diff --git a/packages/cli/src/handlers/shared/format/identity-filter.test.ts b/packages/cli/src/handlers/shared/format/identity-filter.test.ts
new file mode 100644
index 00000000..1f78d6ef
--- /dev/null
+++ b/packages/cli/src/handlers/shared/format/identity-filter.test.ts
@@ -0,0 +1,64 @@
+import { describe, it, expect } from "bun:test";
+import { filterIdentity } from "./identity-filter.js";
+
+describe("filterIdentity", () => {
+  describe("x-anthropic-billing-header stripping", () => {
+    it("strips billing header with cch hash", () => {
+      const input = "Some system prompt\nx-anthropic-billing-header: cc_version=2.1.92.a35; cc_entrypoint=cli; cch=8ae40;\nMore content";
+      const result = filterIdentity(input);
+      expect(result).not.toContain("x-anthropic-billing-header");
+      expect(result).toContain("More content");
+    });
+
+    it("strips billing header with different cch values", () => {
+      const result1 = filterIdentity("prefix\nx-anthropic-billing-header: cc_version=2.1.92; cch=8ae40;\nsuffix");
+      const result2 = filterIdentity("prefix\nx-anthropic-billing-header: cc_version=2.1.92; cch=4e20a;\nsuffix");
+      // After stripping, both should produce identical output
+      expect(result1).toBe(result2);
+    });
+
+    it("handles header at start of content", () => {
+      const input = "x-anthropic-billing-header: cc_version=2.1.92; cch=abc;\nRest of prompt";
+      const result = filterIdentity(input);
+      expect(result).not.toContain("x-anthropic-billing-header");
+      expect(result).toContain("Rest of prompt");
+    });
+
+    it("handles header at end of content without trailing newline", () => {
+      const input = "Some prompt\nx-anthropic-billing-header: cc_version=2.1.92; cch=abc;";
+      const result = filterIdentity(input);
+      expect(result).not.toContain("x-anthropic-billing-header");
+    });
+
+    it("preserves surrounding content intact", () => {
+      const input = "Line 1\nx-anthropic-billing-header: cc_version=2.1.92; cch=abc;\nLine 3";
+      const result = filterIdentity(input);
+      expect(result).toContain("Line 1");
+      expect(result).toContain("Line 3");
+    });
+  });
+
+  describe("Claude identity replacement", () => {
+    it("replaces Claude Code identity", () => {
+      const result = filterIdentity("You are Claude Code, Anthropic's official CLI tool.");
+      expect(result).toContain("This is Claude Code, an AI-powered CLI tool");
+      expect(result).not.toContain("Anthropic's official CLI");
+    });
+
+    it("replaces model name reference", () => {
+      const result = filterIdentity("You are powered by the model named Claude 3.5 Sonnet.");
+      expect(result).toContain("You are powered by an AI model.");
+    });
+
+    it("strips claude_background_info blocks", () => {
+      const result = filterIdentity("Before\n<claude_background_info>secret</claude_background_info>\nAfter");
+      expect(result).not.toContain("claude_background_info");
+      expect(result).not.toContain("secret");
+    });
+
+    it("prepends non-Claude identity instruction", () => {
+      const result = filterIdentity("Hello");
+      expect(result).toMatch(/^IMPORTANT: You are NOT Claude/);
+    });
+  });
+});
diff --git a/packages/cli/src/handlers/shared/format/identity-filter.ts b/packages/cli/src/handlers/shared/format/identity-filter.ts
index 7b6f9249..1e98a4da 100644
--- a/packages/cli/src/handlers/shared/format/identity-filter.ts
+++ b/packages/cli/src/handlers/shared/format/identity-filter.ts
@@ -10,6 +10,9 @@
  */
 export function filterIdentity(content: string): string {
   return content
+    // Strip Anthropic billing header — contains a per-turn hash (cch=) that
+    // breaks vLLM prefix caching by making the system prompt differ every turn
+    .replace(/x-anthropic-billing-header:[^\n]*\n?/g, "")
     .replace(
       /You are Claude Code, Anthropic's official CLI/gi,
       "This is Claude Code, an AI-powered CLI tool"