diff --git a/mlx_lm/generate.py b/mlx_lm/generate.py
index 3573b2640..6aa70f196 100644
--- a/mlx_lm/generate.py
+++ b/mlx_lm/generate.py
@@ -1508,6 +1508,7 @@ def __init__(
         prefill_batch_size: int = 8,
         prefill_step_size: int = 2048,
         max_kv_size: Optional[int] = None,
+        prefer_prefill_when_pending: bool = False,
         stream=None,
     ):
         self.model = model
@@ -1519,6 +1520,7 @@ def __init__(
         self.prefill_batch_size = prefill_batch_size
         self.completion_batch_size = max(completion_batch_size, prefill_batch_size)
         self.max_kv_size = max_kv_size
+        self._prefer_prefill_when_pending = prefer_prefill_when_pending
 
         self._stream = stream or generation_stream
 
@@ -1770,8 +1772,27 @@ def _next(self):
         generation_responses = []
         prompt_responses = []
 
+        # With prefer_prefill_when_pending=True, skip the decode step when
+        # any prefill work is queued or in flight, unless the decode batch is
+        # already saturated. This matters most for long-context multi-agent
+        # workloads where the prefill chunk (~1s+ at 32k context) and a
+        # single decode step (~10ms) share the same GPU: interleaving them
+        # 1:1 — the default scheduler — drops already-decoding requests to
+        # near-zero tok/s while another request is prefilling. Pausing the
+        # decode lets the batch decode together at native speed once
+        # prefill catches up.
+        pending_prefill = self._prefer_prefill_when_pending and (
+            len(self._unprocessed_sequences) > 0
+            or len(self._currently_processing) > 0
+            or len(self._prompt_batch) > 0
+        )
+        saturated = len(self._generation_batch) >= self.completion_batch_size
+        do_decode = len(self._generation_batch) > 0 and (
+            not pending_prefill or saturated
+        )
+
         # Generate tokens first
-        if len(self._generation_batch) > 0:
+        if do_decode:
             generation_responses = self._generation_batch.next()
             self._gen_tokens_counter += len(generation_responses)
             self._steps_counter += 1
@@ -1779,7 +1800,7 @@ def _next(self):
                 mx.clear_cache()
 
         # Exit early because we already have our hands full with decoding
-        if len(self._generation_batch) >= self.completion_batch_size:
+        if saturated:
             return prompt_responses, generation_responses
 
         # Check if we have sequences and add them to the prompt batch
diff --git a/tests/test_generate.py b/tests/test_generate.py
index 4f5bb4c91..93a28b88a 100644
--- a/tests/test_generate.py
+++ b/tests/test_generate.py
@@ -806,6 +806,72 @@ def test_batch_max_kv_size_none_creates_regular_cache(self):
                 for cache in r.prompt_cache:
                     self.assertIsInstance(cache, KVCache)
 
+    def test_prefer_prefill_when_pending_default_false(self):
+        # Default behavior must be unchanged: the new flag defaults to False.
+        gen = BatchGenerator(self.model, max_tokens=1)
+        self.assertFalse(gen._prefer_prefill_when_pending)
+
+    def test_prefer_prefill_when_pending_accepted_and_stored(self):
+        # Opting in stores the flag without affecting other init kwargs.
+        gen = BatchGenerator(
+            self.model,
+            max_tokens=1,
+            prefer_prefill_when_pending=True,
+        )
+        self.assertTrue(gen._prefer_prefill_when_pending)
+
+    def test_prefer_prefill_pauses_decode_when_prefill_pending(self):
+        # With the flag on, a step that has both queued prefill work and an
+        # in-flight decode batch (below saturation) should skip the decode
+        # this cycle and drain prefill first. With the flag off (default),
+        # the decode runs as usual.
+        prompt_a = self.tokenizer.encode("Write a long story about a cat")
+        prompt_b = self.tokenizer.encode("Write a long story about a dog")
+
+        def run(prefer_prefill):
+            gen = BatchGenerator(
+                self.model,
+                max_tokens=5,
+                prefill_batch_size=1,
+                prefill_step_size=4,
+                completion_batch_size=4,
+                prefer_prefill_when_pending=prefer_prefill,
+            )
+            # Insert prompt A and drive next() until prefill has completed
+            # and the sequence has been promoted into _generation_batch.
+            # With prefill_step_size=4 and a longer prompt, the first sequence
+            # needs multiple next() cycles to traverse prefill before it can
+            # start decoding.
+            gen.insert([prompt_a])
+            for _ in range(20):
+                gen.next()
+                if len(gen._generation_batch) == 1:
+                    break
+            self.assertEqual(len(gen._generation_batch), 1)
+            self.assertLess(len(gen._generation_batch), gen.completion_batch_size)
+
+            # Queue a second prompt so prefill work is now pending while a
+            # decode batch is in flight and not yet saturated.
+            gen.insert([prompt_b])
+            self.assertGreater(
+                len(gen._unprocessed_sequences)
+                + len(gen._currently_processing)
+                + len(gen._prompt_batch),
+                0,
+            )
+
+            tokens_before = gen._gen_tokens_counter
+            gen.next()
+            return gen._gen_tokens_counter - tokens_before
+
+        decoded_with_flag_off = run(prefer_prefill=False)
+        decoded_with_flag_on = run(prefer_prefill=True)
+
+        # Flag off: the in-flight request gets a decode token this cycle.
+        self.assertGreater(decoded_with_flag_off, 0)
+        # Flag on: decode is paused so prefill can run first.
+        self.assertEqual(decoded_with_flag_on, 0)
+
 
 if __name__ == "__main__":
     unittest.main()