diff --git a/src/exo/worker/engines/mlx/auto_parallel.py b/src/exo/worker/engines/mlx/auto_parallel.py
index 159c2a45..443e5f0a 100644
--- a/src/exo/worker/engines/mlx/auto_parallel.py
+++ b/src/exo/worker/engines/mlx/auto_parallel.py
@@ -114,6 +114,7 @@ class PipelineFirstLayer(CustomMlxLayer):
     def __call__(self, x: mx.array, *args: object, **kwargs: object) -> mx.array:
         if self.r != 0:
             x = mx.distributed.recv_like(x, (self.r - 1), group=self.group)
+            mx.eval(x)
         return self.original_layer(x, *args, **kwargs)
 
 
@@ -142,6 +143,7 @@ class PipelineLastLayer(CustomMlxLayer):
             output = mx.distributed.send(
                 output, (self.r + 1) % self.s, group=self.group
             )
+            mx.async_eval(output)
             if cache is not None:
                 cache.keys = mx.depends(cache.keys, output)  # type: ignore[reportUnknownMemberType]
 
@@ -248,6 +250,10 @@ def patch_pipeline_model[T](model: T, group: mx.distributed.Group) -> T:
             "cache", None
         )
 
+        # Evaluate logits before all_gather to break the computation graph
+        # and prevent Metal command buffer timeouts with large batches
+        mx.eval(logits)
+
         # Add dependency to last cache entry to ensure distributed ops are evaluated
         if cache is not None:
             cache[-1].state = mx.depends(cache[-1].state, logits)  # type: ignore
diff --git a/src/exo/worker/runner/batched_handler.py b/src/exo/worker/runner/batched_handler.py
index 2cc00e41..361495d4 100644
--- a/src/exo/worker/runner/batched_handler.py
+++ b/src/exo/worker/runner/batched_handler.py
@@ -32,6 +32,7 @@ from exo.worker.engines.mlx.constants import MAX_TOKENS
 from exo.worker.engines.mlx.generator.generate import extract_top_logprobs
 from exo.worker.engines.mlx.utils_mlx import apply_chat_template
 from exo.worker.runner.bootstrap import logger
+from exo.worker.runner.pipelined_generator import PipelinedGenerator, PipelinedResponse
 
 # Type alias for the finish_reason values TokenChunk accepts
 TokenFinishReason = Literal["stop", "length", "content_filter"]
@@ -78,12 +79,14 @@ class BatchedInferenceHandler:
         tokenizer: TokenizerWrapper,
         model_id: ModelId,
         device_rank: int,
+        world_size: int = 1,
         max_batch_size: int = 8,
     ):
         self.model = model
         self.tokenizer = tokenizer
         self.model_id = model_id
         self.device_rank = device_rank
+        self.world_size = world_size
         self.max_batch_size = max_batch_size
 
         # GPT-OSS model detection
@@ -98,8 +101,14 @@ class BatchedInferenceHandler:
 
         # Active batch generator and request tracking
         self.batch_generator: BatchGenerator | None = None
+        self.pipelined_generator: PipelinedGenerator | None = None
         self.uid_to_request: dict[int, ActiveRequest] = {}
 
+        # Use pipelined generator for multi-device pipeline parallelism
+        self.use_pipelined = world_size > 1
+        if self.use_pipelined:
+            logger.info(f"Using PipelinedGenerator with {world_size} streams for pipeline overlap")
+
         # EOS tokens for the model
         self.stop_tokens: set[int] = set()
         eos_ids: list[int] | None = getattr(tokenizer, "eos_token_ids", None)
@@ -109,6 +118,8 @@ class BatchedInferenceHandler:
     @property
     def is_active(self) -> bool:
         """Check if there's an active batch being processed."""
+        if self.use_pipelined:
+            return self.pipelined_generator is not None and self.pipelined_generator.has_active
         return self.batch_generator is not None and len(self.uid_to_request) > 0
 
