# PAACE: A Plan-Aware Automated Agent Context Engineering Framework

arXiv: https://arxiv.org/abs/2512.16970 · HTML: https://mlsanity.com/paper/2512.16970/

## Key facts

- Cited by 2 papers in the map (data through 14 Oct 2026).
- Placed in General LLM agent frameworks and benchmarks, one of 16 directions in LLM agents and tool use.
- Builds on 23 of its 38 references that are in the map.
- First posted on arXiv 18 Dec 2025.

## Placed in

- LLM agents and tool use / [General LLM agent frameworks and benchmarks](https://mlsanity.com/agents/general-llm-agent-frameworks-and-benchmarks/)

## Builds on (most cited first, 23 of 23)

- [Training language models to follow instructions with human feedback](https://mlsanity.com/paper/2203.02155/) (2022)
- [Exploring the Limits of Transfer Learning with a Unified Text-to-Text Transformer](https://mlsanity.com/paper/1910.10683/) (2019)
- [Chain-of-Thought Prompting Elicits Reasoning in Large Language Models](https://mlsanity.com/paper/2201.11903/) (2022)
- [ReAct: Synergizing Reasoning and Acting in Language Models](https://mlsanity.com/paper/2210.03629/) (2022)
- [Reflexion: Language Agents with Verbal Reinforcement Learning](https://mlsanity.com/paper/2303.11366/) (2023)
- [Toolformer: Language Models Can Teach Themselves to Use Tools](https://mlsanity.com/paper/2302.04761/) (2023)
- [Generative Agents: Interactive Simulacra of Human Behavior](https://mlsanity.com/paper/2304.03442/) (2023)
- [Tree of Thoughts: Deliberate Problem Solving with Large Language Models](https://mlsanity.com/paper/2305.10601/) (2023)
- [Scaling Instruction-Finetuned Language Models](https://mlsanity.com/paper/2210.11416/) (2022)
- [WebArena: A Realistic Web Environment for Building Autonomous Agents](https://mlsanity.com/paper/2307.13854/) (2023)
- [Self-RAG: Learning to Retrieve, Generate, and Critique through Self-Reflection](https://mlsanity.com/paper/2310.11511/) (2023)
- [Big Bird: Transformers for Longer Sequences](https://mlsanity.com/paper/2007.14062/) (2020)
- [Get To The Point: Summarization with Pointer-Generator Networks](https://mlsanity.com/paper/1704.04368/) (2017)
- [PEGASUS: Pre-training with Extracted Gap-sentences for Abstractive Summarization](https://mlsanity.com/paper/1912.08777/) (2019)
- [Compressive Transformers for Long-Range Sequence Modelling](https://mlsanity.com/paper/1911.05507/) (2019)
- [AppWorld: A Controllable World of Apps and People for Benchmarking Interactive Coding Agents](https://mlsanity.com/paper/2407.18901/) (2024)
- [Large Language Models as Tool Makers](https://mlsanity.com/paper/2305.17126/) (2023)
- [MEM1: Learning to Synergize Memory and Reasoning for Efficient Long-Horizon Agents](https://mlsanity.com/paper/2506.15841/) (2025)
- [LongT5: Efficient Text-To-Text Transformer for Long Sequences](https://mlsanity.com/paper/2112.07916/) (2021)
- [Scaling Long-Horizon LLM Agent via Context-Folding](https://mlsanity.com/paper/2510.11967/) (2025)
- [OfficeBench: Benchmarking Language Agents across Multiple Applications for Office Automation](https://mlsanity.com/paper/2407.19056/) (2024)
- [Prompt Compression for Large Language Models: A Survey](https://mlsanity.com/paper/2410.12388/) (2024)
- [ReCAP: Recursive Context-Aware Reasoning and Planning for Large Language Model Agents](https://mlsanity.com/paper/2510.23822/) (2025)

## Built on by (most cited first, 2 of 2)

- [Diagnosing and Mitigating Context Rot in Long-horizon Search](https://mlsanity.com/paper/2606.29718/) (2026)
- [FOCUS: Training-Free Decision-Preserving Context Compression for LLM Agents](https://mlsanity.com/paper/2609.37590/) (2026)

## Abstract (arXiv)

Large Language Model (LLM) agents are increasingly deployed in complex, multi-step workflows involving planning, tool use, reflection, and interaction with external knowledge systems. These workflows generate rapidly expanding contexts that must be curated, transformed, and compressed to maintain fidelity, avoid attention dilution, and reduce inference cost. Prior work on summarization and query-aware compression largely ignores the multi-step, plan-aware nature of agentic reasoning. In this work, we introduce PAACE (Plan-Aware Automated Context Engineering), a unified framework for optimizing the evolving state of LLM agents through next-k-task relevance modeling, plan-structure analysis, instruction co-refinement, and function-preserving compression. PAACE comprises (1) PAACE-Syn, a large-scale generator of synthetic agent workflows annotated with stepwise compression supervision, and (2) PAACE-FT, a family of distilled, plan-aware compressors trained from successful teacher demonstrations. Experiments on long-horizon benchmarks (AppWorld, OfficeBench, and 8-Objective QA) demonstrate that PAACE consistently improves agent correctness while substantially reducing context load. On AppWorld, PAACE achieves higher accuracy than all baselines while lowering peak context and cumulative dependency. On OfficeBench and multi-hop QA, PAACE improves both accuracy and F1, achieving fewer steps, lower peak tokens, and reduced attention dependency. Distilled PAACE-FT retains 97 percent of the teacher's performance while reducing inference cost by over an order of magnitude, enabling practical deployment of plan-aware compression with compact models.