diff --git a/packages/@n8n/api-types/src/index.ts b/packages/@n8n/api-types/src/index.ts
index 736bb7d470d..c28a36e4511 100644
--- a/packages/@n8n/api-types/src/index.ts
+++ b/packages/@n8n/api-types/src/index.ts
@@ -677,6 +677,7 @@ export type { AgentRunState } from './schemas/agent-run-reducer';
 export {
 	formatDebugJson,
 	summarizeJsonValue,
+	stepInstructions,
 	parseSystemPromptForDisplay,
 	parseMessageBlocks,
 	parseUsageSummary,
diff --git a/packages/@n8n/api-types/src/schemas/__tests__/llm-step-display.test.ts b/packages/@n8n/api-types/src/schemas/__tests__/llm-step-display.test.ts
index 9cf33f1db3e..3529eddfc0e 100644
--- a/packages/@n8n/api-types/src/schemas/__tests__/llm-step-display.test.ts
+++ b/packages/@n8n/api-types/src/schemas/__tests__/llm-step-display.test.ts
@@ -12,6 +12,7 @@ import {
 	parseUsageSummary,
 	summarizeJsonValue,
 	extractObservationsBlock,
+	stepInstructions,
 } from '../llm-step-display';
 
 describe('llm-step-display', () => {
@@ -287,4 +288,36 @@ describe('llm-step-display', () => {
 			{ type: 'text', text: 'Skill loading protocol' },
 		]);
 	});
+
+	describe('stepInstructions', () => {
+		it('reads the v7 `instructions` field', () => {
+			expect(stepInstructions({ instructions: 'You are helpful.' })).toBe('You are helpful.');
+		});
+
+		it('falls back to the pre-v7 `system` field for older snapshots', () => {
+			expect(stepInstructions({ system: 'You are helpful.' })).toBe('You are helpful.');
+		});
+
+		it('prefers `instructions` when a snapshot somehow carries both', () => {
+			expect(stepInstructions({ instructions: 'new', system: 'old' })).toBe('new');
+		});
+
+		it('returns undefined for a missing input', () => {
+			expect(stepInstructions(undefined)).toBeUndefined();
+		});
+
+		// The shape real captures carry: `{ role, content, providerOptions }`.
+		it('lets parseStepSummary size a v7 instructions object', () => {
+			const summary = parseStepSummary(
+				{ instructions: { role: 'system', content: 'x'.repeat(120) } },
+				{ finishReason: 'stop' },
+			);
+			expect(summary.systemCharCount).toBe(120);
+		});
+
+		it('still sizes a pre-v7 string system prompt', () => {
+			const summary = parseStepSummary({ system: 'x'.repeat(42) }, { finishReason: 'stop' });
+			expect(summary.systemCharCount).toBe(42);
+		});
+	});
 });
diff --git a/packages/@n8n/api-types/src/schemas/llm-step-display.ts b/packages/@n8n/api-types/src/schemas/llm-step-display.ts
index 63c28da8046..2e2c41eb1a8 100644
--- a/packages/@n8n/api-types/src/schemas/llm-step-display.ts
+++ b/packages/@n8n/api-types/src/schemas/llm-step-display.ts
@@ -431,6 +431,16 @@ function extractObservationsFromBlock(block: ReadableContentBlock): {
 	};
 }
 
+/**
+ * The step's system prompt, wherever the SDK put it. AI SDK v7 standardizes it as
+ * `instructions` (`StandardizedPrompt`); `system` is the pre-v7 name, kept as a
+ * fallback so snapshots captured before the rename still render. Without this the
+ * System section — and the `<observations>` block inside it — reads as empty.
+ */
+export function stepInstructions(input: Record<string, unknown> | undefined): unknown {
+	return input?.instructions ?? input?.system;
+}
+
 export function parseSystemPromptForDisplay(system: unknown): ParsedSystemPromptDisplay {
 	const blocks = parseSystemBlocks(system);
 	const observationsParts: string[] = [];
@@ -588,7 +598,15 @@ export function parseInputExtras(input: Record<string, unknown> | undefined): un
 	if (!input) return undefined;
 
 	const extras: Record<string, unknown> = {};
-	const primaryKeys = new Set(['system', 'messages', 'stepNumber', 'sdkStepNumber']);
+	// `instructions` is the v7 name for `system` — both are rendered as the System
+	// section, so neither belongs in the extras dump.
+	const primaryKeys = new Set([
+		'system',
+		'instructions',
+		'messages',
+		'stepNumber',
+		'sdkStepNumber',
+	]);
 
 	for (const [key, value] of Object.entries(input)) {
 		if (!primaryKeys.has(key)) {
@@ -753,11 +771,15 @@ export function parseStepSummary(
 		}
 	}
 
