diff --git a/src/basic_memory/cli/commands/status.py b/src/basic_memory/cli/commands/status.py
index 9353508ff..e67e2a042 100644
--- a/src/basic_memory/cli/commands/status.py
+++ b/src/basic_memory/cli/commands/status.py
@@ -94,7 +94,7 @@ def display_changes(
     """Display changes using Rich for better visualization."""
     tree = Tree(f"{project_name}: {title}")
 
-    if changes.total == 0:
+    if changes.total == 0 and not changes.skipped_files:
         tree.add("No changes")
         console.print(Panel(tree, expand=False))
         return
@@ -114,6 +114,13 @@ def display_changes(
         if changes.deleted:
             del_branch = tree.add("[red]Deleted[/red]")
             add_files_to_tree(del_branch, changes.deleted, "red")
+        if changes.skipped_files:
+            skip_branch = tree.add("[red]⚠️  Skipped (Circuit Breaker)[/red]")
+            for skipped in sorted(changes.skipped_files, key=lambda x: x.path):
+                skip_branch.add(
+                    f"[red]{skipped.path}[/red] "
+                    f"(failures: {skipped.failure_count}, reason: {skipped.reason})"
+                )
     else:
         # Show directory summaries
         by_dir = group_changes_by_directory(changes)
@@ -122,6 +129,14 @@ def display_changes(
             if summary:  # Only show directories with changes
                 tree.add(f"[bold]{dir_name}/[/bold] {summary}")
 
+        # Show skipped files summary in non-verbose mode
+        if changes.skipped_files:
+            skip_count = len(changes.skipped_files)
+            tree.add(
+                f"[red]⚠️  {skip_count} file{'s' if skip_count != 1 else ''} "
+                f"skipped due to repeated failures[/red]"
+            )
+
     console.print(Panel(tree, expand=False))
 
 
diff --git a/src/basic_memory/importers/claude_conversations_importer.py b/src/basic_memory/importers/claude_conversations_importer.py
index de7dc9580..d516a149a 100644
--- a/src/basic_memory/importers/claude_conversations_importer.py
+++ b/src/basic_memory/importers/claude_conversations_importer.py
@@ -155,7 +155,8 @@ def _format_chat_markdown(
             if msg.get("content"):
                 # Filter out None values before joining
                 content = " ".join(
-                    str(c.get("text", "")) for c in msg["content"]
+                    str(c.get("text", ""))
+                    for c in msg["content"]
                     if c and c.get("text") is not None
                 )
             lines.append(content)
diff --git a/src/basic_memory/schemas/sync_report.py b/src/basic_memory/schemas/sync_report.py
index 267bf669a..edb83bd6d 100644
--- a/src/basic_memory/schemas/sync_report.py
+++ b/src/basic_memory/schemas/sync_report.py
@@ -1,6 +1,7 @@
 """Pydantic schemas for sync report responses."""
 
-from typing import TYPE_CHECKING, Dict, Set
+from datetime import datetime
+from typing import TYPE_CHECKING, Dict, List, Set
 
 from pydantic import BaseModel, Field
 
@@ -9,6 +10,17 @@
     from basic_memory.sync.sync_service import SyncReport
 
 
+class SkippedFileResponse(BaseModel):
+    """Information about a file that was skipped due to repeated failures."""
+
+    path: str = Field(description="File path relative to project root")
+    reason: str = Field(description="Error message from last failure")
+    failure_count: int = Field(description="Number of consecutive failures")
+    first_failed: datetime = Field(description="Timestamp of first failure")
+
+    model_config = {"from_attributes": True}
+
+
 class SyncReportResponse(BaseModel):
     """Report of file changes found compared to database state.
 