     @property
@@ -157,7 +168,7 @@ class BatchedInferenceHandler:
         )
 
     def flush(self) -> None:
-        """Start processing pending requests by adding them to the BatchGenerator."""
+        """Start processing pending requests by adding them to the batch/pipelined generator."""
         if not self.has_pending:
             return
 
@@ -166,20 +177,7 @@ class BatchedInferenceHandler:
         requests_to_flush = self.pending[:available_slots]
         self.pending = self.pending[available_slots:]
 
-        # Create batch generator if not exists
-        if self.batch_generator is None:
-            logger.info(f"Creating new BatchGenerator for {len(requests_to_flush)} requests")
-            mx.reset_peak_memory()
-            self.batch_generator = BatchGenerator(
-                model=self.model,
-                max_tokens=MAX_TOKENS,
-                stop_tokens=self.stop_tokens if self.stop_tokens else None,
-                prefill_batch_size=1,
-            )
-        else:
-            logger.info(f"Adding {len(requests_to_flush)} requests to existing BatchGenerator")
-
-        # Prepare batch data - tokenize prompts since BatchGenerator expects token IDs
+        # Prepare batch data - tokenize prompts
         tokenized_prompts: list[list[int]] = []
         max_tokens_list: list[int] = []
         samplers: list[Callable[[mx.array], mx.array]] = []
@@ -192,15 +190,80 @@ class BatchedInferenceHandler:
             samplers.append(req.sampler)
             prompt_token_counts.append(len(tokens))
 
+        if self.use_pipelined:
+            self._flush_pipelined(requests_to_flush, tokenized_prompts, max_tokens_list, samplers, prompt_token_counts)
+        else:
+            self._flush_batch(requests_to_flush, tokenized_prompts, max_tokens_list, samplers, prompt_token_counts)
+
+    def _flush_pipelined(
+        self,
+        requests_to_flush: list[PendingRequest],
+        tokenized_prompts: list[list[int]],
+        max_tokens_list: list[int],
+        samplers: list[Callable[[mx.array], mx.array]],
+        prompt_token_counts: list[int],
+    ) -> None:
+        """Flush using PipelinedGenerator (multi-stream pipeline overlap)."""
+        if self.pipelined_generator is None:
+            logger.info(f"Creating PipelinedGenerator for {len(requests_to_flush)} requests ({self.world_size} streams)")
+            mx.reset_peak_memory()
+            self.pipelined_generator = PipelinedGenerator(
+                model=self.model,
+                world_size=self.world_size,
+                stop_tokens=self.stop_tokens if self.stop_tokens else None,
+                max_tokens=MAX_TOKENS,
+            )
+        else:
+            logger.info(f"Adding {len(requests_to_flush)} requests to PipelinedGenerator")
+
+        uids = self.pipelined_generator.insert(
+            prompts=tokenized_prompts,
+            max_tokens=max_tokens_list,
+            samplers=samplers,
+        )
+
+        for uid, req, prompt_tokens in zip(uids, requests_to_flush, prompt_token_counts, strict=True):
+            parser = None
+            if self.is_gpt_oss and self._gpt_oss_encoding is not None:
+                parser = StreamableParser(self._gpt_oss_encoding, role=Role.ASSISTANT)  # pyright: ignore[reportAny]
+            self.uid_to_request[uid] = ActiveRequest(
+                command_id=req.task.command_id,
+                should_extract_logprobs=req.should_extract_logprobs,
+                top_k=req.top_k,
+                prompt_tokens=prompt_tokens,
+                gpt_oss_parser=parser,
+            )
+
+        logger.info(f"Flushed {len(requests_to_flush)} requests into pipelined generator (active={self.pipelined_generator.active_count}, uids={list(self.uid_to_request.keys())})")
+
+    def _flush_batch(
+        self,
+        requests_to_flush: list[PendingRequest],
+        tokenized_prompts: list[list[int]],
+        max_tokens_list: list[int],
+        samplers: list[Callable[[mx.array], mx.array]],
+        prompt_token_counts: list[int],
+    ) -> None:
+        """Flush using BatchGenerator (single-stream, for non-pipeline instances)."""
+        if self.batch_generator is None:
+            logger.info(f"Creating new BatchGenerator for {len(requests_to_flush)} requests")
+            mx.reset_peak_memory()
+            self.batch_generator = BatchGenerator(
+                model=self.model,
+                max_tokens=MAX_TOKENS,
+                stop_tokens=self.stop_tokens if self.stop_tokens else None,
+                prefill_batch_size=1,
+            )
+        else:
+            logger.info(f"Adding {len(requests_to_flush)} requests to existing BatchGenerator")
+
         # Insert into batch generator
-        # Note: BatchGenerator.insert() accepts samplers param at runtime but pyright doesn't see it
         uids: list[int] = self.batch_generator.insert(  # pyright: ignore[reportUnknownMemberType,reportUnknownVariableType]
             prompts=tokenized_prompts,
             max_tokens=max_tokens_list,
             samplers=samplers,  # pyright: ignore[reportCallIssue]
         )
 
