diff --git a/CHANGELOG.md b/CHANGELOG.md
index 5c350de..d74fefc 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -5,6 +5,14 @@ All notable changes to this project will be documented in this file.
 The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/),
 and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
 
+## [0.14.1] - 2026-04-09
+
+### Fixed
+- **Thinking configuration**: Use `--thinking adaptive` / `--thinking disabled` CLI flags instead of mapping to `--max-thinking-tokens`. Previously, `ThinkingConfigAdaptive` was mapped to `--max-thinking-tokens 32000` (fixed budget) and `ThinkingConfigDisabled` to `--max-thinking-tokens 0`, which put the CLI into the wrong mode. Only `ThinkingConfigEnabled` now uses `--max-thinking-tokens`. (Parity with [Python SDK #796](https://github.com/anthropics/claude-agent-sdk-python/pull/796))
+
+### Added
+- **`exclude_dynamic_sections`** on `SystemPromptPreset`: When set to `true`, the CLI strips per-user dynamic sections (working directory, auto-memory, git status) from the preset system prompt and re-injects them into the first user message. This makes the system prompt byte-identical across users, enabling cross-user prompt-caching hits. Sent via `excludeDynamicSections` in the initialize control message; older CLIs silently ignore it. (Parity with [Python SDK #797](https://github.com/anthropics/claude-agent-sdk-python/pull/797))
+
 ## [0.14.0] - 2026-04-08 — Python SDK v0.1.51–0.1.56 Parity
 
 ### Added
diff --git a/README.md b/README.md
index 2c4252d..ebeb26e 100644
--- a/README.md
+++ b/README.md
@@ -724,12 +724,12 @@ For complete examples, see [examples/structured_output_example.rb](examples/stru
 Control extended thinking behavior with typed configuration objects. The `thinking` option takes precedence over the deprecated `max_thinking_tokens`.
 
 ```ruby
-# Adaptive thinking — uses a default budget of 32,000 tokens
+# Adaptive thinking — CLI dynamically adjusts budget based on task complexity
 options = ClaudeAgentSDK::ClaudeAgentOptions.new(
   thinking: ClaudeAgentSDK::ThinkingConfigAdaptive.new
 )
 
-# Enabled thinking with custom budget
+# Enabled thinking with explicit token budget
 options = ClaudeAgentSDK::ClaudeAgentOptions.new(
   thinking: ClaudeAgentSDK::ThinkingConfigEnabled.new(budget_tokens: 50_000)
 )
@@ -750,6 +750,22 @@ options = ClaudeAgentSDK::ClaudeAgentOptions.new(
 
 > **Note:** When `system_prompt` is `nil` (the default), the SDK passes `--system-prompt ""` to the CLI, which suppresses the default Claude Code system prompt. To use the default system prompt, use a `SystemPromptPreset`.
 
+### Cross-User Prompt Caching
+
+When running a multi-user fleet with shared preset prompts, enable `exclude_dynamic_sections` to make the system prompt byte-identical across users for prompt-caching hits:
+
+```ruby
+options = ClaudeAgentSDK::ClaudeAgentOptions.new(
+  system_prompt: ClaudeAgentSDK::SystemPromptPreset.new(
+    preset: 'claude_code',
+    append: '...your shared domain instructions...',
+    exclude_dynamic_sections: true
+  )
+)
+```
+
+When set, the CLI strips per-user dynamic sections (working directory, auto-memory, git status) from the system prompt and re-injects them into the first user message instead. Older CLIs silently ignore this option.
