diff --git a/codex-rs/ext/goal/src/spec.rs b/codex-rs/ext/goal/src/spec.rs
index 2c92c0384..6b97a24e9 100644
--- a/codex-rs/ext/goal/src/spec.rs
+++ b/codex-rs/ext/goal/src/spec.rs
@@ -27,7 +27,7 @@ pub fn create_create_goal_tool() -> ToolSpec {
         (
             "objective".to_string(),
             JsonSchema::string(Some(
-                "Required. The concrete objective to start pursuing. This starts a new active goal only when no goal is currently defined; if a goal already exists, this tool fails."
+                "Required. The concrete objective to start pursuing. This starts a new active goal when no goal exists or replaces the current goal when it is complete."
                     .to_string(),
             )),
         ),
@@ -44,7 +44,7 @@ pub fn create_create_goal_tool() -> ToolSpec {
         name: CREATE_GOAL_TOOL_NAME.to_string(),
         description: format!(
             r#"Create a goal only when explicitly requested by the user or system/developer instructions; do not infer goals from ordinary tasks.
-Set token_budget only when an explicit token budget is requested. Fails if a goal exists; use {UPDATE_GOAL_TOOL_NAME} only for status."#
+Set token_budget only when an explicit token budget is requested. Fails if an unfinished goal exists; use {UPDATE_GOAL_TOOL_NAME} only for status."#
         ),
         strict: false,
         defer_loading: None,
diff --git a/codex-rs/ext/goal/src/tool.rs b/codex-rs/ext/goal/src/tool.rs
index 17947aa34..8c0f51300 100644
--- a/codex-rs/ext/goal/src/tool.rs
+++ b/codex-rs/ext/goal/src/tool.rs
@@ -191,7 +191,7 @@ impl GoalToolExecutor {
             .map_err(|err| FunctionCallError::RespondToModel(format!("failed to create goal: {err}")))?
             .ok_or_else(|| {
                 FunctionCallError::RespondToModel(
-                    "cannot create a new goal because this thread already has a goal; use update_goal only when the existing goal is complete"
+                    "cannot create a new goal because this thread has an unfinished goal; complete the existing goal first"
                         .to_string(),
                 )
             })?;
diff --git a/codex-rs/ext/goal/tests/goal_extension_backend.rs b/codex-rs/ext/goal/tests/goal_extension_backend.rs
index f89a08ebb..b922f5332 100644
--- a/codex-rs/ext/goal/tests/goal_extension_backend.rs
+++ b/codex-rs/ext/goal/tests/goal_extension_backend.rs
@@ -124,7 +124,7 @@ async fn goal_tools_hidden_for_review_subagents() -> anyhow::Result<()> {
 }
 
 #[tokio::test]
-async fn installed_goal_tools_reject_duplicate_goal_creation() -> anyhow::Result<()> {
+async fn installed_goal_tools_only_replace_complete_goal() -> anyhow::Result<()> {
     let runtime = test_runtime().await?;
     let thread_id = test_thread_id()?;
     seed_thread_metadata(runtime.as_ref(), thread_id).await?;
@@ -152,10 +152,31 @@ async fn installed_goal_tools_reject_duplicate_goal_creation() -> anyhow::Result
     assert_eq!(
         err,
         FunctionCallError::RespondToModel(
-            "cannot create a new goal because this thread already has a goal; use update_goal only when the existing goal is complete"
+            "cannot create a new goal because this thread has an unfinished goal; complete the existing goal first"
                 .to_string()
         )
     );
+
+    let update_tool = tool_by_name(&tools, "update_goal");
+    update_tool
+        .handle(tool_call(
+            "update_goal",
+            "call-complete-goal",
+            json!({ "status": "complete" }),
+        ))
+        .await?;
+
+    let invocation = tool_call(
+        "create_goal",
+        "call-create-goal-3",
+        json!({ "objective": "replacement goal" }),
+    );
+    let output = create_tool.handle(invocation.clone()).await?;
+    let result = output.code_mode_result(&invocation.payload);
+
+    assert_eq!(json!("replacement goal"), result["goal"]["objective"]);
+    assert_eq!(json!("active"), result["goal"]["status"]);
+    assert_eq!(json!(0), result["goal"]["tokensUsed"]);
     Ok(())
 }
 
diff --git a/codex-rs/state/src/runtime/goals.rs b/codex-rs/state/src/runtime/goals.rs
index aa0e90462..50e8cf068 100644
--- a/codex-rs/state/src/runtime/goals.rs
+++ b/codex-rs/state/src/runtime/goals.rs
@@ -141,7 +141,16 @@ INSERT INTO thread_goals (
     created_at_ms,
     updated_at_ms
 ) VALUES (?, ?, ?, ?, ?, 0, 0, ?, ?)
-ON CONFLICT(thread_id) DO NOTHING
+ON CONFLICT(thread_id) DO UPDATE SET
+    goal_id = excluded.goal_id,
+    objective = excluded.objective,
+    status = excluded.status,
+    token_budget = excluded.token_budget,
+    tokens_used = 0,
+    time_used_seconds = 0,
+    created_at_ms = excluded.created_at_ms,
+    updated_at_ms = excluded.updated_at_ms
+WHERE thread_goals.status = 'complete'
 RETURNING
     thread_id,
     goal_id,