diff --git a/Cargo.lock b/Cargo.lock
index bcbff9efc3..12cc4f2928 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -114,6 +114,7 @@ dependencies = [
  "serde_json_lenient",
  "settings",
  "smol",
+ "sqlez",
  "streaming_diff",
  "telemetry",
  "telemetry_events",
@@ -133,6 +134,7 @@ dependencies = [
  "workspace-hack",
  "zed_actions",
  "zed_llm_client",
+ "zstd",
 ]
 
 [[package]]
diff --git a/crates/agent/Cargo.toml b/crates/agent/Cargo.toml
index f9c6fcd4e4..c1f9d9a3fa 100644
--- a/crates/agent/Cargo.toml
+++ b/crates/agent/Cargo.toml
@@ -46,6 +46,7 @@ git.workspace = true
 gpui.workspace = true
 heed.workspace = true
 html_to_markdown.workspace = true
+indoc.workspace = true
 http_client.workspace = true
 indexed_docs.workspace = true
 inventory.workspace = true
@@ -78,6 +79,7 @@ serde_json.workspace = true
 serde_json_lenient.workspace = true
 settings.workspace = true
 smol.workspace = true
+sqlez.workspace = true
 streaming_diff.workspace = true
 telemetry.workspace = true
 telemetry_events.workspace = true
@@ -97,6 +99,7 @@ workspace-hack.workspace = true
 workspace.workspace = true
 zed_actions.workspace = true
 zed_llm_client.workspace = true
+zstd.workspace = true
 
 [dev-dependencies]
 buffer_diff = { workspace = true, features = ["test-support"] }
diff --git a/crates/agent/src/thread_store.rs b/crates/agent/src/thread_store.rs
index 8c6fc909e9..b6edbc3919 100644
--- a/crates/agent/src/thread_store.rs
+++ b/crates/agent/src/thread_store.rs
@@ -1,8 +1,7 @@
-use std::borrow::Cow;
 use std::cell::{Ref, RefCell};
 use std::path::{Path, PathBuf};
 use std::rc::Rc;
-use std::sync::Arc;
+use std::sync::{Arc, Mutex};
 
 use agent_settings::{AgentProfile, AgentProfileId, AgentSettings, CompletionMode};
 use anyhow::{Context as _, Result, anyhow};
@@ -17,8 +16,7 @@ use gpui::{
     App, BackgroundExecutor, Context, Entity, EventEmitter, Global, ReadGlobal, SharedString,
     Subscription, Task, prelude::*,
 };
-use heed::Database;
-use heed::types::SerdeBincode;
+
 use language_model::{LanguageModelToolResultContent, LanguageModelToolUseId, Role, TokenUsage};
 use project::context_server_store::{ContextServerStatus, ContextServerStore};
 use project::{Project, ProjectItem, ProjectPath, Worktree};
@@ -35,6 +33,42 @@ use crate::context_server_tool::ContextServerTool;
 use crate::thread::{
     DetailedSummaryState, ExceededWindowError, MessageId, ProjectSnapshot, Thread, ThreadId,
 };
+use indoc::indoc;
+use sqlez::{
+    bindable::{Bind, Column},
+    connection::Connection,
+    statement::Statement,
+};
+
+#[derive(Debug, Clone, PartialEq, Eq, Serialize, Deserialize)]
+pub enum DataType {
+    #[serde(rename = "json")]
+    Json,
+    #[serde(rename = "zstd")]
+    Zstd,
+}
+
+impl Bind for DataType {
+    fn bind(&self, statement: &Statement, start_index: i32) -> Result<i32> {
+        let value = match self {
+            DataType::Json => "json",
+            DataType::Zstd => "zstd",
+        };
+        value.bind(statement, start_index)
+    }
+}
+
+impl Column for DataType {
+    fn column(statement: &mut Statement, start_index: i32) -> Result<(Self, i32)> {
+        let (value, next_index) = String::column(statement, start_index)?;
+        let data_type = match value.as_str() {
+            "json" => DataType::Json,
+            "zstd" => DataType::Zstd,
+            _ => anyhow::bail!("Unknown data type: {}", value),
+        };
+        Ok((data_type, next_index))
+    }
+}
 
 const RULES_FILE_NAMES: [&'static str; 6] = [
     ".rules",
@@ -866,25 +900,27 @@ impl Global for GlobalThreadsDatabase {}
 
 pub(crate) struct ThreadsDatabase {
     executor: BackgroundExecutor,
-    env: heed::Env,
-    threads: Database<SerdeBincode<ThreadId>, SerializedThread>,
+    connection: Arc<Mutex<Connection>>,
 }
 
-impl heed::BytesEncode<'_> for SerializedThread {
-    type EItem = SerializedThread;
+impl ThreadsDatabase {
+    fn connection(&self) -> Arc<Mutex<Connection>> {
+        self.connection.clone()
+    }
 