+	// Same field move as the System section: read through `stepInstructions`, or
+	// this silently stays undefined for every v7 snapshot. `parseSystemBlocks`
+	// handles the string, array and single-object forms alike.
+	const instructions = stepInstructions(input);
 	let systemCharCount: number | undefined;
-	if (typeof input?.system === 'string') {
-		systemCharCount = input.system.length;
-	} else if (Array.isArray(input?.system)) {
-		systemCharCount = parseSystemBlocks(input.system).reduce(
+	if (typeof instructions === 'string') {
+		systemCharCount = instructions.length;
+	} else if (instructions !== undefined && instructions !== null) {
+		systemCharCount = parseSystemBlocks(instructions).reduce(
 			(total, block) => total + block.content.length,
 			0,
 		);
diff --git a/packages/@n8n/instance-ai/evaluations/report/run-debug-report.ts b/packages/@n8n/instance-ai/evaluations/report/run-debug-report.ts
index 88327996917..bd82ed083ec 100644
--- a/packages/@n8n/instance-ai/evaluations/report/run-debug-report.ts
+++ b/packages/@n8n/instance-ai/evaluations/report/run-debug-report.ts
@@ -21,6 +21,7 @@ import {
 	parseStepSummary,
 	parseSystemPromptForDisplay,
 	parseUsageSummary,
+	stepInstructions,
 } from '@n8n/api-types';
 import fs from 'fs';
 import path from 'path';
@@ -116,7 +117,7 @@ function renderStepDetail(
 	step: InstanceAiRunDebugStep,
 	workflowCode: InstanceAiRunDebugWorkflowCodeSnapshot[],
 ): string {
-	const parsedSystem = parseSystemPromptForDisplay(step.input?.system);
+	const parsedSystem = parseSystemPromptForDisplay(stepInstructions(step.input));
 	const messageBlocks = parseMessageBlocks(step.input?.messages);
 	const inputExtras = parseInputExtras(step.input);
 	const outputBlocks = parseOutputDisplayBlocks(step.output);
diff --git a/packages/frontend/editor-ui/src/features/ai/instanceAi/components/InstanceAiLlmStepDetail.vue b/packages/frontend/editor-ui/src/features/ai/instanceAi/components/InstanceAiLlmStepDetail.vue
index 6c898544fad..dd03285ce0b 100644
--- a/packages/frontend/editor-ui/src/features/ai/instanceAi/components/InstanceAiLlmStepDetail.vue
+++ b/packages/frontend/editor-ui/src/features/ai/instanceAi/components/InstanceAiLlmStepDetail.vue
@@ -8,6 +8,7 @@ import {
 	parseOutputExtras,
 	parseSystemPromptForDisplay,
 	parseUsageSummary,
+	stepInstructions,
 } from '@n8n/api-types';
 import { N8nText } from '@n8n/design-system';
 import { useI18n } from '@n8n/i18n';
@@ -26,7 +27,9 @@ const props = defineProps<{
 const i18n = useI18n();
 const outputSectionRef = ref<HTMLElement | null>(null);
 
-const parsedSystemPrompt = computed(() => parseSystemPromptForDisplay(props.input?.system));
+const parsedSystemPrompt = computed(() =>
+	parseSystemPromptForDisplay(stepInstructions(props.input)),
+);
 const systemBlocks = computed(() => parsedSystemPrompt.value.systemBlocks);
 const systemObservations = computed(() => parsedSystemPrompt.value.observations);
 const messageBlocks = computed(() => parseMessageBlocks(props.input?.messages));