diff --git a/vscode/src/chat/agentic/DeepCodyRateLimiter.test.ts b/vscode/src/chat/agentic/DeepCodyRateLimiter.test.ts
index 2d386d378b72..bef272f0f6d4 100644
--- a/vscode/src/chat/agentic/DeepCodyRateLimiter.test.ts
+++ b/vscode/src/chat/agentic/DeepCodyRateLimiter.test.ts
@@ -87,6 +87,18 @@ describe('DeepCodyRateLimiter', () => {
 
             expect(rateLimiter.isAtLimit()).toBeUndefined()
         })
+
+        it('resets quota after 24 hours of non-use', () => {
+            rateLimiter = new DeepCodyRateLimiter(50, 1)
+            const mockUsage = {
+                quota: 0, // Empty quota
+                lastUsed: new Date(NOW.getTime() - 25 * 60 * 60 * 1000), // 25 hours ago
+            }
+            vi.spyOn(localStorage, 'getDeepCodyUsage').mockImplementation(() => mockUsage)
+
+            expect(rateLimiter.isAtLimit()).toBeUndefined()
+            expect(localStorage.setDeepCodyUsage).toHaveBeenCalledWith(50, NOW.toISOString())
+        })
     })
 
     describe('getRateLimitError', () => {
diff --git a/vscode/src/chat/agentic/DeepCodyRateLimiter.ts b/vscode/src/chat/agentic/DeepCodyRateLimiter.ts
index 3d9c504e66e0..ddf75402331f 100644
--- a/vscode/src/chat/agentic/DeepCodyRateLimiter.ts
+++ b/vscode/src/chat/agentic/DeepCodyRateLimiter.ts
@@ -15,38 +15,38 @@ export class DeepCodyRateLimiter {
         private readonly multiplier: number = 1
     ) {}
 
-    /**
-     * Returns the number of seconds the user needs to wait before they can use DeepCody again.
-     */
     public isAtLimit(): string | undefined {
         const DAILY_QUOTA = this.baseQuota * this.multiplier
 
-        // If there is no quota set, there is no limit.
+        // If there is no quota set, there is no limit
         if (!DAILY_QUOTA) {
             return undefined
         }
 
-        // Get current quota and last used time, with defaults
+        const now = new Date().getTime()
         const { quota, lastUsed } = localStorage.getDeepCodyUsage()
-        const currentQuota = quota ?? DAILY_QUOTA
         const lastUsedTime = lastUsed.getTime()
-
-        const now = new Date().getTime()
         const timeDiff = now - lastUsedTime
 
-        // Calculate quota replenishment based on time passed
+        // Reset quota if more than 24 hours have passed
+        if (timeDiff >= this.ONE_DAY_MS) {
+            // Reset to full quota and update last used time
+            localStorage.setDeepCodyUsage(DAILY_QUOTA, new Date().toISOString())
+            return undefined
+        }
+
+        // Calculate remaining quota with time-based replenishment
         const quotaToAdd = DAILY_QUOTA * (timeDiff / this.ONE_DAY_MS)
+        const currentQuota = quota ?? DAILY_QUOTA
         const newQuota = Math.min(DAILY_QUOTA, currentQuota + quotaToAdd)
 
         // If we have at least 1 quota available
         if (newQuota >= 1) {
-            // Update quota and timestamp
-            localStorage?.setDeepCodyUsage(newQuota - 1, new Date().toISOString())
+            localStorage.setDeepCodyUsage(newQuota - 1, new Date().toISOString())
             return undefined
         }
 
-        // No quota available.
-        // Calculate how much time after the lastUsedTime we need to wait.
+        // Calculate wait time if no quota available
         const timeToWait = this.ONE_DAY_MS - timeDiff
         return Math.floor(timeToWait / 1000).toString()
     }