zed 0.202.8

acp: Pass project environment to external agent servers (#37568 )
Closes #37469 Release Notes: - agent: The project shell environment is now passed to external agent processes. Co-authored-by: Richard Feldman <oss@rtfeldman.com> Co-authored-by: Nia Espera <nia-e@haecceity.cc>
2025-09-08 14:33:57 -04:00 · 2025-09-08 13:29:40 -04:00 · 2025-09-08 13:24:57 -04:00 · 2025-09-08 13:22:26 -04:00 · 2025-09-08 19:21:40 +02:00 · 2025-09-08 19:21:40 +02:00
293 changed files with 22273 additions and 17033 deletions
--- a/.github/ISSUE_TEMPLATE/10_bug_report.yml
+++ b/.github/ISSUE_TEMPLATE/10_bug_report.yml
@@ -14,7 +14,7 @@ body:
        ### Description
        <!--  Describe with sufficient detail to reproduce from a clean Zed install.
          - Any code must be sufficient to reproduce (include context!)
-          - Code must as text, not just as a screenshot.
+          - Include code as text, not just as a screenshot.
          - Issues with insufficient detail may be summarily closed.
        -->

--- a/.github/workflows/ci.yml
+++ b/.github/workflows/ci.yml
@@ -81,6 +81,7 @@ jobs:
            echo "run_license=false" >> "$GITHUB_OUTPUT"

          echo "$CHANGED_FILES" | grep -qP '^(nix/|flake\.|Cargo\.|rust-toolchain.toml|\.cargo/config.toml)' && \
+            echo "$GITHUB_REF_NAME" | grep -qvP '^v[0-9]+\.[0-9]+\.[0-9x](-pre)?$' && \
            echo "run_nix=true" >> "$GITHUB_OUTPUT" || \
            echo "run_nix=false" >> "$GITHUB_OUTPUT"

--- a/Cargo.lock
+++ b/Cargo.lock
@@ -8,6 +8,7 @@ version = "0.1.0"
 dependencies = [
 "action_log",
 "agent-client-protocol",
+ "agent_settings",
 "anyhow",
 "buffer_diff",
 "collections",
@@ -22,6 +23,7 @@ dependencies = [
 "language_model",
 "markdown",
 "parking_lot",
+ "portable-pty",
 "project",
 "prompt_store",
 "rand 0.8.5",
@@ -29,6 +31,7 @@ dependencies = [
 "serde_json",
 "settings",
 "smol",
+ "task",
 "tempfile",
 "terminal",
 "ui",
@@ -36,6 +39,27 @@ dependencies = [
 "util",
 "uuid",
 "watch",
+ "which 6.0.3",
+ "workspace-hack",
+]
+
+[[package]]
+name = "acp_tools"
+version = "0.1.0"
+dependencies = [
+ "agent-client-protocol",
+ "collections",
+ "gpui",
+ "language",
+ "markdown",
+ "project",
+ "serde",
+ "serde_json",
+ "settings",
+ "theme",
+ "ui",
+ "util",
+ "workspace",
 "workspace-hack",
 ]

@@ -171,11 +195,12 @@ dependencies = [

 [[package]]
 name = "agent-client-protocol"
-version = "0.0.30"
+version = "0.2.0-alpha.6"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "5f792e009ba59b137ee1db560bc37e567887ad4b5af6f32181d381fff690e2d4"
+checksum = "6d02292efd75080932b6466471d428c70e2ac06908ae24792fc7c36ecbaf67ca"
 dependencies = [
 "anyhow",
+ "async-broadcast",
 "futures 0.3.31",
 "log",
 "parking_lot",
@@ -226,7 +251,6 @@ dependencies = [
 "open",
 "parking_lot",
 "paths",
- "portable-pty",
 "pretty_assertions",
 "project",
 "prompt_store",
@@ -252,7 +276,6 @@ dependencies = [
 "uuid",
 "watch",
 "web_search",
- "which 6.0.3",
 "workspace-hack",
 "worktree",
 "zlog",
@@ -264,30 +287,28 @@ name = "agent_servers"
 version = "0.1.0"
 dependencies = [
 "acp_thread",
+ "acp_tools",
 "action_log",
 "agent-client-protocol",
 "agent_settings",
- "agentic-coding-protocol",
 "anyhow",
 "client",
 "collections",
- "context_server",
 "env_logger 0.11.8",
 "fs",
 "futures 0.3.31",
 "gpui",
 "gpui_tokio",
 "indoc",
- "itertools 0.14.0",
 "language",
 "language_model",
 "language_models",
 "libc",
 "log",
 "nix 0.29.0",
+ "node_runtime",
 "paths",
 "project",
- "rand 0.8.5",
 "reqwest_client",
 "schemars",
 "semver",
@@ -295,12 +316,10 @@ dependencies = [
 "serde_json",
 "settings",
 "smol",
- "strum 0.27.1",
 "tempfile",
 "thiserror 2.0.12",
 "ui",
 "util",
- "uuid",
 "watch",
 "which 6.0.3",
 "workspace-hack",
@@ -382,6 +401,7 @@ dependencies = [
 "parking_lot",
 "paths",
 "picker",
+ "postage",
 "pretty_assertions",
 "project",
 "prompt_store",
@@ -396,6 +416,7 @@ dependencies = [
 "serde_json",
 "serde_json_lenient",
 "settings",
+ "shlex",
 "smol",
 "streaming_diff",
 "task",
@@ -421,24 +442,6 @@ dependencies = [
 "zed_actions",
 ]

-[[package]]
-name = "agentic-coding-protocol"
-version = "0.0.10"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "a3e6ae951b36fa2f8d9dd6e1af6da2fcaba13d7c866cf6a9e65deda9dc6c5fe4"
-dependencies = [
- "anyhow",
- "chrono",
- "derive_more 2.0.1",
- "futures 0.3.31",
- "log",
- "parking_lot",
- "schemars",
- "semver",
- "serde",
- "serde_json",
-]
-
 [[package]]
 name = "ahash"
 version = "0.7.8"
@@ -854,7 +857,7 @@ dependencies = [
 "anyhow",
 "async-trait",
 "collections",
- "derive_more 0.99.19",
+ "derive_more",
 "extension",
 "futures 0.3.31",
 "gpui",
@@ -917,7 +920,7 @@ dependencies = [
 "clock",
 "collections",
 "ctor",
- "derive_more 0.99.19",
+ "derive_more",
 "gpui",
 "icons",
 "indoc",
@@ -954,7 +957,7 @@ dependencies = [
 "cloud_llm_client",
 "collections",
 "component",
- "derive_more 0.99.19",
+ "derive_more",
 "diffy",
 "editor",
 "feature_flags",
@@ -3067,7 +3070,7 @@ dependencies = [
 "cocoa 0.26.0",
 "collections",
 "credentials_provider",
- "derive_more 0.99.19",
+ "derive_more",
 "feature_flags",
 "fs",
 "futures 0.3.31",
@@ -3499,7 +3502,7 @@ name = "command_palette_hooks"
 version = "0.1.0"
 dependencies = [
 "collections",
- "derive_more 0.99.19",
+ "derive_more",
 "gpui",
 "workspace-hack",
 ]
@@ -4662,27 +4665,6 @@ dependencies = [
 "syn 2.0.101",
 ]

