diff --git a/backend/chainlit/data/chainlit_data_layer.py b/backend/chainlit/data/chainlit_data_layer.py
index 847668b6de..eb194516f7 100644
--- a/backend/chainlit/data/chainlit_data_layer.py
+++ b/backend/chainlit/data/chainlit_data_layer.py
@@ -568,40 +568,40 @@ async def update_thread(
             else (metadata.get("name") if metadata and "name" in metadata else None)
         )
 
-        data = {
-            "id": thread_id,
-            "name": thread_name,
-            "userId": user_id,
-            "tags": tags,
-            "metadata": json.dumps(metadata or {}),
-            "updatedAt": datetime.now(),
-        }
-
-        # Remove None values
-        data = {k: v for k, v in data.items() if v is not None}
-
-        # Build the query dynamically based on available fields
-        columns = [f'"{k}"' for k in data.keys()]
-        placeholders = [f"${i + 1}" for i in range(len(data))]
-        values = list(data.values())
-
-        update_sets = [f'"{k}" = EXCLUDED."{k}"' for k in data.keys() if k != "id"]
-
-        if update_sets:
-            query = f"""
-                INSERT INTO "Thread" ({", ".join(columns)})
-                VALUES ({", ".join(placeholders)})
-                ON CONFLICT (id) DO UPDATE
-                SET {", ".join(update_sets)};
+        now = datetime.now()
+
+        # Convert metadata to JSONB if provided
+        metadata_jsonb = json.dumps(metadata) if metadata is not None else None
+
+        # Build atomic UPSERT with PostgreSQL-native JSON merging
+        if metadata_jsonb is not None:
+            # When metadata is provided, use PostgreSQL's || operator for atomic merging
+            query = """
+                INSERT INTO "Thread" (id, name, "userId", metadata, "updatedAt", "createdAt")
+                VALUES ($1, $2, $3, $4, $5, $5)
+                ON CONFLICT (id) DO UPDATE SET
+                    name = COALESCE(EXCLUDED.name, "Thread".name),
+                    "userId" = COALESCE(EXCLUDED."userId", "Thread"."userId"),
+                    metadata = COALESCE("Thread".metadata::jsonb, '{}'::jsonb) || EXCLUDED.metadata::jsonb,
+                    "updatedAt" = EXCLUDED."updatedAt"
             """
+            params = [thread_id, thread_name, user_id, metadata_jsonb, now]
         else:
-            query = f"""
-                INSERT INTO "Thread" ({", ".join(columns)})
-                VALUES ({", ".join(placeholders)})
-                ON CONFLICT (id) DO NOTHING
+            # When metadata is None, ensure metadata gets default empty JSON
+            query = """
+                INSERT INTO "Thread" (id, name, "userId", metadata, "updatedAt", "createdAt")
+                VALUES ($1, $2, $3, '{}'::jsonb, $4, $4)
+                ON CONFLICT (id) DO UPDATE SET
+                    name = COALESCE(EXCLUDED.name, "Thread".name),
+                    "userId" = COALESCE(EXCLUDED."userId", "Thread"."userId"),
+                    "updatedAt" = EXCLUDED."updatedAt"
             """
+            params = [thread_id, thread_name, user_id, now]
+
+        # Create params dict with numbered keys for execute_query
+        numbered_params = {str(i + 1): value for i, value in enumerate(params)}
 
-        await self.execute_query(query, {str(i + 1): v for i, v in enumerate(values)})
+        await self.execute_query(query, numbered_params)
 