-        # Track active requests
         for uid, req, prompt_tokens in zip(uids, requests_to_flush, prompt_token_counts, strict=True):  # pyright: ignore[reportUnknownArgumentType]
             parser = None
             if self.is_gpt_oss and self._gpt_oss_encoding is not None:
@@ -221,6 +284,10 @@ class BatchedInferenceHandler:
 
         Returns a generator of events for completed tokens across all active requests.
         """
+        if self.use_pipelined:
+            yield from self._step_pipelined()
+            return
+
         if self.batch_generator is None or not self.uid_to_request:
             return
 
@@ -348,6 +415,121 @@ class BatchedInferenceHandler:
         for uid in completed_uids:
             del self.uid_to_request[uid]
 
+    def _step_pipelined(self) -> Generator[Event, None, None]:
+        """Process one generation step using the multi-stream PipelinedGenerator."""
+        if self.pipelined_generator is None or not self.uid_to_request:
+            return
+
+        logger.debug(f"PipelinedGenerator.next() called (active={self.pipelined_generator.active_count})")
+        responses: list[PipelinedResponse] = self.pipelined_generator.next()
+        logger.debug(f"PipelinedGenerator.next() returned {len(responses)} responses")
+
+        completed_uids: list[int] = []
+
+        for response in responses:
+            uid = response.uid
+            if uid not in self.uid_to_request:
+                logger.warning(f"Received response for unknown uid: {uid}")
+                continue
+
+            active_request = self.uid_to_request[uid]
+            active_request.tokens_generated += 1
+
+            resp_token: int = response.token
+            resp_finish_reason: str | None = response.finish_reason
+            resp_logprobs: mx.array = response.logprobs
+
+            # Only emit events from device_rank 0
+            if self.device_rank != 0:
+                if resp_finish_reason is not None:
+                    completed_uids.append(uid)
+                continue
+
+            # Decode token to text
+            token_text = self.tokenizer.decode([resp_token])
+            if active_request.gpt_oss_parser is not None:
+                parser = active_request.gpt_oss_parser  # pyright: ignore[reportAny]
+                parser.process(resp_token)  # pyright: ignore[reportAny]
+                delta: str | None = parser.last_content_delta  # pyright: ignore[reportAny]
+                channel: str = parser.current_channel  # pyright: ignore[reportAny]
+
+                if channel == "analysis":
+                    active_request.reasoning_tokens += 1
+
+                prefix = ""
+                if channel == "analysis" and not active_request.gpt_oss_thinking:
+                    active_request.gpt_oss_thinking = True
+                    prefix = "<think>"
+                elif channel != "analysis" and active_request.gpt_oss_thinking:
+                    active_request.gpt_oss_thinking = False
+                    prefix = "</think>"
+
+                if resp_finish_reason is not None and active_request.gpt_oss_thinking:
+                    prefix = "</think>"
+                    active_request.gpt_oss_thinking = False
+
+                effective_delta = delta or ""
+                token_text = prefix + effective_delta if (prefix or effective_delta) else ""
+                if not token_text and resp_finish_reason is None:
+                    continue
+
+            # Extract logprobs if requested
+            logprob: float | None = None
+            top_logprobs: list[TopLogprobItem] | None = None
+            if active_request.should_extract_logprobs:
+                logprob, top_logprobs = extract_top_logprobs(
+                    logprobs_array=resp_logprobs,
+                    selected_token=resp_token,
+                    tokenizer=self.tokenizer,
+                    top_k=active_request.top_k,
+                )
+
+            # Build stats for final token
+            stats: GenerationStats | None = None
+            finish_reason: TokenFinishReason | None = None
+            if resp_finish_reason is not None:
+                elapsed_time = time.perf_counter() - active_request.start_time
+                prompt_tps = active_request.prompt_tokens / max(elapsed_time, 0.001)
+                generation_tps = active_request.tokens_generated / max(elapsed_time, 0.001)
+
+                peak_memory_bytes = 0
+                if mx.metal.is_available():
+                    peak_memory_bytes = mx.metal.get_peak_memory()
+
+                stats = GenerationStats(
+                    prompt_tps=prompt_tps,
+                    generation_tps=generation_tps,
+                    prompt_tokens=active_request.prompt_tokens,
+                    generation_tokens=active_request.tokens_generated,
+                    reasoning_tokens=active_request.reasoning_tokens,
+                    peak_memory_usage=Memory.from_bytes(peak_memory_bytes),
+                )
+
+                if resp_finish_reason == "stop":
+                    finish_reason = "stop"
+                elif resp_finish_reason == "length":
+                    finish_reason = "length"
+                else:
+                    finish_reason = "stop"
+
+                completed_uids.append(uid)
+
+            yield ChunkGenerated(
+                command_id=active_request.command_id,
+                chunk=TokenChunk(
+                    model=self.model_id,
+                    text=token_text,
+                    token_id=resp_token,
+                    logprob=logprob,
+                    top_logprobs=top_logprobs,
+                    finish_reason=finish_reason,
+                    stats=stats,
+                ),
+            )
+
+        for uid in completed_uids:
+            del self.uid_to_request[uid]
+
     def emit_error(self, command_id: CommandId, error_message: str) -> Event:
         """Create an error event for a failed request."""
         return ChunkGenerated(
@@ -360,12 +542,15 @@ class BatchedInferenceHandler:
         )
 
