diff --git a/README.md b/README.md
index 7469fe0..be895d8 100644
--- a/README.md
+++ b/README.md
@@ -193,3 +193,38 @@ steps:
     stdin: $categorize.stdout
     condition: $approve.approved
 ```
+
+### Step fields
+
+| Field | Required | Description |
+|---|---|---|
+| `id` | yes | Unique step identifier; used to reference the step's output in subsequent steps via `$id.stdout` or `$id.json`. |
+| `command` | yes (for regular steps) | Shell command to run. Mutually exclusive with `lobster`. |
+| `lobster` | yes (for sub-workflow steps) | Path to a `.lobster` file to run as a sub-workflow (resolved relative to the parent workflow). Mutually exclusive with `command`. |
+| `args` | no | Key/value map of input arguments passed to the sub-workflow. Values support `${arg}` and `$stepId.stdout`/`$stepId.json` template syntax. Only valid when `lobster` is set. |
+| `loop` | no | Repeat the sub-workflow step in a loop. Only valid when `lobster` is set. |
+| `loop.maxIterations` | yes (when `loop` is set) | Maximum number of iterations. |
+| `loop.condition` | no | Shell command evaluated after each iteration. Exit code 0 continues the loop; non-zero stops it early. Receives `LOBSTER_LOOP_STDOUT`, `LOBSTER_LOOP_JSON`, and `LOBSTER_LOOP_ITERATION` as environment variables. |
+| `stdin` | no | Pass a previous step's output as stdin. |
+| `approval` | no | Set to `required` to insert an approval gate before the step runs. |
+| `condition` | no | Expression that must be truthy for the step to run. |
+
+### Sub-workflow step example
+
+Use the `lobster` field to embed another `.lobster` file as a step in your workflow, optionally passing arguments and looping until a condition is met:
+
+```yaml
+steps:
+  - id: prepare
+    command: echo "hello"
+
+  - id: process
+    lobster: ./sub_workflow.lobster
+    args:
+      input: $prepare.stdout
+    loop:
+      maxIterations: 10
+      condition: '! echo "$LOBSTER_LOOP_STDOUT" | grep -q "^done"'
+```
+
+The sub-workflow's last step result (stdout/json) is stored as the step result and is accessible via `$process.stdout` / `$process.json` in subsequent steps.
diff --git a/src/workflows/file.ts b/src/workflows/file.ts
index be17fee..c5e1e7d 100644
--- a/src/workflows/file.ts
+++ b/src/workflows/file.ts
@@ -16,9 +16,19 @@ export type WorkflowFile = {
   steps: WorkflowStep[];
 };
 
+export type LoopConfig = {
+  maxIterations: number;
+  condition?: string;
+};
+
 export type WorkflowStep = {
   id: string;
-  command: string;
+  // Sub-lobster step: lobster holds the path to the sub-workflow file
+  lobster?: string;
+  args?: Record<string, unknown>;
+  loop?: LoopConfig;
+  // Regular shell step:
+  command?: string;
   env?: Record<string, string>;
   cwd?: string;
   stdin?: unknown;
@@ -98,12 +108,18 @@ export async function loadWorkflowFile(filePath: string): Promise<WorkflowFile>
     if (!step.id || typeof step.id !== 'string') {
       throw new Error('Workflow step requires an id');
     }
-    if (!step.command || typeof step.command !== 'string') {
-      throw new Error(`Workflow step ${step.id} requires a command string`);
-    }
     if (seen.has(step.id)) {
       throw new Error(`Duplicate workflow step id: ${step.id}`);
     }
+    if (step.lobster !== undefined) {
+      if (typeof step.lobster !== 'string' || !step.lobster) {
+        throw new Error(`Workflow step ${step.id} 'lobster' must be a non-empty file path string`);
+      }
+    } else {
+      if (!step.command || typeof step.command !== 'string') {
