diff --git a/docs/bug-fixes/windows-spaces-issue.md b/docs/bug-fixes/windows-spaces-issue.md
new file mode 100644
index 00000000..f25b466b
--- /dev/null
+++ b/docs/bug-fixes/windows-spaces-issue.md
@@ -0,0 +1,98 @@
+---
+Title: Bug: SDK Agent fails on Windows when username contains spaces
+---
+
+## Bug Report
+
+**Summary:** Claude SDK Agent fails to start on Windows when the user's path contains spaces (e.g., `C:\Users\Anderson Wang\`), causing PostToolUse hooks to hang indefinitely.
+
+**Severity:** High - Core functionality broken
+
+**Affected Platform:** Windows only
+
+---
+
+## Symptoms
+
+PostToolUse hook displays `(1/2 done)` indefinitely. Worker logs show:
+
+```
+ERROR [SESSION] Generator failed {provider=claude, error=Claude Code process exited with code 1}
+ERROR [SESSION] Generator exited unexpectedly
+```
+
+---
+
+## Root Cause
+
+Two issues in the Windows code path:
+
+1. **`SDKAgent.ts`** - Returns full auto-detected path with spaces:
+   ```
+   C:\Users\Anderson Wang\AppData\Roaming\npm\claude.cmd
+   ```
+
+2. **`ProcessRegistry.ts`** - Node.js `spawn()` cannot directly execute `.cmd` files when the path contains spaces
+
+---
+
+## Proposed Fix
+
+### File 1: `src/services/worker/SDKAgent.ts`
+
+On Windows, prefer `claude.cmd` via PATH instead of full auto-detected path:
+
+```typescript
+// On Windows, prefer "claude.cmd" (via PATH) to avoid spawn issues with spaces in paths
+if (process.platform === 'win32') {
+  try {
+    execSync('where claude.cmd', { encoding: 'utf8', windowsHide: true, stdio: ['ignore', 'pipe', 'ignore'] });
+    return 'claude.cmd'; // Let Windows resolve via PATHEXT
+  } catch {
+    // Fall through to generic error
+  }
+}
+```
+
+### File 2: `src/services/worker/ProcessRegistry.ts`
+
+Use `cmd.exe /d /c` wrapper for .cmd files on Windows:
+
+```typescript
+const useCmdWrapper = process.platform === 'win32' && spawnOptions.command.endsWith('.cmd');
+
+if (useCmdWrapper) {
+  child = spawn('cmd.exe', ['/d', '/c', spawnOptions.command, ...spawnOptions.args], {
+    cwd: spawnOptions.cwd,
+    env: spawnOptions.env,
+    stdio: ['pipe', 'pipe', 'pipe'],
+    signal: spawnOptions.signal,
+    windowsHide: true
+  });
+}
+```
+
+---
+
+## Why This Works
+
+- **PATHEXT Resolution:** Windows searches PATH and tries each extension in PATHEXT automatically
+- **cmd.exe wrapper:** Properly handles paths with spaces and argument passing
+- **Avoids shell parsing:** Using direct arguments instead of `shell: true` prevents empty string misparsing
+
+---
+
+## Testing
+
+Verified on Windows 11 with username containing spaces:
+- PostToolUse hook completes successfully
+- Observations are stored to database
+- No more "process exited with code 1" errors
+
+---
+
+## Additional Notes
+
+- Maintains backward compatibility with `CLAUDE_CODE_PATH` setting
+- No impact on non-Windows platforms
+- Related to Issue #733 (credential isolation) - separate fix
diff --git a/src/services/worker/ProcessRegistry.ts b/src/services/worker/ProcessRegistry.ts
index 4125ff1f..1f72a770 100644
--- a/src/services/worker/ProcessRegistry.ts
+++ b/src/services/worker/ProcessRegistry.ts
@@ -282,13 +282,24 @@ export function createPidCapturingSpawn(sessionDbId: number) {
     env?: NodeJS.ProcessEnv;
     signal?: AbortSignal;
   }) => {
-    const child = spawn(spawnOptions.command, spawnOptions.args, {
-      cwd: spawnOptions.cwd,
-      env: spawnOptions.env,
-      stdio: ['pipe', 'pipe', 'pipe'],
-      signal: spawnOptions.signal, // CRITICAL: Pass signal for AbortController integration
-      windowsHide: true
-    });
+    // On Windows, use cmd.exe wrapper for .cmd files to properly handle paths with spaces
+    const useCmdWrapper = process.platform === 'win32' && spawnOptions.command.endsWith('.cmd');
+
+    const child = useCmdWrapper
+      ? spawn('cmd.exe', ['/d', '/c', spawnOptions.command, ...spawnOptions.args], {
+          cwd: spawnOptions.cwd,
+          env: spawnOptions.env,
+          stdio: ['pipe', 'pipe', 'pipe'],
+          signal: spawnOptions.signal,
+          windowsHide: true
+        })
+      : spawn(spawnOptions.command, spawnOptions.args, {
+          cwd: spawnOptions.cwd,
+          env: spawnOptions.env,
+          stdio: ['pipe', 'pipe', 'pipe'],
+          signal: spawnOptions.signal, // CRITICAL: Pass signal for AbortController integration
+          windowsHide: true
+        });
 
     // Capture stderr for debugging spawn failures
     if (child.stderr) {
diff --git a/src/services/worker/SDKAgent.ts b/src/services/worker/SDKAgent.ts
index 66a3a450..81946c4c 100644
--- a/src/services/worker/SDKAgent.ts
+++ b/src/services/worker/SDKAgent.ts
@@ -446,7 +446,17 @@ export class SDKAgent {
       return settings.CLAUDE_CODE_PATH;
     }
 
-    // 2. Try auto-detection
+    // 2. On Windows, prefer "claude.cmd" via PATH to avoid spawn issues with spaces in paths
+    if (process.platform === 'win32') {
+      try {
+        execSync('where claude.cmd', { encoding: 'utf8', windowsHide: true, stdio: ['ignore', 'pipe', 'ignore'] });
+        return 'claude.cmd'; // Let Windows resolve via PATHEXT
+      } catch {
+        // Fall through to generic error
+      }
+    }
+
+    // 3. Try auto-detection for non-Windows platforms
     try {
       const claudePath = execSync(
         process.platform === 'win32' ? 'where claude' : 'which claude',