diff --git a/atom/model_engine/block_manager.py b/atom/model_engine/block_manager.py
index d62a2c413..7e081a725 100644
--- a/atom/model_engine/block_manager.py
+++ b/atom/model_engine/block_manager.py
@@ -118,6 +118,15 @@ def can_allocate(self, seq: Sequence) -> bool:
             block_id = self.hash_to_block_id.get(h, -1)
             if block_id == -1 or self.blocks[block_id].token_ids != token_ids:
                 cache_miss = True
+            # If the entire prompt would be cached, force the last full block
+            # to recompute so prefill has at least one token to forward and
+            # produce logits for the next-token sampler.
+            if (
+                not cache_miss
+                and i == seq.num_blocks - 1
+                and len(token_ids) == self.block_size
+            ):
+                cache_miss = True
             if cache_miss:
                 needed_free += 1
         return (
@@ -142,6 +151,16 @@ def allocate(self, seq: Sequence):
             )
             if block_id == -1 or self.blocks[block_id].token_ids != token_ids:
                 cache_miss = True
+            # If the entire prompt would be cached, force the last full block
+            # to recompute so prefill has at least one token to forward and
+            # produce logits for the next-token sampler. Must mirror the same
+            # condition in can_allocate() so the block budget agrees.
+            if (
+                not cache_miss
+                and i == seq.num_blocks - 1
+                and len(token_ids) == self.block_size
+            ):
+                cache_miss = True
             if cache_miss:
                 block_id = self._pop_free_block()
                 block = self._allocate_block(block_id)
diff --git a/atom/model_ops/attention_mla.py b/atom/model_ops/attention_mla.py
index 9e2faa889..c92c231c0 100644
--- a/atom/model_ops/attention_mla.py
+++ b/atom/model_ops/attention_mla.py
@@ -698,10 +698,6 @@ def forward_impl_server_mode(
         kv_cache = kv_cache_data[f"layer_{self.layer_num}"].k_cache
 
         if context.is_prefill and not use_prefill_mla:
-            use_prefix_cache = (
-                attn_metadata.has_cached and self.kv_b_proj.weight.dtype != dtypes.fp4x2
-            )
-
             prefill_q = self.q_proj(q, x_scale=q_scale).view(
                 -1, self.num_heads, self.qk_head_dim
             )
@@ -718,7 +714,7 @@ def forward_impl_server_mode(
                     scale=self._k_scale,
                 )
 
-            if use_prefix_cache:
+            if attn_metadata.has_cached:
                 # k_full/v_full are used for attention compute; gather_kv_b_proj reads
                 # fp8 from cache and dequantizes internally, so output must be model dtype
                 k_full = torch.empty(
diff --git a/tests/test_block_manager.py b/tests/test_block_manager.py
index 60a6c1061..9ad059ff2 100644
--- a/tests/test_block_manager.py
+++ b/tests/test_block_manager.py
@@ -301,10 +301,11 @@ def test_preempt_and_reschedule_reuses_cache(self, seq_factory):
         assert s1.num_cached_tokens == 0
         assert s1.block_table == []
 
-        # Re-allocate — should get cache hits on both blocks
+        # Re-allocate — first block is a cache hit; the last full block is
+        # force-recomputed so prefill has at least one token to forward.
         s1_retry = seq_factory([1, 2, 3, 4, 5, 6, 7, 8])
         bm.allocate(s1_retry)
-        assert s1_retry.num_cached_tokens == 8  # both blocks cached
+        assert s1_retry.num_cached_tokens == 4
 
 
 # ── Edge cases ───────────────────────────────────────────────────────────
@@ -325,8 +326,9 @@ def test_single_token_no_cache(self, seq_factory):
         # Partial block → hash is -1 → no caching
         assert s2.num_cached_tokens == 0
 
-    def test_exact_block_size_fully_cached(self, seq_factory):
-        """Sequence with exactly block_size tokens — fully cached on reuse."""
+    def test_exact_block_size_last_block_recomputed(self, seq_factory):
+        """Single-block prompt: last full block is force-recomputed on reuse so
+        prefill has at least one token to forward and produce logits."""
         cfg = MockConfig(
             num_kvcache_blocks=4, kv_cache_block_size=4, enable_prefix_caching=True
         )
@@ -336,7 +338,7 @@ def test_exact_block_size_fully_cached(self, seq_factory):
         bm.deallocate(s1)
         s2 = seq_factory([1, 2, 3, 4])
         bm.allocate(s2)
-        assert s2.num_cached_tokens == 4
+        assert s2.num_cached_tokens == 0
 
     def test_free_block_ids_set_consistent(self, block_manager, seq_factory):
         """free_block_ids_set stays consistent through allocate/deallocate."""