-[[package]]
-name = "derive_more"
-version = "2.0.1"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "093242cf7570c207c83073cf82f79706fe7b8317e98620a47d5be7c3d8497678"
-dependencies = [
- "derive_more-impl",
-]
-
-[[package]]
-name = "derive_more-impl"
-version = "2.0.1"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "bda628edc44c4bb645fbe0f758797143e4e07926f7ebf4e9bdfbd3d2ce621df3"
-dependencies = [
- "proc-macro2",
- "quote",
- "syn 2.0.101",
- "unicode-xid",
-]
-
 [[package]]
 name = "derive_refineable"
 version = "0.1.0"
@@ -4703,7 +4685,6 @@ dependencies = [
 "component",
 "ctor",
 "editor",
- "futures 0.3.31",
 "gpui",
 "indoc",
 "language",
@@ -6419,7 +6400,7 @@ dependencies = [
 "askpass",
 "async-trait",
 "collections",
- "derive_more 0.99.19",
+ "derive_more",
 "futures 0.3.31",
 "git2",
 "gpui",
@@ -7449,7 +7430,7 @@ dependencies = [
 "core-video",
 "cosmic-text",
 "ctor",
- "derive_more 0.99.19",
+ "derive_more",
 "embed-resource",
 "env_logger 0.11.8",
 "etagere",
@@ -7974,7 +7955,7 @@ version = "0.1.0"
 dependencies = [
 "anyhow",
 "bytes 1.10.1",
- "derive_more 0.99.19",
+ "derive_more",
 "futures 0.3.31",
 "http 1.3.1",
 "http-body 1.0.1",
@@ -8486,6 +8467,7 @@ dependencies = [
 "theme",
 "ui",
 "util",
+ "util_macros",
 "workspace",
 "workspace-hack",
 "zed_actions",
@@ -9230,6 +9212,7 @@ dependencies = [
 "language",
 "lsp",
 "project",
+ "proto",
 "release_channel",
 "serde_json",
 "settings",
@@ -13538,6 +13521,7 @@ dependencies = [
 "smol",
 "sysinfo",
 "telemetry_events",
+ "thiserror 2.0.12",
 "toml 0.8.20",
 "unindent",
 "util",
@@ -14377,12 +14361,10 @@ version = "1.0.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "fe8c9d1c68d67dd9f97ecbc6f932b60eb289c5dbddd8aa1405484a8fd2fcd984"
 dependencies = [
- "chrono",
 "dyn-clone",
 "indexmap",
 "ref-cast",
 "schemars_derive",
- "semver",
 "serde",
 "serde_json",
 ]
@@ -15328,6 +15310,7 @@ dependencies = [
 "futures 0.3.31",
 "indoc",
 "libsqlite3-sys",
+ "log",
 "parking_lot",
 "smol",
 "sqlformat",
@@ -16466,7 +16449,7 @@ version = "0.1.0"
 dependencies = [
 "anyhow",
 "collections",
- "derive_more 0.99.19",
+ "derive_more",
 "fs",
 "futures 0.3.31",
 "gpui",
@@ -19807,7 +19790,6 @@ dependencies = [
 "any_vec",
 "anyhow",
 "async-recursion",
- "bincode",
 "call",
 "client",
 "clock",
@@ -19826,6 +19808,7 @@ dependencies = [
 "node_runtime",
 "parking_lot",
 "postage",
+ "pretty_assertions",
 "project",
 "remote",
 "schemars",
@@ -19981,7 +19964,6 @@ dependencies = [
 "rustix 1.0.7",
 "rustls 0.23.26",
 "rustls-webpki 0.103.1",
- "schemars",
 "scopeguard",
 "sea-orm",
 "sea-query-binder",
@@ -20415,8 +20397,9 @@ dependencies = [

 [[package]]
 name = "zed"
-version = "0.202.0"
+version = "0.202.8"
 dependencies = [
+ "acp_tools",
 "activity_indicator",
 "agent",
 "agent_servers",
--- a/Cargo.toml
+++ b/Cargo.toml
@@ -1,6 +1,7 @@
 [workspace]
 resolver = "2"
 members = [
+    "crates/acp_tools",
    "crates/acp_thread",
    "crates/action_log",
    "crates/activity_indicator",
@@ -227,6 +228,7 @@ edition = "2024"
 # Workspace member crates
 #

+acp_tools = { path = "crates/acp_tools" }
 acp_thread = { path = "crates/acp_thread" }
 action_log = { path = "crates/action_log" }
 agent = { path = "crates/agent" }
@@ -424,8 +426,7 @@ zlog_settings = { path = "crates/zlog_settings" }
 # External crates
 #

-agentic-coding-protocol = "0.0.10"
-agent-client-protocol = "0.0.30"
+agent-client-protocol = { version = "0.2.0-alpha.6", features = ["unstable"]}
 aho-corasick = "1.1"
 alacritty_terminal = { git = "https://github.com/zed-industries/alacritty.git", branch = "add-hush-login-flag" }
 any_vec = "0.14"
@@ -841,6 +842,9 @@ too_many_arguments = "allow"
 # We often have large enum variants yet we rarely actually bother with splitting them up.
 large_enum_variant = "allow"

