diff --git a/openhands-agent-server/openhands/agent_server/conversation_service.py b/openhands-agent-server/openhands/agent_server/conversation_service.py
index f641d7e3dd..6327258fa5 100644
--- a/openhands-agent-server/openhands/agent_server/conversation_service.py
+++ b/openhands-agent-server/openhands/agent_server/conversation_service.py
@@ -1029,6 +1029,20 @@ def _prepare_persisted_runtime(self, stored: StoredConversation) -> None:
     async def _get_or_load_event_service(
         self, conversation_id: UUID
     ) -> EventService | None:
+        # Fast path: check the cache *without* acquiring the lifecycle lock.
+        # This ensures that already-loaded conversations can be retrieved even
+        # when the lock is held by a slow ``asyncio.to_thread`` call for a
+        # different conversation.  The dict lookup is safe because
+        # ``_event_services`` is only mutated under the lock (insert / delete);
+        # a fast-path miss falls through to the locked slow path, which
+        # re-checks the cache and handles any state changes correctly.
+        event_services = self._event_services
+        if event_services is not None:
+            cached = event_services.get(conversation_id)
+            if cached is not None and cached.is_open():
+                cached.touch()
+                return cached
+
         async with self._lifecycle_lock:
             return await self._get_or_load_event_service_locked(conversation_id)
 
diff --git a/tests/agent_server/test_event_service_thread_pool_exhaustion.py b/tests/agent_server/test_event_service_thread_pool_exhaustion.py
new file mode 100644
index 0000000000..c0febbfb85
--- /dev/null
+++ b/tests/agent_server/test_event_service_thread_pool_exhaustion.py
@@ -0,0 +1,144 @@
+"""Test: thread-pool exhaustion must not deadlock the lifecycle lock.
+
+``_get_or_load_event_service`` acquires ``lifecycle_lock`` and then calls
+``asyncio.to_thread(_prepare_persisted_runtime)`` inside the lock.  If the
+default thread pool is exhausted, the ``to_thread`` call queues indefinitely
+while still holding the lock.  Every subsequent ``get_event_service`` call —
+including the WebSocket event-stream path and the REST ``/events/search``
+endpoint — blocks waiting for the lock, making the entire agent-server appear
+wedged even though simple endpoints (``/ready``, ``/api/settings``) still
+respond.
+
+This test asserts the **correct** behavior:
+
+* Loading an already-cached conversation (no ``to_thread`` needed) must
+  succeed immediately even when the thread pool is full, because the
+  lifecycle lock must not be held while waiting for a thread.
+
+The test currently **fails** on unpatched code, demonstrating the bug.
+"""
+
+import asyncio
+import threading
+from concurrent.futures import ThreadPoolExecutor
+from pathlib import Path
+from uuid import UUID
+
+import pytest
+
+from openhands.agent_server.conversation_service import ConversationService
+from openhands.agent_server.event_service import EventService
+from openhands.agent_server.models import StartConversationRequest
+from openhands.sdk import LLM, Agent
+from openhands.sdk.security.confirmation_policy import NeverConfirm
+from openhands.sdk.workspace import LocalWorkspace
+
+
+async def _create_persisted_conversation(
+    conversations_dir: Path, workspace_dir: Path
+) -> UUID:
+    """Create a conversation on disk so it can be loaded later."""
+    workspace_dir.mkdir(parents=True, exist_ok=True)
+    request = StartConversationRequest(
+        agent=Agent(llm=LLM(model="gpt-4o", usage_id="test-llm"), tools=[]),
+        workspace=LocalWorkspace(working_dir=str(workspace_dir)),
+        confirmation_policy=NeverConfirm(),
+    )
+    async with ConversationService(conversations_dir=conversations_dir) as service:
+        info, _ = await service.start_conversation(request)
+    return info.id
+
+
+@pytest.mark.asyncio
+async def test_thread_pool_exhaustion_does_not_block_cached_conversation(
+    tmp_path,
+):
+    """Loading an already-cached conversation must not deadlock when the
+    thread pool is exhausted.
+
+    The lifecycle lock is held while ``asyncio.to_thread`` waits for a free
+    thread.  If the pool is full, the lock is held indefinitely, blocking
+    every subsequent ``get_event_service`` call — even for conversations that
+    are already in the cache and need no thread work at all.
+
+    This is the root cause of the "events don't load" production incident.
+    """
+    conversations_dir = tmp_path / "conversations"
+    workspace_dir = tmp_path / "workspace"
+
+    # 1. Create two persisted conversations on disk.
+    conv_a = await _create_persisted_conversation(
+        conversations_dir, workspace_dir / "a"
+    )
+    conv_b = await _create_persisted_conversation(
+        conversations_dir, workspace_dir / "b"
+    )
+
+    # 2. Replace the event-loop's default executor with a 1-worker pool.
+    loop = asyncio.get_running_loop()
+    tiny_pool = ThreadPoolExecutor(max_workers=1)
+    loop.set_default_executor(tiny_pool)
+
+    service = ConversationService(conversations_dir=conversations_dir)
+    await service.__aenter__()
+    block_event: threading.Event | None = None
+    block_task: asyncio.Task[None] | None = None
+    stuck_task: asyncio.Task[EventService | None] | None = None
+    try:
+        # Pre-load both conversations into the cache.
+        es_a = await service.get_event_service(conv_a)
+        assert es_a is not None
+        es_b = await service.get_event_service(conv_b)
+        assert es_b is not None
+
+        # 3. Saturate the 1-thread pool with a blocking call that never
+        #    returns on its own.
+        block_event = threading.Event()
+
+        async def _block_pool() -> None:
+            await loop.run_in_executor(None, block_event.wait)
+
+        block_task = asyncio.create_task(_block_pool())
+        await asyncio.sleep(0.3)
+
+        # 4. Evict conv_a from the cache so the next load needs
+        #    asyncio.to_thread(_prepare_persisted_runtime) — this call will
+        #    hang waiting for a thread.
+        if service._event_services is not None:
+            service._event_services.pop(conv_a, None)
+
+        # Kick off the stuck load in the background.  Give it time to
+        # acquire the lifecycle lock and enter asyncio.to_thread before we
+        # try the cached load below.
+        stuck_task = asyncio.create_task(service.get_event_service(conv_a))
+        await asyncio.sleep(0.3)
+
+        # 5. Loading conv_b — which IS in the cache and needs no thread work —
+        #    must succeed immediately.  The lifecycle lock must not be held
+        #    while waiting for a thread.
+        es_b2 = await asyncio.wait_for(service.get_event_service(conv_b), timeout=3.0)
+        assert es_b2 is not None
+        assert es_b2 is es_b
+
+        # Clean up the stuck task.
+        block_event.set()
+        assert stuck_task is not None
+        try:
+            await asyncio.wait_for(stuck_task, timeout=10.0)
+        except (TimeoutError, asyncio.CancelledError):
+            stuck_task.cancel()
+    finally:
+        if block_event is not None:
+            block_event.set()
+        if block_task is not None:
+            try:
+                await asyncio.wait_for(block_task, timeout=5.0)
+            except (TimeoutError, asyncio.CancelledError):
+                block_task.cancel()
+        if stuck_task is not None:
+            try:
+                await asyncio.wait_for(stuck_task, timeout=5.0)
+            except (TimeoutError, asyncio.CancelledError):
+                stuck_task.cancel()
+        await service.__aexit__(None, None, None)
+        tiny_pool.shutdown(wait=False)