diff --git a/PLAN.md b/PLAN.md
index 7dc792f..dfadb5d 100644
--- a/PLAN.md
+++ b/PLAN.md
@@ -2,6 +2,11 @@
 
 This file is the single source of truth for autonomous maintenance. Read by Claude on every `/loop` iteration.
 
+## Targeted Streaming Follow-up
+
+- [x] #360: return the DO `/watch` response before awaiting backpressured backlog writes; run replay in background and clean up failed/cancelled streams. Real Workers regression tests cover non-empty replay, reconnect cursors, live delivery, and cancellation.
+- #366 concurrent replay/live ordering remains separate; draft #361 is not reused. PR CI must pass; do not merge or deploy this fix or touch release-please.
+
 ## Targeted Security Follow-up
 
 - [x] #389: persist verified user/org identity bindings, backfill recognized existing tenants without moving data, resolve dashboard tenant before reads/writes, and restore explicit Personal selection. Shared/unknown legacy ownership requires operator audit; see `docs/knowledge/organization-identity.md`.
diff --git a/packages/api/src/state-stream-hub.ts b/packages/api/src/state-stream-hub.ts
index 391b8c3..c9d1037 100644
--- a/packages/api/src/state-stream-hub.ts
+++ b/packages/api/src/state-stream-hub.ts
@@ -42,23 +42,41 @@ export class StateStreamHub extends DurableObject<Env> {
   }
 
   private async watch(projectId: string, after: number, signal: AbortSignal): Promise<Response> {
-    const stream = new TransformStream<Uint8Array, Uint8Array>();
+    let controller!: TransformStreamDefaultController<Uint8Array>;
+    const stream = new TransformStream<Uint8Array, Uint8Array>({
+      start(streamController) {
+        controller = streamController;
+      },
+    });
     const writer = stream.writable.getWriter();
     this.writers.add(writer);
 
-    const heartbeat = setInterval(() => {
-      writer.write(this.encoder.encode("event: ping\ndata: {}\n\n")).catch(() => {
-        this.writers.delete(writer);
-      });
-    }, 15_000);
-
-    signal.addEventListener("abort", () => {
+    const cleanup = () => {
       clearInterval(heartbeat);
       this.writers.delete(writer);
-      writer.close().catch(() => {});
-    });
+      signal.removeEventListener("abort", abort);
+    };
+    const abort = () => {
+      // Error the readable too, releasing any backpressured replay write.
+      controller.error(signal.reason);
+      cleanup();
+    };
+    const heartbeat = setInterval(() => {
+      writer.write(this.encoder.encode("event: ping\ndata: {}\n\n")).catch(cleanup);
+    }, 15_000);
 
-    await this.writeBacklog(writer, projectId, after);
+    signal.addEventListener("abort", abort, { once: true });
+    void writer.closed.then(cleanup, cleanup);
+    if (signal.aborted) abort();
+
+    // Return the readable before awaiting writes: replay is backpressured until
+    // the caller can attach a reader to the response (#360).
+    this.ctx.waitUntil(
+      this.writeBacklog(writer, projectId, after).catch((error) => {
+        controller.error(error);
+        cleanup();
+      }),
+    );
 