-    fn bytes_encode(item: &Self::EItem) -> Result<Cow<[u8]>, heed::BoxedError> {
-        serde_json::to_vec(item).map(Cow::Owned).map_err(Into::into)
+    const COMPRESSION_LEVEL: i32 = 3;
+}
+
+impl Bind for ThreadId {
+    fn bind(&self, statement: &Statement, start_index: i32) -> Result<i32> {
+        self.to_string().bind(statement, start_index)
     }
 }
 
-impl<'a> heed::BytesDecode<'a> for SerializedThread {
-    type DItem = SerializedThread;
-
-    fn bytes_decode(bytes: &'a [u8]) -> Result<Self::DItem, heed::BoxedError> {
-        // We implement this type manually because we want to call `SerializedThread::from_json`,
-        // instead of the Deserialize trait implementation for `SerializedThread`.
-        SerializedThread::from_json(bytes).map_err(Into::into)
+impl Column for ThreadId {
+    fn column(statement: &mut Statement, start_index: i32) -> Result<(Self, i32)> {
+        let (id_str, next_index) = String::column(statement, start_index)?;
+        Ok((ThreadId::from(id_str.as_str()), next_index))
     }
 }
 
@@ -900,8 +936,8 @@ impl ThreadsDatabase {
         let database_future = executor
             .spawn({
                 let executor = executor.clone();
-                let database_path = paths::data_dir().join("threads/threads-db.1.mdb");
-                async move { ThreadsDatabase::new(database_path, executor) }
+                let threads_dir = paths::data_dir().join("threads");
+                async move { ThreadsDatabase::new(threads_dir, executor) }
             })
             .then(|result| future::ready(result.map(Arc::new).map_err(Arc::new)))
             .boxed()
@@ -910,41 +946,144 @@ impl ThreadsDatabase {
         cx.set_global(GlobalThreadsDatabase(database_future));
     }
 
-    pub fn new(path: PathBuf, executor: BackgroundExecutor) -> Result<Self> {
-        std::fs::create_dir_all(&path)?;
+    pub fn new(threads_dir: PathBuf, executor: BackgroundExecutor) -> Result<Self> {
+        std::fs::create_dir_all(&threads_dir)?;
+
+        let sqlite_path = threads_dir.join("threads.db");
+        let mdb_path = threads_dir.join("threads-db.1.mdb");
+
+        let needs_migration_from_heed = mdb_path.exists();
+
+        let connection = Connection::open_file(&sqlite_path.to_string_lossy());
+
+        connection.exec(indoc! {"
+                CREATE TABLE IF NOT EXISTS threads (
+                    id TEXT PRIMARY KEY,
+                    summary TEXT NOT NULL,
+                    updated_at TEXT NOT NULL,
+                    data_type TEXT NOT NULL,
+                    data BLOB NOT NULL
+                )
+            "})?()
+        .map_err(|e| anyhow!("Failed to create threads table: {}", e))?;
+
+        let db = Self {
+            executor: executor.clone(),
+            connection: Arc::new(Mutex::new(connection)),
+        };
+
+        if needs_migration_from_heed {
+            let db_connection = db.connection();
+            let executor_clone = executor.clone();
+            executor
+                .spawn(async move {
+                    log::info!("Starting threads.db migration");
+                    Self::migrate_from_heed(&mdb_path, db_connection, executor_clone)?;
+                    std::fs::remove_dir_all(mdb_path)?;
+                    log::info!("threads.db migrated to sqlite");
+                    Ok::<(), anyhow::Error>(())
+                })
+                .detach();
+        }
+
+        Ok(db)
+    }
+
+    // Remove this migration after 2025-09-01
+    fn migrate_from_heed(
+        mdb_path: &Path,
+        connection: Arc<Mutex<Connection>>,
+        _executor: BackgroundExecutor,
+    ) -> Result<()> {
+        use heed::types::SerdeBincode;
+        struct SerializedThreadHeed(SerializedThread);
+
+        impl heed::BytesEncode<'_> for SerializedThreadHeed {
+            type EItem = SerializedThreadHeed;
+
+            fn bytes_encode(
+                item: &Self::EItem,
+            ) -> Result<std::borrow::Cow<[u8]>, heed::BoxedError> {
+                serde_json::to_vec(&item.0)
+                    .map(std::borrow::Cow::Owned)
+                    .map_err(Into::into)
+            }
+        }
+
+        impl<'a> heed::BytesDecode<'a> for SerializedThreadHeed {
+            type DItem = SerializedThreadHeed;
+
+            fn bytes_decode(bytes: &'a [u8]) -> Result<Self::DItem, heed::BoxedError> {
+                SerializedThread::from_json(bytes)
+                    .map(SerializedThreadHeed)
+                    .map_err(Into::into)
+            }
+        }
 
         const ONE_GB_IN_BYTES: usize = 1024 * 1024 * 1024;
+
         let env = unsafe {
             heed::EnvOpenOptions::new()
                 .map_size(ONE_GB_IN_BYTES)
                 .max_dbs(1)
-                .open(path)?
+                .open(mdb_path)?
         };
 
