diff --git a/packages/mcp-server/src/adapters/built-in/search-adapter.ts b/packages/mcp-server/src/adapters/built-in/search-adapter.ts
index 68d2dff..c272b50 100644
--- a/packages/mcp-server/src/adapters/built-in/search-adapter.ts
+++ b/packages/mcp-server/src/adapters/built-in/search-adapter.ts
@@ -41,8 +41,6 @@ export class SearchAdapter extends ToolAdapter {
   };
 
   private indexer: RepositoryIndexer;
-  private compactFormatter: CompactFormatter;
-  private verboseFormatter: VerboseFormatter;
   private config: Required<SearchAdapterConfig>;
 
   constructor(config: SearchAdapterConfig) {
@@ -53,17 +51,6 @@ export class SearchAdapter extends ToolAdapter {
       defaultFormat: config.defaultFormat ?? 'compact',
       defaultLimit: config.defaultLimit ?? 10,
     };
-
-    // Initialize formatters
-    this.compactFormatter = new CompactFormatter({
-      maxResults: this.config.defaultLimit,
-      tokenBudget: 1000,
-    });
-
-    this.verboseFormatter = new VerboseFormatter({
-      maxResults: this.config.defaultLimit,
-      tokenBudget: 5000,
-    });
   }
 
   async initialize(context: AdapterContext): Promise<void> {
@@ -107,6 +94,13 @@ export class SearchAdapter extends ToolAdapter {
             maximum: 1,
             default: 0,
           },
+          tokenBudget: {
+            type: 'number',
+            description:
+              'Maximum tokens for results. Uses progressive disclosure to fit within budget (default: 2000 compact, 5000 verbose)',
+            minimum: 500,
+            maximum: 10000,
+          },
         },
         required: ['query'],
       },
@@ -119,6 +113,7 @@ export class SearchAdapter extends ToolAdapter {
       format = this.config.defaultFormat,
       limit = this.config.defaultLimit,
       scoreThreshold = 0,
+      tokenBudget,
     } = args;
 
     // Validate query
@@ -165,9 +160,29 @@ export class SearchAdapter extends ToolAdapter {
       };
     }
 
+    // Validate tokenBudget if provided
+    if (
+      tokenBudget !== undefined &&
+      (typeof tokenBudget !== 'number' || tokenBudget < 500 || tokenBudget > 10000)
+    ) {
+      return {
+        success: false,
+        error: {
+          code: 'INVALID_TOKEN_BUDGET',
+          message: 'Token budget must be a number between 500 and 10000',
+        },
+      };
+    }
+
     try {
       const startTime = Date.now();
-      context.logger.debug('Executing search', { query, format, limit, scoreThreshold });
+      context.logger.debug('Executing search', {
+        query,
+        format,
+        limit,
+        scoreThreshold,
+        tokenBudget,
+      });
 
       // Perform search
       const results = await this.indexer.search(query as string, {
@@ -175,8 +190,22 @@ export class SearchAdapter extends ToolAdapter {
         scoreThreshold: scoreThreshold as number,
       });
 
-      // Format results
-      const formatter = format === 'verbose' ? this.verboseFormatter : this.compactFormatter;
+      // Create formatter with token budget if specified
+      const formatter =
+        format === 'verbose'
+          ? new VerboseFormatter({
+              maxResults: limit as number,
+              tokenBudget: (tokenBudget as number | undefined) ?? 5000,
+              includeSnippets: true,
+              includeImports: true,
+            })
+          : new CompactFormatter({
+              maxResults: limit as number,
+              tokenBudget: (tokenBudget as number | undefined) ?? 2000,
+              includeSnippets: true,
+              includeImports: true,
+            });
+
       const formatted = formatter.formatResults(results);
 