+
 ## Budget Control
 
 Use `max_budget_usd` to set a spending cap for your queries:
@@ -1565,9 +1581,9 @@ end
 | `PermissionResultAllow` | Permission callback result to allow tool use |
 | `PermissionResultDeny` | Permission callback result to deny tool use |
 | `AgentDefinition` | Agent definition with description, prompt, tools, model, skills, memory, mcp_servers |
-| `ThinkingConfigAdaptive` | Adaptive thinking mode (32,000 token default budget) |
+| `ThinkingConfigAdaptive` | Adaptive thinking mode (CLI dynamically adjusts budget) |
 | `ThinkingConfigEnabled` | Enabled thinking with explicit `budget_tokens` |
-| `ThinkingConfigDisabled` | Disabled thinking (0 tokens) |
+| `ThinkingConfigDisabled` | Disabled thinking |
 | `SdkMcpTool` | SDK MCP tool definition with name, description, input_schema, handler, annotations |
 | `McpStdioServerConfig` | MCP server config for stdio transport |
 | `McpSSEServerConfig` | MCP server config for SSE transport |
diff --git a/lib/claude_agent_sdk.rb b/lib/claude_agent_sdk.rb
index ea44ddc..17d4c57 100644
--- a/lib/claude_agent_sdk.rb
+++ b/lib/claude_agent_sdk.rb
@@ -340,6 +340,10 @@ def connect(prompt = nil)
       # Convert hooks to internal format
       hooks = convert_hooks_to_internal_format(configured_options.hooks) if configured_options.hooks
 
+      # Extract exclude_dynamic_sections from preset system prompt for the
+      # initialize request (older CLIs ignore unknown initialize fields)
+      exclude_dynamic_sections = extract_exclude_dynamic_sections(configured_options.system_prompt)
+
       # Create Query handler
       @query_handler = Query.new(
         transport: @transport,
@@ -347,7 +351,8 @@ def connect(prompt = nil)
         can_use_tool: configured_options.can_use_tool,
         hooks: hooks,
         sdk_mcp_servers: sdk_mcp_servers,
-        agents: configured_options.agents
+        agents: configured_options.agents,
+        exclude_dynamic_sections: exclude_dynamic_sections
       )
 
       # Start query handler and initialize
@@ -527,5 +532,19 @@ def convert_hooks_to_internal_format(hooks)
       end
       internal_hooks
     end
+
+    def extract_exclude_dynamic_sections(system_prompt)
+      if system_prompt.is_a?(SystemPromptPreset)
+        eds = system_prompt.exclude_dynamic_sections
+        return eds if [true, false].include?(eds)
+      elsif system_prompt.is_a?(Hash)
+        type = system_prompt[:type] || system_prompt['type']
+        if type == 'preset'
+          eds = system_prompt.fetch(:exclude_dynamic_sections) { system_prompt['exclude_dynamic_sections'] }
+          return eds if [true, false].include?(eds)
+        end
+      end
+      nil
+    end
   end
 end
diff --git a/lib/claude_agent_sdk/query.rb b/lib/claude_agent_sdk/query.rb
index 4a190e3..060f5e7 100644
--- a/lib/claude_agent_sdk/query.rb
+++ b/lib/claude_agent_sdk/query.rb
@@ -25,13 +25,15 @@ class Query
     STREAM_CLOSE_TIMEOUT_ENV_VAR = 'CLAUDE_CODE_STREAM_CLOSE_TIMEOUT'
     DEFAULT_STREAM_CLOSE_TIMEOUT_SECONDS = 60.0
 
-    def initialize(transport:, is_streaming_mode:, can_use_tool: nil, hooks: nil, sdk_mcp_servers: nil, agents: nil)
+    def initialize(transport:, is_streaming_mode:, can_use_tool: nil, hooks: nil, sdk_mcp_servers: nil, agents: nil,
+                   exclude_dynamic_sections: nil)
       @transport = transport
       @is_streaming_mode = is_streaming_mode
       @can_use_tool = can_use_tool
       @hooks = hooks || {}
       @sdk_mcp_servers = sdk_mcp_servers || {}
       @agents = agents
+      @exclude_dynamic_sections = exclude_dynamic_sections
 
       # Control protocol state
       @pending_control_responses = {}
@@ -109,6 +111,7 @@ def initialize_protocol
         hooks: hooks_config.empty? ? nil : hooks_config,
         agents: agents_dict
       }
+      request[:excludeDynamicSections] = @exclude_dynamic_sections unless @exclude_dynamic_sections.nil?
 
       response = send_control_request(request)
       @initialized = true
diff --git a/lib/claude_agent_sdk/subprocess_cli_transport.rb b/lib/claude_agent_sdk/subprocess_cli_transport.rb
index 2cf8f0d..ffd01bf 100644
--- a/lib/claude_agent_sdk/subprocess_cli_transport.rb
+++ b/lib/claude_agent_sdk/subprocess_cli_transport.rb
@@ -120,8 +120,7 @@ def build_command
       end
 
       # Thinking configuration (takes precedence over deprecated max_thinking_tokens)
-      thinking_tokens = resolve_thinking_tokens
-      cmd.concat(['--max-thinking-tokens', thinking_tokens.to_s]) unless thinking_tokens.nil?
+      build_thinking_args(cmd)
 
       # Effort level (valid values: low, medium, high, max)
       cmd.concat(['--effort', @options.effort.to_s]) if @options.effort
@@ -494,8 +493,6 @@ def ready?
