Structured state space models (SSMs) such as S4 and Mamba rely on associative matrix operations to enable efficient parallel scans over sequences. We propose O-SSM, a state space model whose hidden state evolves via octonion multiplication in O ∼ = R 8 , deliberately exploiting the non-associativity of the octonion algebra. Among the 7 3 = 343 basis triples of the imaginary octonions, exactly 168 = |PSL(2, 7)| produce nonzero associators-creating 168 directions in which sequential state products depend on parenthesization order. Across 15 benchmarks spanning order-dependent, hierarchical, symmetry, and temporal tasks, O-SSM wins 12, including sorting (69.5% vs 35%), LRA-style ListOps (26% vs 15%), and Morse decoding (44.5% vs 14%). Multi-head scaling (4 heads × 8-dim = 32-dim hidden, 640 parameters) further improves sorting accuracy to 72.5% while diagonal SSMs remain at random chance (32.5%). O-SSM also outperforms S4D-Inv initialized diagonal SSMs by 11% on next-token prediction (loss 1.80 vs 2.01), showing that cross-dimensional coupling provides genuine advantage over structured initialization alone. The composition algebra property |xy| = |x| • |y| (Hurwitz's theorem) guarantees norm preservation through time, providing inherent training stability absent in sedenion (dim 16) extensions where zero divisors destroy state information. O-SSM is uniquely positioned at the Cayley-Dickson boundary: the maximal algebra combining non-commutativity, non-associativity, and norm preservation.