+# Boolean expressions can be hard to read, requiring only the minimal form gets in the way
+nonminimal_bool = "allow"
+
 [workspace.metadata.cargo-machete]
 ignored = [
    "bindgen",
--- a/Procfile.web
+++ b/Procfile.web
@@ -0,0 +1,2 @@
+postgrest_llm: postgrest crates/collab/postgrest_llm.conf
+website: cd ../zed.dev; npm run dev -- --port=3000
--- a/assets/icons/attach.svg
+++ b/assets/icons/attach.svg
@@ -0,0 +1,3 @@
+<svg width="16" height="16" viewBox="0 0 16 16" fill="none" xmlns="http://www.w3.org/2000/svg">
+<path d="M7.37288 4.48506L7.43539 10.6638C7.43539 10.9365 7.54373 11.1981 7.73655 11.3909C7.92938 11.5837 8.19092 11.6921 8.46362 11.6921C8.73632 11.6921 8.99785 11.5837 9.19068 11.3909C9.38351 11.1981 9.49184 10.9366 9.49184 10.6638L9.42933 4.48506C9.42933 3.93975 9.2127 3.41678 8.82711 3.03119C8.44152 2.6456 7.91855 2.42898 7.37324 2.42898C6.82794 2.42898 6.30496 2.6456 5.91937 3.03119C5.53378 3.41678 5.31716 3.93975 5.31716 4.48506L5.37968 10.6384C5.37636 11.0455 5.45368 11.4492 5.60718 11.8263C5.76067 12.2034 5.98731 12.5463 6.27401 12.8354C6.56071 13.1244 6.9018 13.3538 7.27761 13.5104C7.65341 13.667 8.0565 13.7476 8.46362 13.7476C8.87073 13.7476 9.27382 13.667 9.64963 13.5104C10.0254 13.3538 10.3665 13.1244 10.6532 12.8354C10.9399 12.5463 11.1666 12.2034 11.3201 11.8263C11.4736 11.4492 11.5509 11.0455 11.5476 10.6384L11.485 4.48506" stroke="black" stroke-width="1.2" stroke-linecap="round" stroke-linejoin="round"/>
+</svg>
--- a/assets/icons/copy.svg
+++ b/assets/icons/copy.svg
@@ -1 +1,4 @@
-<svg xmlns="http://www.w3.org/2000/svg" width="16" height="16" fill="none"><path stroke="#000" stroke-linecap="round" stroke-linejoin="round" stroke-width="1.2" d="M12.286 6H7.048C6.469 6 6 6.469 6 7.048v5.238c0 .578.469 1.047 1.048 1.047h5.238c.578 0 1.047-.469 1.047-1.047V7.048c0-.579-.469-1.048-1.047-1.048Z"/><path stroke="#000" stroke-linecap="round" stroke-linejoin="round" stroke-width="1.2" d="M3.714 10a1.05 1.05 0 0 1-1.047-1.048V3.714a1.05 1.05 0 0 1 1.047-1.047h5.238A1.05 1.05 0 0 1 10 3.714"/></svg>
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+<path d="M3.91712 10.203C3.63951 10.2022 3.37351 10.0915 3.1773 9.89511C2.98109 9.69872 2.87064 9.43261 2.87012 9.155V3.917C2.87091 3.63956 2.98147 3.37371 3.17765 3.17753C3.37383 2.98135 3.63968 2.87079 3.91712 2.87H9.15512C9.43273 2.87053 9.69883 2.98097 9.89523 3.17718C10.0916 3.37339 10.2023 3.63939 10.2031 3.917" stroke="black" stroke-width="1.2" stroke-linecap="round" stroke-linejoin="round"/>
+</svg>
--- a/assets/icons/pencil_unavailable.svg
+++ b/assets/icons/pencil_unavailable.svg
@@ -0,0 +1,6 @@
+<svg width="16" height="16" viewBox="0 0 16 16" fill="none" xmlns="http://www.w3.org/2000/svg">
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+<path d="M3 3L13 13" stroke="black" stroke-width="1.2" stroke-linecap="round" stroke-linejoin="round"/>
+</svg>
--- a/assets/icons/terminal_ghost.svg
+++ b/assets/icons/terminal_ghost.svg
@@ -0,0 +1,4 @@
+<svg width="16" height="16" viewBox="0 0 16 16" fill="none" xmlns="http://www.w3.org/2000/svg">
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+</svg>
--- a/assets/icons/tool_think.svg
+++ b/assets/icons/tool_think.svg
@@ -1,3 +1,3 @@
 <svg width="16" height="16" viewBox="0 0 16 16" fill="none" xmlns="http://www.w3.org/2000/svg">
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 </svg>
--- a/assets/images/acp_grid.svg
+++ b/assets/images/acp_grid.svg
--- a/assets/images/acp_logo.svg
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+<linearGradient id="paint1_linear_100_26" x1="33.8049" y1="16.9269" x2="38.7165" y2="26.9811" gradientUnits="userSpaceOnUse">
+<stop stop-color="white"/>
+<stop offset="1" stop-color="white" stop-opacity="0"/>
+</linearGradient>
+<linearGradient id="paint2_linear_100_26" x1="55.0065" y1="30.3095" x2="68.2066" y2="40.7142" gradientUnits="userSpaceOnUse">
+<stop stop-color="white"/>
+<stop offset="1" stop-color="white" stop-opacity="0"/>
+</linearGradient>
+<clipPath id="clip0_100_26">
+<rect width="121.515" height="46.4384" fill="white"/>
+</clipPath>
+</defs>
+</svg>
--- a/assets/keymaps/default-linux.json
+++ b/assets/keymaps/default-linux.json
@@ -41,7 +41,7 @@
      "shift-f11": "debugger::StepOut",
      "f11": "zed::ToggleFullScreen",
      "ctrl-alt-z": "edit_prediction::RateCompletions",
-      "ctrl-shift-i": "edit_prediction::ToggleMenu",
+      "ctrl-alt-shift-i": "edit_prediction::ToggleMenu",
      "ctrl-alt-l": "lsp_tool::ToggleMenu"
    }
  },
@@ -121,7 +121,7 @@
      "alt-g m": "git::OpenModifiedFiles",
      "menu": "editor::OpenContextMenu",
      "shift-f10": "editor::OpenContextMenu",
-      "ctrl-shift-e": "editor::ToggleEditPrediction",
+      "ctrl-alt-shift-e": "editor::ToggleEditPrediction",
      "f9": "editor::ToggleBreakpoint",
      "shift-f9": "editor::EditLogBreakpoint"
    }
@@ -856,7 +856,7 @@
      "ctrl-backspace": ["project_panel::Delete", { "skip_prompt": false }],
      "ctrl-delete": ["project_panel::Delete", { "skip_prompt": false }],
      "alt-ctrl-r": "project_panel::RevealInFileManager",
-      "ctrl-shift-enter": "project_panel::OpenWithSystem",
+      "ctrl-shift-enter": "workspace::OpenWithSystem",
      "alt-d": "project_panel::CompareMarkedFiles",
      "shift-find": "project_panel::NewSearchInDirectory",
      "ctrl-alt-shift-f": "project_panel::NewSearchInDirectory",
@@ -1195,9 +1195,16 @@
      "ctrl-1": "onboarding::ActivateBasicsPage",
      "ctrl-2": "onboarding::ActivateEditingPage",
      "ctrl-3": "onboarding::ActivateAISetupPage",
-      "ctrl-escape": "onboarding::Finish",
-      "alt-tab": "onboarding::SignIn",
+      "ctrl-enter": "onboarding::Finish",
+      "alt-shift-l": "onboarding::SignIn",
      "alt-shift-a": "onboarding::OpenAccount"
    }
+  },
+  {
+    "context": "InvalidBuffer",
+    "use_key_equivalents": true,
+    "bindings": {
+      "ctrl-shift-enter": "workspace::OpenWithSystem"
+    }
  }
 ]
--- a/assets/keymaps/default-macos.json
+++ b/assets/keymaps/default-macos.json
@@ -915,7 +915,7 @@
      "cmd-backspace": ["project_panel::Trash", { "skip_prompt": true }],
      "cmd-delete": ["project_panel::Delete", { "skip_prompt": false }],
      "alt-cmd-r": "project_panel::RevealInFileManager",
-      "ctrl-shift-enter": "project_panel::OpenWithSystem",
+      "ctrl-shift-enter": "workspace::OpenWithSystem",
      "alt-d": "project_panel::CompareMarkedFiles",
      "cmd-alt-backspace": ["project_panel::Delete", { "skip_prompt": false }],
      "cmd-alt-shift-f": "project_panel::NewSearchInDirectory",
@@ -1301,5 +1301,12 @@
      "alt-tab": "onboarding::SignIn",
      "alt-shift-a": "onboarding::OpenAccount"
    }
+  },
+  {
+    "context": "InvalidBuffer",
+    "use_key_equivalents": true,
+    "bindings": {
+      "ctrl-shift-enter": "workspace::OpenWithSystem"
+    }
  }
 ]
--- a/assets/keymaps/default-windows.json
+++ b/assets/keymaps/default-windows.json
--- a/assets/keymaps/linux/emacs.json
+++ b/assets/keymaps/linux/emacs.json
@@ -38,6 +38,7 @@
      "alt-;": ["editor::ToggleComments", { "advance_downwards": false }],
      "ctrl-x ctrl-;": "editor::ToggleComments",
      "alt-.": "editor::GoToDefinition", // xref-find-definitions
+      "alt-?": "editor::FindAllReferences", // xref-find-references
      "alt-,": "pane::GoBack", // xref-pop-marker-stack
      "ctrl-x h": "editor::SelectAll", // mark-whole-buffer
      "ctrl-d": "editor::Delete", // delete-char
--- a/assets/keymaps/macos/emacs.json
+++ b/assets/keymaps/macos/emacs.json
@@ -38,6 +38,7 @@
      "alt-;": ["editor::ToggleComments", { "advance_downwards": false }],
      "ctrl-x ctrl-;": "editor::ToggleComments",
      "alt-.": "editor::GoToDefinition", // xref-find-definitions
+      "alt-?": "editor::FindAllReferences", // xref-find-references
      "alt-,": "pane::GoBack", // xref-pop-marker-stack
      "ctrl-x h": "editor::SelectAll", // mark-whole-buffer
      "ctrl-d": "editor::Delete", // delete-char
--- a/assets/keymaps/vim.json
+++ b/assets/keymaps/vim.json
@@ -428,11 +428,13 @@
      "g h": "vim::StartOfLine",
      "g s": "vim::FirstNonWhitespace", // "g s" default behavior is "space s"
      "g e": "vim::EndOfDocument",
+      "g .": "vim::HelixGotoLastModification", // go to last modification
      "g r": "editor::FindAllReferences", // zed specific
      "g t": "vim::WindowTop",
      "g c": "vim::WindowMiddle",
      "g b": "vim::WindowBottom",

