diff --git a/examples/foundational/54-context-summarization-openai.py b/examples/foundational/54-context-summarization-openai.py
new file mode 100644
index 000000000..652a3af13
--- /dev/null
+++ b/examples/foundational/54-context-summarization-openai.py
@@ -0,0 +1,188 @@
+#
+# Copyright (c) 2024-2026, Daily
+#
+# SPDX-License-Identifier: BSD 2-Clause License
+#
+
+"""Example demonstrating context summarization feature.
+
+This example shows how to enable and configure context summarization to automatically
+compress conversation history when token limits are approached. It also demonstrates
+that summarization correctly handles function calls, preserving incomplete function
+call sequences.
+"""
+
+import asyncio
+import os
+
+from dotenv import load_dotenv
+from loguru import logger
+
+from pipecat.adapters.schemas.function_schema import FunctionSchema
+from pipecat.adapters.schemas.tools_schema import ToolsSchema
+from pipecat.audio.turn.smart_turn.local_smart_turn_v3 import LocalSmartTurnAnalyzerV3
+from pipecat.audio.vad.silero import SileroVADAnalyzer
+from pipecat.audio.vad.vad_analyzer import VADParams
+from pipecat.frames.frames import LLMRunFrame
+from pipecat.pipeline.pipeline import Pipeline
+from pipecat.pipeline.runner import PipelineRunner
+from pipecat.pipeline.task import PipelineParams, PipelineTask
+from pipecat.processors.aggregators.llm_context import LLMContext
+from pipecat.processors.aggregators.llm_response_universal import (
+    LLMAssistantAggregatorParams,
+    LLMContextAggregatorPair,
+    LLMUserAggregatorParams,
+)
+from pipecat.runner.types import RunnerArguments
+from pipecat.runner.utils import create_transport
+from pipecat.services.cartesia.tts import CartesiaTTSService
+from pipecat.services.deepgram.stt import DeepgramSTTService
+from pipecat.services.llm_service import FunctionCallParams
+from pipecat.services.openai.llm import OpenAILLMService
+from pipecat.transports.base_transport import BaseTransport, TransportParams
+from pipecat.transports.daily.transport import DailyParams
+from pipecat.transports.websocket.fastapi import FastAPIWebsocketParams
+from pipecat.turns.user_stop import TurnAnalyzerUserTurnStopStrategy
+from pipecat.turns.user_turn_strategies import UserTurnStrategies
+from pipecat.utils.context.llm_context_summarization import LLMContextSummarizationConfig
+
+load_dotenv(override=True)
+
+# We use lambdas to defer transport parameter creation until the transport
+# type is selected at runtime.
+transport_params = {
+    "daily": lambda: DailyParams(
+        audio_in_enabled=True,
+        audio_out_enabled=True,
+    ),
+    "twilio": lambda: FastAPIWebsocketParams(
+        audio_in_enabled=True,
+        audio_out_enabled=True,
+    ),
+    "webrtc": lambda: TransportParams(
+        audio_in_enabled=True,
+        audio_out_enabled=True,
+    ),
+}
+
+
+# Tool functions for the LLM
+async def get_current_weather(params: FunctionCallParams):
+    """Get the current time in a readable format."""
+    logger.info("Tool called: get_current_weather")
+    await asyncio.sleep(1)  # Simulate some processing
+    await params.result_callback({"conditions": "nice", "temperature": "75"})
+
+
+async def run_bot(transport: BaseTransport, runner_args: RunnerArguments):
+    logger.info("Starting bot")
+
+    stt = DeepgramSTTService(api_key=os.getenv("DEEPGRAM_API_KEY"))
+
+    tts = CartesiaTTSService(
+        api_key=os.getenv("CARTESIA_API_KEY"),
+        voice_id="71a7ad14-091c-4e8e-a314-022ece01c121",  # British Reading Lady
+    )
+
+    llm = OpenAILLMService(api_key=os.getenv("OPENAI_API_KEY"))
+
+    # Register tool functions
+    llm.register_function("get_current_weather", get_current_weather)
+
+    weather_function = FunctionSchema(
+        name="get_current_weather",
+        description="Get the current weather",
+        properties={
+            "location": {
+                "type": "string",
+                "description": "The city and state, e.g. San Francisco, CA",
+            },
+            "format": {
+                "type": "string",
+                "enum": ["celsius", "fahrenheit"],
+                "description": "The temperature unit to use. Infer this from the user's location.",
+            },
+        },
+        required=["location", "format"],
+    )
+    tools = ToolsSchema(standard_tools=[weather_function])
+
+    messages = [
+        {
+            "role": "system",
+            "content": "You are a helpful LLM in a WebRTC call. Your goal is to demonstrate your capabilities in a succinct way. Your output will be spoken aloud, so avoid special characters that can't easily be spoken, such as emojis or bullet points. Respond to what the user said in a creative and helpful way. You have access to tools to get the current weather - use them when relevant.",
+        },
+    ]
+
+    context = LLMContext(messages, tools=tools)
+
+    # Create aggregators with summarization enabled
+    user_aggregator, assistant_aggregator = LLMContextAggregatorPair(
+        context,
+        user_params=LLMUserAggregatorParams(
+            user_turn_strategies=UserTurnStrategies(
+                stop=[TurnAnalyzerUserTurnStopStrategy(turn_analyzer=LocalSmartTurnAnalyzerV3())]
+            ),
+            vad_analyzer=SileroVADAnalyzer(params=VADParams(stop_secs=0.2)),
+        ),
+        assistant_params=LLMAssistantAggregatorParams(
+            enable_context_summarization=True,
+            # Optional: customize context summarization behavior
+            # Using low limits to demonstrate the feature quickly
+            context_summarization_config=LLMContextSummarizationConfig(
+                max_context_tokens=1000,  # Trigger summarization at 1000 tokens
+                target_context_tokens=800,  # Target context size for the summarization
+                max_unsummarized_messages=10,  # Or when 10 new messages accumulate
+                min_messages_after_summary=2,  # Keep last 2 messages uncompressed
+            ),
+        ),
+    )
+
+    pipeline = Pipeline(
+        [
+            transport.input(),  # Transport user input
+            stt,
+            user_aggregator,  # User responses
+            llm,  # LLM
+            tts,  # TTS
+            transport.output(),  # Transport bot output
+            assistant_aggregator,  # Assistant spoken responses
+        ]
+    )
+
+    task = PipelineTask(
+        pipeline,
+        params=PipelineParams(
+            enable_metrics=True,
+            enable_usage_metrics=True,
+        ),
+        idle_timeout_secs=runner_args.pipeline_idle_timeout_secs,
+    )
+
+    @transport.event_handler("on_client_connected")
+    async def on_client_connected(transport, client):
+        logger.info("Client connected")
+        # Kick off the conversation.
+        messages.append({"role": "system", "content": "Please introduce yourself to the user."})
+        await task.queue_frames([LLMRunFrame()])
+
+    @transport.event_handler("on_client_disconnected")
+    async def on_client_disconnected(transport, client):
+        logger.info("Client disconnected")
+        await task.cancel()
+
+    runner = PipelineRunner(handle_sigint=runner_args.handle_sigint)
+
+    await runner.run(task)
+
+
+async def bot(runner_args: RunnerArguments):
+    """Main bot entry point compatible with Pipecat Cloud."""
+    transport = await create_transport(runner_args, transport_params)
+    await run_bot(transport, runner_args)
+
+
+if __name__ == "__main__":
+    from pipecat.runner.run import main
+
+    main()