diff --git a/packages/cli/src/commands/connection-mapping.ts b/packages/cli/src/commands/connection-mapping.ts
index 9389ccd1..5bae8e6e 100644
--- a/packages/cli/src/commands/connection-mapping.ts
+++ b/packages/cli/src/commands/connection-mapping.ts
@@ -28,7 +28,6 @@ import {
   loadKtxProject,
   parseMetabaseMappingBootstrap,
   serializeKtxProjectConfig,
-  stripKtxSetupCompletedSteps,
 } from '@ktx/context/project';
 import type { KtxCliIo } from '../index.js';
 import { profileMark } from '../startup-profile.js';
@@ -170,7 +169,7 @@ async function writeMetabaseMappings(
   };
   await project.fileStore.writeFile(
     'ktx.yaml',
-    serializeKtxProjectConfig(stripKtxSetupCompletedSteps(nextConfig)),
+    serializeKtxProjectConfig(nextConfig),
     'ktx',
     'ktx@example.com',
     message,
diff --git a/packages/cli/src/commands/connection-metabase-setup.ts b/packages/cli/src/commands/connection-metabase-setup.ts
index 6e80200c..b0980c3b 100644
--- a/packages/cli/src/commands/connection-metabase-setup.ts
+++ b/packages/cli/src/commands/connection-metabase-setup.ts
@@ -32,7 +32,6 @@ import {
   loadKtxProject,
   parseMetabaseMappingBootstrap,
   serializeKtxProjectConfig,
-  stripKtxSetupCompletedSteps,
 } from '@ktx/context/project';
 
 import { createClackSpinner, type KtxCliSpinner } from '../clack.js';
@@ -723,7 +722,7 @@ export async function runKtxConnectionMetabaseSetup(
       };
       await project.fileStore.writeFile(
         'ktx.yaml',
-        serializeKtxProjectConfig(stripKtxSetupCompletedSteps(finalConfig)),
+        serializeKtxProjectConfig(finalConfig),
         'ktx',
         'ktx@example.com',
         `Setup Metabase connection ${connectionId}`,
diff --git a/packages/cli/src/setup-agents.ts b/packages/cli/src/setup-agents.ts
index 151967aa..9c5c6fd5 100644
--- a/packages/cli/src/setup-agents.ts
+++ b/packages/cli/src/setup-agents.ts
@@ -6,7 +6,6 @@ import {
   loadKtxProject,
   markKtxSetupStateStepComplete,
   serializeKtxProjectConfig,
-  stripKtxSetupCompletedSteps,
 } from '@ktx/context/project';
 import type { KtxCliIo } from './cli-runtime.js';
 import { withMenuOptionsSpacing, withMultiselectNavigation } from './prompt-navigation.js';
@@ -376,7 +375,7 @@ async function installTarget(input: {
 
 async function markAgentsComplete(projectDir: string): Promise<void> {
   const project = await loadKtxProject({ projectDir });
-  await writeFile(project.configPath, serializeKtxProjectConfig(stripKtxSetupCompletedSteps(project.config)), 'utf-8');
+  await writeFile(project.configPath, serializeKtxProjectConfig(project.config), 'utf-8');
   await markKtxSetupStateStepComplete(projectDir, 'agents');
 }
 
diff --git a/packages/cli/src/setup-context.test.ts b/packages/cli/src/setup-context.test.ts
index 1ef044ae..9115d7a5 100644
--- a/packages/cli/src/setup-context.test.ts
+++ b/packages/cli/src/setup-context.test.ts
@@ -1,7 +1,7 @@
 import { mkdir, mkdtemp, readFile, rm, writeFile } from 'node:fs/promises';
 import { tmpdir } from 'node:os';
 import { join } from 'node:path';
-import { readKtxSetupState } from '@ktx/context/project';
+import { readKtxSetupState, writeKtxSetupState } from '@ktx/context/project';
 import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest';
 
 import {
@@ -40,12 +40,6 @@ async function writeReadyProject(projectDir: string) {
       'setup:',
       '  database_connection_ids:',
       '    - warehouse',
-      '  completed_steps:',
-      '    - project',
-      '    - llm',
-      '    - embeddings',
-      '    - databases',
-      '    - sources',
       'connections:',
       '  warehouse:',
       '    driver: postgres',
@@ -71,6 +65,9 @@ async function writeReadyProject(projectDir: string) {
     ].join('\n'),
     'utf-8',
   );
+  await writeKtxSetupState(projectDir, {
+    completed_steps: ['project', 'llm', 'embeddings', 'databases', 'sources'],
+  });
 }
 
 async function writeScanReport(
diff --git a/packages/cli/src/setup-context.ts b/packages/cli/src/setup-context.ts
index efcd35f1..8f6e5ce1 100644
--- a/packages/cli/src/setup-context.ts
+++ b/packages/cli/src/setup-context.ts
@@ -5,11 +5,9 @@ import { cancel, isCancel, select } from '@clack/prompts';
 import {
   type KtxLocalProject,
   loadKtxProject,
-  ktxSetupCompletedSteps,
   markKtxSetupStateStepComplete,
   readKtxSetupState,
   serializeKtxProjectConfig,
-  stripKtxSetupCompletedSteps,
 } from '@ktx/context/project';
 import type { KtxCliIo } from './cli-runtime.js';
 import { buildPublicIngestPlan } from './public-ingest.js';
@@ -470,7 +468,7 @@ async function defaultVerifyContextReady(projectDir: string): Promise<KtxSetupCo
 
 async function markContextComplete(projectDir: string): Promise<void> {
   const project = await loadKtxProject({ projectDir });
-  await writeFile(project.configPath, serializeKtxProjectConfig(stripKtxSetupCompletedSteps(project.config)), 'utf-8');
+  await writeFile(project.configPath, serializeKtxProjectConfig(project.config), 'utf-8');
   await markKtxSetupStateStepComplete(projectDir, 'context');
 }
 