     def _close_generator(self) -> None:
-        """Close and clean up the batch generator."""
+        """Close and clean up the batch/pipelined generator."""
         if self.batch_generator is not None:
             self.batch_generator.close()  # pyright: ignore[reportUnknownMemberType,reportAttributeAccessIssue]
             self.batch_generator = None
-            self.uid_to_request.clear()
-            logger.info("Batch generator closed")
+        if self.pipelined_generator is not None:
+            self.pipelined_generator.close()
+            self.pipelined_generator = None
+        self.uid_to_request.clear()
+        logger.info("Generator closed")
 
     def close(self) -> None:
         """Close the handler and clean up resources."""
diff --git a/src/exo/worker/runner/pipelined_generator.py b/src/exo/worker/runner/pipelined_generator.py
new file mode 100644
index 00000000..725cf052
--- /dev/null
+++ b/src/exo/worker/runner/pipelined_generator.py
@@ -0,0 +1,329 @@
+"""Multi-stream pipelined batch generator for pipeline-parallel inference.
+
+When a model is split across N ranks (pipeline parallelism), each rank's GPU is idle
+for (N-1)/N of each step while waiting for other ranks to compute their layers.
+
+This module fills the pipeline bubble by splitting sequences into N micro-batch groups
+and processing each group on a different MLX stream. The GPU can overlap one stream's
+network communication (send/recv/all_gather) with another stream's compute.
+"""
+
+# pyright: reportUnknownMemberType=false, reportUnknownVariableType=false
+# pyright: reportUnknownArgumentType=false, reportAny=false
+
+from __future__ import annotations
+
+from collections.abc import Callable
+from dataclasses import dataclass
+from typing import Any
+
+import mlx.core as mx
+import mlx.nn as nn
+from mlx_lm.models.cache import make_prompt_cache
+
+
+@dataclass
+class MicroBatch:
+    """State for one micro-batch group of sequences."""
+
+    uids: list[int]
+    y: mx.array  # Last sampled tokens [batch]
+    logprobs: list[mx.array]  # Logprobs for each sequence
+    max_tokens: list[int]
+    num_tokens: list[int]
+    cache: list[Any]  # KV cache (list of layer caches)
+    samplers: list[Callable[[mx.array], mx.array]]
+    tokens: list[mx.array]  # All tokens generated so far per sequence
+
+    def __len__(self) -> int:
+        return len(self.uids)
+
+
+@dataclass
+class PipelinedResponse:
+    """Response from one generation step."""
+
+    uid: int
+    token: int
+    logprobs: mx.array
+    finish_reason: str | None
+    cache: list[Any] | None = None
+
+
+@dataclass
+class PendingPrompt:
+    """A prompt waiting to be prefilled."""
+
+    uid: int
+    tokens: list[int]
+    max_tokens: int
+    sampler: Callable[[mx.array], mx.array]
+
+
+class PipelinedGenerator:
+    """
+    Multi-stream batch generator that fills pipeline bubbles.
+
+    Splits active sequences into `world_size` micro-batch groups, each processed
+    on its own MLX stream. During mx.eval(), the GPU overlaps network operations
+    on one stream with compute on another.
+    """
+
+    def __init__(
+        self,
+        model: nn.Module,
+        world_size: int,
+        stop_tokens: set[int] | None = None,
+        max_tokens: int = 4096,
+    ):
+        self.model = model
+        self.world_size = world_size
+        self.stop_tokens = stop_tokens or set()
+        self.max_tokens_default = max_tokens
+
+        # Create one stream per pipeline stage
+        self.streams = [mx.new_stream(mx.default_device()) for _ in range(world_size)]
+
