← Back to glossaryGlossary

Hallucination

Reviewed 19 July 2026Canonical definitionPart of: Agent Evaluation Terms →

A hallucination occurs when an AI model generates information that sounds plausible but is factually incorrect or fabricated. In agentic systems, hallucinated tool calls, data references, or decisions can trigger real-world consequences.

Looking for the applied side? Read Building agent hallucination guardrails.

§01 / QUESTIONSterm: Hallucination
Questions

Common questions.

What is Hallucination?

A hallucination occurs when an AI model generates information that sounds plausible but is factually incorrect or fabricated.

How does Hallucination work?

In agentic systems, hallucinated tool calls, data references, or decisions can trigger real-world consequences.

Which terms are related to Hallucination?

Closely related concepts include Context Recall, Model Card, Agent Grounding, Model Distillation. Each is defined in the Prefactor glossary.

Where can I read more about Hallucination in practice?

The guide "Building agent hallucination guardrails" covers the applied side in depth.

§02 / RELATEDnext: where this fits
Keep reading

Where this fits.

See how every agent performs, and make it better

Prefactor helps teams observe, evaluate, and improve their AI agents in production, across every framework and provider.