@@ -714,7 +712,7 @@ export async function runKtxSetupContextStep(
   try {
     const project = await loadKtxProject({ projectDir: args.projectDir });
     const existingState = await readKtxSetupContextState(args.projectDir);
-    const completedSteps = ktxSetupCompletedSteps(project.config, await readKtxSetupState(args.projectDir));
+    const completedSteps = (await readKtxSetupState(args.projectDir)).completed_steps;
     if (completedSteps.includes('context') && existingState.status === 'completed') {
       return { status: 'ready', projectDir: args.projectDir, runId: existingState.runId ?? 'setup-context-completed' };
     }
diff --git a/packages/cli/src/setup-databases.test.ts b/packages/cli/src/setup-databases.test.ts
index 3b6d013e..65ee191a 100644
--- a/packages/cli/src/setup-databases.test.ts
+++ b/packages/cli/src/setup-databases.test.ts
@@ -1,7 +1,7 @@
 import { mkdtemp, readFile, rm, stat, writeFile } from 'node:fs/promises';
 import { tmpdir } from 'node:os';
 import { join, resolve } from 'node:path';
-import { initKtxProject, parseKtxProjectConfig, readKtxSetupState } from '@ktx/context/project';
+import { initKtxProject, parseKtxProjectConfig, readKtxSetupState, writeKtxSetupState } from '@ktx/context/project';
 import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest';
 import {
   type KtxSetupDatabaseDriver,
@@ -548,12 +548,11 @@ describe('setup databases step', () => {
         'setup:',
         '  database_connection_ids:',
         '    - warehouse',
-        '  completed_steps:',
-        '    - databases',
         '',
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['databases'] });
     const prompts = makePromptAdapter({ multiselectValues: [['back']], selectValues: ['continue'] });
     const testConnection = vi.fn(async () => 0);
     const scanConnection = vi.fn(async () => 0);
@@ -590,12 +589,11 @@ describe('setup databases step', () => {
         'setup:',
         '  database_connection_ids:',
         '    - warehouse',
-        '  completed_steps:',
-        '    - databases',
         '',
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['databases'] });
     const prompts = makePromptAdapter({
       selectValues: ['add', 'url', 'continue'],
       multiselectValues: [['mysql']],
@@ -706,12 +704,11 @@ describe('setup databases step', () => {
         'setup:',
         '  database_connection_ids:',
         '    - warehouse',
-        '  completed_steps:',
-        '    - databases',
         '',
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['databases'] });
     const io = makeIo();
     const prompts = makePromptAdapter({
       multiselectValues: [[]],
@@ -1211,7 +1208,7 @@ describe('setup databases step', () => {
     expect(scanConnection).toHaveBeenCalledTimes(2);
     const config = parseKtxProjectConfig(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8'));
     expect(config.setup?.database_connection_ids).toEqual(['warehouse', 'analytics']);
-    expect(config.setup?.completed_steps).toBeUndefined();
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect((await readKtxSetupState(tempDir)).completed_steps).toContain('databases');
   });
 
@@ -1237,7 +1234,7 @@ describe('setup databases step', () => {
     expect(result.status).toBe('failed');
     const config = parseKtxProjectConfig(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8'));
     expect(config.connections.warehouse).toMatchObject({ driver: 'postgres', url: 'env:DATABASE_URL' });
-    expect(config.setup?.completed_steps ?? []).not.toContain('databases');
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect(io.stderr()).toContain('Structural scan failed for warehouse.');
   });
 
@@ -1542,7 +1539,6 @@ describe('setup databases step', () => {
 
     expect(result.status).toBe('skipped');
     expect(io.stdout()).toContain('KTX cannot work until you add a primary source.');
-    const config = parseKtxProjectConfig(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8'));
-    expect(config.setup?.completed_steps ?? []).not.toContain('databases');
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
   });
 });
diff --git a/packages/cli/src/setup-databases.ts b/packages/cli/src/setup-databases.ts
index f770c5c4..eceaf5bb 100644
--- a/packages/cli/src/setup-databases.ts
+++ b/packages/cli/src/setup-databases.ts
@@ -7,7 +7,6 @@ import {
   markKtxSetupStateStepComplete,
   serializeKtxProjectConfig,
   setKtxSetupDatabaseConnectionIds,
-  stripKtxSetupCompletedSteps,
 } from '@ktx/context/project';
 import type { KtxTableListEntry } from '@ktx/context/scan';
 import type { KtxCliIo } from './cli-runtime.js';
@@ -1020,7 +1019,7 @@ async function writeConnectionConfig(input: {
       [input.connectionId]: input.connection,
     },
   };
-  await writeFile(project.configPath, serializeKtxProjectConfig(stripKtxSetupCompletedSteps(config)), 'utf-8');
+  await writeFile(project.configPath, serializeKtxProjectConfig(config), 'utf-8');
 
   const historicSql =
     typeof input.connection.historicSql === 'object' &&
@@ -1314,7 +1313,7 @@ async function ensureHistoricSqlIngestDefaults(projectDir: string): Promise<void
   await writeFile(
     project.configPath,
     serializeKtxProjectConfig(
-      stripKtxSetupCompletedSteps({
+      {
         ...project.config,
         ingest: {
           ...project.config.ingest,
@@ -1324,7 +1323,7 @@ async function ensureHistoricSqlIngestDefaults(projectDir: string): Promise<void
             maxConcurrency,
           },
         },
-      }),
+      },
     ),
     'utf-8',
   );
@@ -1333,7 +1332,7 @@ async function ensureHistoricSqlIngestDefaults(projectDir: string): Promise<void
 async function markDatabasesComplete(projectDir: string, connectionIds: string[]): Promise<void> {
   const project = await loadKtxProject({ projectDir });
   const config = setKtxSetupDatabaseConnectionIds(project.config, unique(connectionIds));
-  await writeFile(project.configPath, serializeKtxProjectConfig(stripKtxSetupCompletedSteps(config)), 'utf-8');
+  await writeFile(project.configPath, serializeKtxProjectConfig(config), 'utf-8');
   await markKtxSetupStateStepComplete(projectDir, 'databases');
 }
 