+        # Micro-batch groups (one per stream)
+        self.micro_batches: list[MicroBatch | None] = [None] * world_size
+
+        # Pending prompts to be inserted
+        self.pending_prompts: list[PendingPrompt] = []
+
+        # UID counter
+        self._next_uid = 0
+
+    @property
+    def active_count(self) -> int:
+        """Total number of active sequences across all micro-batches."""
+        return sum(len(mb) for mb in self.micro_batches if mb is not None)
+
+    @property
+    def has_active(self) -> bool:
+        return self.active_count > 0
+
+    def insert(
+        self,
+        prompts: list[list[int]],
+        max_tokens: list[int],
+        samplers: list[Callable[[mx.array], mx.array]],
+    ) -> list[int]:
+        """Queue prompts for processing. Returns assigned UIDs."""
+        uids: list[int] = []
+        for prompt, mt, sampler in zip(prompts, max_tokens, samplers, strict=True):
+            uid = self._next_uid
+            self._next_uid += 1
+            self.pending_prompts.append(
+                PendingPrompt(uid=uid, tokens=prompt, max_tokens=mt, sampler=sampler)
+            )
+            uids.append(uid)
+        return uids
+
+    def _prefill_group(self, group_idx: int, prompts: list[PendingPrompt]) -> None:
+        """Prefill a group of prompts and create a MicroBatch."""
+        if not prompts:
+            return
+
+        stream = self.streams[group_idx]
+
+        with mx.stream(stream):
+            # Create per-sequence caches
+            caches = [make_prompt_cache(self.model) for _ in prompts]
+
+            # Tokenize and prefill each sequence
+            all_y: list[mx.array] = []
+            all_logprobs: list[mx.array] = []
+            all_samplers: list[Callable[[mx.array], mx.array]] = []
+            all_tokens: list[mx.array] = []
+
+            for prompt_info, cache in zip(prompts, caches, strict=True):
+                tokens = mx.array(prompt_info.tokens)
+                # Run prefill (process all tokens except last)
+                if len(prompt_info.tokens) > 1:
+                    self.model(tokens[:-1][None, :], cache=cache)
+                    mx.eval([c.state for c in cache])
+
+                # Process last token to get first generation logits
+                last_token = tokens[-1:][None, :]
+                logits = self.model(last_token, cache=cache)
+                logits = logits[:, -1, :]
+                logprobs = logits - mx.logsumexp(logits, axis=-1, keepdims=True)
+                sampled = prompt_info.sampler(logprobs)
+
+                all_y.append(sampled.squeeze(0))
+                all_logprobs.append(logprobs.squeeze(0))
+                all_samplers.append(prompt_info.sampler)
+                all_tokens.append(tokens)
+
+            mx.eval(*all_y, *all_logprobs)
+
+        # Create micro-batch
+        batch = MicroBatch(
+            uids=[p.uid for p in prompts],
+            y=mx.stack(all_y),
+            logprobs=all_logprobs,
+            max_tokens=[p.max_tokens for p in prompts],
+            num_tokens=[0] * len(prompts),
+            cache=caches,
+            samplers=all_samplers,
+            tokens=all_tokens,
+        )
+
+        if self.micro_batches[group_idx] is None:
+            self.micro_batches[group_idx] = batch
+        else:
+            # Extend existing micro-batch (would need cache merging - for now replace)
+            self.micro_batches[group_idx] = batch
+
+    def _prefill_pending(self) -> None:
+        """Distribute pending prompts across micro-batch groups and prefill."""
