diff --git a/internal/router/router.go b/internal/router/router.go
index 1d7bd7f..39a74c4 100644
--- a/internal/router/router.go
+++ b/internal/router/router.go
@@ -124,9 +124,20 @@ func (r *Router) HandleEvent(e domain.Event) ([]domain.Event, error) {
 		return nil, nil
 	}
 	if e.Type == "TaskReleased" {
-		r.attempts[e.TaskID]++
-		if r.Retry.Backoff > 0 {
-			r.backoff[e.TaskID] = r.Now().Add(r.Retry.Backoff)
+		// Rotation *is* TaskReleased (spec §5.3: "rotation = intra-task
+		// lease transfer") — a task healthy enough to rotate repeatedly
+		// must not be killed by the retry limit meant for genuine failures
+		// (expiry, crash). Only a release without a valid handoff_ref
+		// (expiry/crash) counts against MaxAttempts.
+		var p struct {
+			HandoffRef string `json:"handoff_ref"`
+		}
+		isRotation := json.Unmarshal(e.Payload, &p) == nil && p.HandoffRef != ""
+		if !isRotation {
+			r.attempts[e.TaskID]++
+			if r.Retry.Backoff > 0 {
+				r.backoff[e.TaskID] = r.Now().Add(r.Retry.Backoff)
+			}
 		}
 	}
 	return r.AssignPending()
@@ -166,7 +177,10 @@ func (r *Router) AssignPending() ([]domain.Event, error) {
 			if err != nil {
 				continue
 			}
-			r.attempts[t.ID]++
+			// attempts is the failure counter checked against MaxAttempts
+			// above; it advances only on a non-rotation TaskReleased (see
+			// HandleEvent), not here, so a task that leases and rotates
+			// repeatedly is not double-counted toward the retry limit.
 			out = append(out, e)
 			if r.OnLease != nil {
 				if err := r.OnLease(e); err != nil {
diff --git a/internal/router/router_test.go b/internal/router/router_test.go
index d0e49c6..09df11a 100644
--- a/internal/router/router_test.go
+++ b/internal/router/router_test.go
@@ -45,6 +45,72 @@ func TestAssignsByAffinityCapabilityAndConcurrency(t *testing.T) {
 	}
 }
 
+// TestRotationDoesNotCountAgainstRetryLimit guards B4: rotation is
+// TaskReleased carrying a valid handoff_ref (spec §5.3: "rotation =
+// intra-task lease transfer"), never a failure. A task healthy enough to
+// rotate repeatedly must survive past MaxAttempts, which is a retry policy
+// for genuine failures (expiry/crash releases without a handoff_ref), not
+// for lease transfers.
+func TestRotationDoesNotCountAgainstRetryLimit(t *testing.T) {
+	s, err := store.Open(t.TempDir())
+	if err != nil {
+		t.Fatal(err)
+	}
+	r, err := registry.New(registry.Config{
+		Projects: []registry.Project{{ID: "p", MachineAffinity: []string{"m"}}},
+		Machines: []registry.Machine{{ID: "m", Address: "unused"}},
+		Herdrs:   []registry.Herdr{{ID: "h", MachineID: "m", Capabilities: []string{"go"}, Concurrency: 1}},
+	})
+	if err != nil {
+		t.Fatal(err)
+	}
+	b, _ := json.Marshal(map[string]any{"source": "test", "external_id": "a", "project": "p", "capability": []string{"go"}})
+	if err := s.Append(domain.Event{ID: "a", TaskID: "a", Type: "TaskCreated", Version: 1, Payload: b, Surface: string(authz.System)}); err != nil {
+		t.Fatal(err)
+	}
+	rt := Router{Store: s, Registry: r, Reachability: reachable{}, Retry: RetryPolicy{MaxAttempts: 3}}
+	handoffRef, err := s.PutArtifact([]byte("handoff"))
+	if err != nil {
+		t.Fatal(err)
+	}
+
+	for i := 0; i < 5; i++ {
+		got, err := rt.AssignPending()
+		if err != nil {
+			t.Fatal(err)
+		}
+		task, ok := s.Task("a")
+		if !ok {
+			t.Fatal("task missing")
+		}
+		if task.State == domain.StateFailed {
+			t.Fatalf("task failed after %d rotations, retry limit wrongly counted rotation as a failure", i)
+		}
+		if task.State != domain.StateLeased {
+			if len(got) == 0 {
+				t.Fatalf("round %d: task not leased and nothing assigned (state=%v)", i, task.State)
+			}
+			continue
+		}
+		rb, _ := json.Marshal(map[string]string{
+			"handoff_ref": handoffRef,
+			"reason":      "threshold",
+			"anchor_sha":  "0123456789abcdef0123456789abcdef01234567",
+		})
+		release := domain.Event{ID: domain.NewID(), Type: "TaskReleased", TaskID: "a", Version: task.Version + 1, Payload: rb, Surface: string(authz.System)}
+		if err := s.Append(release); err != nil {
+			t.Fatal(err)
+		}
+		if _, err := rt.HandleEvent(release); err != nil {
+			t.Fatal(err)
+		}
+	}
+	task, _ := s.Task("a")
+	if task.State == domain.StateFailed {
+		t.Fatal("task failed after 5 rotations, want still alive")
+	}
+}
+
 // TestQuotaWindowsAreIndependent proves the 5-hour rolling window and the
 // weekly window (spec §7.2, §9 item 1) are each conservative-80%-full gates
 // on their own — a harness can be fine on one window and excluded by the