     return new Response(stream.readable, {
       headers: {
diff --git a/packages/api/test/state-stream-hub.test.ts b/packages/api/test/state-stream-hub.test.ts
new file mode 100644
index 0000000..025d9b7
--- /dev/null
+++ b/packages/api/test/state-stream-hub.test.ts
@@ -0,0 +1,163 @@
+import { env, SELF } from "cloudflare:test";
+import { beforeAll, beforeEach, describe, expect, it } from "vitest";
+import type { StateEventResponse } from "../src/services/states";
+import { applyMigrations, authHeaders, seedProject, TEST_PROJECT_ID } from "./setup";
+
+async function within<T>(promise: Promise<T>): Promise<T> {
+  let timer: ReturnType<typeof setTimeout>;
+  try {
+    return await Promise.race([
+      promise,
+      new Promise<never>((_, reject) => {
+        timer = setTimeout(() => reject(new Error("Watch stalled for 3 seconds")), 3_000);
+      }),
+    ]);
+  } finally {
+    clearTimeout(timer!);
+  }
+}
+
+async function seedEvent(index: number): Promise<StateEventResponse> {
+  const event = {
+    id: crypto.randomUUID(),
+    state_key: `watch-${index}`,
+    agent_id: "watch-agent",
+    event_type: "upsert" as const,
+    data: { index },
+    metadata: null,
+    tags: ["watch"],
+    idempotency_key: null,
+    created_at: Date.now(),
+  };
+  // Seed directly so no delayed /notify races with backlog-only assertions (#366).
+  const row = await env.DB.prepare(
+    `INSERT INTO state_events
+      (id, project_id, state_key, agent_id, event_type, data, tags, created_at)
+      VALUES (?, ?, ?, ?, ?, ?, ?, ?) RETURNING sequence`,
+  )
+    .bind(
+      event.id,
+      TEST_PROJECT_ID,
+      event.state_key,
+      event.agent_id,
+      event.event_type,
+      JSON.stringify(event.data),
+      JSON.stringify(event.tags),
+      event.created_at,
+    )
+    .first<{ sequence: number }>();
+  return { ...event, sequence: row!.sequence };
+}
+
+async function openWatch(after = 0) {
+  // No once=true: this must exercise the real StateStreamHub DO via the API.
+  const pending = SELF.fetch(`http://localhost/api/v1/states/watch?after=${after}`, {
+    headers: authHeaders(),
+  });
+  let response: Response;
+  try {
+    response = await within(pending);
+  } catch (error) {
+    void pending.then((late) => late.body?.cancel()).catch(() => {});
+    throw error;
+  }
+  const reader = response.body!.getReader();
+  const decoder = new TextDecoder();
+  let buffer = "";
+  return {
+    response,
+    cancel: () => within(reader.cancel()),
+    read: () =>
+      within(
+        (async () => {
+          while (!buffer.includes("\n\n")) {
+            const chunk = await reader.read();
+            if (chunk.done) throw new Error("Watch closed before the next event");
+            buffer += decoder.decode(chunk.value, { stream: true });
+          }
+          const boundary = buffer.indexOf("\n\n");
+          const frame = buffer.slice(0, boundary);
+          buffer = buffer.slice(boundary + 2);
+          return frame;
+        })(),
+      ),
+  };
+}
+
+function expectFrame(frameText: string, event: StateEventResponse) {
+  const lines = frameText.split("\n");
+  expect(lines[0]).toBe(`id: ${event.sequence}`);
+  expect(lines[1]).toBe(`event: state.${event.event_type}`);
+  expect(lines[2].startsWith("data: ")).toBe(true);
+  // Compare parsed JSON: key order differs between the replay mapper and a
+  // broadcast payload, but clients consume JSON semantics.
+  expect(JSON.parse(lines[2].slice("data: ".length))).toEqual(event);
+}
+
+async function notify(event: StateEventResponse) {
+  const hub = env.STATE_STREAM_HUB.getByName(TEST_PROJECT_ID);
+  const response = await within(
+    hub.fetch("https://state-stream.local/notify", {
+      method: "POST",
+      body: JSON.stringify(event),
+    }),
+  );
+  expect(response.status).toBe(204);
+}
+
+describe("StateStreamHub watch", () => {
+  beforeAll(applyMigrations);
+  beforeEach(seedProject);
+
+  it.each([1, 3])("opens and replays a %i-row backlog without hanging", async (count) => {
+    const events = [];
+    for (let index = 0; index < count; index++) events.push(await seedEvent(index));
+    const watch = await openWatch();
+    try {
+      expect(watch.response.status).toBe(200);
+      expect(watch.response.headers.get("Content-Type")).toBe("text/event-stream");
+      expect(watch.response.headers.get("Cache-Control")).toBe("no-cache");
+      for (const event of events) expectFrame(await watch.read(), event);
+      const live = await seedEvent(count);
+      await notify(live);
+      expectFrame(await watch.read(), live);
+    } finally {
+      await watch.cancel();
+    }
+  });
+
+  it("replays only events after the reconnect cursor", async () => {
+    const first = await seedEvent(0);
+    const second = await seedEvent(1);
+    const watch = await openWatch(first.sequence);
+    try {
+      expectFrame(await watch.read(), second);
+    } finally {
+      await watch.cancel();
+    }
+  });
+
+  it("opens an empty backlog and receives live notifications", async () => {
+    const watch = await openWatch();
+    try {
+      expect(watch.response.status).toBe(200);
+      const live = await seedEvent(0);
+      await notify(live);
+      expectFrame(await watch.read(), live);
+    } finally {
+      await watch.cancel();
+    }
+  });
+
+  it("can cancel without consuming the backlog and reconnect", async () => {
+    const event = await seedEvent(0);
+    const unread = await openWatch();
+    await unread.cancel();
+    const watch = await openWatch();
+    try {
+      expectFrame(await watch.read(), event);
+    } finally {
+      await watch.cancel();
+    }
+  });
+});