diff --git a/example/convex/chat.ts b/example/convex/chat.ts
index 190c501..f81650a 100644
--- a/example/convex/chat.ts
+++ b/example/convex/chat.ts
@@ -21,25 +21,50 @@ export const streamChat = httpAction(async (ctx, request) => {
       // Lets grab the history up to now so that the AI has some context
       const history = await ctx.runQuery(internal.messages.getHistory);
 
-      // Lets kickoff a stream request to OpenAI
-      const stream = await openai.chat.completions.create({
-        model: "gpt-4.1-mini",
-        messages: [
+      // o4-mini works best with the Responses API for reasoning
+      const response = await openai.responses.create({
+        model: "o4-mini",
+        input: [
           {
             role: "system",
             content: `You are a helpful assistant that can answer questions and help with tasks.
           Please provide your response in markdown format.
-          
+
           You are continuing a conversation. The conversation so far is found in the following JSON-formatted value:`,
           },
           ...history,
         ],
+        reasoning: {
+          effort: "medium",
+          summary: "auto", // Get reasoning summary
+        },
         stream: true,
       });
 
-      // Append each chunk to the persistent stream as they come in from openai
-      for await (const part of stream)
-        await append(part.choices[0]?.delta?.content || "");
+      let currentReasoning = "";
+      let currentText = "";
+
+      // Process the streaming response
+      for await (const event of response) {
+
+        // Handle reasoning summary chunks
+        if (event.type === "response.reasoning_summary_text.delta") {
+          currentReasoning += event.delta || "";
+          await append({
+            text: "",
+            reasoning: event.delta || "",
+          });
+        }
+
+        // Handle output text chunks
+        if (event.type === "response.output_text.delta") {
+          currentText += event.delta || "";
+          await append({
+            text: event.delta || "",
+            reasoning: "",
+          });
+        }
+      }
     },
   );
 
diff --git a/example/src/components/ServerMessage.tsx b/example/src/components/ServerMessage.tsx
index 3518238..55ad770 100644
--- a/example/src/components/ServerMessage.tsx
+++ b/example/src/components/ServerMessage.tsx
@@ -17,7 +17,7 @@ export function ServerMessage({
   stopStreaming: () => void;
   scrollToBottom: () => void;
 }) {
-  const { text, status } = useStream(
+  const { text, reasoning, status } = useStream(
     api.streaming.getStreamBody,
     new URL(`${getConvexSiteUrl()}/chat-stream`),
     isDriven,
@@ -42,7 +42,15 @@ export function ServerMessage({
 
   return (
     <div className="md-answer">
-      <Markdown>{text || "Thinking..."}</Markdown>
+      {reasoning && reasoning.length > 0 && (
+        <div className="mb-3 pb-3 border-b border-gray-200">
+          <div className="text-xs text-gray-500 mb-2">Reasoning:</div>
+          <div className="text-sm text-gray-600">
+            <Markdown>{reasoning}</Markdown>
+          </div>
+        </div>
+      )}
+      <Markdown>{text}</Markdown>
       {status === "error" && (
         <div className="text-red-500 mt-2">Error loading response</div>
       )}
diff --git a/src/client/index.ts b/src/client/index.ts
index 2140955..1f987ba 100644
--- a/src/client/index.ts
+++ b/src/client/index.ts
@@ -14,10 +14,12 @@ export type StreamId = string & { __isStreamId: true };
 export const StreamIdValidator = v.string();
 export type StreamBody = {
   text: string;
+  reasoning: string;
   status: StreamStatus;
 };
 
-export type ChunkAppender = (text: string) => Promise<void>;
+export type StreamChunk = string | { text: string; reasoning?: string };
+export type ChunkAppender = (chunk: StreamChunk) => Promise<void>;
 export type StreamWriter<A extends GenericActionCtx<GenericDataModel>> = (
   ctx: A,
   request: Request,
@@ -77,11 +79,15 @@ export class PersistentTextStreaming {
     ctx: RunQueryCtx,
     streamId: StreamId,
   ): Promise<StreamBody> {
-    const { text, status } = await ctx.runQuery(
+    const { text, reasoning, status } = await ctx.runQuery(
       this.component.lib.getStreamText,
       { streamId },
     );
-    return { text, status: status as StreamStatus };
+    return {
+      text,
+      reasoning: reasoning ?? "",
+      status: status as StreamStatus
+    };
   }
 