@@ -24,6 +36,9 @@ class SyncReportResponse(BaseModel):
     checksums: Dict[str, str] = Field(
         default_factory=dict, description="Current file checksums (path -> checksum)"
     )
+    skipped_files: List[SkippedFileResponse] = Field(
+        default_factory=list, description="Files skipped due to repeated failures"
+    )
     total: int = Field(description="Total number of changes")
 
     @classmethod
@@ -42,6 +57,15 @@ def from_sync_report(cls, report: "SyncReport") -> "SyncReportResponse":
             deleted=report.deleted,
             moves=report.moves,
             checksums=report.checksums,
+            skipped_files=[
+                SkippedFileResponse(
+                    path=skipped.path,
+                    reason=skipped.reason,
+                    failure_count=skipped.failure_count,
+                    first_failed=skipped.first_failed,
+                )
+                for skipped in report.skipped_files
+            ],
             total=report.total,
         )
 
diff --git a/src/basic_memory/sync/sync_service.py b/src/basic_memory/sync/sync_service.py
index bb64c7206..0080da9b4 100644
--- a/src/basic_memory/sync/sync_service.py
+++ b/src/basic_memory/sync/sync_service.py
@@ -7,7 +7,7 @@
 from dataclasses import dataclass, field
 from datetime import datetime
 from pathlib import Path
-from typing import Dict, Optional, Set, Tuple
+from typing import Dict, List, Optional, Set, Tuple
 
 from loguru import logger
 from sqlalchemy import select
@@ -26,6 +26,45 @@
 from basic_memory.services.search_service import SearchService
 from basic_memory.services.sync_status_service import sync_status_tracker, SyncStatus
 
+# Circuit breaker configuration
+MAX_CONSECUTIVE_FAILURES = 3
+
+
+@dataclass
+class FileFailureInfo:
+    """Track failure information for a file that repeatedly fails to sync.
+
+    Attributes:
+        count: Number of consecutive failures
+        first_failure: Timestamp of first failure in current sequence
+        last_failure: Timestamp of most recent failure
+        last_error: Error message from most recent failure
+        last_checksum: Checksum of file when it last failed (for detecting file changes)
+    """
+
+    count: int
+    first_failure: datetime
+    last_failure: datetime
+    last_error: str
+    last_checksum: str
+
+
+@dataclass
+class SkippedFile:
+    """Information about a file that was skipped due to repeated failures.
+
+    Attributes:
+        path: File path relative to project root
+        reason: Error message from last failure
+        failure_count: Number of consecutive failures
+        first_failed: Timestamp of first failure
+    """
+
+    path: str
+    reason: str
+    failure_count: int
+    first_failed: datetime
+
 
 @dataclass
 class SyncReport:
@@ -38,6 +77,7 @@ class SyncReport:
         deleted: Files that exist in database but not on disk
         moves: Files that have been moved from one location to another
         checksums: Current checksums for files on disk
+        skipped_files: Files that were skipped due to repeated failures
     """
 
     # We keep paths as strings in sets/dicts for easier serialization
@@ -46,6 +86,7 @@ class SyncReport:
     deleted: Set[str] = field(default_factory=set)
     moves: Dict[str, str] = field(default_factory=dict)  # old_path -> new_path
     checksums: Dict[str, str] = field(default_factory=dict)  # path -> checksum
+    skipped_files: List[SkippedFile] = field(default_factory=list)
 
     @property
     def total(self) -> int:
@@ -90,6 +131,8 @@ def __init__(
         self._thread_pool = ThreadPoolExecutor(max_workers=app_config.sync_thread_pool_size)
         # Load ignore patterns once at initialization for performance
         self._ignore_patterns = load_bmignore_patterns()
+        # Circuit breaker: track file failures to prevent infinite retry loops
+        self._file_failures: Dict[str, FileFailureInfo] = {}
 
     async def _read_file_async(self, file_path: Path) -> str:
         """Read file content in thread pool to avoid blocking the event loop."""
@@ -125,6 +168,102 @@ def __del__(self):
         if hasattr(self, "_thread_pool"):
             self._thread_pool.shutdown(wait=False)
 
