diff --git a/docs/source/llm/run-with-c-plus-plus.md b/docs/source/llm/run-with-c-plus-plus.md
index 217afad847b..b6c6082c3a6 100644
--- a/docs/source/llm/run-with-c-plus-plus.md
+++ b/docs/source/llm/run-with-c-plus-plus.md
@@ -183,13 +183,13 @@ struct GenerationConfig {
   int32_t num_eos = 0;             // Number of EOS tokens to add
 
   // Helper method to resolve the actual max_new_tokens based on constraints
-  int32_t resolve_max_new_tokens(int32_t max_context_len, int32_t num_prompt_tokens) const;
+  int32_t resolve_max_new_tokens(int64_t max_context_len, int64_t num_tokens_occupied) const;
 };
 ```
 
 The `resolve_max_new_tokens` method handles the logic of determining how many tokens can be generated based on:
 - The model's maximum context length
-- The number of tokens in the prompt
+- The number of token positions already occupied in the context window
 - The user-specified maximum sequence length and maximum new tokens
 
 ### Implementation Components
diff --git a/extension/llm/runner/_llm_runner.pyi b/extension/llm/runner/_llm_runner.pyi
index 20333578763..271cf1e1540 100644
--- a/extension/llm/runner/_llm_runner.pyi
+++ b/extension/llm/runner/_llm_runner.pyi
@@ -47,14 +47,15 @@ class GenerationConfig:
         ...
 
     def resolve_max_new_tokens(
-        self, max_context_len: int, num_prompt_tokens: int
+        self, max_context_len: int, num_tokens_occupied: int
     ) -> int:
         """
         Resolve the maximum number of new tokens to generate based on constraints.
 
         Args:
             max_context_len: The maximum context length supported by the model
-            num_prompt_tokens: The number of tokens in the input prompt
+            num_tokens_occupied: The number of token positions already occupied
+                in the context window (e.g. pos after prefill)
 
         Returns:
             The resolved maximum number of new tokens to generate
diff --git a/extension/llm/runner/irunner.h b/extension/llm/runner/irunner.h
index 0fcce1f37e4..bb7dd767fea 100644
--- a/extension/llm/runner/irunner.h
+++ b/extension/llm/runner/irunner.h
@@ -10,6 +10,7 @@
 
 #pragma once
 
+#include <algorithm>
 #include <cstdint>
 #include <functional>
 #include <memory>
@@ -65,36 +66,41 @@ struct GenerationConfig {
    *
    * This method calculates the maximum number of new tokens that can be
    * generated considering both seq_len and max_new_tokens constraints, as well
-   * as the model's maximum context length and the number of tokens in the
-   * prompt.
+   * as the model's maximum context length and how many token positions are
+   * already occupied (e.g. by prior turns and the current prompt).
    *
    * @param max_context_len The maximum context length supported by the model
-   * @param num_prompt_tokens The number of tokens in the input prompt
+   * @param num_tokens_occupied The number of token positions already occupied
+   *   in the context window (e.g. pos_ after prefill)
    * @return The resolved maximum number of new tokens to generate
    */
   int32_t resolve_max_new_tokens(
-      int32_t max_context_len,
-      int32_t num_prompt_tokens) const {
-    int32_t result;
+      int64_t max_context_len,
+      int64_t num_tokens_occupied) const {
+    int64_t result;
 
     if (seq_len == -1 && max_new_tokens == -1) {
-      // Both are -1, use max context len minus prompt tokens
-      result = max_context_len - num_prompt_tokens;
+      // Both are -1, use max context len minus occupied tokens
+      result = max_context_len - num_tokens_occupied;
     } else if (seq_len == -1 && max_new_tokens != -1) {
       // Only max_new_tokens is specified
-      result = std::min(max_new_tokens, max_context_len - num_prompt_tokens);
+      result = std::min(
