diff --git a/packages/coding-agent/CHANGELOG.md b/packages/coding-agent/CHANGELOG.md
index a843be21..0cf98e80 100644
--- a/packages/coding-agent/CHANGELOG.md
+++ b/packages/coding-agent/CHANGELOG.md
@@ -24,6 +24,7 @@
 
 ### Fixed
 
+- Fixed `SettingsManager.inMemory()` initial settings being lost after reloads triggered by SDK resource loading ([#3616](https://github.com/badlogic/pi-mono/issues/3616))
 - Fixed `models.json` provider compatibility to accept `compat.supportsLongCacheRetention`, allowing proxies to opt out of long-retention cache fields when needed while long retention is enabled by default when requested ([#3543](https://github.com/badlogic/pi-mono/issues/3543))
 - Fixed `--thinking xhigh` for `openai-codex` `gpt-5.5` so it is no longer downgraded to `high`.
 - Fixed git package installs with custom `npmCommand` values such as `pnpm` by avoiding npm-specific production flags in that compatibility path ([#3604](https://github.com/badlogic/pi-mono/issues/3604))
diff --git a/packages/coding-agent/src/core/settings-manager.ts b/packages/coding-agent/src/core/settings-manager.ts
index cd2339ac..d54b7753 100644
--- a/packages/coding-agent/src/core/settings-manager.ts
+++ b/packages/coding-agent/src/core/settings-manager.ts
@@ -289,7 +289,9 @@ export class SettingsManager {
 	/** Create an in-memory SettingsManager (no file I/O) */
 	static inMemory(settings: Partial<Settings> = {}): SettingsManager {
 		const storage = new InMemorySettingsStorage();
-		return new SettingsManager(storage, settings, {});
+		const initialSettings = SettingsManager.migrateSettings(structuredClone(settings) as Record<string, unknown>);
+		storage.withLock("global", () => JSON.stringify(initialSettings, null, 2));
+		return SettingsManager.fromStorage(storage);
 	}
 
 	private static loadFromStorage(storage: SettingsStorage, scope: SettingsScope): Settings {
diff --git a/packages/coding-agent/test/suite/regressions/3616-settings-inmemory-reload.test.ts b/packages/coding-agent/test/suite/regressions/3616-settings-inmemory-reload.test.ts
new file mode 100644
index 00000000..daa2c030
--- /dev/null
+++ b/packages/coding-agent/test/suite/regressions/3616-settings-inmemory-reload.test.ts
@@ -0,0 +1,86 @@
+import { existsSync, mkdirSync, rmSync } from "node:fs";
+import { tmpdir } from "node:os";
+import { join } from "node:path";
+import { afterEach, beforeEach, describe, expect, it } from "vitest";
+import { DefaultResourceLoader } from "../../../src/core/resource-loader.js";
+import { SettingsManager } from "../../../src/core/settings-manager.js";
+
+describe("regression #3616: in-memory settings survive reload", () => {
+	let tempDir: string;
+	let agentDir: string;
+
+	beforeEach(() => {
+		tempDir = join(tmpdir(), `pi-settings-inmemory-${Date.now()}-${Math.random().toString(36).slice(2)}`);
+		agentDir = join(tempDir, "agent");
+		mkdirSync(agentDir, { recursive: true });
+	});
+
+	afterEach(() => {
+		if (tempDir && existsSync(tempDir)) {
+			rmSync(tempDir, { recursive: true, force: true });
+		}
+	});
+
+	it("preserves initial settings after direct reload", async () => {
+		const settingsManager = SettingsManager.inMemory({
+			defaultThinkingLevel: "high",
+			images: { autoResize: false },
+			compaction: { enabled: false },
+		});
+
+		await settingsManager.reload();
+
+		expect(settingsManager.getDefaultThinkingLevel()).toBe("high");
+		expect(settingsManager.getImageAutoResize()).toBe(false);
+		expect(settingsManager.getCompactionEnabled()).toBe(false);
+		expect(settingsManager.getGlobalSettings()).toEqual({
+			defaultThinkingLevel: "high",
+			images: { autoResize: false },
+			compaction: { enabled: false },
+		});
+	});
+
+	it("preserves initial settings when DefaultResourceLoader reloads", async () => {
+		const settingsManager = SettingsManager.inMemory({
+			defaultThinkingLevel: "high",
+			images: { autoResize: false },
+			compaction: { enabled: false },
+		});
+		const resourceLoader = new DefaultResourceLoader({
+			cwd: tempDir,
+			agentDir,
+			settingsManager,
+			noExtensions: true,
+			noSkills: true,
+			noPromptTemplates: true,
+			noThemes: true,
+			noContextFiles: true,
+		});
+
+		await resourceLoader.reload();
+
+		expect(settingsManager.getDefaultThinkingLevel()).toBe("high");
+		expect(settingsManager.getImageAutoResize()).toBe(false);
+		expect(settingsManager.getCompactionEnabled()).toBe(false);
+	});
+
+	it("preserves initial settings after an unrelated setter, flush, and reload", async () => {
+		const settingsManager = SettingsManager.inMemory({
+			images: { autoResize: false },
+			compaction: { enabled: false },
+		});
+
+		settingsManager.setTheme("dark");
+		await settingsManager.flush();
+		await settingsManager.reload();
+
+		expect(settingsManager.getTheme()).toBe("dark");
+		expect(settingsManager.getImageAutoResize()).toBe(false);
+		expect(settingsManager.getCompactionEnabled()).toBe(false);
+		expect(settingsManager.getGlobalSettings()).toEqual({
+			images: { autoResize: false },
+			compaction: { enabled: false },
+			theme: "dark",
+		});
+	});
+});