+    async def _should_skip_file(self, path: str) -> bool:
+        """Check if file should be skipped due to repeated failures.
+
+        Computes current file checksum and compares with last failed checksum.
+        If checksums differ, file has changed and we should retry.
+
+        Args:
+            path: File path to check
+
+        Returns:
+            True if file should be skipped, False otherwise
+        """
+        if path not in self._file_failures:
+            return False
+
+        failure_info = self._file_failures[path]
+
+        # Check if failure count exceeds threshold
+        if failure_info.count < MAX_CONSECUTIVE_FAILURES:
+            return False
+
+        # Compute current checksum to see if file changed
+        try:
+            current_checksum = await self._compute_checksum_async(path)
+
+            # If checksum changed, file was modified - reset and retry
+            if current_checksum != failure_info.last_checksum:
+                logger.info(
+                    f"File {path} changed since last failure (checksum differs), "
+                    f"resetting failure count and retrying"
+                )
+                del self._file_failures[path]
+                return False
+        except Exception as e:
+            # If we can't compute checksum, log but still skip to avoid infinite loops
+            logger.warning(f"Failed to compute checksum for {path}: {e}")
+
+        # File unchanged and exceeded threshold - skip it
+        return True
+
+    async def _record_failure(self, path: str, error: str) -> None:
+        """Record a file sync failure for circuit breaker tracking.
+
+        Args:
+            path: File path that failed
+            error: Error message from the failure
+        """
+        now = datetime.now()
+
+        # Compute checksum for failure tracking
+        try:
+            checksum = await self._compute_checksum_async(path)
+        except Exception:
+            # If checksum fails, use empty string (better than crashing)
+            checksum = ""
+
+        if path in self._file_failures:
+            # Update existing failure record
+            failure_info = self._file_failures[path]
+            failure_info.count += 1
+            failure_info.last_failure = now
+            failure_info.last_error = error
+            failure_info.last_checksum = checksum
+
+            logger.warning(
+                f"File sync failed (attempt {failure_info.count}/{MAX_CONSECUTIVE_FAILURES}): "
+                f"path={path}, error={error}"
+            )
+
+            # Log when threshold is reached
+            if failure_info.count >= MAX_CONSECUTIVE_FAILURES:
+                logger.error(
+                    f"File {path} has failed {MAX_CONSECUTIVE_FAILURES} times and will be skipped. "
+                    f"First failure: {failure_info.first_failure}, Last error: {error}"
+                )
+        else:
+            # Create new failure record
+            self._file_failures[path] = FileFailureInfo(
+                count=1,
+                first_failure=now,
+                last_failure=now,
+                last_error=error,
+                last_checksum=checksum,
+            )
+            logger.debug(f"Recording first failure for {path}: {error}")
+
+    def _clear_failure(self, path: str) -> None:
+        """Clear failure tracking for a file after successful sync.
+
+        Args:
+            path: File path that successfully synced
+        """
+        if path in self._file_failures:
+            logger.info(f"Clearing failure history for {path} after successful sync")
+            del self._file_failures[path]
+
     async def sync(self, directory: Path, project_name: Optional[str] = None) -> SyncReport:
         """Sync all files with database."""
 
@@ -192,7 +331,20 @@ async def sync(self, directory: Path, project_name: Optional[str] = None) -> Syn
 
         # then new and modified
         for path in report.new:
-            await self.sync_file(path, new=True)
+            entity, _ = await self.sync_file(path, new=True)
+
+            # Track if file was skipped
+            if entity is None and await self._should_skip_file(path):
+                failure_info = self._file_failures[path]
+                report.skipped_files.append(
+                    SkippedFile(
+                        path=path,
+                        reason=failure_info.last_error,
+                        failure_count=failure_info.count,
+                        first_failed=failure_info.first_failure,
+                    )
+                )
+
             files_processed += 1
             if project_name:
                 sync_status_tracker.update_project_progress(
@@ -203,7 +355,20 @@ async def sync(self, directory: Path, project_name: Optional[str] = None) -> Syn
                 )
 