diff --git a/packages/cli/src/setup-embeddings.test.ts b/packages/cli/src/setup-embeddings.test.ts
index 67ef83b3..e66aa05a 100644
--- a/packages/cli/src/setup-embeddings.test.ts
+++ b/packages/cli/src/setup-embeddings.test.ts
@@ -1,7 +1,7 @@
 import { mkdir, mkdtemp, readFile, rm, writeFile } from 'node:fs/promises';
 import { tmpdir } from 'node:os';
 import { join } from 'node:path';
-import { initKtxProject, parseKtxProjectConfig, readKtxSetupState } from '@ktx/context/project';
+import { initKtxProject, parseKtxProjectConfig, readKtxSetupState, writeKtxSetupState } from '@ktx/context/project';
 import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest';
 import { type KtxSetupEmbeddingsPromptAdapter, runKtxSetupEmbeddingsStep } from './setup-embeddings.js';
 
@@ -172,7 +172,7 @@ describe('setup embeddings step', () => {
       sentenceTransformers: { base_url: 'managed:local-embeddings', pathPrefix: '' },
     });
     expect(config.scan.enrichment.embeddings).toMatchObject(config.ingest.embeddings);
-    expect(config.setup?.completed_steps).toEqual(undefined);
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect((await readKtxSetupState(tempDir)).completed_steps).toContain('embeddings');
     expect(spinnerEvents).toContainEqual(
       'start:Testing local sentence-transformers embeddings (all-MiniLM-L6-v2, 384 dimensions). First run may take up to 60 seconds.',
@@ -251,7 +251,7 @@ describe('setup embeddings step', () => {
       sentenceTransformers: { base_url: 'managed:local-embeddings', pathPrefix: '' },
     });
     expect(config.scan.enrichment.embeddings).toMatchObject(config.ingest.embeddings);
-    expect(config.setup?.completed_steps).toEqual(undefined);
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect((await readKtxSetupState(tempDir)).completed_steps).toContain('embeddings');
   });
 
@@ -301,7 +301,7 @@ describe('setup embeddings step', () => {
 
     expect(result.status).toBe('failed');
     const config = parseKtxProjectConfig(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8'));
-    expect(config.setup?.completed_steps ?? []).not.toContain('embeddings');
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect(config.ingest.embeddings.backend).toBe('deterministic');
     expect(io.stderr()).toContain('Local embedding health check failed: 401 invalid api key [redacted]');
     expect(io.stderr()).toContain('Prepare the runtime with: ktx dev runtime start --feature local-embeddings');
@@ -413,7 +413,7 @@ describe('setup embeddings step', () => {
 
     expect(result.status).toBe('skipped');
     const config = parseKtxProjectConfig(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8'));
-    expect(config.setup?.completed_steps ?? []).not.toContain('embeddings');
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect(config.ingest.embeddings.backend).toBe('deterministic');
   });
 
@@ -450,10 +450,6 @@ describe('setup embeddings step', () => {
         'project: warehouse',
         'setup:',
         '  database_connection_ids: []',
-        '  completed_steps:',
-        '    - project',
-        '    - llm',
-        '    - embeddings',
         'connections: {}',
         'ingest:',
         '  embeddings:',
@@ -466,6 +462,7 @@ describe('setup embeddings step', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project', 'llm', 'embeddings'] });
 
     const healthCheck = vi.fn(async () => ({ ok: true as const }));
     await expect(
diff --git a/packages/cli/src/setup-embeddings.ts b/packages/cli/src/setup-embeddings.ts
index 1b6a2381..ba3333f1 100644
--- a/packages/cli/src/setup-embeddings.ts
+++ b/packages/cli/src/setup-embeddings.ts
@@ -4,12 +4,10 @@ import { resolveKtxConfigReference } from '@ktx/context/core';
 import {
   type KtxProjectConfig,
   type KtxProjectEmbeddingConfig,
-  ktxSetupCompletedSteps,
   loadKtxProject,
   markKtxSetupStateStepComplete,
   readKtxSetupState,
   serializeKtxProjectConfig,
-  stripKtxSetupCompletedSteps,
 } from '@ktx/context/project';
 import { type KtxEmbeddingConfig, type KtxEmbeddingHealthCheckResult, runKtxEmbeddingHealthCheck } from '@ktx/llm';
 import type { KtxCliIo } from './cli-runtime.js';
@@ -110,7 +108,7 @@ function createPromptAdapter(): KtxSetupEmbeddingsPromptAdapter {
 
 async function hasCompletedEmbeddings(projectDir: string, config: KtxProjectConfig): Promise<boolean> {
   return (
-    ktxSetupCompletedSteps(config, await readKtxSetupState(projectDir)).includes('embeddings') &&
+    (await readKtxSetupState(projectDir)).completed_steps.includes('embeddings') &&
     config.ingest.embeddings.backend !== 'none' &&
     config.ingest.embeddings.backend !== 'deterministic' &&
     typeof config.ingest.embeddings.model === 'string' &&
@@ -184,22 +182,20 @@ function embeddingBackendDisplayName(backend: KtxSetupEmbeddingBackend): string
 