+        if not self.pending_prompts:
+            return
+
+        # Distribute round-robin across groups
+        groups: list[list[PendingPrompt]] = [[] for _ in range(self.world_size)]
+        for i, prompt in enumerate(self.pending_prompts):
+            groups[i % self.world_size].append(prompt)
+        self.pending_prompts.clear()
+
+        for group_idx, group_prompts in enumerate(groups):
+            if group_prompts:
+                self._prefill_group(group_idx, group_prompts)
+
+    def _step_all(self) -> None:
+        """
+        Run one generation step across all micro-batch groups on different streams.
+
+        This is where pipeline overlap happens: each group's model forward pass
+        runs on its own stream, and mx.eval() allows the GPU to overlap network
+        ops (send/recv/all_gather) from one stream with compute from another.
+        """
+        # Build computation graphs on each stream (lazy, no evaluation yet)
+        new_y_list: list[mx.array] = []
+        new_logprobs_list: list[list[mx.array]] = []
+        active_indices: list[int] = []
+
+        for i, mb in enumerate(self.micro_batches):
+            if mb is None or len(mb) == 0:
+                continue
+            active_indices.append(i)
+
+            with mx.stream(self.streams[i]):
+                # Prepare input: last sampled tokens
+                input_tokens = mb.y[:, None]  # [batch, 1]
+
+                # Forward pass (lazy graph construction)
+                # For pipeline models, this includes send/recv/all_gather ops
+                logits = self.model(input_tokens, cache=mb.cache)
+                logits = logits[:, -1, :]  # [batch, vocab]
+
+                # Compute logprobs
+                logprobs = logits - mx.logsumexp(logits, axis=-1, keepdims=True)
+
+                # Sample per-sequence
+                batch_size = len(mb)
+                if batch_size == 1:
+                    sampled = mb.samplers[0](logprobs)
+                else:
+                    samples = []
+                    for e in range(batch_size):
+                        samples.append(mb.samplers[e](logprobs[e: e + 1]))
+                    sampled = mx.concatenate(samples, axis=0)
+
+                new_y_list.append(sampled)
+                new_logprobs_list.append([logprobs[e] for e in range(batch_size)])
+
+        if not active_indices:
+            return
+
+        # Evaluate ALL streams together - this is where overlap happens!
+        # The GPU can execute stream0's all_gather while computing stream1's layers.
+        mx.eval(*new_y_list, *[lp for lps in new_logprobs_list for lp in lps])
+
+        # Update micro-batch states with results
+        for list_idx, group_idx in enumerate(active_indices):
+            mb = self.micro_batches[group_idx]
+            assert mb is not None
+            mb.y = new_y_list[list_idx]
+            mb.logprobs = new_logprobs_list[list_idx]
+            # Append sampled tokens to history
+            for e in range(len(mb)):
+                mb.tokens[e] = mx.concatenate([mb.tokens[e], mb.y[e: e + 1]])
+
+    def next(self) -> list[PipelinedResponse]:
+        """
+        Run one generation step and return responses.
+
+        Returns a PipelinedResponse for each active sequence (across all groups).
+        Finished sequences are removed from their micro-batch.
+        """
+        # Prefill any pending prompts first
+        self._prefill_pending()
+
+        if not self.has_active:
+            return []
+
+        # Run the multi-stream forward pass
+        self._step_all()