+      "shift-r": "editor::Paste",
      "x": "editor::SelectLine",
      "shift-x": "editor::SelectLine",
      "%": "editor::SelectAll",
@@ -819,7 +821,7 @@
      "v": "project_panel::OpenPermanent",
      "p": "project_panel::Open",
      "x": "project_panel::RevealInFileManager",
-      "s": "project_panel::OpenWithSystem",
+      "s": "workspace::OpenWithSystem",
      "z d": "project_panel::CompareMarkedFiles",
      "] c": "project_panel::SelectNextGitEntry",
      "[ c": "project_panel::SelectPrevGitEntry",
--- a/assets/settings/default.json
+++ b/assets/settings/default.json
@@ -162,6 +162,12 @@
  //  2. Always quit the application
  //         "on_last_window_closed": "quit_app",
  "on_last_window_closed": "platform_default",
+  // Whether to show padding for zoomed panels.
+  // When enabled, zoomed center panels (e.g. code editor) will have padding all around,
+  // while zoomed bottom/left/right panels will have padding to the top/right/left (respectively).
+  //
+  // Default: true
+  "zoomed_padding": true,
  // Whether to use the system provided dialogs for Open and Save As.
  // When set to false, Zed will use the built-in keyboard-first pickers.
  "use_system_path_prompts": true,
@@ -647,6 +653,8 @@
      //    "never"
      "show": "always"
    },
+    // Whether to enable drag-and-drop operations in the project panel.
+    "drag_and_drop": true,
    // Whether to hide the root entry when only one folder is open in the window.
    "hide_root": false
  },
@@ -1133,11 +1141,6 @@
      // The minimum severity of the diagnostics to show inline.
      // Inherits editor's diagnostics' max severity settings when `null`.
      "max_severity": null
-    },
-    "cargo": {
-      // When enabled, Zed disables rust-analyzer's check on save and starts to query
-      // Cargo diagnostics separately.
-      "fetch_cargo_diagnostics": false
    }
  },
  // Files or globs of files that will be excluded by Zed entirely. They will be skipped during file
@@ -1503,6 +1506,11 @@
    //
    // Default: fallback
    "words": "fallback",
+    // Minimum number of characters required to automatically trigger word-based completions.
+    // Before that value, it's still possible to trigger the words-based completion manually with the corresponding editor command.
+    //
+    // Default: 3
+    "words_min_length": 3,
    // Whether to fetch LSP completions or not.
    //
    // Default: true
@@ -1575,7 +1583,7 @@
      "ensure_final_newline_on_save": false
    },
    "Elixir": {
-      "language_servers": ["elixir-ls", "!next-ls", "!lexical", "..."]
+      "language_servers": ["elixir-ls", "!expert", "!next-ls", "!lexical", "..."]
    },
    "Elm": {
      "tab_size": 4
@@ -1600,7 +1608,7 @@
      }
    },
    "HEEX": {
-      "language_servers": ["elixir-ls", "!next-ls", "!lexical", "..."]
+      "language_servers": ["elixir-ls", "!expert", "!next-ls", "!lexical", "..."]
    },
    "HTML": {
      "prettier": {
@@ -1629,6 +1637,9 @@
        "allowed": true
      }
    },
+    "Kotlin": {
+      "language_servers": ["kotlin-language-server", "!kotlin-lsp", "..."]
+    },
    "LaTeX": {
      "formatter": "language_server",
      "language_servers": ["texlab", "..."],
@@ -1642,9 +1653,6 @@
      "use_on_type_format": false,
      "allow_rewrap": "anywhere",
      "soft_wrap": "editor_width",
-      "completions": {
-        "words": "disabled"
-      },
      "prettier": {
        "allowed": true
      }
@@ -1658,9 +1666,6 @@
      }
    },
    "Plain Text": {
-      "completions": {
-        "words": "disabled"
-      },
      "allow_rewrap": "anywhere"
    },
    "Python": {
--- a/assets/settings/initial_tasks.json
+++ b/assets/settings/initial_tasks.json
@@ -43,8 +43,8 @@
    //           "args": ["--login"]
    //         }
    //     }
-    "shell": "system",
+    "shell": "system"
    // Represents the tags for inline runnable indicators, or spawning multiple tasks at once.
-    "tags": []
+    // "tags": []
  }
 ]
--- a/assets/themes/ayu/ayu.json
+++ b/assets/themes/ayu/ayu.json
@@ -93,7 +93,7 @@
        "terminal.ansi.bright_cyan": "#4c806fff",
        "terminal.ansi.dim_cyan": "#cbf2e4ff",
        "terminal.ansi.white": "#bfbdb6ff",
-        "terminal.ansi.bright_white": "#bfbdb6ff",
+        "terminal.ansi.bright_white": "#fafafaff",
        "terminal.ansi.dim_white": "#787876ff",
        "link_text.hover": "#5ac1feff",
        "conflict": "#feb454ff",
@@ -479,7 +479,7 @@
        "terminal.ansi.bright_cyan": "#ace0cbff",
        "terminal.ansi.dim_cyan": "#2a5f4aff",
        "terminal.ansi.white": "#fcfcfcff",
-        "terminal.ansi.bright_white": "#fcfcfcff",
+        "terminal.ansi.bright_white": "#ffffffff",
        "terminal.ansi.dim_white": "#bcbec0ff",
        "link_text.hover": "#3b9ee5ff",
        "conflict": "#f1ad49ff",
@@ -865,7 +865,7 @@
        "terminal.ansi.bright_cyan": "#4c806fff",
        "terminal.ansi.dim_cyan": "#cbf2e4ff",
        "terminal.ansi.white": "#cccac2ff",
-        "terminal.ansi.bright_white": "#cccac2ff",
+        "terminal.ansi.bright_white": "#fafafaff",
        "terminal.ansi.dim_white": "#898a8aff",
        "link_text.hover": "#72cffeff",
        "conflict": "#fecf72ff",
--- a/assets/themes/gruvbox/gruvbox.json
+++ b/assets/themes/gruvbox/gruvbox.json
@@ -94,7 +94,7 @@
        "terminal.ansi.bright_cyan": "#45603eff",
        "terminal.ansi.dim_cyan": "#c7dfbdff",
        "terminal.ansi.white": "#fbf1c7ff",
-        "terminal.ansi.bright_white": "#fbf1c7ff",
+        "terminal.ansi.bright_white": "#ffffffff",
        "terminal.ansi.dim_white": "#b0a189ff",
        "link_text.hover": "#83a598ff",
        "version_control.added": "#b7bb26ff",
@@ -494,7 +494,7 @@
        "terminal.ansi.bright_cyan": "#45603eff",
        "terminal.ansi.dim_cyan": "#c7dfbdff",
        "terminal.ansi.white": "#fbf1c7ff",
-        "terminal.ansi.bright_white": "#fbf1c7ff",
+        "terminal.ansi.bright_white": "#ffffffff",
        "terminal.ansi.dim_white": "#b0a189ff",
        "link_text.hover": "#83a598ff",
        "version_control.added": "#b7bb26ff",
@@ -894,7 +894,7 @@
        "terminal.ansi.bright_cyan": "#45603eff",
        "terminal.ansi.dim_cyan": "#c7dfbdff",
        "terminal.ansi.white": "#fbf1c7ff",
-        "terminal.ansi.bright_white": "#fbf1c7ff",
+        "terminal.ansi.bright_white": "#ffffffff",
        "terminal.ansi.dim_white": "#b0a189ff",
        "link_text.hover": "#83a598ff",
        "version_control.added": "#b7bb26ff",
@@ -1294,7 +1294,7 @@
        "terminal.ansi.bright_cyan": "#9fbca8ff",
        "terminal.ansi.dim_cyan": "#253e2eff",
        "terminal.ansi.white": "#fbf1c7ff",
-        "terminal.ansi.bright_white": "#fbf1c7ff",
+        "terminal.ansi.bright_white": "#ffffffff",
        "terminal.ansi.dim_white": "#b0a189ff",
        "link_text.hover": "#0b6678ff",
        "version_control.added": "#797410ff",
@@ -1694,7 +1694,7 @@
        "terminal.ansi.bright_cyan": "#9fbca8ff",
        "terminal.ansi.dim_cyan": "#253e2eff",
        "terminal.ansi.white": "#f9f5d7ff",
-        "terminal.ansi.bright_white": "#f9f5d7ff",
+        "terminal.ansi.bright_white": "#ffffffff",
        "terminal.ansi.dim_white": "#b0a189ff",
        "link_text.hover": "#0b6678ff",
        "version_control.added": "#797410ff",
@@ -2094,7 +2094,7 @@
        "terminal.ansi.bright_cyan": "#9fbca8ff",
        "terminal.ansi.dim_cyan": "#253e2eff",
        "terminal.ansi.white": "#f2e5bcff",
-        "terminal.ansi.bright_white": "#f2e5bcff",
+        "terminal.ansi.bright_white": "#ffffffff",
        "terminal.ansi.dim_white": "#b0a189ff",
        "link_text.hover": "#0b6678ff",
        "version_control.added": "#797410ff",
--- a/assets/themes/one/one.json
+++ b/assets/themes/one/one.json
@@ -93,7 +93,7 @@
        "terminal.ansi.bright_cyan": "#3a565bff",
        "terminal.ansi.dim_cyan": "#b9d9dfff",
        "terminal.ansi.white": "#dce0e5ff",
-        "terminal.ansi.bright_white": "#dce0e5ff",
+        "terminal.ansi.bright_white": "#fafafaff",
        "terminal.ansi.dim_white": "#575d65ff",
        "link_text.hover": "#74ade8ff",
        "version_control.added": "#27a657ff",
@@ -468,7 +468,7 @@
        "terminal.bright_foreground": "#242529ff",
        "terminal.dim_foreground": "#fafafaff",
        "terminal.ansi.black": "#242529ff",
-        "terminal.ansi.bright_black": "#242529ff",
+        "terminal.ansi.bright_black": "#747579ff",
        "terminal.ansi.dim_black": "#97979aff",
        "terminal.ansi.red": "#d36151ff",
        "terminal.ansi.bright_red": "#f0b0a4ff",
@@ -489,7 +489,7 @@
        "terminal.ansi.bright_cyan": "#a3bedaff",
        "terminal.ansi.dim_cyan": "#254058ff",
        "terminal.ansi.white": "#fafafaff",
-        "terminal.ansi.bright_white": "#fafafaff",
+        "terminal.ansi.bright_white": "#ffffffff",
        "terminal.ansi.dim_white": "#aaaaaaff",
        "link_text.hover": "#5c78e2ff",
        "version_control.added": "#27a657ff",
--- a/crates/acp_thread/Cargo.toml
+++ b/crates/acp_thread/Cargo.toml
@@ -19,6 +19,7 @@ test-support = ["gpui/test-support", "project/test-support", "dep:parking_lot"]
 action_log.workspace = true
 agent-client-protocol.workspace = true
 anyhow.workspace = true
+agent_settings.workspace = true
 buffer_diff.workspace = true
 collections.workspace = true
 editor.workspace = true
@@ -30,18 +31,21 @@ language.workspace = true
 language_model.workspace = true
 markdown.workspace = true
 parking_lot = { workspace = true, optional = true }
+portable-pty.workspace = true
 project.workspace = true
 prompt_store.workspace = true
 serde.workspace = true
 serde_json.workspace = true
 settings.workspace = true
 smol.workspace = true
+task.workspace = true
 terminal.workspace = true
 ui.workspace = true
 url.workspace = true
 util.workspace = true
 uuid.workspace = true
 watch.workspace = true
+which.workspace = true
 workspace-hack.workspace = true

