Abstract
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 demonstr