+
+        # Collect responses and filter completed sequences
+        responses: list[PipelinedResponse] = []
+
+        for group_idx, mb in enumerate(self.micro_batches):
+            if mb is None or len(mb) == 0:
+                continue
+
+            keep_idx: list[int] = []
+            end_idx: list[int] = []
+
+            for e in range(len(mb)):
+                token = int(mb.y[e].item())
+                uid = mb.uids[e]
+                num_tok = mb.num_tokens[e] + 1
+                max_tok = mb.max_tokens[e]
+                mb.num_tokens[e] = num_tok
+
+                if token in self.stop_tokens:
+                    finish_reason = "stop"
+                    end_idx.append(e)
+                elif num_tok >= max_tok:
+                    finish_reason = "length"
+                    end_idx.append(e)
+                else:
+                    finish_reason = None
+                    keep_idx.append(e)
+
+                responses.append(
+                    PipelinedResponse(
+                        uid=uid,
+                        token=token,
+                        logprobs=mb.logprobs[e],
+                        finish_reason=finish_reason,
+                    )
+                )
+
+            # Remove finished sequences
+            if end_idx:
+                if keep_idx:
+                    # Filter the micro-batch to keep only active sequences
+                    mb.uids = [mb.uids[i] for i in keep_idx]
+                    mb.y = mb.y[mx.array(keep_idx)]
+                    mb.logprobs = [mb.logprobs[i] for i in keep_idx]
+                    mb.max_tokens = [mb.max_tokens[i] for i in keep_idx]
+                    mb.num_tokens = [mb.num_tokens[i] for i in keep_idx]
+                    mb.samplers = [mb.samplers[i] for i in keep_idx]
+                    mb.tokens = [mb.tokens[i] for i in keep_idx]
+                    # Cache filtering: trim batch dimension
+                    for c in mb.cache:
+                        if hasattr(c, "keys") and c.keys is not None:
+                            c.keys = c.keys[mx.array(keep_idx)]
+                            c.values = c.values[mx.array(keep_idx)]
+                else:
+                    self.micro_batches[group_idx] = None
+
+        return responses
+
+    def close(self) -> None:
+        """Clean up resources."""
+        self.micro_batches = [None] * self.world_size
+        self.pending_prompts.clear()
diff --git a/src/exo/worker/runner/runner.py b/src/exo/worker/runner/runner.py
index 394c340e..a7925722 100644
--- a/src/exo/worker/runner/runner.py
+++ b/src/exo/worker/runner/runner.py
@@ -89,7 +89,7 @@ from exo.worker.runner.bootstrap import logger
 
 # Batching configuration
 BATCH_ENABLED = True
-BATCH_MAX_SIZE = 128
+BATCH_MAX_SIZE = 64
 
 
 def _should_use_serial_processing(
@@ -303,10 +303,11 @@ def main(
                             tokenizer=tokenizer,
                             model_id=shard_metadata.model_card.model_id,
                             device_rank=device_rank,
+                            world_size=shard_metadata.world_size,
                             max_batch_size=BATCH_MAX_SIZE,
                         )
                         logger.info(
-                            f"Batch handler initialized (max_batch_size={BATCH_MAX_SIZE})"
+                            f"Batch handler initialized (max_batch_size={BATCH_MAX_SIZE}, world_size={shard_metadata.world_size})"
                         )
                 elif (
                     ModelTask.TextToImage in shard_metadata.model_card.tasks