       @ready
     end
 
-    DEFAULT_ADAPTIVE_THINKING_TOKENS = 32_000
-
     private
 
     def build_settings_args(cmd)
@@ -599,18 +596,18 @@ def load_settings_file(path)
       JSON.parse(File.read(path))
     end
 
-    def resolve_thinking_tokens
+    def build_thinking_args(cmd)
       if @options.thinking
         case @options.thinking
         when ThinkingConfigAdaptive
-          DEFAULT_ADAPTIVE_THINKING_TOKENS
+          cmd.concat(['--thinking', 'adaptive'])
         when ThinkingConfigEnabled
-          @options.thinking.budget_tokens
+          cmd.concat(['--max-thinking-tokens', @options.thinking.budget_tokens.to_s])
         when ThinkingConfigDisabled
-          0
+          cmd.concat(['--thinking', 'disabled'])
         end
       elsif @options.max_thinking_tokens
-        @options.max_thinking_tokens
+        cmd.concat(['--max-thinking-tokens', @options.max_thinking_tokens.to_s])
       end
     end
   end
diff --git a/lib/claude_agent_sdk/types.rb b/lib/claude_agent_sdk/types.rb
index 5892c3e..64a3155 100644
--- a/lib/claude_agent_sdk/types.rb
+++ b/lib/claude_agent_sdk/types.rb
@@ -1735,17 +1735,19 @@ def to_h
 
   # System prompt preset configuration
   class SystemPromptPreset
-    attr_accessor :type, :preset, :append
+    attr_accessor :type, :preset, :append, :exclude_dynamic_sections
 
-    def initialize(preset:, append: nil)
+    def initialize(preset:, append: nil, exclude_dynamic_sections: nil)
       @type = 'preset'
       @preset = preset
       @append = append
+      @exclude_dynamic_sections = exclude_dynamic_sections
     end
 
     def to_h
       result = { type: @type, preset: @preset }
       result[:append] = @append if @append
+      result[:exclude_dynamic_sections] = @exclude_dynamic_sections unless @exclude_dynamic_sections.nil?
       result
     end
   end
diff --git a/lib/claude_agent_sdk/version.rb b/lib/claude_agent_sdk/version.rb
index 51c1c31..a7dc44c 100644
--- a/lib/claude_agent_sdk/version.rb
+++ b/lib/claude_agent_sdk/version.rb
@@ -1,5 +1,5 @@
 # frozen_string_literal: true
 
 module ClaudeAgentSDK
-  VERSION = '0.14.0'
+  VERSION = '0.14.1'
 end
diff --git a/plugins/claude-agent-ruby/skills/claude-agent-ruby/references/options.md b/plugins/claude-agent-ruby/skills/claude-agent-ruby/references/options.md
index 56e9589..cb1597b 100644
--- a/plugins/claude-agent-ruby/skills/claude-agent-ruby/references/options.md
+++ b/plugins/claude-agent-ruby/skills/claude-agent-ruby/references/options.md
@@ -22,14 +22,14 @@ Notes:
 
 ## Core knobs
 
-- `system_prompt`: Set an overall instruction as a string, or use `ClaudeAgentSDK::SystemPromptPreset.new(preset: 'claude_code', append: '...')` to extend a preset prompt.
+- `system_prompt`: Set an overall instruction as a string, use `ClaudeAgentSDK::SystemPromptPreset.new(preset: 'claude_code', append: '...', exclude_dynamic_sections: true)` to extend a preset (with optional cross-user caching), or use `ClaudeAgentSDK::SystemPromptFile.new(path: '/path/to/prompt.txt')` to load from a file.
 - `model`: Select the model.
 - `fallback_model`: Use when the primary model is unavailable.
 - `max_turns`: Cap the number of turns.
 - `max_budget_usd`: Cap total spend (USD).
 - `include_partial_messages`: Include partial assistant messages in the stream when supported.
 - `cwd`: Run Claude Code in a specific working directory.
-- `max_thinking_tokens`: Stored for API parity, but not currently passed through to Claude CLI.
+- `max_thinking_tokens`: Deprecated — use `thinking:` instead (`ThinkingConfigAdaptive`, `ThinkingConfigEnabled`, or `ThinkingConfigDisabled`). Falls back to `--max-thinking-tokens` when `thinking` is unset.
 
 ## Tools and permissions
 
diff --git a/skills/references/options.md b/skills/references/options.md
index 646eee6..b212412 100644
--- a/skills/references/options.md
+++ b/skills/references/options.md
@@ -22,7 +22,7 @@ Notes:
 
 ## Core knobs
 
-- `system_prompt`: Set an overall instruction as a string, use `ClaudeAgentSDK::SystemPromptPreset.new(preset: 'claude_code', append: '...')` to extend a preset, or use `ClaudeAgentSDK::SystemPromptFile.new(path: '/path/to/prompt.txt')` to load from a file.