+        throw new Error(`Workflow step ${step.id} requires a command string`);
+      }
+    }
     seen.add(step.id);
   }
 
@@ -174,7 +190,14 @@ export async function runWorkflowFile({
       continue;
     }
 
-    const command = resolveTemplate(step.command, resolvedArgs, results);
+    if (step.lobster !== undefined) {
+      const stepResult = await runLobsterSubStep(step, resolvedArgs, results, resolvedFilePath, ctx);
+      results[step.id] = stepResult;
+      lastStepId = step.id;
+      continue;
+    }
+
+    const command = resolveTemplate(step.command!, resolvedArgs, results);
     const stdinValue = resolveStdin(step.stdin, resolvedArgs, results);
     const env = mergeEnv(ctx.env, workflow.env, step.env, resolvedArgs, results);
     const cwd = resolveCwd(step.cwd ?? workflow.cwd, resolvedArgs);
@@ -505,3 +528,104 @@ async function runShellCommand({
     });
   });
 }
+
+async function runLobsterSubStep(
+  step: WorkflowStep,
+  parentArgs: Record<string, unknown>,
+  parentResults: Record<string, WorkflowStepResult>,
+  parentFilePath: string,
+  ctx: RunContext,
+): Promise<WorkflowStepResult> {
+  const resolvedFile = resolveSubWorkflowPath(step.lobster!, parentFilePath, parentArgs, parentResults);
+  const subArgs = resolveSubWorkflowArgs(step.args, parentArgs, parentResults);
+
+  if (step.loop) {
+    return runLobsterSubStepLoop(step.id, resolvedFile, subArgs, step.loop, ctx);
+  }
+
+  const result = await runWorkflowFile({ filePath: resolvedFile, args: subArgs, ctx });
+  if (result.status !== 'ok') {
+    throw new Error(`Sub-workflow step '${step.id}' did not complete: ${result.status}`);
+  }
+  return subWorkflowResultToStepResult(step.id, result);
+}
+
+async function runLobsterSubStepLoop(
+  stepId: string,
+  filePath: string,
+  args: Record<string, unknown>,
+  loop: LoopConfig,
+  ctx: RunContext,
+): Promise<WorkflowStepResult> {
+  let lastResult: WorkflowStepResult = { id: stepId };
+
+  for (let i = 0; i < loop.maxIterations; i++) {
+    const result = await runWorkflowFile({ filePath, args, ctx });
+    if (result.status !== 'ok') {
+      throw new Error(`Sub-workflow loop iteration ${i + 1} did not complete: ${result.status}`);
+    }
+    lastResult = subWorkflowResultToStepResult(stepId, result);
+
+    if (loop.condition) {
+      const continueLoop = await evaluateLoopCondition(loop.condition, lastResult, i + 1, ctx.env);
+      if (!continueLoop) break;
+    }
+  }
+
+  return lastResult;
+}
+
+async function evaluateLoopCondition(
+  condition: string,
+  lastResult: WorkflowStepResult,
+  iteration: number,
+  env: Record<string, string | undefined>,
+): Promise<boolean> {
+  const loopEnv: Record<string, string | undefined> = {
+    ...env,
+    LOBSTER_LOOP_STDOUT: lastResult.stdout ?? '',
+    LOBSTER_LOOP_JSON: lastResult.json !== undefined ? JSON.stringify(lastResult.json) : '',
+    LOBSTER_LOOP_ITERATION: String(iteration),
+  };
+  try {
+    await runShellCommand({ command: condition, stdin: null, env: loopEnv });
+    return true;
+  } catch {
+    return false;
+  }
+}
+
+function resolveSubWorkflowPath(
+  file: string,
+  parentFilePath: string,
+  parentArgs: Record<string, unknown>,
+  parentResults: Record<string, WorkflowStepResult>,
+): string {
+  const resolved = resolveTemplate(file, parentArgs, parentResults);
+  if (path.isAbsolute(resolved)) return resolved;
+  return path.resolve(path.dirname(parentFilePath), resolved);
+}
+
+function resolveSubWorkflowArgs(
+  args: Record<string, unknown> | undefined,
