diff --git a/packages/coding-agent/src/system-prompt.ts b/packages/coding-agent/src/system-prompt.ts
index f413447cb..24ca780af 100644
--- a/packages/coding-agent/src/system-prompt.ts
+++ b/packages/coding-agent/src/system-prompt.ts
@@ -294,8 +294,8 @@ export async function loadProjectContextFiles(
 }
 
 /**
- * Load system prompt customization files (SYSTEM.md).
- * Returns combined content from all discovered SYSTEM.md files.
+ * Load the effective system prompt customization from SYSTEM.md.
+ * Project-level SYSTEM.md overrides user-level SYSTEM.md.
  */
 export async function loadSystemPromptFiles(options: LoadContextFilesOptions = {}): Promise<string | null> {
 	const resolvedCwd = options.cwd ?? getProjectDir();
@@ -304,16 +304,13 @@ export async function loadSystemPromptFiles(options: LoadContextFilesOptions = {
 
 	if (result.items.length === 0) return null;
 
-	// Combine all SYSTEM.md contents (user-level first, then project-level)
-	const userLevel = result.items.filter(item => item.level === "user");
-	const projectLevel = result.items.filter(item => item.level === "project");
-
-	const parts: string[] = [];
-	for (const item of [...userLevel, ...projectLevel]) {
-		parts.push(item.content);
+	const projectLevel = result.items.find(item => item.level === "project");
+	if (projectLevel) {
+		return projectLevel.content;
 	}
 
-	return parts.join("\n\n");
+	const userLevel = result.items.find(item => item.level === "user");
+	return userLevel?.content ?? null;
 }
 
 export interface SystemPromptToolMetadata {
@@ -510,7 +507,8 @@ export async function buildSystemPrompt(options: BuildSystemPromptOptions = {}):
 
 	const environment = await logger.timeAsync("getEnvironmentInfo", getEnvironmentInfo);
 	const data = {
-		systemPromptCustomization: systemPromptCustomization ?? "",
+		// Explicit custom prompts replace discovered SYSTEM.md content rather than layering it twice.
+		systemPromptCustomization: resolvedCustomPrompt ? "" : (systemPromptCustomization ?? ""),
 		customPrompt: resolvedCustomPrompt,
 		appendPrompt: resolvedAppendPrompt ?? "",
 		tools: toolNames,
diff --git a/packages/coding-agent/test/system-prompt-dedup.test.ts b/packages/coding-agent/test/system-prompt-dedup.test.ts
new file mode 100644
index 000000000..1334a074a
--- /dev/null
+++ b/packages/coding-agent/test/system-prompt-dedup.test.ts
@@ -0,0 +1,80 @@
+import { afterEach, beforeEach, describe, expect, it } from "bun:test";
+import * as fs from "node:fs";
+import * as os from "node:os";
+import * as path from "node:path";
+import { Settings } from "@oh-my-pi/pi-coding-agent/config/settings";
+import { createAgentSession } from "@oh-my-pi/pi-coding-agent/sdk";
+import { SessionManager } from "@oh-my-pi/pi-coding-agent/session/session-manager";
+import { loadSystemPromptFiles } from "@oh-my-pi/pi-coding-agent/system-prompt";
+
+function escapeRegExp(text: string): string {
+	return text.replace(/[.*+?^${}()|[\]\\]/g, "\\$&");
+}
+
+describe("SYSTEM.md prompt assembly", () => {
+	let tempDir = "";
+	let tempHomeDir = "";
+	let originalHome: string | undefined;
+
+	beforeEach(() => {
+		tempDir = fs.mkdtempSync(path.join(os.tmpdir(), "pi-system-prompt-"));
+		tempHomeDir = fs.mkdtempSync(path.join(os.tmpdir(), "pi-system-home-"));
+		originalHome = process.env.HOME;
+		process.env.HOME = tempHomeDir;
+	});
+
+	afterEach(() => {
+		if (tempDir) {
+			fs.rmSync(tempDir, { recursive: true, force: true });
+		}
+		if (tempHomeDir) {
+			fs.rmSync(tempHomeDir, { recursive: true, force: true });
+		}
+		if (originalHome === undefined) {
+			delete process.env.HOME;
+		} else {
+			process.env.HOME = originalHome;
+		}
+	});
+
+	it("renders SYSTEM.md exactly once when it is used as the custom base prompt", async () => {
+		const projectDir = path.join(tempDir, "project");
+		const systemDir = path.join(projectDir, ".omp");
+		const systemPrompt = "You are the project SYSTEM prompt.";
+		fs.mkdirSync(systemDir, { recursive: true });
+		fs.writeFileSync(path.join(systemDir, "SYSTEM.md"), systemPrompt);
+
+		const { session } = await createAgentSession({
+			cwd: projectDir,
+			agentDir: projectDir,
+			sessionManager: SessionManager.inMemory(),
+			settings: Settings.isolated(),
+			systemPrompt,
+			disableExtensionDiscovery: true,
+			skills: [],
+			contextFiles: [],
+			promptTemplates: [],
+			slashCommands: [],
+			enableMCP: false,
+			enableLsp: false,
+		});
+
+		try {
+			const formatted = session.formatSessionAsText();
+			const matches = formatted.match(new RegExp(escapeRegExp(systemPrompt), "g")) ?? [];
+			expect(matches).toHaveLength(1);
+		} finally {
+			await session.dispose();
+		}
+	});
+
+	it("prefers project SYSTEM.md over user SYSTEM.md", async () => {
+		const projectDir = path.join(tempDir, "project");
+		fs.mkdirSync(path.join(projectDir, ".omp"), { recursive: true });
+		fs.mkdirSync(path.join(tempHomeDir, ".omp", "agent"), { recursive: true });
+		fs.writeFileSync(path.join(tempHomeDir, ".omp", "agent", "SYSTEM.md"), "User SYSTEM prompt");
+		fs.writeFileSync(path.join(projectDir, ".omp", "SYSTEM.md"), "Project SYSTEM prompt");
+
+		await expect(loadSystemPromptFiles({ cwd: projectDir })).resolves.toBe("Project SYSTEM prompt");
+	});
+});