   /**
@@ -125,14 +131,19 @@ export class PersistentTextStreaming {
     let writer =
       writable.getWriter() as WritableStreamDefaultWriter<Uint8Array> | null;
     const textEncoder = new TextEncoder();
-    let pending = "";
+    let pending = { text: "", reasoning: "" };
 
     const doStream = async () => {
-      const chunkAppender: ChunkAppender = async (text) => {
+      const chunkAppender: ChunkAppender = async (chunk) => {
+        // Normalize input to object form
+        const normalized = typeof chunk === "string" ? { text: chunk } : chunk;
+
         // write to this handler's response stream on every update
         if (writer) {
           try {
-            await writer.write(textEncoder.encode(text));
+            await writer.write(textEncoder.encode(
+              JSON.stringify(normalized) + "\n"
+            ));
           } catch (e) {
             console.error("Error writing to stream", e);
             console.error(
@@ -141,11 +152,12 @@ export class PersistentTextStreaming {
             writer = null;
           }
         }
-        pending += text;
+        pending.text += normalized.text;
+        pending.reasoning += normalized.reasoning || "";
         // write to the database periodically, like at the end of sentences
-        if (hasDelimeter(text)) {
-          await this.addChunk(ctx, streamId, pending, false);
-          pending = "";
+        if (hasDelimeter(normalized.text)) {
+          await this.addChunk(ctx, streamId, pending.text, pending.reasoning, false);
+          pending = { text: "", reasoning: "" };
         }
       };
       try {
@@ -159,7 +171,7 @@ export class PersistentTextStreaming {
       }
 
       // Success? Flush any last updates
-      await this.addChunk(ctx, streamId, pending, true);
+      await this.addChunk(ctx, streamId, pending.text, pending.reasoning, true);
 
       if (writer) {
         await writer.close();
@@ -178,11 +190,13 @@ export class PersistentTextStreaming {
     ctx: RunMutationCtx,
     streamId: StreamId,
     text: string,
+    reasoning: string,
     final: boolean,
   ) {
     await ctx.runMutation(this.component.lib.addChunk, {
       streamId,
       text,
+      reasoning: reasoning || undefined,
       final,
     });
   }
diff --git a/src/component/_generated/component.ts b/src/component/_generated/component.ts
index 6053923..5c2db6d 100644
--- a/src/component/_generated/component.ts
+++ b/src/component/_generated/component.ts
@@ -27,7 +27,7 @@ export type ComponentApi<Name extends string | undefined = string | undefined> =
       addChunk: FunctionReference<
         "mutation",
         "internal",
-        { final: boolean; streamId: string; text: string },
+        { final: boolean; reasoning?: string; streamId: string; text: string },
         any,
         Name
       >;
@@ -44,6 +44,7 @@ export type ComponentApi<Name extends string | undefined = string | undefined> =
         "internal",
         { streamId: string },
         {
+          reasoning: string;
           status: "pending" | "streaming" | "done" | "error" | "timeout";
           text: string;
         },
diff --git a/src/component/lib.ts b/src/component/lib.ts
index cc01906..a781f6f 100644
--- a/src/component/lib.ts
+++ b/src/component/lib.ts
@@ -20,6 +20,7 @@ export const addChunk = mutation({
   args: {
     streamId: v.id("streams"),
     text: v.string(),
+    reasoning: v.optional(v.string()),
     final: v.boolean(),
   },
   handler: async (ctx, args) => {
@@ -37,6 +38,7 @@ export const addChunk = mutation({
     await ctx.db.insert("chunks", {
       streamId: args.streamId,
       text: args.text,
+      reasoning: args.reasoning,
     });
     if (args.final) {
       await ctx.db.patch(args.streamId, {
@@ -97,6 +99,7 @@ export const getStreamText = query({
   },
   returns: v.object({
     text: v.string(),
+    reasoning: v.string(),
     status: streamStatusValidator,
   }),
   handler: async (ctx, args) => {
@@ -105,15 +108,18 @@ export const getStreamText = query({
       throw new Error("Stream not found");
     }
     let text = "";
+    let reasoning = "";
     if (stream.status !== "pending") {
       const chunks = await ctx.db
         .query("chunks")
         .withIndex("byStream", (q) => q.eq("streamId", args.streamId))
         .collect();
       text = chunks.map((chunk) => chunk.text).join("");
+      reasoning = chunks.map((chunk) => chunk.reasoning || "").join("");
     }
     return {
       text,
+      reasoning,
       status: stream.status,
     };
   },
diff --git a/src/component/schema.ts b/src/component/schema.ts
index d7435fc..99c1d47 100644
--- a/src/component/schema.ts
+++ b/src/component/schema.ts
@@ -17,5 +17,6 @@ export default defineSchema({
   chunks: defineTable({
     streamId: v.id("streams"),
     text: v.string(),
+    reasoning: v.optional(v.string()),
   }).index("byStream", ["streamId"]),
 });
diff --git a/src/react/index.ts b/src/react/index.ts
index ef82b0e..5dafcb0 100644
--- a/src/react/index.ts
+++ b/src/react/index.ts
@@ -63,7 +63,7 @@ export function useStream(
     getPersistentBody,
     usePersistence && streamId ? { streamId } : "skip",
   );
-  const [streamBody, setStreamBody] = useState<string>("");
+  const [streamBody, setStreamBody] = useState({ text: "", reasoning: "" });
 
