diff --git a/packages/cli/src/setup-context.test.ts b/packages/cli/src/setup-context.test.ts
index 2cebff8d..0f20ee81 100644
--- a/packages/cli/src/setup-context.test.ts
+++ b/packages/cli/src/setup-context.test.ts
@@ -372,6 +372,48 @@ describe('setup context build state', () => {
     });
   });
 
+  it('watches setup context command status until the run reaches a terminal state', async () => {
+    await mkdir(join(tempDir, '.ktx', 'setup'), { recursive: true });
+    await writeKtxSetupContextState(tempDir, {
+      runId: 'setup-context-local-watch',
+      status: 'running',
+      startedAt: '2026-05-09T10:00:00.000Z',
+      updatedAt: '2026-05-09T10:00:00.000Z',
+      primarySourceConnectionIds: ['warehouse'],
+      contextSourceConnectionIds: ['docs'],
+      reportIds: [],
+      artifactPaths: [],
+      retryableFailedTargets: [],
+      commands: contextBuildCommands(tempDir, 'setup-context-local-watch'),
+    });
+    const io = makeIo();
+    const completeRun = async () => {
+      await writeKtxSetupContextState(tempDir, {
+        runId: 'setup-context-local-watch',
+        status: 'completed',
+        startedAt: '2026-05-09T10:00:00.000Z',
+        updatedAt: '2026-05-09T10:02:00.000Z',
+        completedAt: '2026-05-09T10:02:00.000Z',
+        primarySourceConnectionIds: ['warehouse'],
+        contextSourceConnectionIds: ['docs'],
+        reportIds: [],
+        artifactPaths: [],
+        retryableFailedTargets: [],
+        commands: contextBuildCommands(tempDir, 'setup-context-local-watch'),
+      });
+    };
+
+    await expect(
+      runKtxSetupContextCommand(
+        { command: 'watch', projectDir: tempDir, runId: 'setup-context-local-watch', inputMode: 'disabled' },
+        io.io,
+        { sleep: completeRun, watchIntervalMs: 1 },
+      ),
+    ).resolves.toBe(0);
+    expect(io.stdout()).toContain('KTX context built: running');
+    expect(io.stdout()).toContain('KTX context built: yes');
+  });
+
   it('runs direct build commands without asking for setup confirmation first', async () => {
     await writeReadyProject(tempDir);
     const io = makeIo();
diff --git a/packages/cli/src/setup-context.ts b/packages/cli/src/setup-context.ts
index 042c5b1e..1555f264 100644
--- a/packages/cli/src/setup-context.ts
+++ b/packages/cli/src/setup-context.ts
@@ -99,6 +99,8 @@ export interface KtxSetupContextDeps {
   now?: () => Date;
   runContextBuild?: typeof runContextBuild;
   verifyContextReady?: (projectDir: string) => Promise<KtxSetupContextReadiness>;
+  sleep?: (ms: number) => Promise<void>;
+  watchIntervalMs?: number;
 }
 
 interface KtxSetupContextTargets {
@@ -109,6 +111,7 @@ interface KtxSetupContextTargets {
 const SETUP_CONTEXT_STATE_PATH = ['.ktx', 'setup', 'context-build.json'] as const;
 const LIVE_DATABASE_ADAPTER = 'live-database';
 const SCAN_REPORT_FILE = 'scan-report.json';
+const DEFAULT_WATCH_INTERVAL_MS = 2_000;
 
 function createPromptAdapter(): KtxSetupContextPromptAdapter {
   return {
@@ -698,6 +701,18 @@ function stateMatchesRunId(state: KtxSetupContextState, runId: string | undefine
   return !runId || state.runId === runId;
 }
 
+function isActiveStatus(status: KtxSetupContextBuildStatus): boolean {
+  return status === 'running' || status === 'detached';
+}
+
+function watchExitCode(status: KtxSetupContextBuildStatus): number {
+  return status === 'failed' || status === 'interrupted' || status === 'stale' ? 1 : 0;
+}
+
+function defaultSleep(ms: number): Promise<void> {
+  return new Promise((resolveSleep) => setTimeout(resolveSleep, ms));
+}
+
 function statusPayload(state: KtxSetupContextState): KtxSetupContextStatusSummary {
   return setupContextStatusFromState(state, { completedStep: state.status === 'completed' });
 }
@@ -714,6 +729,38 @@ function writeContextStatus(state: KtxSetupContextState, io: KtxCliIo): void {
   }
 }
 
+async function watchContextStatus(
+  args: Extract<KtxSetupContextCommandArgs, { command: 'watch' }>,
+  initialState: KtxSetupContextState,
+  io: KtxCliIo,
+  deps: KtxSetupContextDeps,
+): Promise<number> {
+  const sleep = deps.sleep ?? defaultSleep;
+  const intervalMs = deps.watchIntervalMs ?? DEFAULT_WATCH_INTERVAL_MS;
+  let state = initialState;
+  let lastRenderedStatus = '';
+
+  io.stdout.write('KTX context build\n');
+  while (true) {
+    const renderedStatus = `${state.status}:${state.updatedAt ?? ''}:${state.completedAt ?? ''}:${state.failureReason ?? ''}`;
+    if (renderedStatus !== lastRenderedStatus) {
+      writeContextStatus(state, io);
+      lastRenderedStatus = renderedStatus;
+    }
+
+    if (!isActiveStatus(state.status)) {
+      return watchExitCode(state.status);
+    }
+
+    await sleep(intervalMs);
+    state = await readKtxSetupContextState(args.projectDir);
+    if (!stateMatchesRunId(state, args.runId)) {
+      io.stderr.write(`KTX setup context run "${args.runId}" was not found.\n`);
+      return 1;
+    }
+  }
+}
+
 export async function runKtxSetupContextCommand(
   args: KtxSetupContextCommandArgs,
   io: KtxCliIo,
@@ -744,9 +791,7 @@ export async function runKtxSetupContextCommand(
   }
 
   if (args.command === 'watch') {
-    io.stdout.write('KTX context build\n');
-    writeContextStatus(state, io);
-    return 0;
+    return await watchContextStatus(args, state, io, deps);
   }
 
   const updatedAt = new Date().toISOString();