 async function persistEmbeddingConfig(projectDir: string, embeddings: KtxProjectEmbeddingConfig): Promise<void> {
   const project = await loadKtxProject({ projectDir });
-  const config = stripKtxSetupCompletedSteps(
-    {
-      ...project.config,
-      ingest: {
-        ...project.config.ingest,
+  const config = {
+    ...project.config,
+    ingest: {
+      ...project.config.ingest,
+      embeddings,
+    },
+    scan: {
+      ...project.config.scan,
+      enrichment: {
+        ...project.config.scan.enrichment,
         embeddings,
       },
-      scan: {
-        ...project.config.scan,
-        enrichment: {
-          ...project.config.scan.enrichment,
-          embeddings,
-        },
-      },
     },
-  );
+  };
   await writeFile(project.configPath, serializeKtxProjectConfig(config), 'utf-8');
   await markKtxSetupStateStepComplete(projectDir, 'embeddings');
 }
diff --git a/packages/cli/src/setup-models.test.ts b/packages/cli/src/setup-models.test.ts
index 82f82875..fb8acb47 100644
--- a/packages/cli/src/setup-models.test.ts
+++ b/packages/cli/src/setup-models.test.ts
@@ -1,7 +1,7 @@
 import { mkdir, mkdtemp, readFile, rm, stat, writeFile } from 'node:fs/promises';
 import { tmpdir } from 'node:os';
 import { join } from 'node:path';
-import { initKtxProject, parseKtxProjectConfig, readKtxSetupState } from '@ktx/context/project';
+import { initKtxProject, parseKtxProjectConfig, readKtxSetupState, writeKtxSetupState } from '@ktx/context/project';
 import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest';
 import {
   BUNDLED_ANTHROPIC_MODELS,
@@ -160,7 +160,7 @@ describe('setup Anthropic model step', () => {
       promptCaching: { enabled: true },
     });
     expect(config.scan.enrichment.mode).toBe('llm');
-    expect(config.setup?.completed_steps).toEqual(undefined);
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect((await readKtxSetupState(tempDir)).completed_steps).toContain('llm');
     expect(io.stdout()).toContain('LLM ready: yes');
     expect(io.stdout()).not.toContain('sk-ant-test');
@@ -199,7 +199,7 @@ describe('setup Anthropic model step', () => {
       },
       models: { default: 'claude-sonnet-4-6' },
     });
-    expect(config.setup?.completed_steps).toEqual(undefined);
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect((await readKtxSetupState(tempDir)).completed_steps).toContain('llm');
     expect(io.stdout()).not.toContain('sk-ant-file');
   });
@@ -516,8 +516,7 @@ describe('setup Anthropic model step', () => {
     );
 
     expect(result.status).toBe('failed');
-    const config = parseKtxProjectConfig(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8'));
-    expect(config.setup?.completed_steps ?? []).not.toContain('llm');
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect(io.stderr()).toContain('Anthropic model health check failed: 401 invalid x-api-key [redacted]');
     expect(io.stderr()).not.toContain('sk-ant-test');
   });
@@ -553,7 +552,7 @@ describe('setup Anthropic model step', () => {
     expect(io.stderr()).toContain('Choose a different credential source or model, or Back.');
     const config = parseKtxProjectConfig(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8'));
     expect(config.llm.models.default).toBe('claude-sonnet-4-6');
-    expect(config.setup?.completed_steps).toEqual(undefined);
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect((await readKtxSetupState(tempDir)).completed_steps).toContain('llm');
     expect(io.stderr()).not.toContain('sk-ant-test');
   });
@@ -565,8 +564,7 @@ describe('setup Anthropic model step', () => {
     );
 
     expect(result.status).toBe('skipped');
-    const config = parseKtxProjectConfig(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8'));
-    expect(config.setup?.completed_steps ?? []).not.toContain('llm');
+    expect(await readFile(join(tempDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
   });
 
   it('returns back without writing config when Back is selected', async () => {
@@ -650,9 +648,6 @@ describe('setup Anthropic model step', () => {
         'project: warehouse',
         'setup:',
         '  database_connection_ids: []',
-        '  completed_steps:',
-        '    - project',
-        '    - llm',
         'connections: {}',
         'llm:',
         '  provider:',
@@ -669,6 +664,7 @@ describe('setup Anthropic model step', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project', 'llm'] });
 
     const healthCheck = vi.fn(async () => ({ ok: true as const }));
     await expect(
@@ -698,9 +694,6 @@ describe('setup Anthropic model step', () => {
         'project: warehouse',
         'setup:',
         '  database_connection_ids: []',
-        '  completed_steps:',
-        '    - project',
-        '    - llm',
         'connections: {}',
         'llm:',
         '  provider:',
@@ -715,6 +708,7 @@ describe('setup Anthropic model step', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project', 'llm'] });
 
     const healthCheck = vi.fn(async () => ({ ok: true as const }));
     const io = makeIo();
diff --git a/packages/cli/src/setup-models.ts b/packages/cli/src/setup-models.ts
index 6d3c6757..221dbd14 100644
--- a/packages/cli/src/setup-models.ts
+++ b/packages/cli/src/setup-models.ts
@@ -8,7 +8,6 @@ import {
   loadKtxProject,
   markKtxSetupStateStepComplete,
   serializeKtxProjectConfig,
-  stripKtxSetupCompletedSteps,
 } from '@ktx/context/project';
 import { type KtxLlmConfig, type KtxLlmHealthCheckResult, runKtxLlmHealthCheck } from '@ktx/llm';
 import type { KtxCliIo } from './cli-runtime.js';
@@ -362,19 +361,17 @@ async function chooseModel(
 