 [dev-dependencies]
--- a/crates/acp_thread/src/acp_thread.rs
+++ b/crates/acp_thread/src/acp_thread.rs
@@ -3,17 +3,20 @@ mod diff;
 mod mention;
 mod terminal;

+use agent_settings::AgentSettings;
 use collections::HashSet;
 pub use connection::*;
 pub use diff::*;
+use futures::future::Shared;
 use language::language_settings::FormatOnSave;
 pub use mention::*;
 use project::lsp_store::{FormatTrigger, LspFormatTarget};
 use serde::{Deserialize, Serialize};
+use settings::Settings as _;
 pub use terminal::*;

 use action_log::ActionLog;
-use agent_client_protocol as acp;
+use agent_client_protocol::{self as acp};
 use anyhow::{Context as _, Result, anyhow};
 use editor::Bias;
 use futures::{FutureExt, channel::oneshot, future::BoxFuture};
@@ -31,7 +34,8 @@ use std::rc::Rc;
 use std::time::{Duration, Instant};
 use std::{fmt::Display, mem, path::PathBuf, sync::Arc};
 use ui::App;
-use util::ResultExt;
+use util::{ResultExt, get_system_shell};
+use uuid::Uuid;

 #[derive(Debug)]
 pub struct UserMessage {
@@ -181,38 +185,46 @@ impl ToolCall {
        tool_call: acp::ToolCall,
        status: ToolCallStatus,
        language_registry: Arc<LanguageRegistry>,
+        terminals: &HashMap<acp::TerminalId, Entity<Terminal>>,
        cx: &mut App,
-    ) -> Self {
-        Self {
+    ) -> Result<Self> {
+        let title = if let Some((first_line, _)) = tool_call.title.split_once("\n") {
+            first_line.to_owned() + "…"
+        } else {
+            tool_call.title
+        };
+        let mut content = Vec::with_capacity(tool_call.content.len());
+        for item in tool_call.content {
+            content.push(ToolCallContent::from_acp(
+                item,
+                language_registry.clone(),
+                terminals,
+                cx,
+            )?);
+        }
+
+        let result = Self {
            id: tool_call.id,
-            label: cx.new(|cx| {
-                Markdown::new(
-                    tool_call.title.into(),
-                    Some(language_registry.clone()),
-                    None,
-                    cx,
-                )
-            }),
+            label: cx
+                .new(|cx| Markdown::new(title.into(), Some(language_registry.clone()), None, cx)),
            kind: tool_call.kind,
-            content: tool_call
-                .content
-                .into_iter()
-                .map(|content| ToolCallContent::from_acp(content, language_registry.clone(), cx))
-                .collect(),
+            content,
            locations: tool_call.locations,
            resolved_locations: Vec::default(),
            status,
            raw_input: tool_call.raw_input,
            raw_output: tool_call.raw_output,
-        }
+        };
+        Ok(result)
    }

    fn update_fields(
        &mut self,
        fields: acp::ToolCallUpdateFields,
        language_registry: Arc<LanguageRegistry>,
+        terminals: &HashMap<acp::TerminalId, Entity<Terminal>>,
        cx: &mut App,
-    ) {
+    ) -> Result<()> {
        let acp::ToolCallUpdateFields {
            kind,
            status,
@@ -233,7 +245,11 @@ impl ToolCall {

        if let Some(title) = title {
            self.label.update(cx, |label, cx| {
-                label.replace(title, cx);
+                if let Some((first_line, _)) = title.split_once("\n") {
+                    label.replace(first_line.to_owned() + "…", cx)
+                } else {
+                    label.replace(title, cx);
+                }
            });
        }

@@ -243,14 +259,15 @@ impl ToolCall {

            // Reuse existing content if we can
            for (old, new) in self.content.iter_mut().zip(content.by_ref()) {
-                old.update_from_acp(new, language_registry.clone(), cx);
+                old.update_from_acp(new, language_registry.clone(), terminals, cx)?;
            }
            for new in content {
                self.content.push(ToolCallContent::from_acp(
                    new,
                    language_registry.clone(),
+                    terminals,
                    cx,
-                ))
+                )?)
            }
            self.content.truncate(new_content_len);
        }
@@ -274,6 +291,7 @@ impl ToolCall {
            }
            self.raw_output = Some(raw_output);
        }
+        Ok(())
    }

    pub fn diffs(&self) -> impl Iterator<Item = &Entity<Diff>> {
@@ -509,7 +527,7 @@ impl ContentBlock {
        "`Image`".into()
    }

-    fn to_markdown<'a>(&'a self, cx: &'a App) -> &'a str {
+    pub fn to_markdown<'a>(&'a self, cx: &'a App) -> &'a str {
        match self {
            ContentBlock::Empty => "",
            ContentBlock::Markdown { markdown } => markdown.read(cx).source(),
@@ -544,13 +562,16 @@ impl ToolCallContent {
    pub fn from_acp(
        content: acp::ToolCallContent,
        language_registry: Arc<LanguageRegistry>,
+        terminals: &HashMap<acp::TerminalId, Entity<Terminal>>,
        cx: &mut App,
-    ) -> Self {
+    ) -> Result<Self> {
        match content {
-            acp::ToolCallContent::Content { content } => {
-                Self::ContentBlock(ContentBlock::new(content, &language_registry, cx))
-            }
-            acp::ToolCallContent::Diff { diff } => Self::Diff(cx.new(|cx| {
+            acp::ToolCallContent::Content { content } => Ok(Self::ContentBlock(ContentBlock::new(
+                content,
+                &language_registry,
+                cx,
+            ))),
+            acp::ToolCallContent::Diff { diff } => Ok(Self::Diff(cx.new(|cx| {
                Diff::finalized(
                    diff.path,
                    diff.old_text,
@@ -558,7 +579,12 @@ impl ToolCallContent {
                    language_registry,
                    cx,
                )
-            })),
+            }))),
+            acp::ToolCallContent::Terminal { terminal_id } => terminals
+                .get(&terminal_id)
+                .cloned()
+                .map(Self::Terminal)
+                .ok_or_else(|| anyhow::anyhow!("Terminal with id `{}` not found", terminal_id)),
        }
    }

@@ -566,8 +592,9 @@ impl ToolCallContent {
        &mut self,
        new: acp::ToolCallContent,
        language_registry: Arc<LanguageRegistry>,
+        terminals: &HashMap<acp::TerminalId, Entity<Terminal>>,
        cx: &mut App,
-    ) {
+    ) -> Result<()> {
        let needs_update = match (&self, &new) {
            (Self::Diff(old_diff), acp::ToolCallContent::Diff { diff: new_diff }) => {
                old_diff.read(cx).needs_update(
@@ -580,8 +607,9 @@ impl ToolCallContent {
        };

        if needs_update {
-            *self = Self::from_acp(new, language_registry, cx);
+            *self = Self::from_acp(new, language_registry, terminals, cx)?;
        }
+        Ok(())
    }

    pub fn to_markdown(&self, cx: &App) -> String {
@@ -756,6 +784,10 @@ pub struct AcpThread {
    connection: Rc<dyn AgentConnection>,
    session_id: acp::SessionId,
    token_usage: Option<TokenUsage>,
+    prompt_capabilities: acp::PromptCapabilities,
+    _observe_prompt_capabilities: Task<anyhow::Result<()>>,
+    determine_shell: Shared<Task<String>>,
+    terminals: HashMap<acp::TerminalId, Entity<Terminal>>,
 }

 #[derive(Debug)]
@@ -770,11 +802,14 @@ pub enum AcpThreadEvent {
    Stopped,
    Error,
    LoadError(LoadError),
+    PromptCapabilitiesUpdated,
+    Refusal,
+    AvailableCommandsUpdated(Vec<acp::AvailableCommand>),
 }

 impl EventEmitter<AcpThreadEvent> for AcpThread {}

-#[derive(PartialEq, Eq)]
+#[derive(PartialEq, Eq, Debug)]
 pub enum ThreadStatus {
    Idle,
    WaitingForToolConfirmation,
@@ -783,16 +818,12 @@ pub enum ThreadStatus {