+  parentArgs: Record<string, unknown>,
+  parentResults: Record<string, WorkflowStepResult>,
+): Record<string, unknown> {
+  if (!args) return {};
+  const resolved: Record<string, unknown> = {};
+  for (const [key, value] of Object.entries(args)) {
+    resolved[key] = typeof value === 'string' ? resolveTemplate(value, parentArgs, parentResults) : value;
+  }
+  return resolved;
+}
+
+function subWorkflowResultToStepResult(id: string, result: WorkflowRunResult): WorkflowStepResult {
+  const output = result.output;
+  if (output.length === 0) return { id };
+  if (output.length === 1) {
+    const item = output[0];
+    if (typeof item === 'string') return { id, stdout: item };
+    return { id, json: item, stdout: JSON.stringify(item) };
+  }
+  return { id, json: output, stdout: JSON.stringify(output) };
+}
diff --git a/test/lobster_sub_step.test.ts b/test/lobster_sub_step.test.ts
new file mode 100644
index 0000000..e78df44
--- /dev/null
+++ b/test/lobster_sub_step.test.ts
@@ -0,0 +1,186 @@
+import test from 'node:test';
+import assert from 'node:assert/strict';
+import { promises as fsp } from 'node:fs';
+import path from 'node:path';
+import os from 'node:os';
+
+import { runWorkflowFile } from '../src/workflows/file.js';
+
+const ctx = {
+  stdin: process.stdin,
+  stdout: process.stdout,
+  stderr: process.stderr,
+  env: process.env as Record<string, string | undefined>,
+  mode: 'tool' as const,
+};
+
+async function writeTmp(dir: string, name: string, content: unknown) {
+  const filePath = path.join(dir, name);
+  await fsp.writeFile(filePath, JSON.stringify(content, null, 2), 'utf8');
+  return filePath;
+}
+
+test('lobster sub-step runs a sub-workflow and captures its output', async () => {
+  const tmpDir = await fsp.mkdtemp(path.join(os.tmpdir(), 'lobster-sub-'));
+
+  const subWorkflow = {
+    args: { greeting: { default: 'hello' } },
+    steps: [
+      { id: 'say', command: 'echo "${greeting} world"' },
+    ],
+  };
+  await writeTmp(tmpDir, 'sub.lobster', subWorkflow);
+
+  const mainWorkflow = {
+    steps: [
+      { id: 'greet', lobster: './sub.lobster', args: { greeting: 'hi' } },
+    ],
+  };
+  const mainPath = await writeTmp(tmpDir, 'main.lobster', mainWorkflow);
+
+  const result = await runWorkflowFile({ filePath: mainPath, ctx });
+  assert.equal(result.status, 'ok');
+  assert.equal((result.output[0] as string).trim(), 'hi world');
+});
+
+test('lobster sub-step passes parent step output as args', async () => {
+  const tmpDir = await fsp.mkdtemp(path.join(os.tmpdir(), 'lobster-sub-'));
+
+  const subWorkflow = {
+    args: { value: { default: '' } },
+    steps: [
+      { id: 'out', command: 'echo "received:${value}"' },
+    ],
+  };
+  await writeTmp(tmpDir, 'sub.lobster', subWorkflow);
+
+  const mainWorkflow = {
+    steps: [
+      { id: 'produce', command: 'echo "myvalue"' },
+      { id: 'consume', lobster: './sub.lobster', args: { value: '$produce.stdout' } },
+    ],
+  };
+  const mainPath = await writeTmp(tmpDir, 'main.lobster', mainWorkflow);
+
+  const result = await runWorkflowFile({ filePath: mainPath, ctx });
+  assert.equal(result.status, 'ok');
+  assert.match(result.output[0] as string, /received:myvalue/);
+});
+
+test('lobster sub-step loop runs exactly maxIterations times when no condition', async () => {
+  const tmpDir = await fsp.mkdtemp(path.join(os.tmpdir(), 'lobster-loop-'));
+
+  const counterFile = path.join(tmpDir, 'count.txt');
+  await fsp.writeFile(counterFile, '0', 'utf8');