 async function persistLlmConfig(projectDir: string, credentialRef: string, model: string): Promise<void> {
   const project = await loadKtxProject({ projectDir });
-  const config = stripKtxSetupCompletedSteps(
-    {
-      ...project.config,
-      llm: buildProjectLlmConfig(project.config.llm, credentialRef, model),
-      scan: {
-        ...project.config.scan,
-        enrichment: {
+  const config = {
+    ...project.config,
+    llm: buildProjectLlmConfig(project.config.llm, credentialRef, model),
+    scan: {
+      ...project.config.scan,
+      enrichment: {
           ...project.config.scan.enrichment,
-          mode: 'llm',
+          mode: 'llm' as const,
         },
       },
-    },
-  );
+    };
   await writeFile(project.configPath, serializeKtxProjectConfig(config), 'utf-8');
   await markKtxSetupStateStepComplete(projectDir, 'llm');
 }
diff --git a/packages/cli/src/setup-project.test.ts b/packages/cli/src/setup-project.test.ts
index f4d3a1d8..70591077 100644
--- a/packages/cli/src/setup-project.test.ts
+++ b/packages/cli/src/setup-project.test.ts
@@ -59,8 +59,7 @@ describe('setup project step', () => {
 
     expect(result.status).toBe('ready');
     expect(result.projectDir).toBe(projectDir);
-    const config = parseKtxProjectConfig(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8'));
-    expect(config.setup?.completed_steps).toEqual(undefined);
+    expect(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect(await readKtxSetupState(projectDir)).toEqual({ completed_steps: ['project'] });
     await expect(stat(join(projectDir, '.git'))).resolves.toBeDefined();
     await expect(readFile(join(projectDir, '.ktx/.gitignore'), 'utf-8')).resolves.toContain('secrets/');
@@ -68,7 +67,7 @@ describe('setup project step', () => {
     expect(testIo.stderr()).toBe('');
   });
 
-  it('loads an existing project with --existing and preserves existing setup metadata', async () => {
+  it('loads an existing project with --existing and drops config setup progress', async () => {
     const projectDir = join(tempDir, 'warehouse');
     await initKtxProject({ projectDir, projectName: 'warehouse' });
     await writeFile(
@@ -95,7 +94,8 @@ describe('setup project step', () => {
     expect(config.setup).toEqual({
       database_connection_ids: ['warehouse'],
     });
-    expect(await readKtxSetupState(projectDir)).toEqual({ completed_steps: ['llm', 'project'] });
+    expect(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
+    expect(await readKtxSetupState(projectDir)).toEqual({ completed_steps: ['project'] });
   });
 
   it('creates a missing auto-mode project only when --yes is present in no-input mode', async () => {
@@ -151,8 +151,7 @@ describe('setup project step', () => {
       }),
     );
     expect(prompts.text).not.toHaveBeenCalled();
-    const config = parseKtxProjectConfig(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8'));
-    expect(config.setup?.completed_steps).toEqual(undefined);
+    expect(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect(await readKtxSetupState(projectDir)).toEqual({ completed_steps: ['project'] });
   });
 
diff --git a/packages/cli/src/setup-project.ts b/packages/cli/src/setup-project.ts
index 18512b03..4b2f71d9 100644
--- a/packages/cli/src/setup-project.ts
+++ b/packages/cli/src/setup-project.ts
@@ -5,15 +5,11 @@ import { basename, join, resolve } from 'node:path';
 import { cancel, isCancel, select, text } from '@clack/prompts';
 import {
   initKtxProject,
-  ktxSetupCompletedSteps,
   type KtxLocalProject,
   loadKtxProject,
   markKtxSetupStateStepComplete,
   mergeKtxSetupGitignoreEntries,
-  readKtxSetupState,
   serializeKtxProjectConfig,
-  stripKtxSetupCompletedSteps,
-  writeKtxSetupState,
 } from '@ktx/context/project';
 import type { KtxCliIo } from './cli-runtime.js';
 import { withMenuOptionsSpacing, withTextInputNavigation } from './prompt-navigation.js';
@@ -170,10 +166,7 @@ async function normalizeSetupGitignore(projectDir: string): Promise<void> {
 }
 
 async function persistProjectStep(project: KtxLocalProject): Promise<KtxLocalProject> {
-  const completedSteps = ktxSetupCompletedSteps(project.config, await readKtxSetupState(project.projectDir));
-  const config = stripKtxSetupCompletedSteps(project.config);
-  await writeFile(project.configPath, serializeKtxProjectConfig(config), 'utf-8');
-  await writeKtxSetupState(project.projectDir, { completed_steps: completedSteps });
+  await writeFile(project.configPath, serializeKtxProjectConfig(project.config), 'utf-8');
   await markKtxSetupStateStepComplete(project.projectDir, 'project');
   await normalizeSetupGitignore(project.projectDir);
   return await loadKtxProject({ projectDir: project.projectDir });
diff --git a/packages/cli/src/setup-sources.test.ts b/packages/cli/src/setup-sources.test.ts
index bc65c95e..27579bb3 100644
--- a/packages/cli/src/setup-sources.test.ts
+++ b/packages/cli/src/setup-sources.test.ts
@@ -102,7 +102,6 @@ describe('setup sources step', () => {
         },
         setup: {
           ...config.setup,
-          completed_steps: config.setup?.completed_steps ?? [],
           database_connection_ids: ['warehouse'],
         },
       }),
@@ -137,7 +136,7 @@ describe('setup sources step', () => {
       projectDir,
     });
 
-    expect((await readConfig()).setup?.completed_steps).toEqual(undefined);
+    expect(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect((await readKtxSetupState(projectDir)).completed_steps).toContain('sources');
     expect(io.stdout()).toContain('Context source setup skipped.');
   });
@@ -171,7 +170,7 @@ describe('setup sources step', () => {
       source_dir: '/repo/dbt',
       project_name: 'analytics',
     });
-    expect(config.setup?.completed_steps).toBeUndefined();
+    expect(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect((await readKtxSetupState(projectDir)).completed_steps).toContain('sources');
     expect(runInitialIngest).toHaveBeenCalledWith(projectDir, 'analytics_dbt', io.io, { inputMode: 'disabled' });
   });
@@ -480,7 +479,7 @@ describe('setup sources step', () => {
       ),
     ).resolves.toEqual({ status: 'failed', projectDir });
 
