Understanding the Agent Loop: How Tool-Using LLM Systems Actually Work

If you are building with tool-calling models, the most important design decision is often not the prompt. It is the loop around the model. An LLM can decide it wants to use a tool, but it cannot execute that tool by itself. The surrounding application or SDK has to assemble context, inspect the model response, run tools, append results, and continue until a final answer is produced. That runtime cycle is the agent loop. This article explains what the agent loop actually is, where the model sto...