diff --git a/openhands-cli/openhands_cli/tui/settings/settings_screen.py b/openhands-cli/openhands_cli/tui/settings/settings_screen.py
index 4822555539..0f6799ed3d 100644
--- a/openhands-cli/openhands_cli/tui/settings/settings_screen.py
+++ b/openhands-cli/openhands_cli/tui/settings/settings_screen.py
@@ -1,6 +1,6 @@
 import os
 
-from openhands.sdk import LLM, BaseConversation, LocalFileStore
+from openhands.sdk import LLM, BaseConversation, LLMSummarizingCondenser, LocalFileStore
 from prompt_toolkit import HTML, print_formatted_text
 from prompt_toolkit.shortcuts import print_container
 from prompt_toolkit.widgets import Frame, TextArea
@@ -182,7 +182,14 @@ class SettingsScreen:
         if not agent:
             agent = get_default_cli_agent(llm=llm)
 
+        # Must update all LLMs
         agent = agent.model_copy(update={'llm': llm})
+        condenser = LLMSummarizingCondenser(
+            llm=llm.model_copy(
+                update={"usage_id": "condenser"}
+            )
+        )
+        agent = agent.model_copy(update={'condenser': condenser})
         self.agent_store.save(agent)
 
     def _save_advanced_settings(
diff --git a/openhands-cli/tests/settings/test_settings_workflow.py b/openhands-cli/tests/settings/test_settings_workflow.py
index 192938380e..157b3cddad 100644
--- a/openhands-cli/tests/settings/test_settings_workflow.py
+++ b/openhands-cli/tests/settings/test_settings_workflow.py
@@ -121,6 +121,38 @@ def test_update_existing_settings_workflow(tmp_path: Path):
     assert True  # If we get here, the workflow completed successfully
 
 
+def test_all_llms_in_agent_are_updated():
+    """Test that modifying LLM settings creates multiple LLMs with same API key but different usage_ids."""
+    # Create a screen with existing agent settings
+    screen = SettingsScreen(conversation=None)
+    initial_llm = LLM(model='openai/gpt-3.5-turbo', api_key=SecretStr('sk-initial'), usage_id='test-service')
+    initial_agent = get_default_cli_agent(llm=initial_llm)
+
+    # Mock the agent store to return the initial agent and capture the save call
+    with (
+        patch.object(screen.agent_store, 'load', return_value=initial_agent),
+        patch.object(screen.agent_store, 'save') as mock_save
+    ):
+        # Modify the LLM settings with new API key
+        screen._save_llm_settings(model='openai/gpt-4o-mini', api_key='sk-updated-123')
+        mock_save.assert_called_once()
+
+        # Get the saved agent from the mock
+        saved_agent = mock_save.call_args[0][0]
+        all_llms = list(saved_agent.get_all_llms())
+        assert len(all_llms) >= 2, f"Expected at least 2 LLMs, got {len(all_llms)}"
+
+        # Verify all LLMs have the same API key
+        api_keys = [llm.api_key.get_secret_value() for llm in all_llms]
+        assert all(api_key == 'sk-updated-123' for api_key in api_keys), \
+            f"Not all LLMs have the same API key: {api_keys}"
+
+        # Verify none of the usage_id attributes match
+        usage_ids = [llm.usage_id for llm in all_llms]
+        assert len(set(usage_ids)) == len(usage_ids), \
+            f"Some usage_ids are duplicated: {usage_ids}"
+
+
 @pytest.mark.parametrize(
     'step_to_cancel',
     ['type', 'provider', 'model', 'apikey', 'save'],
diff --git a/openhands-cli/uv.lock b/openhands-cli/uv.lock
index 4c0ba740b9..64d56cc3b3 100644
--- a/openhands-cli/uv.lock
+++ b/openhands-cli/uv.lock
@@ -1828,7 +1828,7 @@ wheels = [
 
 [[package]]
 name = "openhands"
-version = "1.0.3"
+version = "1.0.4"
 source = { editable = "." }
 dependencies = [
     { name = "openhands-sdk" },