-    expect((await readConfig()).setup?.completed_steps ?? []).not.toContain('sources');
+    expect(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
     expect(io.stderr()).toContain('No LookML files found');
   });
 
@@ -1032,7 +1031,7 @@ describe('setup sources step', () => {
 
     expect(testPrompts.multiselect).not.toHaveBeenCalled();
     expect(io.stdout()).toContain('Connect a primary source before adding context sources.');
-    expect((await readConfig()).setup?.completed_steps ?? []).not.toContain('sources');
+    expect(await readFile(join(projectDir, 'ktx.yaml'), 'utf-8')).not.toContain('completed_steps:');
   });
 
   it('auto-detects dbt_project.yml at the root of a local path', async () => {
diff --git a/packages/cli/src/setup-sources.ts b/packages/cli/src/setup-sources.ts
index 6674ef75..edf83b7b 100644
--- a/packages/cli/src/setup-sources.ts
+++ b/packages/cli/src/setup-sources.ts
@@ -25,7 +25,6 @@ import {
   loadKtxProject,
   markKtxSetupStateStepComplete,
   serializeKtxProjectConfig,
-  stripKtxSetupCompletedSteps,
 } from '@ktx/context/project';
 import type { KtxCliIo } from './cli-runtime.js';
 import { runKtxConnectionMapping } from './commands/connection-mapping.js';
@@ -345,7 +344,7 @@ function fileRepoUrl(sourceDir: string): string {
 
 async function writeProjectConfig(projectDir: string, config: KtxProjectConfig): Promise<void> {
   const project = await loadKtxProject({ projectDir });
-  await writeFile(project.configPath, serializeKtxProjectConfig(stripKtxSetupCompletedSteps(config)), 'utf-8');
+  await writeFile(project.configPath, serializeKtxProjectConfig(config), 'utf-8');
 }
 
 async function writeSourceConnection(
@@ -372,7 +371,7 @@ async function writeSourceConnection(
         : [...project.config.ingest.adapters, adapter],
     },
   };
-  await writeFile(project.configPath, serializeKtxProjectConfig(stripKtxSetupCompletedSteps(config)), 'utf-8');
+  await writeFile(project.configPath, serializeKtxProjectConfig(config), 'utf-8');
   return async () => {
     const latest = await loadKtxProject({ projectDir });
     const connections = { ...latest.config.connections };
@@ -411,7 +410,7 @@ async function ensureSourceAdapterEnabled(projectDir: string, source: KtxSetupSo
 
 async function markSourcesComplete(projectDir: string): Promise<void> {
   const project = await loadKtxProject({ projectDir });
-  await writeFile(project.configPath, serializeKtxProjectConfig(stripKtxSetupCompletedSteps(project.config)), 'utf-8');
+  await writeFile(project.configPath, serializeKtxProjectConfig(project.config), 'utf-8');
   await markKtxSetupStateStepComplete(projectDir, 'sources');
 }
 
diff --git a/packages/cli/src/setup.test.ts b/packages/cli/src/setup.test.ts
index bf9c381f..0cad3ebc 100644
--- a/packages/cli/src/setup.test.ts
+++ b/packages/cli/src/setup.test.ts
@@ -3,6 +3,7 @@ import { mkdir, mkdtemp, readFile, rm, stat, writeFile } from 'node:fs/promises'
 import { tmpdir } from 'node:os';
 import { join } from 'node:path';
 import { promisify } from 'node:util';
+import { writeKtxSetupState } from '@ktx/context/project';
 import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest';
 
 import { localFakeBundleReport, persistLocalBundleReport } from './ingest.test-utils.js';
@@ -133,9 +134,6 @@ describe('setup status', () => {
         '  database_connection_ids:',
         '    - warehouse',
         '    - analytics',
-        '  completed_steps:',
-        '    - project',
-        '    - databases',
         'connections:',
         '  warehouse:',
         '    driver: postgres',
@@ -150,6 +148,7 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project', 'databases'] });
 
     await expect(readKtxSetupStatus(tempDir)).resolves.toMatchObject({
       databases: [
@@ -167,8 +166,6 @@ describe('setup status', () => {
         'setup:',
         '  database_connection_ids:',
         '    - warehouse',
-        '  completed_steps:',
-        '    - project',
         'connections:',
         '  warehouse:',
         '    driver: postgres',
@@ -178,6 +175,7 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project'] });
 
     await expect(readKtxSetupStatus(tempDir)).resolves.toMatchObject({
       databases: [{ connectionId: 'warehouse', ready: false }],
@@ -190,9 +188,6 @@ describe('setup status', () => {
         'setup:',
         '  database_connection_ids:',
         '    - warehouse',
-        '  completed_steps:',
-        '    - project',
-        '    - databases',
         'connections:',
         '  warehouse:',
         '    driver: postgres',
@@ -202,6 +197,7 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project', 'databases'] });
 
     await expect(readKtxSetupStatus(tempDir)).resolves.toMatchObject({
       databases: [{ connectionId: 'warehouse', ready: true }],
@@ -215,9 +211,6 @@ describe('setup status', () => {
         'project: revenue',
         'setup:',
         '  database_connection_ids: []',
-        '  completed_steps:',
-        '    - project',
-        '    - sources',
         'connections:',
         '  docs:',
         '    driver: notion',
@@ -230,6 +223,7 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project', 'sources'] });
 
