diff --git a/code_puppy/tools/file_operations.py b/code_puppy/tools/file_operations.py
index 3796e6e49..5e01787a1 100644
--- a/code_puppy/tools/file_operations.py
+++ b/code_puppy/tools/file_operations.py
@@ -1,5 +1,6 @@
 # file_operations.py
 
+import math
 import os
 import shutil
 import subprocess
@@ -193,10 +194,12 @@ def _list_files(
                     break
 
         if not rg_path and recursive:
-            # Only need ripgrep for recursive listings
-            error_msg = "Error: ripgrep (rg) not found. Please install ripgrep to use this tool."
-            return ListFileOutput(content=error_msg, error=error_msg)
-
+            # Fall back to non-recursive listing when ripgrep is not available
+            output_lines.append(
+                "Warning: ripgrep (rg) not found. Falling back to non-recursive listing. "
+                "Install ripgrep for full recursive support."
+            )
+            recursive = False
         # Only use ripgrep for recursive listings
         if recursive:
             # Build command for ripgrep --files
@@ -512,8 +515,8 @@ def _read_file(
                     for char in content
                 )
 
-            # Simple approximation: ~4 characters per token
-            num_tokens = len(content) // 4
+            # Token estimation consistent with BaseAgent (~2.5 characters per token)
+            num_tokens = max(1, math.floor(len(content) / 2.5))
             if num_tokens > 10000:
                 return ReadFileOutput(
                     content=None,
diff --git a/tests/tools/test_file_operations_coverage.py b/tests/tools/test_file_operations_coverage.py
index e14d62773..79de8cfc7 100644
--- a/tests/tools/test_file_operations_coverage.py
+++ b/tests/tools/test_file_operations_coverage.py
@@ -268,8 +268,9 @@ def test_list_files_ripgrep_not_found_recursive(self, tmp_path):
         ):
             result = _list_files(None, str(tmp_path), recursive=True)
 
-        assert result.error is not None
-        assert "ripgrep" in result.error.lower() or "rg" in result.error.lower()
+        # Fallback behavior: warning in content, no hard error, files still listed
+        assert result.content is not None
+        assert result.error is None or "falling back" in (result.content or "").lower()
 
     def test_list_files_non_recursive_without_ripgrep(self, tmp_path):
         """Test non-recursive listing works without ripgrep."""
diff --git a/tests/tools/test_file_operations_extended.py b/tests/tools/test_file_operations_extended.py
index e535c702f..11cd384bf 100644
--- a/tests/tools/test_file_operations_extended.py
+++ b/tests/tools/test_file_operations_extended.py
@@ -75,7 +75,7 @@ def test_read_file_line_range_out_of_bounds(self, tmp_path):
 
         assert result.error is None
         assert result.content == ""  # Should return empty string
-        assert result.num_tokens == 0
+        assert result.num_tokens == 1
 
     def test_read_file_line_range_negative_start(self, tmp_path):
         """Test reading with negative start line is rejected."""
@@ -124,7 +124,7 @@ def test_read_file_empty_file(self, tmp_path):
 
         assert result.error is None
         assert result.content == ""
-        assert result.num_tokens == 0
+        assert result.num_tokens == 1
 
     # ==================== LIST FILES TESTS ====================
 
@@ -430,7 +430,7 @@ def test_read_large_file_with_token_limit(self, tmp_path):
         """Test that large files are handled and tokens are counted."""
         test_file = tmp_path / "large.txt"
         # Create file with 500 lines
-        lines = [f"Line {i}: " + ("x" * 50) for i in range(500)]
+        lines = [f"Line {i}: " + ("x" * 30) for i in range(400)]
         test_file.write_text("\n".join(lines))
 
         result = _read_file(None, str(test_file))
diff --git a/tests/tools/test_list_files_ripgrep_fallback.py b/tests/tools/test_list_files_ripgrep_fallback.py
new file mode 100644
index 000000000..0cf091b6c
--- /dev/null
+++ b/tests/tools/test_list_files_ripgrep_fallback.py
@@ -0,0 +1,51 @@
+"""Regression test for ripgrep fallback in _list_files.
+
+When ripgrep is not installed, _list_files should fall back to
+non-recursive os.listdir instead of returning an error.
+"""
+
+import os
+import tempfile
+from unittest.mock import patch
+
+from code_puppy.tools.file_operations import _list_files
+
+
+class TestListFilesRipgrepFallback:
+    """_list_files should gracefully handle missing ripgrep."""
+
+    def test_falls_back_when_ripgrep_not_found(self):
+        """
+        When ripgrep is not installed, _list_files should return
+        a non-recursive listing instead of an error.
+        """
+        with tempfile.TemporaryDirectory() as tmpdir:
+            test_file = os.path.join(tmpdir, "test.py")
+            with open(test_file, "w") as f:
+                f.write("print('hello')")
+
+            with patch("shutil.which", return_value=None):
+                result = _list_files(None, tmpdir, recursive=True)
+
+            # Should not return a hard error
+            assert result.content is not None
+            assert (
+                "not found" not in (result.content or "").lower()
+                or "falling back" in (result.content or "").lower()
+            )
+            # Should still return file listing
+            assert "test.py" in result.content
+
+    def test_returns_files_without_ripgrep(self):
+        """
+        Files in the directory should be listed even without ripgrep.
+        """
+        with tempfile.TemporaryDirectory() as tmpdir:
+            test_file = os.path.join(tmpdir, "myfile.py")
+            with open(test_file, "w") as f:
+                f.write("x = 1")
+
+            with patch("shutil.which", return_value=None):
+                result = _list_files(None, tmpdir, recursive=True)
+
+            assert "myfile.py" in result.content