diff --git a/bin/install.js b/bin/install.js
index 0381d09f4..7f9d8ded9 100755
--- a/bin/install.js
+++ b/bin/install.js
@@ -5666,8 +5666,11 @@ function install(isGlobal, runtime = 'claude') {
     const hasValidateCommitHook = settings.hooks[preToolEvent].some(entry =>
       entry.hooks && entry.hooks.some(h => h.command && h.command.includes('gsd-validate-commit'))
     );
-
-    if (!hasValidateCommitHook) {
+    // Guard: only register if the .sh file was actually installed. If the npm package
+    // omitted the file (as happened in v1.32.0, bug #1817), registering a missing hook
+    // causes a hook error on every Bash tool invocation.
+    const validateCommitFile = path.join(targetDir, 'hooks', 'gsd-validate-commit.sh');
+    if (!hasValidateCommitHook && fs.existsSync(validateCommitFile)) {
       settings.hooks[preToolEvent].push({
         matcher: 'Bash',
         hooks: [
@@ -5679,6 +5682,8 @@ function install(isGlobal, runtime = 'claude') {
         ]
       });
       console.log(`  ${green}✓${reset} Configured commit validation hook (opt-in via config)`);
+    } else if (!hasValidateCommitHook && !fs.existsSync(validateCommitFile)) {
+      console.warn(`  ${yellow}⚠${reset}  Skipped commit validation hook — gsd-validate-commit.sh not found at target`);
     }
 
     // Configure session state orientation hook (opt-in)
@@ -5688,8 +5693,8 @@ function install(isGlobal, runtime = 'claude') {
     const hasSessionStateHook = settings.hooks.SessionStart.some(entry =>
       entry.hooks && entry.hooks.some(h => h.command && h.command.includes('gsd-session-state'))
     );
-
-    if (!hasSessionStateHook) {
+    const sessionStateFile = path.join(targetDir, 'hooks', 'gsd-session-state.sh');
+    if (!hasSessionStateHook && fs.existsSync(sessionStateFile)) {
       settings.hooks.SessionStart.push({
         hooks: [
           {
@@ -5699,6 +5704,8 @@ function install(isGlobal, runtime = 'claude') {
         ]
       });
       console.log(`  ${green}✓${reset} Configured session state orientation hook (opt-in via config)`);
+    } else if (!hasSessionStateHook && !fs.existsSync(sessionStateFile)) {
+      console.warn(`  ${yellow}⚠${reset}  Skipped session state hook — gsd-session-state.sh not found at target`);
     }
 
     // Configure phase boundary detection hook (opt-in)
@@ -5708,8 +5715,8 @@ function install(isGlobal, runtime = 'claude') {
     const hasPhaseBoundaryHook = settings.hooks[postToolEvent].some(entry =>
       entry.hooks && entry.hooks.some(h => h.command && h.command.includes('gsd-phase-boundary'))
     );
-
-    if (!hasPhaseBoundaryHook) {
+    const phaseBoundaryFile = path.join(targetDir, 'hooks', 'gsd-phase-boundary.sh');
+    if (!hasPhaseBoundaryHook && fs.existsSync(phaseBoundaryFile)) {
       settings.hooks[postToolEvent].push({
         matcher: 'Write|Edit',
         hooks: [
@@ -5721,6 +5728,8 @@ function install(isGlobal, runtime = 'claude') {
         ]
       });
       console.log(`  ${green}✓${reset} Configured phase boundary detection hook (opt-in via config)`);
+    } else if (!hasPhaseBoundaryHook && !fs.existsSync(phaseBoundaryFile)) {
+      console.warn(`  ${yellow}⚠${reset}  Skipped phase boundary hook — gsd-phase-boundary.sh not found at target`);
     }
   }
 
diff --git a/tests/bug-1817-sh-hook-guard.test.cjs b/tests/bug-1817-sh-hook-guard.test.cjs
new file mode 100644
index 000000000..4378a8923
--- /dev/null
+++ b/tests/bug-1817-sh-hook-guard.test.cjs
@@ -0,0 +1,63 @@
+/**
+ * Regression tests for bug #1817
+ *
+ * The installer must NOT register .sh hook entries in settings.json when the
+ * corresponding .sh file does not exist at the target path. The original bug:
+ * v1.32.0's npm package omitted the .sh files from hooks/dist/, so the copy
+ * step produced no files, yet the registration step ran unconditionally —
+ * leaving users with hook errors on every tool invocation.
+ *
+ * Defensive guard: before registering each .sh hook in settings.json,
+ * install.js must verify the target file exists. If it doesn't, skip
+ * registration and emit a warning.
+ */
+
+'use strict';
+
+const { describe, test } = require('node:test');
+const assert = require('node:assert/strict');
+const fs = require('fs');
+const path = require('path');
+
+const INSTALL_SRC = path.join(__dirname, '..', 'bin', 'install.js');
+
+const SH_HOOKS = [
+  { name: 'gsd-validate-commit.sh', settingsVar: 'validateCommitCommand' },
+  { name: 'gsd-session-state.sh',   settingsVar: 'sessionStateCommand' },
+  { name: 'gsd-phase-boundary.sh',  settingsVar: 'phaseBoundaryCommand' },
+];
+
+describe('bug #1817: .sh hook registration guards', () => {
+  let src;
+
+  // Read once — all tests in this suite share the same source snapshot.
+  try {
+    src = fs.readFileSync(INSTALL_SRC, 'utf-8');
+  } catch {
+    src = '';
+  }
+
+  for (const { name, settingsVar } of SH_HOOKS) {
+    describe(`${name} registration`, () => {
+      test(`install.js checks file existence before registering ${name}`, () => {
+        // Find the block where this .sh hook is registered.
+        // Each registration block is preceded by the command variable declaration
+        // and followed by the next hook or end of registration section.
+        const varIdx = src.indexOf(settingsVar);
+        assert.ok(varIdx !== -1, `${settingsVar} variable not found in install.js`);
+
+        // Extract ~900 chars around the variable to find the registration block
+        const blockStart = Math.max(0, varIdx - 50);
+        const blockEnd = Math.min(src.length, varIdx + 900);
+        const block = src.slice(blockStart, blockEnd);
+
+        assert.ok(
+          block.includes('fs.existsSync') || block.includes('existsSync'),
+          `install.js must call fs.existsSync on the target path before registering ${name} in settings.json. ` +
+          `Without this guard, hooks are registered even when the .sh file was never copied ` +
+          `(the root cause of #1817).`
+        );
+      });
+    });
+  }
+});
diff --git a/tests/thinking-model-guidance.test.cjs b/tests/thinking-model-guidance.test.cjs
index 989fead55..60960134d 100644
--- a/tests/thinking-model-guidance.test.cjs
+++ b/tests/thinking-model-guidance.test.cjs
@@ -226,7 +226,7 @@ describe('agent files use inline @-reference wiring at decision points', () => {
         assert.equal(
           reqReadingContent.includes(wiring.refFile),
           false,
-          `${agent}.md puts ${wiring.refFile} inside a <required_reading> block — should use inline @-reference wiring instead`
+          `${agent}.md puts ${wiring.refFile} inside a <required_reading> block — thinking-model references must use inline @-reference wiring at decision points, not <required_reading> blocks`
         );
       });
     });