         for path in report.modified:
-            await self.sync_file(path, new=False)
+            entity, _ = await self.sync_file(path, new=False)
+
+            # Track if file was skipped
+            if entity is None and await self._should_skip_file(path):
+                failure_info = self._file_failures[path]
+                report.skipped_files.append(
+                    SkippedFile(
+                        path=path,
+                        reason=failure_info.last_error,
+                        failure_count=failure_info.count,
+                        first_failed=failure_info.first_failure,
+                    )
+                )
+
             files_processed += 1
             if project_name:
                 sync_status_tracker.update_project_progress(  # pragma: no cover
@@ -220,9 +385,24 @@ async def sync(self, directory: Path, project_name: Optional[str] = None) -> Syn
             sync_status_tracker.complete_project_sync(project_name)
 
         duration_ms = int((time.time() - start_time) * 1000)
-        logger.info(
-            f"Sync operation completed: directory={directory}, total_changes={report.total}, duration_ms={duration_ms}"
-        )
+
+        # Log summary with skipped files if any
+        if report.skipped_files:
+            logger.warning(
+                f"Sync completed with {len(report.skipped_files)} skipped files: "
+                f"directory={directory}, total_changes={report.total}, "
+                f"skipped={len(report.skipped_files)}, duration_ms={duration_ms}"
+            )
+            for skipped in report.skipped_files:
+                logger.warning(
+                    f"Skipped file: path={skipped.path}, "
+                    f"failures={skipped.failure_count}, reason={skipped.reason}"
+                )
+        else:
+            logger.info(
+                f"Sync operation completed: directory={directory}, "
+                f"total_changes={report.total}, duration_ms={duration_ms}"
+            )
 
         return report
 
@@ -298,15 +478,20 @@ async def get_db_file_state(self) -> Dict[str, str]:
     async def sync_file(
         self, path: str, new: bool = True
     ) -> Tuple[Optional[Entity], Optional[str]]:
-        """Sync a single file.
+        """Sync a single file with circuit breaker protection.
 
         Args:
             path: Path to file to sync
             new: Whether this is a new file
 
         Returns:
-            Tuple of (entity, checksum) or (None, None) if sync fails
+            Tuple of (entity, checksum) or (None, None) if sync fails or file is skipped
         """
+        # Check if file should be skipped due to repeated failures
+        if await self._should_skip_file(path):
+            logger.warning(f"Skipping file due to repeated failures: {path}")
+            return None, None
+
         try:
             logger.debug(
                 f"Syncing file path={path} is_new={new} is_markdown={self.file_service.is_markdown(path)}"
@@ -320,13 +505,21 @@ async def sync_file(
             if entity is not None:
                 await self.search_service.index_entity(entity)
 
+                # Clear failure tracking on successful sync
+                self._clear_failure(path)
+
                 logger.debug(
                     f"File sync completed, path={path}, entity_id={entity.id}, checksum={checksum[:8]}"
                 )
             return entity, checksum
 
-        except Exception as e:  # pragma: no cover
-            logger.error(f"Failed to sync file: path={path}, error={str(e)}")
+        except Exception as e:
+            error_msg = str(e)
+            logger.error(f"Failed to sync file: path={path}, error={error_msg}")
+
+            # Record failure for circuit breaker
+            await self._record_failure(path, error_msg)
+
             return None, None
 
