diff --git a/codex-rs/app-server/src/message_processor.rs b/codex-rs/app-server/src/message_processor.rs
index 59d7e2b4f7e5..4ca6ddea9d9c 100644
--- a/codex-rs/app-server/src/message_processor.rs
+++ b/codex-rs/app-server/src/message_processor.rs
@@ -309,7 +309,11 @@ impl MessageProcessor {
         thread_manager
             .plugins_manager()
             .set_analytics_events_client(analytics_events_client.clone());
-        let skills_watcher = SkillsWatcher::new(thread_manager.skills_service(), outgoing.clone());
+        let skills_watcher = SkillsWatcher::new(
+            thread_manager.skills_service(),
+            &config.codex_home,
+            outgoing.clone(),
+        );
 
         let pending_thread_unloads = Arc::new(Mutex::new(HashSet::new()));
         let thread_watch_manager =
diff --git a/codex-rs/app-server/src/skills_watcher.rs b/codex-rs/app-server/src/skills_watcher.rs
index 4852394fef0b..87661b904b15 100644
--- a/codex-rs/app-server/src/skills_watcher.rs
+++ b/codex-rs/app-server/src/skills_watcher.rs
@@ -15,7 +15,9 @@ use codex_file_watcher::Receiver;
 use codex_file_watcher::ThrottledWatchReceiver;
 use codex_file_watcher::WatchPath;
 use codex_file_watcher::WatchRegistration;
+use codex_protocol::protocol::SkillScope;
 use codex_protocol::protocol::TurnEnvironmentSelection;
+use codex_skills::system_cache_root_dir;
 use codex_utils_absolute_path::AbsolutePathBuf;
 use tokio_util::sync::CancellationToken;
 use tokio_util::sync::DropGuard;
@@ -36,6 +38,7 @@ pub(crate) struct SkillsWatcher {
 impl SkillsWatcher {
     pub(crate) fn new(
         skills_service: Arc<SkillsService>,
+        codex_home: &AbsolutePathBuf,
         outgoing: Arc<OutgoingMessageSender>,
     ) -> Arc<Self> {
         let file_watcher = match FileWatcher::new() {
@@ -48,7 +51,14 @@ impl SkillsWatcher {
         let (subscriber, rx) = file_watcher.add_subscriber();
         let shutdown_token = CancellationToken::new();
         let shutdown_drop_guard = shutdown_token.clone().drop_guard();
-        Self::spawn_event_loop(rx, skills_service, outgoing, shutdown_token.child_token());
+        let system_skills_root = system_cache_root_dir(codex_home);
+        Self::spawn_event_loop(
+            rx,
+            skills_service,
+            system_skills_root,
+            outgoing,
+            shutdown_token.child_token(),
+        );
         Arc::new(Self {
             subscriber,
             runtime_extra_roots_registration: Mutex::new(WatchRegistration::default()),
@@ -114,8 +124,9 @@ impl SkillsWatcher {
             .skill_roots_for_config(&skills_input, Some(environment.get_filesystem()))
             .await
             .into_iter()
-            // Plugin roots are invalidated by plugin lifecycle operations.
-            .filter(|root| root.plugin_identity.is_none())
+            // Plugin roots have explicit lifecycle invalidation; generated system skills are
+            // installed before this watcher starts.
+            .filter(|root| root.plugin_identity.is_none() && root.scope != SkillScope::System)
             .map(|root| WatchPath {
                 path: root.path.into_path_buf(),
                 recursive: true,
@@ -127,6 +138,7 @@ impl SkillsWatcher {
     fn spawn_event_loop(
         rx: Receiver,
         skills_service: Arc<SkillsService>,
+        system_skills_root: AbsolutePathBuf,
         outgoing: Arc<OutgoingMessageSender>,
         shutdown_token: CancellationToken,
     ) {
@@ -141,8 +153,16 @@ impl SkillsWatcher {
                     _ = shutdown_token.cancelled() => break,
                     event = rx.recv() => event,
                 };
-                if event.is_none() {
+                let Some(event) = event else {
                     break;
+                };
+                // The legacy user-skills root contains `.system` and is watched recursively.
+                if event
+                    .paths
+                    .iter()
+                    .all(|path| path.starts_with(system_skills_root.as_path()))
+                {
+                    continue;
                 }
                 skills_service.clear_cache();
                 outgoing