 #[derive(Debug, Clone)]
 pub enum LoadError {
-    NotInstalled {
-        error_message: SharedString,
-        install_message: SharedString,
-        install_command: String,
-    },
    Unsupported {
-        error_message: SharedString,
-        upgrade_message: SharedString,
-        upgrade_command: String,
+        command: SharedString,
+        current_version: SharedString,
+        minimum_version: SharedString,
    },
+    FailedToInstall(SharedString),
    Exited {
        status: ExitStatus,
    },
@@ -802,12 +833,19 @@ pub enum LoadError {
 impl Display for LoadError {
    fn fmt(&self, f: &mut Formatter<'_>) -> std::fmt::Result {
        match self {
-            LoadError::NotInstalled { error_message, .. }
-            | LoadError::Unsupported { error_message, .. } => {
-                write!(f, "{error_message}")
+            LoadError::Unsupported {
+                command: path,
+                current_version,
+                minimum_version,
+            } => {
+                write!(
+                    f,
+                    "version {current_version} from {path} is not supported (need at least {minimum_version})"
+                )
            }
+            LoadError::FailedToInstall(msg) => write!(f, "Failed to install: {msg}"),
            LoadError::Exited { status } => write!(f, "Server exited with status {status}"),
-            LoadError::Other(msg) => write!(f, "{}", msg),
+            LoadError::Other(msg) => write!(f, "{msg}"),
        }
    }
 }
@@ -821,7 +859,34 @@ impl AcpThread {
        project: Entity<Project>,
        action_log: Entity<ActionLog>,
        session_id: acp::SessionId,
+        mut prompt_capabilities_rx: watch::Receiver<acp::PromptCapabilities>,
+        cx: &mut Context<Self>,
    ) -> Self {
+        let prompt_capabilities = *prompt_capabilities_rx.borrow();
+        let task = cx.spawn::<_, anyhow::Result<()>>(async move |this, cx| {
+            loop {
+                let caps = prompt_capabilities_rx.recv().await?;
+                this.update(cx, |this, cx| {
+                    this.prompt_capabilities = caps;
+                    cx.emit(AcpThreadEvent::PromptCapabilitiesUpdated);
+                })?;
+            }
+        });
+
+        let determine_shell = cx
+            .background_spawn(async move {
+                if cfg!(windows) {
+                    return get_system_shell();
+                }
+
+                if which::which("bash").is_ok() {
+                    "bash".into()
+                } else {
+                    get_system_shell()
+                }
+            })
+            .shared();
+
        Self {
            action_log,
            shared_buffers: Default::default(),
@@ -833,9 +898,17 @@ impl AcpThread {
            connection,
            session_id,
            token_usage: None,
+            prompt_capabilities,
+            _observe_prompt_capabilities: task,
+            terminals: HashMap::default(),
+            determine_shell,
        }
    }

+    pub fn prompt_capabilities(&self) -> acp::PromptCapabilities {
+        self.prompt_capabilities
+    }
+
    pub fn connection(&self) -> &Rc<dyn AgentConnection> {
        &self.connection
    }
@@ -931,6 +1004,9 @@ impl AcpThread {
            acp::SessionUpdate::Plan(plan) => {
                self.update_plan(plan, cx);
            }
+            acp::SessionUpdate::AvailableCommandsUpdate { available_commands } => {
+                cx.emit(AcpThreadEvent::AvailableCommandsUpdated(available_commands))
+            }
        }
        Ok(())
    }
@@ -1052,27 +1128,28 @@ impl AcpThread {
        let update = update.into();
        let languages = self.project.read(cx).languages().clone();

-        let (ix, current_call) = self
-            .tool_call_mut(update.id())
+        let ix = self
+            .index_for_tool_call(update.id())
            .context("Tool call not found")?;
+        let AgentThreadEntry::ToolCall(call) = &mut self.entries[ix] else {
+            unreachable!()
+        };
+
        match update {
            ToolCallUpdate::UpdateFields(update) => {
                let location_updated = update.fields.locations.is_some();
-                current_call.update_fields(update.fields, languages, cx);
+                call.update_fields(update.fields, languages, &self.terminals, cx)?;
                if location_updated {
                    self.resolve_locations(update.id, cx);
                }
            }
            ToolCallUpdate::UpdateDiff(update) => {
-                current_call.content.clear();
-                current_call
-                    .content
-                    .push(ToolCallContent::Diff(update.diff));
+                call.content.clear();
+                call.content.push(ToolCallContent::Diff(update.diff));
            }
            ToolCallUpdate::UpdateTerminal(update) => {
-                current_call.content.clear();
-                current_call
-                    .content
+                call.content.clear();
+                call.content
                    .push(ToolCallContent::Terminal(update.terminal));
            }
        }
@@ -1095,21 +1172,30 @@ impl AcpThread {
    /// Fails if id does not match an existing entry.
    pub fn upsert_tool_call_inner(
        &mut self,
-        tool_call_update: acp::ToolCallUpdate,
+        update: acp::ToolCallUpdate,
        status: ToolCallStatus,
        cx: &mut Context<Self>,
    ) -> Result<(), acp::Error> {
        let language_registry = self.project.read(cx).languages().clone();
-        let id = tool_call_update.id.clone();
+        let id = update.id.clone();

-        if let Some((ix, current_call)) = self.tool_call_mut(&id) {
-            current_call.update_fields(tool_call_update.fields, language_registry, cx);
-            current_call.status = status;
+        if let Some(ix) = self.index_for_tool_call(&id) {
+            let AgentThreadEntry::ToolCall(call) = &mut self.entries[ix] else {
+                unreachable!()
+            };
+
+            call.update_fields(update.fields, language_registry, &self.terminals, cx)?;
+            call.status = status;

            cx.emit(AcpThreadEvent::EntryUpdated(ix));
        } else {
-            let call =
-                ToolCall::from_acp(tool_call_update.try_into()?, status, language_registry, cx);
+            let call = ToolCall::from_acp(
+                update.try_into()?,
+                status,
+                language_registry,
+                &self.terminals,
+                cx,
+            )?;
            self.push_entry(AgentThreadEntry::ToolCall(call), cx);
        };

@@ -1117,6 +1203,22 @@ impl AcpThread {
        Ok(())
    }

+    fn index_for_tool_call(&self, id: &acp::ToolCallId) -> Option<usize> {
+        self.entries
+            .iter()
+            .enumerate()
+            .rev()
+            .find_map(|(index, entry)| {
+                if let AgentThreadEntry::ToolCall(tool_call) = entry
+                    && &tool_call.id == id
+                {
+                    Some(index)
+                } else {
+                    None
+                }
+            })
+    }
+
    fn tool_call_mut(&mut self, id: &acp::ToolCallId) -> Option<(usize, &mut ToolCall)> {
        // The tool call we are looking for is typically the last one, or very close to the end.
        // At the moment, it doesn't seem like a hashmap would be a good fit for this use case.
@@ -1202,9 +1304,29 @@ impl AcpThread {
        tool_call: acp::ToolCallUpdate,
        options: Vec<acp::PermissionOption>,
        cx: &mut Context<Self>,
-    ) -> Result<oneshot::Receiver<acp::PermissionOptionId>, acp::Error> {
+    ) -> Result<BoxFuture<'static, acp::RequestPermissionOutcome>> {
        let (tx, rx) = oneshot::channel();

+        if AgentSettings::get_global(cx).always_allow_tool_actions {
+            // Don't use AllowAlways, because then if you were to turn off always_allow_tool_actions,
+            // some tools would (incorrectly) continue to auto-accept.
+            if let Some(allow_once_option) = options.iter().find_map(|option| {
+                if matches!(option.kind, acp::PermissionOptionKind::AllowOnce) {
+                    Some(option.id.clone())
+                } else {
+                    None
+                }
+            }) {
+                self.upsert_tool_call_inner(tool_call, ToolCallStatus::Pending, cx)?;
+                return Ok(async {
+                    acp::RequestPermissionOutcome::Selected {
+                        option_id: allow_once_option,
+                    }
+                }
+                .boxed());
+            }
+        }
+
        let status = ToolCallStatus::WaitingForConfirmation {
            options,
            respond_tx: tx,
@@ -1212,7 +1334,16 @@ impl AcpThread {

        self.upsert_tool_call_inner(tool_call, status, cx)?;
        cx.emit(AcpThreadEvent::ToolAuthorizationRequired);
-        Ok(rx)
+
+        let fut = async {
+            match rx.await {
+                Ok(option) => acp::RequestPermissionOutcome::Selected { option_id: option },
+                Err(oneshot::Canceled) => acp::RequestPermissionOutcome::Cancelled,
+            }
+        }
+        .boxed();
+
+        Ok(fut)
    }

    pub fn authorize_tool_call(
@@ -1373,6 +1504,10 @@ impl AcpThread {
        })
    }