     async def sync_markdown_file(self, path: str, new: bool = True) -> Tuple[Optional[Entity], str]:
diff --git a/tests/sync/test_sync_service.py b/tests/sync/test_sync_service.py
index c4ff06dd3..7bef4c9c3 100644
--- a/tests/sync/test_sync_service.py
+++ b/tests/sync/test_sync_service.py
@@ -1316,3 +1316,252 @@ async def mock_update(entity_id, updates):
             await sync_service.sync_regular_file(
                 str(test_file.relative_to(project_config.home)), new=True
             )
+
+
+@pytest.mark.asyncio
+async def test_circuit_breaker_skips_after_three_failures(
+    sync_service: SyncService, project_config: ProjectConfig
+):
+    """Test that circuit breaker skips file after 3 consecutive failures."""
+    from unittest.mock import patch
+
+    project_dir = project_config.home
+    test_file = project_dir / "failing_file.md"
+
+    # Create a file with malformed content that will fail to parse
+    await create_test_file(test_file, "invalid markdown content")
+
+    # Mock sync_markdown_file to always fail
+    async def mock_sync_markdown_file(*args, **kwargs):
+        raise ValueError("Simulated sync failure")
+
+    with patch.object(sync_service, "sync_markdown_file", side_effect=mock_sync_markdown_file):
+        # First sync - should fail and record (1/3)
+        report1 = await sync_service.sync(project_dir)
+        assert len(report1.skipped_files) == 0  # Not skipped yet
+
+        # Second sync - should fail and record (2/3)
+        report2 = await sync_service.sync(project_dir)
+        assert len(report2.skipped_files) == 0  # Still not skipped
+
+        # Third sync - should fail, record (3/3), and be added to skipped list
+        report3 = await sync_service.sync(project_dir)
+        assert len(report3.skipped_files) == 1
+        assert report3.skipped_files[0].path == "failing_file.md"
+        assert report3.skipped_files[0].failure_count == 3
+        assert "Simulated sync failure" in report3.skipped_files[0].reason
+
+        # Fourth sync - should be skipped immediately without attempting
+        report4 = await sync_service.sync(project_dir)
+        assert len(report4.skipped_files) == 1  # Still skipped
+
+
+@pytest.mark.asyncio
+async def test_circuit_breaker_resets_on_file_change(
+    sync_service: SyncService, project_config: ProjectConfig, entity_service: EntityService
+):
+    """Test that circuit breaker resets when file content changes."""
+    from unittest.mock import patch
+
+    project_dir = project_config.home
+    test_file = project_dir / "changing_file.md"
+
+    # Create initial failing content
+    await create_test_file(test_file, "initial bad content")
+
+    # Mock sync_markdown_file to fail
+    call_count = 0
+
+    async def mock_sync_markdown_file(*args, **kwargs):
+        nonlocal call_count
+        call_count += 1
+        raise ValueError("Simulated sync failure")
+
+    with patch.object(sync_service, "sync_markdown_file", side_effect=mock_sync_markdown_file):
+        # Fail 3 times to hit circuit breaker threshold
+        await sync_service.sync(project_dir)  # Fail 1
+        await sync_service.sync(project_dir)  # Fail 2
+        report3 = await sync_service.sync(project_dir)  # Fail 3 - now skipped
+        assert len(report3.skipped_files) == 1
+
+    # Now change the file content
+    valid_content = dedent(
+        """
+        ---
+        title: Fixed Content
+        type: knowledge
+        ---
+        # Fixed Content
+        This should work now.
+        """
+    ).strip()
+    await create_test_file(test_file, valid_content)
+
+    # Circuit breaker should reset and allow retry
+    report = await sync_service.sync(project_dir)
+    assert len(report.skipped_files) == 0  # Should not be skipped anymore
+
+    # Verify entity was created successfully
+    entity = await entity_service.get_by_permalink("changing-file")
+    assert entity is not None
+    assert entity.title == "Fixed Content"
+
+
+@pytest.mark.asyncio
+async def test_circuit_breaker_clears_on_success(
+    sync_service: SyncService, project_config: ProjectConfig, entity_service: EntityService
+):
+    """Test that circuit breaker clears failure history after successful sync."""
+    from unittest.mock import patch
+
+    project_dir = project_config.home
+    test_file = project_dir / "sometimes_failing.md"
+
+    valid_content = dedent(
+        """
+        ---
+        title: Test File
+        type: knowledge
+        ---
+        # Test File
+        Test content
+        """
+    ).strip()
+    await create_test_file(test_file, valid_content)
+
+    # Mock to fail twice, then succeed
+    call_count = 0