       const duration_ms = Date.now() - startTime;
diff --git a/packages/mcp-server/src/formatters/__tests__/formatters.test.ts b/packages/mcp-server/src/formatters/__tests__/formatters.test.ts
index b674cb7..45e95d8 100644
--- a/packages/mcp-server/src/formatters/__tests__/formatters.test.ts
+++ b/packages/mcp-server/src/formatters/__tests__/formatters.test.ts
@@ -467,4 +467,183 @@ describe('Formatters', () => {
       });
     });
   });
+
+  describe('Token Budget Management', () => {
+    // Generate mock results with snippets for testing
+    const generateMockResults = (count: number): SearchResult[] => {
+      return Array.from({ length: count }, (_, i) => ({
+        id: `test-${i}`,
+        score: 0.9 - i * 0.05,
+        metadata: {
+          path: `src/file${i}.ts`,
+          type: 'function',
+          language: 'typescript',
+          name: `function${i}`,
+          startLine: i * 10,
+          endLine: i * 10 + 20,
+          exported: true,
+          signature: `function function${i}(): void`,
+          snippet: `export function function${i}() {\n  // Line 1\n  // Line 2\n  // Line 3\n  return ${i};\n}`,
+          imports: ['./utils', '../lib'],
+        },
+      }));
+    };
+
+    describe('CompactFormatter budget', () => {
+      it('should respect token budget', () => {
+        const formatter = new CompactFormatter({
+          tokenBudget: 100,
+          maxResults: 10,
+          includeSnippets: true,
+          includeImports: true,
+          progressiveDisclosure: false, // Force all results to use full detail
+        });
+
+        const results = generateMockResults(10);
+        const output = formatter.formatResults(results);
+
+        // Should be within budget (with some tolerance for truncation notice)
+        expect(output.tokens).toBeLessThanOrEqual(150);
+        // Should have truncation notice since budget is small
+        expect(output.content).toContain('more results');
+      });
+
+      it('should use progressive disclosure', () => {
+        const formatter = new CompactFormatter({
+          tokenBudget: 1000,
+          maxResults: 10,
+          includeSnippets: true,
+          includeImports: true,
+          fullDetailCount: 2,
+          signatureDetailCount: 2,
+        });
+
+        const results = generateMockResults(10);
+        const output = formatter.formatResults(results);
+
+        // First results should have snippets
+        expect(output.content).toContain('export function function0');
+        // Later results should be minimal (just name + path)
+        // Check that result 5+ doesn't have its snippet
+        const lines = output.content.split('\n');
+        const result5Line = lines.find((l) => l.includes('function5'));
+        expect(result5Line).toBeDefined();
+      });
+
+      it('should always include at least first result', () => {
+        const formatter = new CompactFormatter({
+          tokenBudget: 10, // Very small budget
+          maxResults: 10,
+          includeSnippets: true,
+        });
+
+        const results = generateMockResults(5);
+        const output = formatter.formatResults(results);
+
+        // Should have at least one result
+        expect(output.content).toContain('function0');
+      });
+
+      it('should disable progressive disclosure when option is false', () => {
+        const formatter = new CompactFormatter({
+          tokenBudget: 500,
+          maxResults: 5,
+          includeSnippets: true,
+          progressiveDisclosure: false,
+        });
+
+        const results = generateMockResults(5);
+        const output = formatter.formatResults(results);
+
+        // All results should have full detail (until budget runs out)
+        // Check that early results have snippets
+        expect(output.content).toContain('export function function0');
+      });
+    });
+
+    describe('VerboseFormatter budget', () => {
+      it('should respect token budget', () => {
+        const formatter = new VerboseFormatter({
+          tokenBudget: 500,
+          maxResults: 10,
+          includeSnippets: true,
+          includeImports: true,
+        });
+
+        const results = generateMockResults(10);
+        const output = formatter.formatResults(results);
+
+        // Should be within budget (with some tolerance)
+        expect(output.tokens).toBeLessThanOrEqual(600);
+      });
+
+      it('should use progressive disclosure', () => {
+        const formatter = new VerboseFormatter({
+          tokenBudget: 2000,
+          maxResults: 10,
+          includeSnippets: true,
+          includeImports: true,
+          fullDetailCount: 2,
+          signatureDetailCount: 3,
+        });
+
+        const results = generateMockResults(10);
+        const output = formatter.formatResults(results);
+
+        // First results should have Code: section
+        expect(output.content).toContain('Code:');
+        expect(output.content).toContain('export function function0');
+      });
+
+      it('should show truncation notice when budget exceeded', () => {
+        const formatter = new VerboseFormatter({
+          tokenBudget: 100, // Very small budget
+          maxResults: 10,
+          includeSnippets: true,
+          progressiveDisclosure: false, // Force all results to use full detail
+        });
+
+        const results = generateMockResults(10);
+        const output = formatter.formatResults(results);
+
+        expect(output.content).toContain('more results (token budget reached)');
+      });
+    });
+
+    describe('Detail levels', () => {
+      it('should format with full detail', () => {
+        const formatter = new CompactFormatter({ includeSnippets: true, includeImports: true });
+        const result = generateMockResults(1)[0];
+
+        const output = formatter.formatResultWithDetail(result, 'full');
+
+        expect(output).toContain('export function');
+        expect(output).toContain('Imports:');
+      });
+
+      it('should format with signature detail', () => {
+        const formatter = new CompactFormatter({ includeSnippets: true, includeImports: true });
+        const result = generateMockResults(1)[0];
+
+        const output = formatter.formatResultWithDetail(result, 'signature');
+
+        expect(output).toContain('function function0(): void');
+        expect(output).not.toContain('export function');
+        expect(output).not.toContain('Imports:');
+      });
+
+      it('should format with minimal detail', () => {
+        const formatter = new CompactFormatter({ includeSnippets: true, includeImports: true });
+        const result = generateMockResults(1)[0];
+
+        const output = formatter.formatResultWithDetail(result, 'minimal');
+
+        expect(output).toContain('function0');
+        expect(output).toContain('src/file0.ts');
+        expect(output).not.toContain('export function');
+        expect(output).not.toContain('Imports:');
+        expect(output).not.toContain('function function0(): void');
+      });
+    });
+  });
 });
diff --git a/packages/mcp-server/src/formatters/compact-formatter.ts b/packages/mcp-server/src/formatters/compact-formatter.ts
index d00ee41..ccd13c9 100644
--- a/packages/mcp-server/src/formatters/compact-formatter.ts
+++ b/packages/mcp-server/src/formatters/compact-formatter.ts
@@ -1,20 +1,26 @@
 /**
  * Compact Formatter
- * Token-efficient formatter that returns summaries only
+ * Token-efficient formatter with progressive disclosure support
  */
 