   useEffect(() => {
     if (driven && streamId && !streamStarted.current) {
@@ -72,8 +72,11 @@ export function useStream(
         const success = await startStreaming(
           streamUrl,
           streamId,
-          (text) => {
-            setStreamBody((prev) => prev + text);
+          (chunk) => {
+            setStreamBody((prev) => ({
+              text: prev.text + chunk.text,
+              reasoning: prev.reasoning + (chunk.reasoning || ""),
+            }));
           },
           {
             ...opts?.headers,
@@ -110,12 +113,13 @@ export function useStream(
     }
     let status: StreamStatus;
     if (streamEnded === null) {
-      status = streamBody.length > 0 ? "streaming" : "pending";
+      status = streamBody.text.length > 0 ? "streaming" : "pending";
     } else {
       status = streamEnded ? "done" : "error";
     }
     return {
-      text: streamBody,
+      text: streamBody.text,
+      reasoning: streamBody.reasoning,
       status: status as StreamStatus,
     };
   }, [persistentBody, streamBody, streamEnded]);
@@ -139,7 +143,7 @@ export function useStream(
 async function startStreaming(
   url: URL,
   streamId: StreamId,
-  onUpdate: (text: string) => void,
+  onUpdate: (chunk: { text: string; reasoning?: string }) => void,
   headers: Record<string, string>,
 ) {
   const response = await fetch(url, {
@@ -162,18 +166,74 @@ async function startStreaming(
     console.error("No body in response", response);
     return false;
   }
-  const reader = response.body.getReader();
-  while (true) {
-    try {
-      const { done, value } = await reader.read();
-      if (done) {
-        onUpdate(new TextDecoder().decode(value));
-        return true;
+
+  const reader = response.body.pipeThrough(new TextDecoderStream()).getReader();
+
+  // Read first chunk to detect format
+  const firstRead = await reader.read();
+  if (firstRead.done) {
+    return true;
+  }
+
+  const firstChunk = firstRead.value;
+  const isJsonMode = firstChunk.trimStart().startsWith("{");
+
+  if (isJsonMode) {
+    // JSON mode: split by newlines and parse each line
+    let buffer = firstChunk;
+
+    const processBuffer = () => {
+      const lines = buffer.split("\n");
+      buffer = lines.pop() || "";
+      for (const line of lines) {
+        if (line.trim()) {
+          try {
+            onUpdate(JSON.parse(line));
+          } catch {
+            onUpdate({ text: line });
+          }
+        }
+      }
+    };
+
+    processBuffer();
+
+    while (true) {
+      try {
+        const { done, value } = await reader.read();
+        if (done) {
+          // Flush remaining buffer
+          if (buffer.trim()) {
+            try {
+              onUpdate(JSON.parse(buffer));
+            } catch {
+              onUpdate({ text: buffer });
+            }
+          }
+          return true;
+        }
+        buffer += value;
+        processBuffer();
+      } catch (e) {
+        console.error("Error reading stream", e);
+        return false;
+      }
+    }
+  } else {
+    // Plain text mode: pass chunks through directly
+    onUpdate({ text: firstChunk });
+
+    while (true) {
+      try {
+        const { done, value } = await reader.read();
+        if (done) {
+          return true;
+        }
+        onUpdate({ text: value });
+      } catch (e) {
+        console.error("Error reading stream", e);
+        return false;
       }
-      onUpdate(new TextDecoder().decode(value));
-    } catch (e) {
-      console.error("Error reading stream", e);
-      return false;
     }
   }
 }