diff --git a/.changeset/fix-finish-step-event-name.md b/.changeset/fix-finish-step-event-name.md
new file mode 100644
index 00000000..95c0e6f8
--- /dev/null
+++ b/.changeset/fix-finish-step-event-name.md
@@ -0,0 +1,5 @@
+---
+"chat": patch
+---
+
+Fix `fromFullStream()` step separator detection for AI SDK v5+: rename `step-finish` event check to `finish-step`
diff --git a/packages/chat/src/from-full-stream.test.ts b/packages/chat/src/from-full-stream.test.ts
index 79740cf6..81683011 100644
--- a/packages/chat/src/from-full-stream.test.ts
+++ b/packages/chat/src/from-full-stream.test.ts
@@ -30,7 +30,7 @@ describe("fromFullStream", () => {
     it("injects separator between steps", async () => {
       const stream = events([
         { type: "text-delta", textDelta: "hello." },
-        { type: "step-finish" },
+        { type: "finish-step" },
         { type: "text-delta", textDelta: "how are you?" },
       ]);
       expect(await collect(fromFullStream(stream))).toBe(
@@ -38,10 +38,10 @@ describe("fromFullStream", () => {
       );
     });
 
-    it("does not add trailing separator after final step-finish", async () => {
+    it("does not add trailing separator after final finish-step", async () => {
       const stream = events([
         { type: "text-delta", textDelta: "done." },
-        { type: "step-finish" },
+        { type: "finish-step" },
       ]);
       expect(await collect(fromFullStream(stream))).toBe("done.");
     });
@@ -49,9 +49,9 @@ describe("fromFullStream", () => {
     it("handles multiple steps", async () => {
       const stream = events([
         { type: "text-delta", textDelta: "step 1" },
-        { type: "step-finish" },
+        { type: "finish-step" },
         { type: "text-delta", textDelta: "step 2" },
-        { type: "step-finish" },
+        { type: "finish-step" },
         { type: "text-delta", textDelta: "step 3" },
       ]);
       expect(await collect(fromFullStream(stream))).toBe(
@@ -64,26 +64,26 @@ describe("fromFullStream", () => {
         { type: "text-delta", textDelta: "before" },
         { type: "tool-call", toolName: "search", args: {} },
         { type: "tool-result", toolName: "search", result: "data" },
-        { type: "step-finish" },
+        { type: "finish-step" },
         { type: "tool-call-streaming-start", toolName: "lookup" },
         { type: "text-delta", textDelta: " after" },
       ]);
       expect(await collect(fromFullStream(stream))).toBe("before\n\n after");
     });
 
-    it("handles consecutive step-finish events", async () => {
+    it("handles consecutive finish-step events", async () => {
       const stream = events([
         { type: "text-delta", textDelta: "a" },
-        { type: "step-finish" },
-        { type: "step-finish" },
+        { type: "finish-step" },
+        { type: "finish-step" },
         { type: "text-delta", textDelta: "b" },
       ]);
       expect(await collect(fromFullStream(stream))).toBe("a\n\nb");
     });
 
-    it("does not inject separator when step-finish comes before any text", async () => {
+    it("does not inject separator when finish-step comes before any text", async () => {
       const stream = events([
-        { type: "step-finish" },
+        { type: "finish-step" },
         { type: "text-delta", textDelta: "first text" },
       ]);
       expect(await collect(fromFullStream(stream))).toBe("first text");
@@ -124,7 +124,7 @@ describe("fromFullStream", () => {
     it("injects separator between steps with text property", async () => {
       const stream = events([
         { type: "text-delta", id: "0", text: "step 1." },
-        { type: "step-finish" },
+        { type: "finish-step" },
         { type: "text-delta", id: "0", text: "step 2." },
       ]);
       expect(await collect(fromFullStream(stream))).toBe("step 1.\n\nstep 2.");
diff --git a/packages/chat/src/from-full-stream.ts b/packages/chat/src/from-full-stream.ts
index d07e3856..fe85e1e4 100644
--- a/packages/chat/src/from-full-stream.ts
+++ b/packages/chat/src/from-full-stream.ts
@@ -64,7 +64,7 @@ export async function* fromFullStream(
       needsSeparator = false;
       hasEmittedText = true;
       yield textContent;
-    } else if (typed.type === "step-finish") {
+    } else if (typed.type === "finish-step") {
       needsSeparator = true;
     }
   }