 import type { SearchResult } from '@lytics/dev-agent-core';
-import type { FormattedResult, FormatterOptions, ResultFormatter } from './types';
+import type { DetailLevel, FormattedResult, FormatterOptions, ResultFormatter } from './types';
 import { estimateTokensForText } from './utils';
 
 /** Default max snippet lines for compact mode */
 const DEFAULT_MAX_SNIPPET_LINES = 10;
 /** Max imports to show before truncating */
 const MAX_IMPORTS_DISPLAY = 5;
+/** Default token budget */
+const DEFAULT_TOKEN_BUDGET = 2000;
+/** Default number of results with full detail */
+const DEFAULT_FULL_DETAIL_COUNT = 3;
+/** Default number of results with signature detail */
+const DEFAULT_SIGNATURE_DETAIL_COUNT = 4;
 
 /**
  * Compact formatter - optimized for token efficiency
- * Returns: path, type, name, score, optional snippet and imports
+ * Supports progressive disclosure to fit within token budgets
  */
 export class CompactFormatter implements ResultFormatter {
   private options: Required<FormatterOptions>;
@@ -25,38 +31,55 @@ export class CompactFormatter implements ResultFormatter {
       includePaths: options.includePaths ?? true,
       includeLineNumbers: options.includeLineNumbers ?? true,
       includeTypes: options.includeTypes ?? true,
-      includeSignatures: options.includeSignatures ?? false, // Compact mode excludes signatures
-      includeSnippets: options.includeSnippets ?? false, // Off by default for compact
-      includeImports: options.includeImports ?? false, // Off by default for compact
+      includeSignatures: options.includeSignatures ?? false,
+      includeSnippets: options.includeSnippets ?? false,
+      includeImports: options.includeImports ?? false,
       maxSnippetLines: options.maxSnippetLines ?? DEFAULT_MAX_SNIPPET_LINES,
-      tokenBudget: options.tokenBudget ?? 1000,
+      tokenBudget: options.tokenBudget ?? DEFAULT_TOKEN_BUDGET,
+      progressiveDisclosure: options.progressiveDisclosure ?? true,
+      fullDetailCount: options.fullDetailCount ?? DEFAULT_FULL_DETAIL_COUNT,
+      signatureDetailCount: options.signatureDetailCount ?? DEFAULT_SIGNATURE_DETAIL_COUNT,
     };
   }
 
