diff --git a/frontend/src/components/event-handler.tsx b/frontend/src/components/event-handler.tsx
index 75eef4116476..a9e0085ae694 100644
--- a/frontend/src/components/event-handler.tsx
+++ b/frontend/src/components/event-handler.tsx
@@ -34,6 +34,7 @@ import { base64ToBlob } from "#/utils/base64-to-blob";
 import { setCurrentAgentState } from "#/state/agentSlice";
 import AgentState from "#/types/AgentState";
 import { getSettings } from "#/services/settings";
+import { generateAgentStateChangeEvent } from "#/services/agentStateService";
 
 interface ServerError {
   error: boolean | string;
@@ -96,6 +97,14 @@ export function EventHandler({ children }: React.PropsWithChildren) {
       return;
     }
 
+    if (event.type === "error") {
+      const message: string = `${event.message}`;
+      if (message.startsWith("Agent reached maximum")) {
+        // We set the agent state to paused here - if the user clicks resume, it auto updates the max iterations
+        send(generateAgentStateChangeEvent(AgentState.PAUSED));
+      }
+    }
+
     if (isErrorObservation(event)) {
       dispatch(
         addErrorMessage({