n/agents/src/runtime/__tests__/observation-log-renderer.test.ts
index 1720f0b4052..6b9fc8f7811 100644
--- a/packages/@n8n/agents/src/runtime/__tests__/observation-log-renderer.test.ts
+++ b/packages/@n8n/agents/src/runtime/__tests__/observation-log-renderer.test.ts
@@ -40,8 +40,6 @@ describe('renderObservationLog', () => {
 		expect(renderObservationLog([child, dropped, parent])).toBe(
 			[
 				'<observations>',
-				'## Memory',
-				'',
 				'The following is your memory of this conversation. It accumulates as observations are made. Older entries may have been merged or dropped during periodic restructuring.',
 				'Marker legend: CRITICAL = must retain, IMPORTANT = useful continuity, INFO = contextual detail, COMPLETION = completed/resolved.',
 				'',
diff --git a/packages/@n8n/agents/src/runtime/observation-log-renderer.ts b/packages/@n8n/agents/src/runtime/observation-log-renderer.ts
index 816016c039d..df8d2a94106 100644
--- a/packages/@n8n/agents/src/runtime/observation-log-renderer.ts
+++ b/packages/@n8n/agents/src/runtime/observation-log-renderer.ts
@@ -78,7 +78,7 @@ export function renderObservationLog(
 
 	if (roots.length === 0) return null;
 
-	const lines: string[] = ['<observations>', '## Memory', '', MEMORY_INTRO, MARKER_LEGEND, ''];
+	const lines: string[] = ['<observations>', MEMORY_INTRO, MARKER_LEGEND, ''];
 	for (const root of roots) {
 		lines.push(renderBullet(root));
 		for (const child of childrenByParent.get(root.id) ?? []) {
diff --git a/packages/cli/src/modules/agents/__tests__/observation-log-observer.test.ts b/packages/cli/src/modules/agents/__tests__/observation-log-observer.test.ts
index 7b8dc5f2b6f..bde46028dcc 100644
--- a/packages/cli/src/modules/agents/__tests__/observation-log-observer.test.ts
+++ b/packages/cli/src/modules/agents/__tests__/observation-log-observer.test.ts
@@ -28,7 +28,7 @@ describe('n8n observation-log observer policy', () => {
 			transcriptTokenCount: 42,
 			observationLogTail: [],
 			renderedObservationLogTail:
-				'## Memory\n\n* CRITICAL (14:28) User is rebuilding observational memory.',
+				'<observations>\n* CRITICAL (14:28) User is rebuilding observational memory.\n</observations>',
 		});
 
 		expect(prompt).toContain('Current timestamp: 2026-05-12T14:30:00.000Z');