+- `system_prompt`: Set an overall instruction as a string, use `ClaudeAgentSDK::SystemPromptPreset.new(preset: 'claude_code', append: '...', exclude_dynamic_sections: true)` to extend a preset (with optional cross-user caching), or use `ClaudeAgentSDK::SystemPromptFile.new(path: '/path/to/prompt.txt')` to load from a file.
 - `model`: Select the model.
 - `fallback_model`: Use when the primary model is unavailable.
 - `max_turns`: Cap the number of turns.
@@ -31,7 +31,7 @@ Notes:
 - `session_id`: Specify a custom session ID upfront (string).
 - `include_partial_messages`: Include partial assistant messages in the stream when supported.
 - `cwd`: Run Claude Code in a specific working directory.
-- `max_thinking_tokens`: Stored for API parity, but not currently passed through to Claude CLI.
+- `max_thinking_tokens`: Deprecated — use `thinking:` instead (`ThinkingConfigAdaptive`, `ThinkingConfigEnabled`, or `ThinkingConfigDisabled`). Falls back to `--max-thinking-tokens` when `thinking` is unset.
 
 ## Tools and permissions
 
diff --git a/spec/unit/client_spec.rb b/spec/unit/client_spec.rb
index 9db059a..09a4c5b 100644
--- a/spec/unit/client_spec.rb
+++ b/spec/unit/client_spec.rb
@@ -276,6 +276,76 @@ def build_transport_class(&on_initialize)
     end
   end
 
+  context 'with exclude_dynamic_sections' do
+    let(:transport) { instance_double(ClaudeAgentSDK::SubprocessCLITransport, connect: true, write: nil) }
+    let(:query_handler) { instance_double(ClaudeAgentSDK::Query, start: true, initialize_protocol: true) }
+
+    before do
+      allow(ClaudeAgentSDK::SubprocessCLITransport).to receive(:new).and_return(transport)
+    end
+
+    it 'passes exclude_dynamic_sections from SystemPromptPreset to Query' do
+      received_kwargs = nil
+      allow(ClaudeAgentSDK::Query).to receive(:new) do |**kwargs|
+        received_kwargs = kwargs
+        query_handler
+      end
+
+      preset = ClaudeAgentSDK::SystemPromptPreset.new(preset: 'claude_code', exclude_dynamic_sections: true)
+      options = ClaudeAgentSDK::ClaudeAgentOptions.new(system_prompt: preset)
+      client = described_class.new(options: options)
+      client.connect
+
+      expect(received_kwargs[:exclude_dynamic_sections]).to eq(true)
+    end
+
+    it 'passes exclude_dynamic_sections from Hash with symbol keys to Query' do
+      received_kwargs = nil
+      allow(ClaudeAgentSDK::Query).to receive(:new) do |**kwargs|
+        received_kwargs = kwargs
+        query_handler
+      end
+
+      options = ClaudeAgentSDK::ClaudeAgentOptions.new(
+        system_prompt: { type: 'preset', preset: 'claude_code', exclude_dynamic_sections: true }
+      )
+      client = described_class.new(options: options)
+      client.connect
+
+      expect(received_kwargs[:exclude_dynamic_sections]).to eq(true)
+    end
+
+    it 'handles false correctly from Hash with symbol keys' do
+      received_kwargs = nil
+      allow(ClaudeAgentSDK::Query).to receive(:new) do |**kwargs|
+        received_kwargs = kwargs
+        query_handler
+      end
+
+      options = ClaudeAgentSDK::ClaudeAgentOptions.new(
+        system_prompt: { type: 'preset', preset: 'claude_code', exclude_dynamic_sections: false }
+      )
+      client = described_class.new(options: options)
+      client.connect
+
+      expect(received_kwargs[:exclude_dynamic_sections]).to eq(false)
+    end
+
+    it 'passes nil when system_prompt is a plain string' do
+      received_kwargs = nil
+      allow(ClaudeAgentSDK::Query).to receive(:new) do |**kwargs|
+        received_kwargs = kwargs
+        query_handler
+      end
+
+      options = ClaudeAgentSDK::ClaudeAgentOptions.new(system_prompt: 'You are a helper')
+      client = described_class.new(options: options)
+      client.connect
+
+      expect(received_kwargs[:exclude_dynamic_sections]).to be_nil
+    end
+  end