+    pub fn can_resume(&self, cx: &App) -> bool {
+        self.connection.resume(&self.session_id, cx).is_some()
+    }
+
    pub fn resume(&mut self, cx: &mut Context<Self>) -> BoxFuture<'static, Result<()>> {
        self.run_turn(cx, async move |this, cx| {
            this.update(cx, |this, cx| {
@@ -1432,15 +1567,42 @@ impl AcpThread {
                            this.send_task.take();
                        }

-                        // Truncate entries if the last prompt was refused.
+                        // Handle refusal - distinguish between user prompt and tool call refusals
                        if let Ok(Ok(acp::PromptResponse {
                            stop_reason: acp::StopReason::Refusal,
                        })) = result
-                            && let Some((ix, _)) = this.last_user_message()
                        {
-                            let range = ix..this.entries.len();
-                            this.entries.truncate(ix);
-                            cx.emit(AcpThreadEvent::EntriesRemoved(range));
+                            if let Some((user_msg_ix, _)) = this.last_user_message() {
+                                // Check if there's a completed tool call with results after the last user message
+                                // This indicates the refusal is in response to tool output, not the user's prompt
+                                let has_completed_tool_call_after_user_msg =
+                                    this.entries.iter().skip(user_msg_ix + 1).any(|entry| {
+                                        if let AgentThreadEntry::ToolCall(tool_call) = entry {
+                                            // Check if the tool call has completed and has output
+                                            matches!(tool_call.status, ToolCallStatus::Completed)
+                                                && tool_call.raw_output.is_some()
+                                        } else {
+                                            false
+                                        }
+                                    });
+
+                                if has_completed_tool_call_after_user_msg {
+                                    // Refusal is due to tool output - don't truncate, just notify
+                                    // The model refused based on what the tool returned
+                                    cx.emit(AcpThreadEvent::Refusal);
+                                } else {
+                                    // User prompt was refused - truncate back to before the user message
+                                    let range = user_msg_ix..this.entries.len();
+                                    if range.start < range.end {
+                                        this.entries.truncate(user_msg_ix);
+                                        cx.emit(AcpThreadEvent::EntriesRemoved(range));
+                                    }
+                                    cx.emit(AcpThreadEvent::Refusal);
+                                }
+                            } else {
+                                // No user message found, treat as general refusal
+                                cx.emit(AcpThreadEvent::Refusal);
+                            }
                        }

                        cx.emit(AcpThreadEvent::Stopped);
@@ -1766,6 +1928,133 @@ impl AcpThread {
        })
    }

+    pub fn create_terminal(
+        &self,
+        mut command: String,
+        args: Vec<String>,
+        extra_env: Vec<acp::EnvVariable>,
+        cwd: Option<PathBuf>,
+        output_byte_limit: Option<u64>,
+        cx: &mut Context<Self>,
+    ) -> Task<Result<Entity<Terminal>>> {
+        for arg in args {
+            command.push(' ');
+            command.push_str(&arg);
+        }
+
+        let shell_command = if cfg!(windows) {
+            format!("$null | & {{{}}}", command.replace("\"", "'"))
+        } else if let Some(cwd) = cwd.as_ref().and_then(|cwd| cwd.as_os_str().to_str()) {
+            // Make sure once we're *inside* the shell, we cd into `cwd`
+            format!("(cd {cwd}; {}) </dev/null", command)
+        } else {
+            format!("({}) </dev/null", command)
+        };
+        let args = vec!["-c".into(), shell_command];
+
+        let env = match &cwd {
+            Some(dir) => self.project.update(cx, |project, cx| {
+                project.directory_environment(dir.as_path().into(), cx)
+            }),
+            None => Task::ready(None).shared(),
+        };
+
+        let env = cx.spawn(async move |_, _| {
+            let mut env = env.await.unwrap_or_default();
+            if cfg!(unix) {
+                env.insert("PAGER".into(), "cat".into());
+            }
+            for var in extra_env {
+                env.insert(var.name, var.value);
+            }
+            env
+        });
+
+        let project = self.project.clone();
+        let language_registry = project.read(cx).languages().clone();
+        let determine_shell = self.determine_shell.clone();
+
+        let terminal_id = acp::TerminalId(Uuid::new_v4().to_string().into());
+        let terminal_task = cx.spawn({
+            let terminal_id = terminal_id.clone();
+            async move |_this, cx| {
+                let program = determine_shell.await;
+                let env = env.await;
+                let terminal = project
+                    .update(cx, |project, cx| {
+                        project.create_terminal_task(
+                            task::SpawnInTerminal {
+                                command: Some(program),
+                                args,
+                                cwd: cwd.clone(),
+                                env,
+                                ..Default::default()
+                            },
+                            cx,
+                        )
+                    })?
+                    .await?;
+
+                cx.new(|cx| {
+                    Terminal::new(
+                        terminal_id,
+                        command,
+                        cwd,
+                        output_byte_limit.map(|l| l as usize),
+                        terminal,
+                        language_registry,
+                        cx,
+                    )
+                })
+            }
+        });
+
+        cx.spawn(async move |this, cx| {
+            let terminal = terminal_task.await?;
+            this.update(cx, |this, _cx| {
+                this.terminals.insert(terminal_id, terminal.clone());
+                terminal
+            })
+        })
+    }
+
+    pub fn kill_terminal(
+        &mut self,
+        terminal_id: acp::TerminalId,
+        cx: &mut Context<Self>,
+    ) -> Result<()> {
+        self.terminals
+            .get(&terminal_id)
+            .context("Terminal not found")?
+            .update(cx, |terminal, cx| {
+                terminal.kill(cx);
+            });
+
+        Ok(())
+    }
+
+    pub fn release_terminal(
+        &mut self,
+        terminal_id: acp::TerminalId,
+        cx: &mut Context<Self>,
+    ) -> Result<()> {
+        self.terminals
+            .remove(&terminal_id)
+            .context("Terminal not found")?
+            .update(cx, |terminal, cx| {
+                terminal.kill(cx);
+            });
+
+        Ok(())
+    }
+
+    pub fn terminal(&self, terminal_id: acp::TerminalId) -> Result<Entity<Terminal>> {
+        self.terminals
+            .get(&terminal_id)
+            .context("Terminal not found")
+            .cloned()
+    }
+
    pub fn to_markdown(&self, cx: &App) -> String {
        self.entries.iter().map(|e| e.to_markdown(cx)).collect()
    }
@@ -2417,6 +2706,187 @@ mod tests {
        assert_eq!(fs.files(), vec![Path::new(path!("/test/file-0"))]);
    }