   formatResult(result: SearchResult): string {
+    return this.formatResultWithDetail(result, 'full');
+  }
+
+  /**
+   * Format a result with a specific detail level
+   */
+  formatResultWithDetail(result: SearchResult, level: DetailLevel): string {
     const lines: string[] = [];
 
-    // Line 1: Header with score, type, name, path
+    // Always include header
     lines.push(this.formatHeader(result));
 
-    // Code snippet (if enabled)
-    if (this.options.includeSnippets && typeof result.metadata.snippet === 'string') {
-      const truncatedSnippet = this.truncateSnippet(
-        result.metadata.snippet,
-        this.options.maxSnippetLines
-      );
-      lines.push(this.indentText(truncatedSnippet, 3));
-    }
+    if (level === 'full') {
+      // Full detail: snippet + imports
+      if (this.options.includeSnippets && typeof result.metadata.snippet === 'string') {
+        const truncatedSnippet = this.truncateSnippet(
+          result.metadata.snippet,
+          this.options.maxSnippetLines
+        );
+        lines.push(this.indentText(truncatedSnippet, 3));
+      }
 
-    // Imports (if enabled)
-    if (this.options.includeImports && Array.isArray(result.metadata.imports)) {
-      const imports = result.metadata.imports as string[];
-      if (imports.length > 0) {
-        const displayImports = imports.slice(0, MAX_IMPORTS_DISPLAY);
-        const suffix = imports.length > MAX_IMPORTS_DISPLAY ? ' ...' : '';
-        lines.push(`   Imports: ${displayImports.join(', ')}${suffix}`);
+      if (this.options.includeImports && Array.isArray(result.metadata.imports)) {
+        const imports = result.metadata.imports as string[];
+        if (imports.length > 0) {
+          const displayImports = imports.slice(0, MAX_IMPORTS_DISPLAY);
+          const suffix = imports.length > MAX_IMPORTS_DISPLAY ? ' ...' : '';
+          lines.push(`   Imports: ${displayImports.join(', ')}${suffix}`);
+        }
+      }
+    } else if (level === 'signature') {
+      // Signature detail: just the signature
+      if (typeof result.metadata.signature === 'string') {
+        lines.push(`   ${result.metadata.signature}`);
       }
     }
+    // 'minimal' level = header only
 
     return lines.join('\n');
   }
@@ -64,20 +87,16 @@ export class CompactFormatter implements ResultFormatter {
   private formatHeader(result: SearchResult): string {
     const parts: string[] = [];
 
-    // Score
     parts.push(`[${(result.score * 100).toFixed(0)}%]`);
 
-    // Type
     if (this.options.includeTypes && typeof result.metadata.type === 'string') {
       parts.push(`${result.metadata.type}:`);
     }
 
-    // Name
     if (typeof result.metadata.name === 'string') {
       parts.push(result.metadata.name);
     }
 
-    // Path with line numbers
     if (this.options.includePaths && typeof result.metadata.path === 'string') {
       const pathPart =
         this.options.includeLineNumbers && typeof result.metadata.startLine === 'number'
@@ -107,8 +126,31 @@ export class CompactFormatter implements ResultFormatter {
       .join('\n');
   }
 
+  /**
+   * Determine detail level based on result position and remaining budget
+   */
+  private getDetailLevel(index: number, remainingBudget: number): DetailLevel {
+    if (!this.options.progressiveDisclosure) {
+      return 'full';
+    }
+
+    // Top N get full detail if budget allows
+    if (index < this.options.fullDetailCount && remainingBudget > 300) {
+      return 'full';
+    }
+
+    // Next M get signatures if budget allows
+    if (
+      index < this.options.fullDetailCount + this.options.signatureDetailCount &&
+      remainingBudget > 100
+    ) {
+      return 'signature';
+    }
+
+    return 'minimal';
+  }
+
   formatResults(results: SearchResult[]): FormattedResult {
-    // Handle empty results
     if (results.length === 0) {
       const content = 'No results found';
       return {
@@ -117,21 +159,43 @@ export class CompactFormatter implements ResultFormatter {
       };
     }
 