-        let mut txn = env.write_txn()?;
-        let threads = env.create_database(&mut txn, Some("threads"))?;
-        txn.commit()?;
+        let txn = env.write_txn()?;
+        let threads: heed::Database<SerdeBincode<ThreadId>, SerializedThreadHeed> = env
+            .open_database(&txn, Some("threads"))?
+            .ok_or_else(|| anyhow!("threads database not found"))?;
 
-        Ok(Self {
-            executor,
-            env,
-            threads,
-        })
+        for result in threads.iter(&txn)? {
+            let (thread_id, thread_heed) = result?;
+            Self::save_thread_sync(&connection, thread_id, thread_heed.0)?;
+        }
+
+        Ok(())
+    }
+
+    fn save_thread_sync(
+        connection: &Arc<Mutex<Connection>>,
+        id: ThreadId,
+        thread: SerializedThread,
+    ) -> Result<()> {
+        let json_data = serde_json::to_string(&thread)?;
+        let summary = thread.summary.to_string();
+        let updated_at = thread.updated_at.to_rfc3339();
+
+        let connection = connection.lock().unwrap();
+
+        let compressed = zstd::encode_all(json_data.as_bytes(), Self::COMPRESSION_LEVEL)?;
+        let data_type = DataType::Zstd;
+        let data = compressed;
+
+        let mut insert = connection.exec_bound::<(ThreadId, String, String, DataType, Vec<u8>)>(indoc! {"
+            INSERT OR REPLACE INTO threads (id, summary, updated_at, data_type, data) VALUES (?, ?, ?, ?, ?)
+        "})?;
+
+        insert((id, summary, updated_at, data_type, data))?;
+
+        Ok(())
     }
 
     pub fn list_threads(&self) -> Task<Result<Vec<SerializedThreadMetadata>>> {
-        let env = self.env.clone();
-        let threads = self.threads;
+        let connection = self.connection.clone();
 
         self.executor.spawn(async move {
-            let txn = env.read_txn()?;
-            let mut iter = threads.iter(&txn)?;
+            let connection = connection.lock().unwrap();
+            let mut select =
+                connection.select_bound::<(), (ThreadId, String, String)>(indoc! {"
+                SELECT id, summary, updated_at FROM threads ORDER BY updated_at DESC
+            "})?;
+
+            let rows = select(())?;
             let mut threads = Vec::new();
-            while let Some((key, value)) = iter.next().transpose()? {
+
+            for (id, summary, updated_at) in rows {
                 threads.push(SerializedThreadMetadata {
-                    id: key,
-                    summary: value.summary,
-                    updated_at: value.updated_at,
+                    id,
+                    summary: summary.into(),
+                    updated_at: DateTime::parse_from_rfc3339(&updated_at)?.with_timezone(&Utc),
                 });
             }
 
@@ -953,36 +1092,51 @@ impl ThreadsDatabase {
     }
 
     pub fn try_find_thread(&self, id: ThreadId) -> Task<Result<Option<SerializedThread>>> {
-        let env = self.env.clone();
-        let threads = self.threads;
+        let connection = self.connection.clone();
 
         self.executor.spawn(async move {
-            let txn = env.read_txn()?;
-            let thread = threads.get(&txn, &id)?;
-            Ok(thread)
+            let connection = connection.lock().unwrap();
+            let mut select = connection.select_bound::<ThreadId, (DataType, Vec<u8>)>(indoc! {"
+                SELECT data_type, data FROM threads WHERE id = ? LIMIT 1
+            "})?;
+
+            let rows = select(id)?;
+            if let Some((data_type, data)) = rows.into_iter().next() {
+                let json_data = match data_type {
+                    DataType::Zstd => {
+                        let decompressed = zstd::decode_all(&data[..])?;
+                        String::from_utf8(decompressed)?
+                    }
+                    DataType::Json => String::from_utf8(data)?,
+                };
+
+                let thread = SerializedThread::from_json(json_data.as_bytes())?;
+                Ok(Some(thread))
+            } else {
+                Ok(None)
+            }
         })
     }
 
     pub fn save_thread(&self, id: ThreadId, thread: SerializedThread) -> Task<Result<()>> {
-        let env = self.env.clone();
-        let threads = self.threads;
+        let connection = self.connection.clone();
 
-        self.executor.spawn(async move {
-            let mut txn = env.write_txn()?;
-            threads.put(&mut txn, &id, &thread)?;
-            txn.commit()?;
-            Ok(())
-        })
+        self.executor
+            .spawn(async move { Self::save_thread_sync(&connection, id, thread) })
     }
 
     pub fn delete_thread(&self, id: ThreadId) -> Task<Result<()>> {
-        let env = self.env.clone();
-        let threads = self.threads;
+        let connection = self.connection.clone();
 
         self.executor.spawn(async move {
-            let mut txn = env.write_txn()?;
-            threads.delete(&mut txn, &id)?;
-            txn.commit()?;
+            let connection = connection.lock().unwrap();
+
+            let mut delete = connection.exec_bound::<ThreadId>(indoc! {"
+                DELETE FROM threads WHERE id = ?
+            "})?;
+
+            delete(id)?;
+
             Ok(())
         })
     }