+          static_cast<int64_t>(max_new_tokens),
+          max_context_len - num_tokens_occupied);
     } else if (seq_len != -1 && max_new_tokens == -1) {
       // Only seq_len is specified
-      result = std::min(seq_len, max_context_len) - num_prompt_tokens;
+      result = std::min(static_cast<int64_t>(seq_len), max_context_len) -
+          num_tokens_occupied;
     } else {
       // Both are specified
       result = std::min(
-          std::min(seq_len, max_context_len) - num_prompt_tokens,
-          max_new_tokens);
+          std::min(static_cast<int64_t>(seq_len), max_context_len) -
+              num_tokens_occupied,
+          static_cast<int64_t>(max_new_tokens));
     }
 
     // Ensure result is not negative
-    return std::max(0, result);
+    return static_cast<int32_t>(std::max(static_cast<int64_t>(0), result));
   }
 };
 
diff --git a/extension/llm/runner/pybindings.cpp b/extension/llm/runner/pybindings.cpp
index ecd49e6341a..3188b5390c4 100644
--- a/extension/llm/runner/pybindings.cpp
+++ b/extension/llm/runner/pybindings.cpp
@@ -297,7 +297,7 @@ PYBIND11_MODULE(_llm_runner, m) {
           "resolve_max_new_tokens",
           &GenerationConfig::resolve_max_new_tokens,
           py::arg("max_context_len"),
-          py::arg("num_prompt_tokens"),
+          py::arg("num_tokens_occupied"),
           "Resolve the maximum number of new tokens to generate based on constraints")
       .def("__repr__", [](const GenerationConfig& config) {
         return "<GenerationConfig max_new_tokens=" +
diff --git a/extension/llm/runner/test/test_generation_config.cpp b/extension/llm/runner/test/test_generation_config.cpp
index f273ac11cd7..dd8d026631f 100644
--- a/extension/llm/runner/test/test_generation_config.cpp
+++ b/extension/llm/runner/test/test_generation_config.cpp
@@ -20,19 +20,19 @@ TEST_F(GenerationConfigTest, TestResolveMaxNewTokensBothDefault) {
   GenerationConfig config;
   // Default values: seq_len = -1, max_new_tokens = -1
 
-  // max_context_len = 100, num_prompt_tokens = 20
-  // Expected: max_context_len - num_prompt_tokens = 100 - 20 = 80
+  // max_context_len = 100, num_tokens_occupied = 20
+  // Expected: max_context_len - num_tokens_occupied = 100 - 20 = 80
   EXPECT_EQ(config.resolve_max_new_tokens(100, 20), 80);
 
-  // max_context_len = 50, num_prompt_tokens = 30
-  // Expected: max_context_len - num_prompt_tokens = 50 - 30 = 20
+  // max_context_len = 50, num_tokens_occupied = 30
+  // Expected: max_context_len - num_tokens_occupied = 50 - 30 = 20
   EXPECT_EQ(config.resolve_max_new_tokens(50, 30), 20);
 
-  // Edge case: num_prompt_tokens equals max_context_len
+  // Edge case: num_tokens_occupied equals max_context_len
   // Expected: 0 (no tokens left)
   EXPECT_EQ(config.resolve_max_new_tokens(40, 40), 0);
 
-  // Edge case: num_prompt_tokens exceeds max_context_len
+  // Edge case: num_tokens_occupied exceeds max_context_len
   // Expected: 0 (no tokens left, and we ensure non-negative result)
   EXPECT_EQ(config.resolve_max_new_tokens(30, 50), 0);
 }
@@ -43,17 +43,17 @@ TEST_F(GenerationConfigTest, TestResolveMaxNewTokensOnlyMaxNewTokens) {
   config.seq_len = -1;
   config.max_new_tokens = 25;
 
-  // max_context_len = 100, num_prompt_tokens = 20
+  // max_context_len = 100, num_tokens_occupied = 20
   // Available tokens: 100 - 20 = 80
   // Expected: min(max_new_tokens, available) = min(25, 80) = 25
   EXPECT_EQ(config.resolve_max_new_tokens(100, 20), 25);
 
-  // max_context_len = 50, num_prompt_tokens = 40
+  // max_context_len = 50, num_tokens_occupied = 40
   // Available tokens: 50 - 40 = 10
   // Expected: min(max_new_tokens, available) = min(25, 10) = 10
   EXPECT_EQ(config.resolve_max_new_tokens(50, 40), 10);
 