-    // Respect max results
     const limitedResults = results.slice(0, this.options.maxResults);
+    const budget = this.options.tokenBudget;
+    let usedTokens = 0;
+    const formatted: string[] = [];
+    let truncatedCount = 0;
+
+    for (let i = 0; i < limitedResults.length; i++) {
+      const result = limitedResults[i];
+      const remainingBudget = budget - usedTokens;
+
+      // Determine detail level
+      const detailLevel = this.getDetailLevel(i, remainingBudget);
+      const formattedResult = `${i + 1}. ${this.formatResultWithDetail(result, detailLevel)}`;
+      const tokens = estimateTokensForText(formattedResult);
+
+      // Check if we have budget (always include at least first result)
+      if (usedTokens + tokens > budget && i > 0) {
+        truncatedCount = limitedResults.length - i;
+        break;
+      }
+
+      formatted.push(formattedResult);
+      usedTokens += tokens;
+    }
 
-    // Format each result
-    const formatted = limitedResults.map((result, index) => {
-      return `${index + 1}. ${this.formatResult(result)}`;
-    });
+    // Add truncation notice if needed
+    if (truncatedCount > 0) {
+      const notice = `\n... ${truncatedCount} more results (token budget reached)`;
+      formatted.push(notice);
+      usedTokens += estimateTokensForText(notice);
+    }
 
-    // Calculate total tokens (content only, no footer)
     const content = formatted.join('\n');
-    const tokens = estimateTokensForText(content);
 
     return {
       content,
-      tokens,
+      tokens: usedTokens,
     };
   }
 
@@ -143,7 +207,6 @@ export class CompactFormatter implements ResultFormatter {
     }
 
     if (this.options.includeImports && Array.isArray(result.metadata.imports)) {
-      // ~3 tokens per import path
       estimate += (result.metadata.imports as string[]).length * 3;
     }
 
diff --git a/packages/mcp-server/src/formatters/types.ts b/packages/mcp-server/src/formatters/types.ts
index 58aed77..a6a07ee 100644
--- a/packages/mcp-server/src/formatters/types.ts
+++ b/packages/mcp-server/src/formatters/types.ts
@@ -38,6 +38,14 @@ export interface ResultFormatter {
   estimateTokens(result: SearchResult): number;
 }
 
+/**
+ * Detail level for progressive disclosure
+ * - full: snippet + imports + signature
+ * - signature: signature only (no snippet)
+ * - minimal: name + path only
+ */
+export type DetailLevel = 'full' | 'signature' | 'minimal';
+
 /**
  * Formatter options
  */
@@ -83,7 +91,24 @@ export interface FormatterOptions {
   maxSnippetLines?: number;
 
   /**
-   * Token budget (soft limit)
+   * Token budget (soft limit) - enables progressive disclosure when set
    */
   tokenBudget?: number;
+
+  /**
+   * Enable progressive disclosure based on token budget
+   * When enabled, top results get full detail, lower results get less
+   * (default: true when tokenBudget is set)
+   */
+  progressiveDisclosure?: boolean;
+
+  /**
+   * Number of top results to show with full detail (default: 3)
+   */
+  fullDetailCount?: number;
+
+  /**
+   * Number of results after fullDetailCount to show with signatures (default: 4)
+   */
+  signatureDetailCount?: number;
 }
diff --git a/packages/mcp-server/src/formatters/verbose-formatter.ts b/packages/mcp-server/src/formatters/verbose-formatter.ts
index 977aab4..ec8b384 100644
--- a/packages/mcp-server/src/formatters/verbose-formatter.ts
+++ b/packages/mcp-server/src/formatters/verbose-formatter.ts
@@ -1,18 +1,24 @@
 /**
  * Verbose Formatter
- * Full-detail formatter that includes signatures, snippets, and metadata
+ * Full-detail formatter with progressive disclosure support
  */
 
 import type { SearchResult } from '@lytics/dev-agent-core';
-import type { FormattedResult, FormatterOptions, ResultFormatter } from './types';
+import type { DetailLevel, FormattedResult, FormatterOptions, ResultFormatter } from './types';
 import { estimateTokensForText } from './utils';
 