     await expect(readKtxSetupStatus(tempDir)).resolves.toMatchObject({
       sources: [{ connectionId: 'docs', type: 'notion', ready: true }],
@@ -268,12 +262,6 @@ describe('setup status', () => {
         'setup:',
         '  database_connection_ids:',
         '    - warehouse',
-        '  completed_steps:',
-        '    - project',
-        '    - llm',
-        '    - embeddings',
-        '    - databases',
-        '    - sources',
         'connections:',
         '  warehouse:',
         '    driver: postgres',
@@ -292,6 +280,9 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, {
+      completed_steps: ['project', 'llm', 'embeddings', 'databases', 'sources'],
+    });
     await writeKtxSetupContextState(tempDir, {
       runId: 'setup-context-local-abc123',
       status: 'running',
@@ -324,10 +315,6 @@ describe('setup status', () => {
         'setup:',
         '  database_connection_ids:',
         '    - warehouse',
-        '  completed_steps:',
-        '    - project',
-        '    - databases',
-        '    - sources',
         'connections:',
         '  warehouse:',
         '    driver: postgres',
@@ -354,6 +341,7 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project', 'databases', 'sources'] });
     await persistLocalBundleReport(
       tempDir,
       localFakeBundleReport('metabase-job-1', {
@@ -1281,9 +1269,6 @@ describe('setup status', () => {
         'setup:',
         '  database_connection_ids:',
         '    - warehouse',
-        '  completed_steps:',
-        '    - project',
-        '    - databases',
         'connections:',
         '  warehouse:',
         '    driver: postgres',
@@ -1296,6 +1281,7 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, { completed_steps: ['project', 'databases'] });
 
     await expect(
       runKtxSetup(
@@ -1782,13 +1768,6 @@ describe('setup status', () => {
       [
         'project: revenue',
         'setup:',
-        '  completed_steps:',
-        '    - project',
-        '    - llm',
-        '    - embeddings',
-        '    - sources',
-        '    - context',
-        '    - agents',
         '  database_connection_ids: []',
         'connections: {}',
         'llm:',
@@ -1805,6 +1784,9 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, {
+      completed_steps: ['project', 'llm', 'embeddings', 'sources', 'context', 'agents'],
+    });
     await writeFile(
       join(tempDir, '.ktx/agents/install-manifest.json'),
       JSON.stringify(
@@ -1893,12 +1875,6 @@ describe('setup status', () => {
       [
         'project: revenue',
         'setup:',
-        '  completed_steps:',
-        '    - project',
-        '    - llm',
-        '    - embeddings',
-        '    - sources',
-        '    - context',
         '  database_connection_ids: []',
         'connections: {}',
         'llm:',
@@ -1915,6 +1891,9 @@ describe('setup status', () => {
       ].join('\n'),
       'utf-8',
     );
+    await writeKtxSetupState(tempDir, {
+      completed_steps: ['project', 'llm', 'embeddings', 'sources', 'context'],
+    });
     await writeKtxSetupContextState(tempDir, {
       runId: 'setup-context-local-ready',
       status: 'completed',
diff --git a/packages/cli/src/setup.ts b/packages/cli/src/setup.ts
index dec0f4d7..064da729 100644
--- a/packages/cli/src/setup.ts
+++ b/packages/cli/src/setup.ts
@@ -4,7 +4,6 @@ import { cancel, isCancel, select } from '@clack/prompts';
 import { getLatestLocalIngestStatus, savedMemoryCountsForReport } from '@ktx/context/ingest';
 import {
   ktxLocalStateDbPath,
-  ktxSetupCompletedSteps,
   loadKtxProject,
   readKtxSetupState,
   type KtxLocalProject,
@@ -297,7 +296,7 @@ export async function readKtxSetupStatus(projectDir: string): Promise<KtxSetupSt
   };
   embeddings.ready = embeddingsReady(embeddings);
 
-  const completedSteps = ktxSetupCompletedSteps(project.config, await readKtxSetupState(resolvedProjectDir));
+  const completedSteps = (await readKtxSetupState(resolvedProjectDir)).completed_steps;
   const contextState = await readKtxSetupContextState(resolvedProjectDir);
   const setupContextStatus = setupContextStatusFromState(contextState, {
     completedStep: completedSteps.includes('context'),
diff --git a/packages/context/src/ingest/local-adapters.test.ts b/packages/context/src/ingest/local-adapters.test.ts
index f8dd7da7..141827be 100644
--- a/packages/context/src/ingest/local-adapters.test.ts
+++ b/packages/context/src/ingest/local-adapters.test.ts
@@ -480,7 +480,7 @@ describe('local ingest adapters', () => {
       }),
       config: {
         ...project.config,
-        setup: { database_connection_ids: ['warehouse'], completed_steps: [] },
+        setup: { database_connection_ids: ['warehouse'] },
         connections: {
           warehouse: {
             driver: 'postgres',
diff --git a/packages/context/src/project/config.test.ts b/packages/context/src/project/config.test.ts
index 1be70322..cad7945c 100644
--- a/packages/context/src/project/config.test.ts
+++ b/packages/context/src/project/config.test.ts
@@ -81,16 +81,13 @@ describe('KTX project config', () => {
     });
   });
 