+    original_sync_markdown_file = sync_service.sync_markdown_file
+
+    async def mock_sync_markdown_file(path, new):
+        nonlocal call_count
+        call_count += 1
+        if call_count <= 2:
+            raise ValueError("Temporary failure")
+        # On third call, use the real implementation
+        return await original_sync_markdown_file(path, new)
+
+    # Patch and fail twice
+    with patch.object(sync_service, "sync_markdown_file", side_effect=mock_sync_markdown_file):
+        await sync_service.sync(project_dir)  # Fail 1
+        await sync_service.sync(project_dir)  # Fail 2
+        await sync_service.sync(project_dir)  # Succeed
+
+    # Verify failure history was cleared
+    assert "sometimes_failing.md" not in sync_service._file_failures
+
+    # Verify entity was created
+    entity = await entity_service.get_by_permalink("sometimes-failing")
+    assert entity is not None
+
+
+@pytest.mark.asyncio
+async def test_circuit_breaker_tracks_multiple_files(
+    sync_service: SyncService, project_config: ProjectConfig
+):
+    """Test that circuit breaker tracks multiple failing files independently."""
+    from unittest.mock import patch
+
+    project_dir = project_config.home
+
+    # Create multiple files with valid markdown
+    await create_test_file(
+        project_dir / "file1.md",
+        """
+---
+type: knowledge
+---
+# File 1
+Content 1
+""",
+    )
+    await create_test_file(
+        project_dir / "file2.md",
+        """
+---
+type: knowledge
+---
+# File 2
+Content 2
+""",
+    )
+    await create_test_file(
+        project_dir / "file3.md",
+        """
+---
+type: knowledge
+---
+# File 3
+Content 3
+""",
+    )
+
+    # Mock to make file1 and file2 fail, but file3 succeed
+    original_sync_markdown_file = sync_service.sync_markdown_file
+
+    async def mock_sync_markdown_file(path, new):
+        if "file1.md" in path or "file2.md" in path:
+            raise ValueError(f"Failure for {path}")
+        # file3 succeeds - use real implementation
+        return await original_sync_markdown_file(path, new)
+
+    with patch.object(sync_service, "sync_markdown_file", side_effect=mock_sync_markdown_file):
+        # Fail 3 times for file1 and file2 (file3 succeeds each time)
+        await sync_service.sync(project_dir)  # Fail count: file1=1, file2=1
+        await sync_service.sync(project_dir)  # Fail count: file1=2, file2=2
+        report3 = await sync_service.sync(project_dir)  # Fail count: file1=3, file2=3, now skipped
+
+        # Both files should be skipped on third sync
+        assert len(report3.skipped_files) == 2
+        skipped_paths = {f.path for f in report3.skipped_files}
+        assert "file1.md" in skipped_paths
+        assert "file2.md" in skipped_paths
+
+        # Verify file3 is not in failures dict
+        assert "file3.md" not in sync_service._file_failures
+
+
+@pytest.mark.asyncio
+async def test_circuit_breaker_handles_checksum_computation_failure(
+    sync_service: SyncService, project_config: ProjectConfig
+):
+    """Test circuit breaker behavior when checksum computation fails."""
+    from unittest.mock import patch
+
+    project_dir = project_config.home
+    test_file = project_dir / "checksum_fail.md"
+    await create_test_file(test_file, "content")
+
+    # Mock sync_markdown_file to fail
+    async def mock_sync_markdown_file(*args, **kwargs):
+        raise ValueError("Sync failure")
+
+    # Mock checksum computation to fail only during _record_failure (not during scan)
+    original_compute_checksum = sync_service._compute_checksum_async
+    call_count = 0
+
+    async def mock_compute_checksum(path):
+        nonlocal call_count
+        call_count += 1
+        # First call is during scan - let it succeed
+        if call_count == 1:
+            return await original_compute_checksum(path)
+        # Second call is during _record_failure - make it fail
+        raise IOError("Cannot read file")
+
+    with (
+        patch.object(sync_service, "sync_markdown_file", side_effect=mock_sync_markdown_file),
+        patch.object(
+            sync_service,
+            "_compute_checksum_async",
+            side_effect=mock_compute_checksum,
+        ),
+    ):
+        # Should still record failure even if checksum fails
+        await sync_service.sync(project_dir)
+
+        # Check that failure was recorded with empty checksum
+        assert "checksum_fail.md" in sync_service._file_failures
+        failure_info = sync_service._file_failures["checksum_fail.md"]
+        assert failure_info.count == 1
+        assert failure_info.last_checksum == ""  # Empty when checksum fails