 /** Default max snippet lines for verbose mode */
 const DEFAULT_MAX_SNIPPET_LINES = 20;
+/** Default token budget for verbose */
+const DEFAULT_TOKEN_BUDGET = 5000;
+/** Default number of results with full detail */
+const DEFAULT_FULL_DETAIL_COUNT = 3;
+/** Default number of results with signature detail */
+const DEFAULT_SIGNATURE_DETAIL_COUNT = 4;
 
 /**
  * Verbose formatter - includes all available information
- * Returns: path, type, name, signature, imports, snippet, metadata, score
+ * Supports progressive disclosure to fit within token budgets
  */
 export class VerboseFormatter implements ResultFormatter {
   private options: Required<FormatterOptions>;
@@ -23,54 +29,74 @@ export class VerboseFormatter implements ResultFormatter {
       includePaths: options.includePaths ?? true,
       includeLineNumbers: options.includeLineNumbers ?? true,
       includeTypes: options.includeTypes ?? true,
-      includeSignatures: options.includeSignatures ?? true, // Verbose mode includes signatures
-      includeSnippets: options.includeSnippets ?? true, // On by default for verbose
-      includeImports: options.includeImports ?? true, // On by default for verbose
+      includeSignatures: options.includeSignatures ?? true,
+      includeSnippets: options.includeSnippets ?? true,
+      includeImports: options.includeImports ?? true,
       maxSnippetLines: options.maxSnippetLines ?? DEFAULT_MAX_SNIPPET_LINES,
-      tokenBudget: options.tokenBudget ?? 5000,
+      tokenBudget: options.tokenBudget ?? DEFAULT_TOKEN_BUDGET,
+      progressiveDisclosure: options.progressiveDisclosure ?? true,
+      fullDetailCount: options.fullDetailCount ?? DEFAULT_FULL_DETAIL_COUNT,
+      signatureDetailCount: options.signatureDetailCount ?? DEFAULT_SIGNATURE_DETAIL_COUNT,
     };
   }
 
   formatResult(result: SearchResult): string {
+    return this.formatResultWithDetail(result, 'full');
+  }
+
+  /**
+   * Format a result with a specific detail level
+   */
+  formatResultWithDetail(result: SearchResult, level: DetailLevel): string {
     const lines: string[] = [];
 
-    // Header: score + type + name
+    // Always include header
     lines.push(this.formatHeader(result));
 
-    // Path with line range
+    // Path with line range (always include in verbose)
     if (this.options.includePaths && typeof result.metadata.path === 'string') {
       const location = this.formatLocation(result);
       lines.push(`  Location: ${location}`);
     }
 
-    // Signature (if available and enabled)
-    if (this.options.includeSignatures && typeof result.metadata.signature === 'string') {
-      lines.push(`  Signature: ${result.metadata.signature}`);
-    }
+    if (level === 'full') {
+      // Full detail: signature + imports + metadata + snippet
+      if (this.options.includeSignatures && typeof result.metadata.signature === 'string') {
+        lines.push(`  Signature: ${result.metadata.signature}`);
+      }
 
-    // Imports (if enabled)
-    if (this.options.includeImports && Array.isArray(result.metadata.imports)) {
-      const imports = result.metadata.imports as string[];
-      if (imports.length > 0) {
-        lines.push(`  Imports: ${imports.join(', ')}`);
+      if (this.options.includeImports && Array.isArray(result.metadata.imports)) {
+        const imports = result.metadata.imports as string[];
+        if (imports.length > 0) {
+          lines.push(`  Imports: ${imports.join(', ')}`);
+        }
       }
-    }
 
-    // Additional metadata
-    const metadata = this.formatMetadata(result);
-    if (metadata) {
-      lines.push(`  Metadata: ${metadata}`);
-    }
+      const metadata = this.formatMetadata(result);
+      if (metadata) {
+        lines.push(`  Metadata: ${metadata}`);
+      }
 