-  // Edge case: num_prompt_tokens equals max_context_len
+  // Edge case: num_tokens_occupied equals max_context_len
   // Available tokens: 0
   // Expected: 0 (no tokens left)
   EXPECT_EQ(config.resolve_max_new_tokens(40, 40), 0);
@@ -65,21 +65,21 @@ TEST_F(GenerationConfigTest, TestResolveMaxNewTokensOnlySeqLen) {
   config.seq_len = 50;
   config.max_new_tokens = -1;
 
-  // max_context_len = 100, num_prompt_tokens = 20
+  // max_context_len = 100, num_tokens_occupied = 20
   // Effective seq_len: min(seq_len, max_context_len) = min(50, 100) = 50
-  // Expected: effective_seq_len - num_prompt_tokens = 50 - 20 = 30
+  // Expected: effective_seq_len - num_tokens_occupied = 50 - 20 = 30
   EXPECT_EQ(config.resolve_max_new_tokens(100, 20), 30);
 
-  // max_context_len = 40, num_prompt_tokens = 20
+  // max_context_len = 40, num_tokens_occupied = 20
   // Effective seq_len: min(seq_len, max_context_len) = min(50, 40) = 40
-  // Expected: effective_seq_len - num_prompt_tokens = 40 - 20 = 20
+  // Expected: effective_seq_len - num_tokens_occupied = 40 - 20 = 20
   EXPECT_EQ(config.resolve_max_new_tokens(40, 20), 20);
 
-  // Edge case: num_prompt_tokens equals effective seq_len
+  // Edge case: num_tokens_occupied equals effective seq_len
   // Expected: 0 (no tokens left)
   EXPECT_EQ(config.resolve_max_new_tokens(100, 50), 0);
 
-  // Edge case: num_prompt_tokens exceeds effective seq_len
+  // Edge case: num_tokens_occupied exceeds effective seq_len
   // Expected: 0 (no tokens left, and we ensure non-negative result)
   EXPECT_EQ(config.resolve_max_new_tokens(100, 60), 0);
 }
@@ -90,19 +90,19 @@ TEST_F(GenerationConfigTest, TestResolveMaxNewTokensBothSpecified) {
   config.seq_len = 50;
   config.max_new_tokens = 25;
 
-  // max_context_len = 100, num_prompt_tokens = 20
+  // max_context_len = 100, num_tokens_occupied = 20
   // Effective seq_len: min(seq_len, max_context_len) = min(50, 100) = 50
-  // Available tokens: effective_seq_len - num_prompt_tokens = 50 - 20 = 30
+  // Available tokens: effective_seq_len - num_tokens_occupied = 50 - 20 = 30
   // Expected: min(max_new_tokens, available) = min(25, 30) = 25
   EXPECT_EQ(config.resolve_max_new_tokens(100, 20), 25);
 
-  // max_context_len = 40, num_prompt_tokens = 20
+  // max_context_len = 40, num_tokens_occupied = 20
   // Effective seq_len: min(seq_len, max_context_len) = min(50, 40) = 40
-  // Available tokens: effective_seq_len - num_prompt_tokens = 40 - 20 = 20
+  // Available tokens: effective_seq_len - num_tokens_occupied = 40 - 20 = 20
   // Expected: min(max_new_tokens, available) = min(25, 20) = 20
   EXPECT_EQ(config.resolve_max_new_tokens(40, 20), 20);
 
-  // Edge case: num_prompt_tokens equals effective seq_len
+  // Edge case: num_tokens_occupied equals effective seq_len
   // Available tokens: 0
   // Expected: 0 (no tokens left)
   EXPECT_EQ(config.resolve_max_new_tokens(40, 40), 0);
diff --git a/extension/llm/runner/test/test_runner_pybindings.py b/extension/llm/runner/test/test_runner_pybindings.py
index f30226bf3e2..5619e586c4b 100644
--- a/extension/llm/runner/test/test_runner_pybindings.py
+++ b/extension/llm/runner/test/test_runner_pybindings.py
@@ -97,6 +97,14 @@ def test_resolve_max_new_tokens(self):
         result = config.resolve_max_new_tokens(1024, 100)
         self.assertEqual(result, 0)  # max(0, 50 - 100)
 
+        # Test case 6: Use keyword argument with new name
+        config.seq_len = -1
+        config.max_new_tokens = -1
+        result = config.resolve_max_new_tokens(
+            max_context_len=1024, num_tokens_occupied=100
+        )
+        self.assertEqual(result, 924)
+
     def test_repr(self):
         """Test the string representation."""
         config = GenerationConfig()