The core loop: Thought, Action, Observation

ReAct runs the model in a loop of three repeating moves:

• Thought: the model reasons about what it knows and what it needs next.
• Action: the model uses a tool, for example searching the web or a database. This is its tool use.
• Observation: the result of the action comes back and the model reads it.

Then it loops again, thinking about the new observation, taking another action, and so on, until it has enough to answer.

flowchart TD
    Q[Question] --> T[Thought:<br/>what do I need to find out?]
    T --> A[Action:<br/>use a tool, e.g. search]
    A --> O[Observation:<br/>read the tool's result]
    O --> D{Enough to answer?}
    D -->|No| T
    D -->|Yes| Ans[Final answer]

The crucial design choice is the observation and action cycle. The model is no longer reasoning in a sealed box; each loop pulls fresh, real information in, which the next thought can use.