-    // Code snippet (if enabled)
-    if (this.options.includeSnippets && typeof result.metadata.snippet === 'string') {
-      lines.push('  Code:');
-      const truncatedSnippet = this.truncateSnippet(
-        result.metadata.snippet,
-        this.options.maxSnippetLines
-      );
-      lines.push(this.indentText(truncatedSnippet, 4));
+      if (this.options.includeSnippets && typeof result.metadata.snippet === 'string') {
+        lines.push('  Code:');
+        const truncatedSnippet = this.truncateSnippet(
+          result.metadata.snippet,
+          this.options.maxSnippetLines
+        );
+        lines.push(this.indentText(truncatedSnippet, 4));
+      }
+    } else if (level === 'signature') {
+      // Signature detail: signature + metadata (no snippet)
+      if (typeof result.metadata.signature === 'string') {
+        lines.push(`  Signature: ${result.metadata.signature}`);
+      }
+
+      const metadata = this.formatMetadata(result);
+      if (metadata) {
+        lines.push(`  Metadata: ${metadata}`);
+      }
     }
+    // 'minimal' level = header + location only
 
     return lines.join('\n');
   }
@@ -145,8 +171,31 @@ export class VerboseFormatter implements ResultFormatter {
       .join('\n');
   }
 
+  /**
+   * Determine detail level based on result position and remaining budget
+   */
+  private getDetailLevel(index: number, remainingBudget: number): DetailLevel {
+    if (!this.options.progressiveDisclosure) {
+      return 'full';
+    }
+
+    // Top N get full detail if budget allows
+    if (index < this.options.fullDetailCount && remainingBudget > 500) {
+      return 'full';
+    }
+
+    // Next M get signatures if budget allows
+    if (
+      index < this.options.fullDetailCount + this.options.signatureDetailCount &&
+      remainingBudget > 150
+    ) {
+      return 'signature';
+    }
+
+    return 'minimal';
+  }
+
   formatResults(results: SearchResult[]): FormattedResult {
-    // Handle empty results
     if (results.length === 0) {
       const content = 'No results found';
       return {
@@ -155,21 +204,43 @@ export class VerboseFormatter implements ResultFormatter {
       };
     }
 
-    // Respect max results
     const limitedResults = results.slice(0, this.options.maxResults);
+    const budget = this.options.tokenBudget;
+    let usedTokens = 0;
+    const formatted: string[] = [];
+    let truncatedCount = 0;
+
+    for (let i = 0; i < limitedResults.length; i++) {
+      const result = limitedResults[i];
+      const remainingBudget = budget - usedTokens;
+
+      // Determine detail level
+      const detailLevel = this.getDetailLevel(i, remainingBudget);
+      const formattedResult = `${i + 1}. ${this.formatResultWithDetail(result, detailLevel)}`;
+      const tokens = estimateTokensForText(formattedResult);
+
+      // Check if we have budget (always include at least first result)
+      if (usedTokens + tokens > budget && i > 0) {
+        truncatedCount = limitedResults.length - i;
+        break;
+      }
 
-    // Format each result with separator
-    const formatted = limitedResults.map((result, index) => {
-      return `${index + 1}. ${this.formatResult(result)}`;
-    });
+      formatted.push(formattedResult);
+      usedTokens += tokens;
+    }
+
+    // Add truncation notice if needed
+    if (truncatedCount > 0) {
+      const notice = `\n... ${truncatedCount} more results (token budget reached)`;
+      formatted.push(notice);
+      usedTokens += estimateTokensForText(notice);
+    }
 
-    // Calculate total tokens (content only, no footer)
     const content = formatted.join('\n\n'); // Double newline for separation
-    const tokens = estimateTokensForText(content);
 
     return {
       content,
-      tokens,
+      tokens: usedTokens,
     };
   }
 
@@ -181,7 +252,6 @@ export class VerboseFormatter implements ResultFormatter {
     }
 
     if (this.options.includeImports && Array.isArray(result.metadata.imports)) {
-      // ~3 tokens per import path
       estimate += (result.metadata.imports as string[]).length * 3;
     }