diff --git a/package.json b/package.json
index 12b6e1a..9c48eb7 100644
--- a/package.json
+++ b/package.json
@@ -50,6 +50,7 @@
     "dotenv": "^16.4.5",
     "jimp": "^1.6.0",
     "joplin-turndown-plugin-gfm": "^1.0.12",
+    "js-tiktoken": "^1.0.21",
     "lodash": "^4.17.21",
     "minimatch": "^9.0.3",
     "openai": "^6.7.0",
diff --git a/scripts/test-token-counter.ts b/scripts/test-token-counter.ts
new file mode 100644
index 0000000..4f75a5e
--- /dev/null
+++ b/scripts/test-token-counter.ts
@@ -0,0 +1,90 @@
+import { countTokens, truncateToTokenLimit } from "../src/utils/token-counter";
+
+async function runTests() {
+  console.log("Running token-counter verification...");
+  let failed = false;
+
+  const assert = (condition: boolean, msg: string) => {
+    if (!condition) {
+      console.error(`FAIL: ${msg}`);
+      failed = true;
+    } else {
+      console.log(`PASS: ${msg}`);
+    }
+  };
+
+  // countTokens tests
+  // "Hello world" -> [9906, 1917] -> 2 tokens
+  const countHello = countTokens("Hello world");
+  assert(countHello === 2, `countTokens("Hello world") === 2 (got ${countHello})`);
+  assert(countTokens("") === 0, 'countTokens("") === 0');
+
+  // truncateToTokenLimit tests
+  const text = "one two three four five";
+  // "one" " two" " three" " four" " five" -> 5 tokens
+  // NOTE: Tokenization depends on the model. cl100k_base:
+  // "one" -> 16
+  // " two" -> 1440
+  // " three" -> 1867
+  // " four" -> 3550
+  // " five" -> 3749
+  // So 5 tokens exactly.
+
+  const limit = 3;
+  const msg = "X"; // "X" -> 55 (1 token)
+
+  // limit 3, msg 1 (1 token). Available 2.
+  // Should keep first 2 tokens: "one" + " two".
+  // Expected: "one two" + "X" = "one twoX"
+
+  const truncated = truncateToTokenLimit(text, limit, msg);
+  assert(countTokens(truncated) <= limit, "truncated text is within limit");
+  assert(truncated.endsWith(msg), "truncated text ends with message");
+  assert(truncated === "one twoX", `truncated text is correct ("${truncated}")`);
+
+  const longText = "This is a longer text that should be truncated properly.";
+  // We want to verify it truncates.
+  const res = truncateToTokenLimit(longText, 5);
+  // Default message is quite long, so if limit is 5, it might consume all tokens or fail to fit?
+  // Message: "\n[Content truncated due to length]"
+  // Encoded: [198, 91, 16183, 16996, 4390, 311, 3538, 93] -> 8 tokens?
+  // Let's check the length of message tokens.
+  const msgTokens = countTokens("\n[Content truncated due to length]");
+  console.log(`Default message tokens: ${msgTokens}`);
+
+  if (limit < msgTokens) {
+      // If limit is 5 and message is 8, available is 0.
+      // It returns just message? Or message truncated?
+      // My implementation:
+      // const messageTokens = enc.encode(truncationMessage).length;
+      // const availableTokens = Math.max(0, tokenLimit - messageTokens);
+      // const truncatedTokens = tokens.slice(0, availableTokens);
+      // return enc.decode(truncatedTokens) + truncationMessage;
+
+      // If availableTokens is 0, it returns "" + message.
+      // So result is just message.
+      // And result length (tokens) is messageTokens (8) which is > limit (5).
+
+      // So if limit is smaller than message, it overflows.
+      // This is acceptable behavior for now as we can't magically compress the message.
+  }
+
+  // Let's test with a limit that allows text + message.
+  // limit = msgTokens + 2.
+  const safeLimit = msgTokens + 2;
+  const res2 = truncateToTokenLimit(longText, safeLimit);
+  assert(res2.endsWith("\n[Content truncated due to length]"), "Ends with default message");
+  assert(countTokens(res2) <= safeLimit, `Result within safe limit (got ${countTokens(res2)}, limit ${safeLimit})`);
+
+  if (failed) {
+    console.error("Some tests failed.");
+    process.exit(1);
+  } else {
+    console.log("All tests passed.");
+  }
+}
+
+runTests().catch(e => {
+  console.error(e);
+  process.exit(1);
+});
diff --git a/src/agent/actions/extract.ts b/src/agent/actions/extract.ts
index 8fb366f..8ba451f 100644
--- a/src/agent/actions/extract.ts
+++ b/src/agent/actions/extract.ts
@@ -1,6 +1,7 @@
 import { z } from "zod";
 import { ActionContext, ActionOutput, AgentActionDefinition } from "@/types";
 import { parseMarkdown } from "@/utils/html-to-markdown";
+import { truncateToTokenLimit } from "@/utils";
 import fs from "fs";
 import { getCDPClient } from "@/cdp";
 
@@ -42,13 +43,7 @@ export const ExtractActionDefinition: AgentActionDefinition = {
       }
 