+
   context 'with default configuration' do
     after { ClaudeAgentSDK.reset_configuration }
 
diff --git a/spec/unit/subprocess_cli_transport_spec.rb b/spec/unit/subprocess_cli_transport_spec.rb
index 1d750b8..ef39f52 100644
--- a/spec/unit/subprocess_cli_transport_spec.rb
+++ b/spec/unit/subprocess_cli_transport_spec.rb
@@ -80,7 +80,7 @@
       expect(cmd).not_to include('--agents')
     end
 
-    it 'passes --max-thinking-tokens for ThinkingConfigAdaptive' do
+    it 'passes --thinking adaptive for ThinkingConfigAdaptive' do
       options = ClaudeAgentSDK::ClaudeAgentOptions.new(
         cli_path: '/usr/bin/claude',
         thinking: ClaudeAgentSDK::ThinkingConfigAdaptive.new
@@ -89,9 +89,10 @@
       transport = described_class.new('hi', options)
       cmd = transport.build_command
 
-      idx = cmd.index('--max-thinking-tokens')
+      idx = cmd.index('--thinking')
       expect(idx).not_to be_nil
-      expect(cmd[idx + 1]).to eq('32000')
+      expect(cmd[idx + 1]).to eq('adaptive')
+      expect(cmd).not_to include('--max-thinking-tokens')
     end
 
     it 'passes --max-thinking-tokens for ThinkingConfigEnabled' do
@@ -106,9 +107,10 @@
       idx = cmd.index('--max-thinking-tokens')
       expect(idx).not_to be_nil
       expect(cmd[idx + 1]).to eq('50000')
+      expect(cmd).not_to include('--thinking')
     end
 
-    it 'passes --max-thinking-tokens 0 for ThinkingConfigDisabled' do
+    it 'passes --thinking disabled for ThinkingConfigDisabled' do
       options = ClaudeAgentSDK::ClaudeAgentOptions.new(
         cli_path: '/usr/bin/claude',
         thinking: ClaudeAgentSDK::ThinkingConfigDisabled.new
@@ -117,24 +119,26 @@
       transport = described_class.new('hi', options)
       cmd = transport.build_command
 
-      idx = cmd.index('--max-thinking-tokens')
+      idx = cmd.index('--thinking')
       expect(idx).not_to be_nil
-      expect(cmd[idx + 1]).to eq('0')
+      expect(cmd[idx + 1]).to eq('disabled')
+      expect(cmd).not_to include('--max-thinking-tokens')
     end
 
     it 'thinking takes precedence over deprecated max_thinking_tokens' do
       options = ClaudeAgentSDK::ClaudeAgentOptions.new(
         cli_path: '/usr/bin/claude',
-        thinking: ClaudeAgentSDK::ThinkingConfigEnabled.new(budget_tokens: 10_000),
+        thinking: ClaudeAgentSDK::ThinkingConfigAdaptive.new,
         max_thinking_tokens: 99_999
       )
 
       transport = described_class.new('hi', options)
       cmd = transport.build_command
 
-      idx = cmd.index('--max-thinking-tokens')
+      idx = cmd.index('--thinking')
       expect(idx).not_to be_nil
-      expect(cmd[idx + 1]).to eq('10000')
+      expect(cmd[idx + 1]).to eq('adaptive')
+      expect(cmd).not_to include('--max-thinking-tokens')
     end
 
     it 'falls back to max_thinking_tokens when thinking is nil' do
diff --git a/spec/unit/types_spec.rb b/spec/unit/types_spec.rb
index ebbea04..8e57d30 100644
--- a/spec/unit/types_spec.rb
+++ b/spec/unit/types_spec.rb
@@ -1318,6 +1318,25 @@
 
         expect(hash.key?(:append)).to eq(false)
       end
+
+      it 'stores exclude_dynamic_sections' do
+        preset = described_class.new(preset: 'claude_code', exclude_dynamic_sections: true)
+        expect(preset.exclude_dynamic_sections).to eq(true)
+      end
+
+      it 'includes exclude_dynamic_sections in to_h when set' do
+        preset = described_class.new(preset: 'claude_code', exclude_dynamic_sections: true)
+        hash = preset.to_h
+
+        expect(hash[:exclude_dynamic_sections]).to eq(true)
+      end
+
+      it 'omits exclude_dynamic_sections from to_h when nil' do
+        preset = described_class.new(preset: 'claude_code')
+        hash = preset.to_h
+
+        expect(hash.key?(:exclude_dynamic_sections)).to eq(false)
+      end
     end
 
     describe 'ClaudeAgentOptions new options' do