diff --git a/.changeset/noble-mice-squeak.md b/.changeset/noble-mice-squeak.md
new file mode 100644
index 000000000..beaac514e
--- /dev/null
+++ b/.changeset/noble-mice-squeak.md
@@ -0,0 +1,5 @@
+---
+type: Fixed
+pr: 3478
+---
+**`gsd-sdk query init.progress` now respects terminal phase labels in roadmap headings** — phases marked COMPLETE/SHIPPED/DEFERRED/SUPERSEDED/MERGED/FOLDED are counted complete and skipped as next pending phase.
diff --git a/sdk/src/query/init-complex.test.ts b/sdk/src/query/init-complex.test.ts
index 925151710..bf2d21ee1 100644
--- a/sdk/src/query/init-complex.test.ts
+++ b/sdk/src/query/init-complex.test.ts
@@ -295,6 +295,70 @@ describe('initProgress', () => {
       await rm(tmp, { recursive: true, force: true });
     }
   });
+
+  it('treats terminal heading labels as complete when selecting next_phase (#3472)', async () => {
+    const tmp = await mkdtemp(join(tmpdir(), 'gsd-init-complex-3472-'));
+    try {
+      await mkdir(join(tmp, '.planning'), { recursive: true });
+      await writeFile(join(tmp, '.planning', 'config.json'), JSON.stringify({
+        model_profile: 'balanced',
+        commit_docs: false,
+        git: {
+          branching_strategy: 'none',
+          phase_branch_template: 'gsd/phase-{phase}-{slug}',
+          milestone_branch_template: 'gsd/{milestone}-{slug}',
+          quick_branch_template: null,
+        },
+        workflow: { research: true, plan_check: true, verifier: true, nyquist_validation: true },
+      }));
+      await writeFile(join(tmp, '.planning', 'STATE.md'), [
+        '---',
+        'milestone: v1.0',
+        '---',
+      ].join('\n'));
+      await writeFile(join(tmp, '.planning', 'ROADMAP.md'), [
+        '# Roadmap',
+        '',
+        '## v1.0: Current',
+        '',
+        '## Phase 4.12: Old Work (COMPLETE)',
+        '',
+        '## Phase 4.13: Another old one (SHIPPED 2026-05-12)',
+        '',
+        '## Phase 4.17: Human Auth (DEFERRED)',
+        '',
+        '## Phase 4.23: New pending work',
+        '',
+        '## Phase 4.24: Follow-up item (PROMOTED)',
+        '',
+        '## Phase 4.25: Another follow-up (REGISTERED)',
+        '',
+        '## Phase 4.26: Triage marker (INSERTED)',
+        '',
+      ].join('\n'));
+
+      const result = await initProgress([], tmp);
+      const data = result.data as Record<string, unknown>;
+      const phases = data.phases as Record<string, unknown>[];
+      const phase412 = phases.find(p => p.number === '4.12');
+      const phase413 = phases.find(p => p.number === '4.13');
+      const phase417 = phases.find(p => p.number === '4.17');
+      const phase424 = phases.find(p => p.number === '4.24');
+      const phase425 = phases.find(p => p.number === '4.25');
+      const phase426 = phases.find(p => p.number === '4.26');
+
+      expect(phase412?.status).toBe('complete');
+      expect(phase413?.status).toBe('complete');
+      expect(phase417?.status).toBe('complete');
+      expect(phase424?.status).not.toBe('complete');
+      expect(phase425?.status).not.toBe('complete');
+      expect(phase426?.status).not.toBe('complete');
+      expect(data.completed_count).toBe(3);
+      expect((data.next_phase as Record<string, unknown>).number).toBe('4.23');
+    } finally {
+      await rm(tmp, { recursive: true, force: true });
+    }
+  });
 });
 
 describe('initManager', () => {
diff --git a/sdk/src/query/init-complex.ts b/sdk/src/query/init-complex.ts
index a9e66e43a..6e60b1071 100644
--- a/sdk/src/query/init-complex.ts
+++ b/sdk/src/query/init-complex.ts
@@ -101,6 +101,25 @@ function extractCheckboxStates(content: string): Map<string, boolean> {
   return states;
 }
 
+/**
+ * Extract terminal phase markers from ROADMAP phase headings, e.g.
+ * `(COMPLETE)`, `(SHIPPED ...)`, `(DEFERRED)`, `(SUPERSEDED ...)`.
+ * These labels mean the phase should not be selected as next pending work.
+ */
+function extractTerminalStatusLabels(content: string): Set<string> {
+  const terminal = new Set<string>();
+  const headingPattern = /#{2,4}\s*Phase\s+(\d+[A-Z]?(?:\.\d+)*)\s*:\s*([^\n]+)/gi;
+  const terminalRe = /(?:\(|\*\*)\s*(SHIPPED|COMPLETE|DEFERRED|SUPERSEDED|MERGED\s+INTO|FOLDED\s+INTO)\b/i;
+  let m: RegExpExecArray | null;
+  while ((m = headingPattern.exec(content)) !== null) {
+    if (terminalRe.test(m[2])) {
+      terminal.add(m[1]);
+      terminal.add(m[1].replace(/^0+/, '') || '0');
+    }
+  }
+  return terminal;
+}
+
 /**
  * Derive progress-level status from a ROADMAP checkbox when the phase has
  * no on-disk directory. Returns 'complete' for `[x]`, 'not_started' otherwise.
@@ -291,6 +310,7 @@ export const initProgress: QueryHandler = async (_args, projectDir, workstream)
   const roadmapPhaseNames = new Map<string, string>();
   const seenPhaseNums = new Set<string>();
   let checkboxStates = new Map<string, boolean>();
+  let terminalLabels = new Set<string>();
 
   try {
     const rawRoadmap = await readFile(paths.roadmap, 'utf-8');
@@ -303,6 +323,7 @@ export const initProgress: QueryHandler = async (_args, projectDir, workstream)
       roadmapPhaseNames.set(pNum, pName);
     }
     checkboxStates = extractCheckboxStates(roadmapContent);
+    terminalLabels = extractTerminalStatusLabels(roadmapContent);
   } catch { /* intentionally empty */ }
 
   // Scan phase directories
@@ -345,6 +366,9 @@ export const initProgress: QueryHandler = async (_args, projectDir, workstream)
       if (roadmapComplete && status !== 'complete') {
         status = 'complete';
       }
+      if (terminalLabels.has(phaseNumber) || terminalLabels.has(strippedNum)) {
+        status = 'complete';
+      }
 
       const phaseInfo: Record<string, unknown> = {
         number: phaseNumber,
@@ -373,17 +397,18 @@ export const initProgress: QueryHandler = async (_args, projectDir, workstream)
     const stripped = num.replace(/^0+/, '') || '0';
     if (!seenPhaseNums.has(stripped)) {
       const status = deriveStatusFromCheckbox(num, checkboxStates);
+      const terminalComplete = terminalLabels.has(num) || terminalLabels.has(stripped);
       const phaseInfo: Record<string, unknown> = {
         number: num,
         name: name.toLowerCase().replace(/[^a-z0-9]+/g, '-').replace(/^-+|-+$/g, ''),
         directory: null,
-        status,
+        status: terminalComplete ? 'complete' : status,
         plan_count: 0,
         summary_count: 0,
         has_research: false,
       };
       phases.push(phaseInfo);
-      if (!nextPhase && !currentPhase && status !== 'complete') {
+      if (!nextPhase && !currentPhase && phaseInfo.status !== 'complete') {
         nextPhase = phaseInfo;
       }
     }