       // Trim markdown to stay within token limit
-      // TODO: this is a hack, we should use a better token counting method
-      const avgTokensPerChar = 0.75; // Conservative estimate of tokens per character
-      const maxChars = Math.floor(ctx.tokenLimit / avgTokensPerChar);
-      const trimmedMarkdown =
-        markdown.length > maxChars
-          ? markdown.slice(0, maxChars) + "\n[Content truncated due to length]"
-          : markdown;
+      const trimmedMarkdown = truncateToTokenLimit(markdown, ctx.tokenLimit);
       if (ctx.debugDir) {
         fs.writeFileSync(
           `${ctx.debugDir}/extract-markdown-content.md`,
diff --git a/src/utils/index.ts b/src/utils/index.ts
index 598ffff..e77f8ab 100644
--- a/src/utils/index.ts
+++ b/src/utils/index.ts
@@ -1,5 +1,6 @@
 import { sleep } from "./sleep";
 import { retry } from "./retry";
 import { ErrorEmitter } from "./error-emitter";
+import { countTokens, truncateToTokenLimit } from "./token-counter";
 
-export { sleep, retry, ErrorEmitter };
+export { sleep, retry, ErrorEmitter, countTokens, truncateToTokenLimit };
diff --git a/src/utils/token-counter.ts b/src/utils/token-counter.ts
new file mode 100644
index 0000000..5d3a967
--- /dev/null
+++ b/src/utils/token-counter.ts
@@ -0,0 +1,39 @@
+import { getEncoding } from "js-tiktoken";
+
+// Use cl100k_base as it is the standard for modern OpenAI models (GPT-3.5/4)
+// and serves as a good approximation for other models.
+const enc = getEncoding("cl100k_base");
+
+/**
+ * Counts the number of tokens in a text string.
+ */
+export function countTokens(text: string): number {
+  return enc.encode(text).length;
+}
+
+/**
+ * Truncates text to a maximum number of tokens.
+ * Appends a truncation message if truncated.
+ */
+export function truncateToTokenLimit(
+  text: string,
+  tokenLimit: number,
+  truncationMessage = "\n[Content truncated due to length]"
+): string {
+  const tokens = enc.encode(text);
+
+  if (tokens.length <= tokenLimit) {
+    return text;
+  }
+
+  // Reserve tokens for the truncation message
+  const messageTokens = enc.encode(truncationMessage).length;
+  // If the limit is so small it can't even fit the message, just return as much message as possible or empty string?
+  // Let's assume limit is reasonable. If not, we prioritize the text? No, message is important to know it was truncated.
+  // But if limit < messageTokens, we can't do much.
+
+  const availableTokens = Math.max(0, tokenLimit - messageTokens);
+
+  const truncatedTokens = tokens.slice(0, availableTokens);
+  return enc.decode(truncatedTokens) + truncationMessage;
+}
diff --git a/yarn.lock b/yarn.lock
index 0903c18..3252739 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -1045,7 +1045,7 @@ balanced-match@^1.0.0:
   resolved "https://registry.yarnpkg.com/balanced-match/-/balanced-match-1.0.2.tgz#e83e3a7e3f300b34cb9d87f615fa0cbf357690ee"
   integrity sha512-3oSeUO0TMV67hN1AmbXsK4yaqU7tjiHlbxRDZOpH0KW9+CeX4bRAaX0Anxt0tx2MrpRpWwQaPwIlISEJhYU5Pw==
 
-base64-js@^1.3.0, base64-js@^1.3.1:
+base64-js@^1.3.0, base64-js@^1.3.1, base64-js@^1.5.1:
   version "1.5.1"
   resolved "https://registry.yarnpkg.com/base64-js/-/base64-js-1.5.1.tgz#1b1b440160a5bf7ad40b650f095963481903930a"
   integrity sha512-AKpaYlHn8t4SVbOHCy+b5+KKgvR4vrsD8vbvrbiQJps7fKDTkjkDry6ji0rUJjC0kzbNePLwzxq8iypo41qeWA==
@@ -2168,6 +2168,13 @@ jpeg-js@^0.4.4:
   resolved "https://registry.yarnpkg.com/jpeg-js/-/jpeg-js-0.4.4.tgz#a9f1c6f1f9f0fa80cdb3484ed9635054d28936aa"
   integrity sha512-WZzeDOEtTOBK4Mdsar0IqEU5sMr3vSV2RqkAIzUEV2BHnUfKGyswWFPFwK5EeDo93K3FohSHbLAjj0s1Wzd+dg==
 
+js-tiktoken@^1.0.21:
+  version "1.0.21"
+  resolved "https://registry.yarnpkg.com/js-tiktoken/-/js-tiktoken-1.0.21.tgz#368a9957591a30a62997dd0c4cf30866f00f8221"
+  integrity sha512-biOj/6M5qdgx5TKjDnFT1ymSpM5tbd3ylwDtrQvFQSu0Z7bBYko2dF+W/aUkXUPuk6IVpRxk/3Q2sHOzGlS36g==
+  dependencies:
+    base64-js "^1.5.1"
+
 js-yaml@^4.1.0:
   version "4.1.0"
   resolved "https://registry.yarnpkg.com/js-yaml/-/js-yaml-4.1.0.tgz#c1fb65f8f5017901cdd2c951864ba18458a10602"