     def _extract_feedback_dict_from_step_row(self, row: Dict) -> Optional[FeedbackDict]:
         if row["feedback_id"] is not None:
diff --git a/backend/tests/data/test_chainlit_data_layer.py b/backend/tests/data/test_chainlit_data_layer.py
new file mode 100644
index 0000000000..357fa70e23
--- /dev/null
+++ b/backend/tests/data/test_chainlit_data_layer.py
@@ -0,0 +1,219 @@
+"""Tests for ChainlitDataLayer metadata handling."""
+
+import json
+from unittest.mock import AsyncMock, patch
+
+import pytest
+
+from chainlit.data.chainlit_data_layer import ChainlitDataLayer
+
+
+@pytest.fixture
+def mock_pool():
+    """Mock asyncpg connection pool."""
+    return AsyncMock()
+
+
+@pytest.fixture
+def data_layer(mock_pool):
+    """Create ChainlitDataLayer instance with mocked pool."""
+    layer = ChainlitDataLayer("postgresql://test", show_logger=False)
+    layer.pool = mock_pool
+    return layer
+
+
+@pytest.mark.asyncio
+async def test_update_thread_metadata_none_preserves_existing(data_layer):
+    """Test that passing metadata=None doesn't overwrite existing metadata."""
+    thread_id = "test_thread_123"
+    existing_metadata = {"key1": "value1", "key2": "value2"}
+
+    # Mock get_thread to return existing thread with metadata
+    mock_thread = {"id": thread_id, "metadata": json.dumps(existing_metadata)}
+
+    with patch.object(data_layer, "get_thread", return_value=mock_thread):
+        with patch.object(data_layer, "execute_query", return_value=[]) as mock_execute:
+            # Call update_thread with metadata=None (default)
+            await data_layer.update_thread(thread_id=thread_id, name="Test Thread")
+
+            # Verify execute_query was called
+            assert mock_execute.called
+
+            # Get the query and parameters that were passed
+            call_args = mock_execute.call_args
+            query = call_args[0][0]
+
+            # The query should NOT include metadata field when metadata=None
+            assert "metadata" not in query.lower()
+
+
+@pytest.mark.asyncio
+async def test_update_thread_metadata_merges_with_existing(data_layer):
+    """Test that new metadata is sent to PostgreSQL for atomic merging."""
+    thread_id = "test_thread_456"
+    new_metadata = {"key1": "new_value", "key3": "added"}
+
+    # Capture the actual SQL parameters that would be passed
+    captured_params = {}
+    captured_query = ""
+
+    def capture_execute_query(query: str, params=None):
+        nonlocal captured_params, captured_query
+        captured_params = params or {}
+        captured_query = query
+        return []
+
+    with patch.object(
+        data_layer, "execute_query", side_effect=capture_execute_query
+    ) as mock_execute:
+        # Call update_thread with new metadata
+        await data_layer.update_thread(thread_id=thread_id, metadata=new_metadata)
+
+        # Verify execute_query was called
+        assert mock_execute.called
+
+        # Verify the query uses PostgreSQL's atomic JSON merge operator
+        assert "|| EXCLUDED.metadata::jsonb" in captured_query
+
+        # Verify only the new metadata is sent (not pre-merged)
+        metadata_json = None
+        for key, value in captured_params.items():
+            if isinstance(value, str) and (value.startswith("{") or value == "{}"):
+                metadata_json = value
+                break
+
+        assert metadata_json is not None, (
+            f"No JSON metadata found in params: {captured_params}"
+        )
+        metadata_param = json.loads(metadata_json)
+
+        # Verify only the new metadata is sent to PostgreSQL (merging happens DB-side)
+        assert metadata_param == new_metadata
+
+
+@pytest.mark.asyncio
+async def test_update_thread_metadata_empty_dict_updates(data_layer):
+    """Test that passing empty dict {} gets sent to PostgreSQL for atomic merging."""
+    thread_id = "test_thread_789"
+    new_metadata = {}
+
+    # Capture the actual SQL parameters that would be passed
+    captured_params = {}
+    captured_query = ""
+
+    def capture_execute_query(query: str, params=None):
+        nonlocal captured_params, captured_query
+        captured_params = params or {}
+        captured_query = query
+        return []
+
+    with patch.object(
+        data_layer, "execute_query", side_effect=capture_execute_query
+    ) as mock_execute:
+        # Call update_thread with empty metadata dict
+        await data_layer.update_thread(thread_id=thread_id, metadata=new_metadata)
+
+        # Verify execute_query was called
+        assert mock_execute.called
+
+        # Verify the query uses PostgreSQL's atomic JSON merge operator
+        assert "|| EXCLUDED.metadata::jsonb" in captured_query
+
+        # Find the metadata parameter
+        metadata_json = None
+        for key, value in captured_params.items():
+            if isinstance(value, str) and (value.startswith("{") or value == "{}"):
+                metadata_json = value
+                break
+
+        assert metadata_json is not None, (
+            f"No JSON metadata found in params: {captured_params}"
+        )
+        metadata_param = json.loads(metadata_json)
+
+        # Verify the empty dict is sent to PostgreSQL (which will merge with existing)
+        assert metadata_param == new_metadata
+
+
+@pytest.mark.asyncio
+async def test_update_thread_metadata_no_existing_thread(data_layer):
+    """Test that metadata works correctly when no existing thread."""
+    thread_id = "test_thread_new"
+    new_metadata = {"key1": "value1", "key2": "value2"}
+
+    # Capture the actual SQL parameters that would be passed
+    captured_params = {}
+
+    def capture_execute_query(query: str, params=None):
+        nonlocal captured_params
+        captured_params = params or {}
+        return []
+
+    # Mock get_thread to return None (no existing thread)
+    with patch.object(data_layer, "get_thread", return_value=None):
+        with patch.object(
+            data_layer, "execute_query", side_effect=capture_execute_query
+        ) as mock_execute:
+            # Call update_thread with new metadata
+            await data_layer.update_thread(thread_id=thread_id, metadata=new_metadata)
+
+            # Verify execute_query was called
+            assert mock_execute.called
+
+            # Find the metadata parameter
+            metadata_json = None
+            for key, value in captured_params.items():
+                if isinstance(value, str) and (value.startswith("{") or value == "{}"):
+                    metadata_json = value
+                    break
+
+            assert metadata_json is not None, (
+                f"No JSON metadata found in params: {captured_params}"
+            )
+            metadata_param = json.loads(metadata_json)
+
+            # Verify the new metadata was stored as-is
+            assert metadata_param == new_metadata
+
+
+@pytest.mark.asyncio
+async def test_update_thread_metadata_corrupted_existing_fallback(data_layer):
+    """Test fallback behavior when existing metadata is corrupted."""
+    thread_id = "test_thread_corrupted"
+    new_metadata = {"key1": "value1"}
+
+    # Mock get_thread to return thread with corrupted metadata
+    mock_thread = {"id": thread_id, "metadata": "invalid_json_string"}
+
+    # Capture the actual SQL parameters that would be passed
+    captured_params = {}
+
+    def capture_execute_query(query: str, params=None):
+        nonlocal captured_params
+        captured_params = params or {}
+        return []
+
+    with patch.object(data_layer, "get_thread", return_value=mock_thread):
+        with patch.object(
+            data_layer, "execute_query", side_effect=capture_execute_query
+        ) as mock_execute:
+            # Call update_thread with new metadata
+            await data_layer.update_thread(thread_id=thread_id, metadata=new_metadata)
+
+            # Verify execute_query was called
+            assert mock_execute.called
+
+            # Find the metadata parameter
+            metadata_json = None
+            for key, value in captured_params.items():
+                if isinstance(value, str) and (value.startswith("{") or value == "{}"):
+                    metadata_json = value
+                    break
+
+            assert metadata_json is not None, (
+                f"No JSON metadata found in params: {captured_params}"
+            )
+            metadata_param = json.loads(metadata_json)
+
+            # Should fallback to just the new metadata
+            assert metadata_param == new_metadata