diff --git a/packages/jupyter-ai/jupyter_ai/chat_handlers/base.py b/packages/jupyter-ai/jupyter_ai/chat_handlers/base.py
index 233099151..9409d4521 100644
--- a/packages/jupyter-ai/jupyter_ai/chat_handlers/base.py
+++ b/packages/jupyter-ai/jupyter_ai/chat_handlers/base.py
@@ -481,6 +481,9 @@ def get_llm_chat_memory(
         last_human_msg: HumanChatMessage,
         **kwargs,
     ) -> "BaseChatMessageHistory":
+        if self.ychat:
+            return self.llm_chat_memory
+
         return WrappedBoundedChatHistory(
             history=self.llm_chat_memory,
             last_human_msg=last_human_msg,
diff --git a/packages/jupyter-ai/jupyter_ai/extension.py b/packages/jupyter-ai/jupyter_ai/extension.py
index 7c02b9e40..e65b6391b 100644
--- a/packages/jupyter-ai/jupyter_ai/extension.py
+++ b/packages/jupyter-ai/jupyter_ai/extension.py
@@ -42,7 +42,7 @@
     RootChatHandler,
     SlashCommandsInfoHandler,
 )
-from .history import BoundedChatHistory
+from .history import BoundedChatHistory, YChatHistory
 
 from jupyter_collaboration import (  # type:ignore[import-untyped]  # isort:skip
     __version__ as jupyter_collaboration_version,
@@ -417,9 +417,13 @@ def initialize_settings(self):
         # list of chat messages to broadcast to new clients
         # this is only used to render the UI, and is not the conversational
         # memory object used by the LM chain.
+        #
+        # TODO: remove this in v3. this list is only used by the REST API to get
+        # history in v2 chat.
         self.settings["chat_history"] = []
 
-        # conversational memory object used by LM chain
+        # TODO: remove this in v3. this is the history implementation that
+        # provides memory to the chat model in v2.
         self.settings["llm_chat_memory"] = BoundedChatHistory(
             k=self.default_max_chat_history
         )
@@ -512,13 +516,18 @@ def _init_chat_handlers(
         eps = entry_points()
         chat_handler_eps = eps.select(group="jupyter_ai.chat_handlers")
         chat_handlers = {}
+        if ychat:
+            llm_chat_memory = YChatHistory(ychat, k=self.default_max_chat_history)
+        else:
+            llm_chat_memory = self.settings["llm_chat_memory"]
+
         chat_handler_kwargs = {
             "log": self.log,
             "config_manager": self.settings["jai_config_manager"],
             "model_parameters": self.settings["model_parameters"],
             "root_chat_handlers": self.settings["jai_root_chat_handlers"],
             "chat_history": self.settings["chat_history"],
-            "llm_chat_memory": self.settings["llm_chat_memory"],
+            "llm_chat_memory": llm_chat_memory,
             "root_dir": self.serverapp.root_dir,
             "dask_client_future": self.settings["dask_client_future"],
             "preferred_dir": self.serverapp.contents_manager.preferred_dir,
diff --git a/packages/jupyter-ai/jupyter_ai/history.py b/packages/jupyter-ai/jupyter_ai/history.py
index 0f1ba7dc0..ec007a8ce 100644
--- a/packages/jupyter-ai/jupyter_ai/history.py
+++ b/packages/jupyter-ai/jupyter_ai/history.py
@@ -2,14 +2,54 @@
 from typing import List, Optional, Sequence, Set, Union
 
 from langchain_core.chat_history import BaseChatMessageHistory
-from langchain_core.messages import BaseMessage
+from langchain_core.messages import AIMessage, BaseMessage, HumanMessage
 from langchain_core.pydantic_v1 import BaseModel, PrivateAttr
 
+from jupyterlab_chat.ychat import YChat
+
 from .models import HumanChatMessage
+from .constants import BOT
 
 HUMAN_MSG_ID_KEY = "_jupyter_ai_human_msg_id"
 
 
+class YChatHistory(BaseChatMessageHistory):
+    """
+    An implementation of `BaseChatMessageHistory` that yields the last `k`
+    exchanges (`k * 2` messages) from the given YChat model.
+    """
+    def __init__(self, ychat: YChat, k: Optional[int]):
+        self.ychat = ychat
+        self.k = k
+    
+    @property
+    def messages(self) -> List[BaseMessage]:
+        """Returns the last `k` messages."""
+        # TODO: consider bounding history based on message size (e.g. total
+        # char/token count) instead of message count.
+        all_messages = self.ychat.get_messages()
+
+        # gather last k * 2 messages and return
+        # we exclude the last message since that is the HumanMessage just
+        # submitted by a user.
+        messages = []
+        for message in all_messages[-self.k * 2 - 1 : -1]:
+            if message["sender"] == BOT["username"]:
+                messages.append(AIMessage(content=message["body"]))
+            else:
+                messages.append(HumanMessage(content=message["body"]))
+
+        return messages
+    
+    def add_message(self, message: BaseMessage) -> None:
+        # do nothing when other LangChain objects call this method, since
+        # message history is maintained by the `YChat` shared document.
+        return
+    
+    def clear(self):
+        raise NotImplementedError()
+    
+    
 class BoundedChatHistory(BaseChatMessageHistory, BaseModel):
     """
     An in-memory implementation of `BaseChatMessageHistory` that stores up to