-  it('parses and serializes setup wizard metadata', () => {
+  it('parses and serializes setup warehouse metadata without setup progress', () => {
     const config = parseKtxProjectConfig(`
 project: revenue
 setup:
   database_connection_ids:
     - warehouse
     - analytics
-  completed_steps:
-    - project
-    - llm
 connections:
   warehouse:
     driver: postgres
@@ -99,13 +96,12 @@ connections:
 
     expect(config.setup).toEqual({
       database_connection_ids: ['warehouse', 'analytics'],
-      completed_steps: ['project', 'llm'],
     });
 
     const serialized = serializeKtxProjectConfig(config);
     expect(serialized).toContain('setup:');
     expect(serialized).toContain('database_connection_ids:');
-    expect(serialized).toContain('completed_steps:');
+    expect(serialized).not.toContain('completed_steps:');
   });
 
   it('parses global direct Anthropic LLM config', () => {
diff --git a/packages/context/src/project/config.ts b/packages/context/src/project/config.ts
index 2412683f..5da193f2 100644
--- a/packages/context/src/project/config.ts
+++ b/packages/context/src/project/config.ts
@@ -75,7 +75,6 @@ export interface KtxProjectConnectionConfig {
 
 export interface KtxProjectSetupConfig {
   database_connection_ids: string[];
-  completed_steps?: string[];
 }
 
 export interface KtxProjectConfig {
@@ -505,15 +504,12 @@ export function parseKtxProjectConfig(raw: string): KtxProjectConfig {
   return {
     project: project.trim(),
     ...(setup
-        ? {
-            setup: {
-              database_connection_ids: stringArray(setup.database_connection_ids, []),
-              ...(setup.completed_steps !== undefined
-                ? { completed_steps: stringArray(setup.completed_steps, []) }
-                : {}),
-            },
-          }
-        : {}),
+      ? {
+          setup: {
+            database_connection_ids: stringArray(setup.database_connection_ids, []),
+          },
+        }
+      : {}),
     connections: isRecord(parsed.connections)
       ? (parsed.connections as Record<string, KtxProjectConnectionConfig>)
       : defaults.connections,
diff --git a/packages/context/src/project/index.ts b/packages/context/src/project/index.ts
index 8fd171d4..8ea92bf6 100644
--- a/packages/context/src/project/index.ts
+++ b/packages/context/src/project/index.ts
@@ -27,12 +27,10 @@ export { initKtxProject, loadKtxProject } from './project.js';
 export type { KtxSetupStep } from './setup-config.js';
 export {
   KTX_SETUP_STEPS,
-  ktxSetupCompletedSteps,
   ktxSetupStatePath,
   markKtxSetupStateStepComplete,
   mergeKtxSetupGitignoreEntries,
   readKtxSetupState,
   setKtxSetupDatabaseConnectionIds,
-  stripKtxSetupCompletedSteps,
   writeKtxSetupState,
 } from './setup-config.js';
diff --git a/packages/context/src/project/setup-config.test.ts b/packages/context/src/project/setup-config.test.ts
index 46912d43..92c02707 100644
--- a/packages/context/src/project/setup-config.test.ts
+++ b/packages/context/src/project/setup-config.test.ts
@@ -4,12 +4,10 @@ import { join } from 'node:path';
 import { afterEach, beforeEach, describe, expect, it } from 'vitest';
 import { buildDefaultKtxProjectConfig } from './config.js';
 import {
-  ktxSetupCompletedSteps,
   markKtxSetupStateStepComplete,
   mergeKtxSetupGitignoreEntries,
   readKtxSetupState,
   setKtxSetupDatabaseConnectionIds,
-  stripKtxSetupCompletedSteps,
 } from './setup-config.js';
 
 describe('KTX setup config helpers', () => {
@@ -48,36 +46,6 @@ describe('KTX setup config helpers', () => {
     expect(config.setup).toBeUndefined();
   });
 
-  it('strips setup completed steps while preserving database connection ids', () => {
-    const config = {
-      ...buildDefaultKtxProjectConfig('warehouse'),
-      setup: {
-        database_connection_ids: ['warehouse'],
-        completed_steps: ['project', 'databases'],
-      },
-    };
-
-    expect(stripKtxSetupCompletedSteps(config).setup).toEqual({
-      database_connection_ids: ['warehouse'],
-    });
-  });
-
-  it('combines legacy config setup steps with local state for reads', () => {
-    const config = {
-      ...buildDefaultKtxProjectConfig('warehouse'),
-      setup: {
-        database_connection_ids: ['warehouse'],
-        completed_steps: ['project', 'databases'],
-      },
-    };
-
-    expect(ktxSetupCompletedSteps(config, { completed_steps: ['databases', 'sources'] })).toEqual([
-      'project',
-      'databases',
-      'sources',
-    ]);
-  });
-
   it('merges setup-local gitignore entries without removing existing lines', () => {
     expect(mergeKtxSetupGitignoreEntries('cache/\ndb.sqlite\n')).toBe(
       ['cache/', 'db.sqlite', 'db.sqlite-*', 'ingest-transcripts/', 'secrets/', 'setup/', 'agents/', ''].join('\n'),
diff --git a/packages/context/src/project/setup-config.ts b/packages/context/src/project/setup-config.ts
index be1e8817..b2c8e161 100644
--- a/packages/context/src/project/setup-config.ts
+++ b/packages/context/src/project/setup-config.ts
@@ -64,27 +64,6 @@ export async function markKtxSetupStateStepComplete(projectDir: string, step: Kt
   return nextState;
 }
 
-export function ktxSetupCompletedSteps(config: KtxProjectConfig, state: KtxSetupState): KtxSetupStep[] {
-  return uniqueSetupSteps([...(config.setup?.completed_steps ?? []), ...state.completed_steps]);
-}
-
-export function stripKtxSetupCompletedSteps(config: KtxProjectConfig): KtxProjectConfig {
-  if (!config.setup) {
-    return config;
-  }
-  const databaseConnectionIds = config.setup.database_connection_ids ?? [];
-  if (databaseConnectionIds.length === 0) {
-    const { setup: _setup, ...withoutSetup } = config;
-    return withoutSetup;
-  }
-  return {
-    ...config,
-    setup: {
-      database_connection_ids: [...databaseConnectionIds],
-    },
-  };
-}
-
 export function setKtxSetupDatabaseConnectionIds(
   config: KtxProjectConfig,
   connectionIds: string[],