diff --git a/scripts/observer/observer.py b/scripts/observer/observer.py
index f4bcbe3..e9e8a61 100644
--- a/scripts/observer/observer.py
+++ b/scripts/observer/observer.py
@@ -24,7 +24,10 @@ logger = logging.getLogger("observer")
 
 class Observer:
     def __init__(self):
-        self.last_processed_file = None
+        # Per-node-directory checkpoint: {"vps": "last/file/path", "piha": "last/file/path"}
+        # Replaces the old single last_processed_file which silently skipped event dirs
+        # that sort alphabetically before the checkpoint (e.g. piha/ < vps/).
+        self.node_checkpoints: dict = {}
         self.world_state = {
             "nodes": {},
             "services": {},
@@ -83,11 +86,22 @@ class Observer:
             try:
                 with open(OBSERVER_STATE_FILE, "r") as f:
                     checkpoint = json.load(f)
-                    self.last_processed_file = checkpoint.get("last_processed_file")
-                    # We might want to persist partial world state, 
-                    # but for now we rebuild from events (idempotent)
-                    # or we can load existing world state files.
-                    self._load_world_from_disk()
+
+                if "node_checkpoints" in checkpoint:
+                    # New format: per-directory checkpoints.
+                    self.node_checkpoints = checkpoint["node_checkpoints"]
+                elif "last_processed_file" in checkpoint:
+                    # Migrate old single-file checkpoint: extract node dir from path.
+                    old = checkpoint["last_processed_file"]
+                    if old:
+                        try:
+                            node_dir = Path(old).relative_to(EVENTS_DIR).parts[0]
+                            self.node_checkpoints = {node_dir: old}
+                            logger.info(f"Migrated old checkpoint → node_checkpoints: {self.node_checkpoints}")
+                        except Exception:
+                            pass  # Bad path — start fresh
+
+                self._load_world_from_disk()
             except Exception as e:
                 logger.error(f"Failed to load checkpoint: {e}")
 
@@ -111,7 +125,7 @@ class Observer:
     def _save_checkpoint(self):
         try:
             with open(OBSERVER_STATE_FILE, "w") as f:
-                json.dump({"last_processed_file": self.last_processed_file}, f)
+                json.dump({"node_checkpoints": self.node_checkpoints}, f, indent=2)
         except Exception as e:
             logger.error(f"Failed to save checkpoint: {e}")
 
@@ -345,19 +359,21 @@ class Observer:
         except Exception as e:
             logger.error(f"Failed to touch heartbeat file: {e}")
 
-        # Find all event files
-        event_files = sorted(glob.glob(str(EVENTS_DIR / "**" / "*.json"), recursive=True))
-        
+        # Collect all event files grouped by node directory.
+        # Per-node checkpoints are compared within each directory independently,
+        # so late-arriving events from remote nodes (sorted earlier in the path)
+        # are never skipped just because another node's checkpoint is further ahead.
+        all_files = sorted(glob.glob(str(EVENTS_DIR / "**" / "*.json"), recursive=True))
+
         new_files = []
-        if self.last_processed_file:
+        for file_path in all_files:
             try:
-                idx = event_files.index(self.last_processed_file)
-                new_files = event_files[idx+1:]
-            except ValueError:
-                # If last_processed_file is gone or not in list, process all
-                new_files = event_files
-        else:
-            new_files = event_files
+                node_dir = str(Path(file_path).relative_to(EVENTS_DIR).parts[0])
+            except (IndexError, ValueError):
+                node_dir = "__unknown__"
+            last_for_node = self.node_checkpoints.get(node_dir, "")
+            if file_path > last_for_node:
+                new_files.append((node_dir, file_path))
 
         if not new_files:
             # Even if no new events, prune stale entries and refresh summary freshness.
@@ -365,13 +381,16 @@ class Observer:
             self._save_world()
             return
 
-        logger.info(f"Processing {len(new_files)} new events")
-        for file_path in new_files:
+        logger.info(f"Processing {len(new_files)} new events across "
+                    f"{len({n for n, _ in new_files})} node(s)")
+        for node_dir, file_path in new_files:
             try:
                 with open(file_path, "r") as f:
                     event = json.load(f)
                     self.process_event(event)
-                self.last_processed_file = file_path
+                # Advance per-node checkpoint (only forward — no regression).
+                if file_path > self.node_checkpoints.get(node_dir, ""):
+                    self.node_checkpoints[node_dir] = file_path
             except Exception as e:
                 logger.error(f"Error processing {file_path}: {e}")