+
+  const subWorkflow = {
+    steps: [
+      { id: 'inc', command: `c=$(cat ${counterFile}); echo $((c+1)) | tee ${counterFile}` },
+    ],
+  };
+  await writeTmp(tmpDir, 'sub.lobster', subWorkflow);
+
+  const mainWorkflow = {
+    steps: [
+      { id: 'loop', lobster: './sub.lobster', loop: { maxIterations: 3 } },
+    ],
+  };
+  const mainPath = await writeTmp(tmpDir, 'main.lobster', mainWorkflow);
+
+  const result = await runWorkflowFile({ filePath: mainPath, ctx });
+  assert.equal(result.status, 'ok');
+
+  const finalCount = parseInt((await fsp.readFile(counterFile, 'utf8')).trim(), 10);
+  assert.equal(finalCount, 3);
+});
+
+test('lobster sub-step loop stops when condition exits non-zero', async () => {
+  const tmpDir = await fsp.mkdtemp(path.join(os.tmpdir(), 'lobster-cond-'));
+
+  const counterFile = path.join(tmpDir, 'count.txt');
+  await fsp.writeFile(counterFile, '0', 'utf8');
+
+  const subWorkflow = {
+    steps: [
+      { id: 'inc', command: `c=$(cat ${counterFile}); echo $((c+1)) | tee ${counterFile}` },
+    ],
+  };
+  await writeTmp(tmpDir, 'sub.lobster', subWorkflow);
+
+  // Condition: continue while LOBSTER_LOOP_ITERATION < 2 (stop after 2nd iteration)
+  const mainWorkflow = {
+    steps: [
+      {
+        id: 'loop',
+        lobster: './sub.lobster',
+        loop: {
+          maxIterations: 10,
+          condition: '[ "$LOBSTER_LOOP_ITERATION" -lt 2 ]',
+        },
+      },
+    ],
+  };
+  const mainPath = await writeTmp(tmpDir, 'main.lobster', mainWorkflow);
+
+  const result = await runWorkflowFile({ filePath: mainPath, ctx });
+  assert.equal(result.status, 'ok');
+
+  const finalCount = parseInt((await fsp.readFile(counterFile, 'utf8')).trim(), 10);
+  assert.equal(finalCount, 2);
+});
+
+test('lobster sub-step loop condition uses LOBSTER_LOOP_STDOUT', async () => {
+  const tmpDir = await fsp.mkdtemp(path.join(os.tmpdir(), 'lobster-stdout-'));
+
+  const counterFile = path.join(tmpDir, 'count.txt');
+  await fsp.writeFile(counterFile, '0', 'utf8');
+
+  // Sub-workflow: increment counter and echo "done" when count reaches 3
+  const subWorkflow = {
+    steps: [
+      {
+        id: 'step',
+        command: `c=$(cat ${counterFile}); n=$((c+1)); echo $n > ${counterFile}; if [ $n -ge 3 ]; then echo "done"; else echo "continue"; fi`,
+      },
+    ],
+  };
+  await writeTmp(tmpDir, 'sub.lobster', subWorkflow);
+
+  // Condition: continue while stdout is NOT "done"
+  const mainWorkflow = {
+    steps: [
+      {
+        id: 'loop',
+        lobster: './sub.lobster',
+        loop: {
+          maxIterations: 10,
+          condition: '! echo "$LOBSTER_LOOP_STDOUT" | grep -q "^done"',
+        },
+      },
+    ],
+  };
+  const mainPath = await writeTmp(tmpDir, 'main.lobster', mainWorkflow);
+
+  const result = await runWorkflowFile({ filePath: mainPath, ctx });
+  assert.equal(result.status, 'ok');
+
+  const finalCount = parseInt((await fsp.readFile(counterFile, 'utf8')).trim(), 10);
+  assert.equal(finalCount, 3);
+  assert.match(result.output[0] as string, /done/);
+});
+
+test('loadWorkflowFile rejects lobster step without file', async () => {
+  const tmpDir = await fsp.mkdtemp(path.join(os.tmpdir(), 'lobster-val-'));
+
+  const workflow = {
+    steps: [
+      { id: 'bad', lobster: '' },
+    ],
+  };
+  const filePath = await writeTmp(tmpDir, 'workflow.lobster', workflow);
+
+  await assert.rejects(
+    () => runWorkflowFile({ filePath, ctx }),
+    /'lobster' must be a non-empty file path/,
+  );
+});