The four-phase lifecycle of a tool call describes the process an agent follows to use a tool:

  1. Decision: The model identifies the need for a tool and generates a structured tool call.
  2. Execution: The runtime executes the tool call.
  3. Observation: The result of the tool execution is captured as an observation.
  4. Feedback: The observation is fed back into the model’s context to inform its next step.

This cycle can repeat multiple times as an agent works towards its goal.

Why it matters: This lifecycle is the fundamental mechanic that allows an LLM to interact with the real world and perform actions beyond generating text.

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