+    #[gpui::test]
+    async fn test_tool_result_refusal(cx: &mut TestAppContext) {
+        use std::sync::atomic::AtomicUsize;
+        init_test(cx);
+
+        let fs = FakeFs::new(cx.executor());
+        let project = Project::test(fs, None, cx).await;
+
+        // Create a connection that simulates refusal after tool result
+        let prompt_count = Arc::new(AtomicUsize::new(0));
+        let connection = Rc::new(FakeAgentConnection::new().on_user_message({
+            let prompt_count = prompt_count.clone();
+            move |_request, thread, mut cx| {
+                let count = prompt_count.fetch_add(1, SeqCst);
+                async move {
+                    if count == 0 {
+                        // First prompt: Generate a tool call with result
+                        thread.update(&mut cx, |thread, cx| {
+                            thread
+                                .handle_session_update(
+                                    acp::SessionUpdate::ToolCall(acp::ToolCall {
+                                        id: acp::ToolCallId("tool1".into()),
+                                        title: "Test Tool".into(),
+                                        kind: acp::ToolKind::Fetch,
+                                        status: acp::ToolCallStatus::Completed,
+                                        content: vec![],
+                                        locations: vec![],
+                                        raw_input: Some(serde_json::json!({"query": "test"})),
+                                        raw_output: Some(
+                                            serde_json::json!({"result": "inappropriate content"}),
+                                        ),
+                                    }),
+                                    cx,
+                                )
+                                .unwrap();
+                        })?;
+
+                        // Now return refusal because of the tool result
+                        Ok(acp::PromptResponse {
+                            stop_reason: acp::StopReason::Refusal,
+                        })
+                    } else {
+                        Ok(acp::PromptResponse {
+                            stop_reason: acp::StopReason::EndTurn,
+                        })
+                    }
+                }
+                .boxed_local()
+            }
+        }));
+
+        let thread = cx
+            .update(|cx| connection.new_thread(project, Path::new("/test"), cx))
+            .await
+            .unwrap();
+
+        // Track if we see a Refusal event
+        let saw_refusal_event = Arc::new(std::sync::Mutex::new(false));
+        let saw_refusal_event_captured = saw_refusal_event.clone();
+        thread.update(cx, |_thread, cx| {
+            cx.subscribe(
+                &thread,
+                move |_thread, _event_thread, event: &AcpThreadEvent, _cx| {
+                    if matches!(event, AcpThreadEvent::Refusal) {
+                        *saw_refusal_event_captured.lock().unwrap() = true;
+                    }
+                },
+            )
+            .detach();
+        });
+
+        // Send a user message - this will trigger tool call and then refusal
+        let send_task = thread.update(cx, |thread, cx| {
+            thread.send(
+                vec![acp::ContentBlock::Text(acp::TextContent {
+                    text: "Hello".into(),
+                    annotations: None,
+                })],
+                cx,
+            )
+        });
+        cx.background_executor.spawn(send_task).detach();
+        cx.run_until_parked();
+
+        // Verify that:
+        // 1. A Refusal event WAS emitted (because it's a tool result refusal, not user prompt)
+        // 2. The user message was NOT truncated
+        assert!(
+            *saw_refusal_event.lock().unwrap(),
+            "Refusal event should be emitted for tool result refusals"
+        );
+
+        thread.read_with(cx, |thread, _| {
+            let entries = thread.entries();
+            assert!(entries.len() >= 2, "Should have user message and tool call");
+
+            // Verify user message is still there
+            assert!(
+                matches!(entries[0], AgentThreadEntry::UserMessage(_)),
+                "User message should not be truncated"
+            );
+
+            // Verify tool call is there with result
+            if let AgentThreadEntry::ToolCall(tool_call) = &entries[1] {
+                assert!(
+                    tool_call.raw_output.is_some(),
+                    "Tool call should have output"
+                );
+            } else {
+                panic!("Expected tool call at index 1");
+            }
+        });
+    }
+
+    #[gpui::test]
+    async fn test_user_prompt_refusal_emits_event(cx: &mut TestAppContext) {
+        init_test(cx);
+
+        let fs = FakeFs::new(cx.executor());
+        let project = Project::test(fs, None, cx).await;
+
+        let refuse_next = Arc::new(AtomicBool::new(false));
+        let connection = Rc::new(FakeAgentConnection::new().on_user_message({
+            let refuse_next = refuse_next.clone();
+            move |_request, _thread, _cx| {
+                if refuse_next.load(SeqCst) {
+                    async move {
+                        Ok(acp::PromptResponse {
+                            stop_reason: acp::StopReason::Refusal,
+                        })
+                    }
+                    .boxed_local()
+                } else {
+                    async move {
+                        Ok(acp::PromptResponse {
+                            stop_reason: acp::StopReason::EndTurn,
+                        })
+                    }
+                    .boxed_local()
+                }
+            }
+        }));
+
+        let thread = cx
+            .update(|cx| connection.new_thread(project, Path::new(path!("/test")), cx))
+            .await
+            .unwrap();
+
+        // Track if we see a Refusal event
+        let saw_refusal_event = Arc::new(std::sync::Mutex::new(false));
+        let saw_refusal_event_captured = saw_refusal_event.clone();
+        thread.update(cx, |_thread, cx| {
+            cx.subscribe(
+                &thread,
+                move |_thread, _event_thread, event: &AcpThreadEvent, _cx| {
+                    if matches!(event, AcpThreadEvent::Refusal) {
+                        *saw_refusal_event_captured.lock().unwrap() = true;
+                    }
+                },
+            )
+            .detach();
+        });
+
+        // Send a message that will be refused
+        refuse_next.store(true, SeqCst);
+        cx.update(|cx| thread.update(cx, |thread, cx| thread.send(vec!["hello".into()], cx)))
+            .await
+            .unwrap();
+
+        // Verify that a Refusal event WAS emitted for user prompt refusal
+        assert!(
+            *saw_refusal_event.lock().unwrap(),
+            "Refusal event should be emitted for user prompt refusals"
+        );
+
+        // Verify the message was truncated (user prompt refusal)
+        thread.read_with(cx, |thread, cx| {
+            assert_eq!(thread.to_markdown(cx), "");
+        });
+    }
+
    #[gpui::test]
    async fn test_refusal(cx: &mut TestAppContext) {
        init_test(cx);
@@ -2480,8 +2950,8 @@ mod tests {
            );
        });

-        // Simulate refusing the second message, ensuring the conversation gets
-        // truncated to before sending it.
+        // Simulate refusing the second message. The message should be truncated
+        // when a user prompt is refused.
        refuse_next.store(true, SeqCst);
        cx.update(|cx| thread.update(cx, |thread, cx| thread.send(vec!["world".into()], cx)))
            .await
@@ -2595,13 +3065,19 @@ mod tests {
                    .into(),
            );
            let action_log = cx.new(|_| ActionLog::new(project.clone()));
-            let thread = cx.new(|_cx| {
+            let thread = cx.new(|cx| {
                AcpThread::new(
                    "Test",
                    self.clone(),
                    project,
                    action_log,
                    session_id.clone(),
+                    watch::Receiver::constant(acp::PromptCapabilities {
+                        image: true,
+                        audio: true,
+                        embedded_context: true,
+                    }),
+                    cx,
                )
            });
            self.sessions.lock().insert(session_id, thread.downgrade());
@@ -2635,14 +3111,6 @@ mod tests {
            }
        }

-        fn prompt_capabilities(&self) -> acp::PromptCapabilities {
-            acp::PromptCapabilities {
-                image: true,
-                audio: true,
-                embedded_context: true,
-            }
-        }
-
        fn cancel(&self, session_id: &acp::SessionId, cx: &mut App) {
            let sessions = self.sessions.lock();
            let thread = sessions.get(session_id).unwrap().clone();
@@ -2659,7 +3127,7 @@ mod tests {
        fn truncate(
            &self,
            session_id: &acp::SessionId,
-            _cx: &mut App,
+            _cx: &App,
        ) -> Option<Rc<dyn AgentSessionTruncate>> {
            Some(Rc::new(FakeAgentSessionEditor {
                _session_id: session_id.clone(),
--- a/crates/acp_thread/src/connection.rs
+++ b/crates/acp_thread/src/connection.rs
@@ -38,12 +38,10 @@ pub trait AgentConnection {
        cx: &mut App,
    ) -> Task<Result<acp::PromptResponse>>;

-    fn prompt_capabilities(&self) -> acp::PromptCapabilities;
-
    fn resume(
        &self,
        _session_id: &acp::SessionId,
-        _cx: &mut App,
+        _cx: &App,
    ) -> Option<Rc<dyn AgentSessionResume>> {
        None
    }
@@ -53,7 +51,7 @@ pub trait AgentConnection {
    fn truncate(
        &self,
        _session_id: &acp::SessionId,
-        _cx: &mut App,
+        _cx: &App,
    ) -> Option<Rc<dyn AgentSessionTruncate>> {
        None
    }
@@ -61,7 +59,7 @@ pub trait AgentConnection {
    fn set_title(
        &self,
        _session_id: &acp::SessionId,
-        _cx: &mut App,
+        _cx: &App,
    ) -> Option<Rc<dyn AgentSessionSetTitle>> {
        None
    }
@@ -77,7 +75,6 @@ pub trait AgentConnection {
    fn telemetry(&self) -> Option<Rc<dyn AgentTelemetry>> {
        None
    }
-
    fn into_any(self: Rc<Self>) -> Rc<dyn Any>;
 }

@@ -234,6 +231,13 @@ impl AgentModelList {
            AgentModelList::Grouped(groups) => groups.is_empty(),
        }
    }
+
+    pub fn len(&self) -> usize {
+        match self {
+            AgentModelList::Flat(models) => models.len(),
+            AgentModelList::Grouped(groups) => groups.values().len(),
+        }
+    }
 }

 #[cfg(feature = "test-support")]
@@ -329,13 +333,19 @@ mod test_support {
        ) -> Task<gpui::Result<Entity<AcpThread>>> {
            let session_id = acp::SessionId(self.sessions.lock().len().to_string().into());
            let action_log = cx.new(|_| ActionLog::new(project.clone()));
-            let thread = cx.new(|_cx| {
+            let thread = cx.new(|cx| {
                AcpThread::new(
                    "Test",
                    self.clone(),
                    project,
                    action_log,
                    session_id.clone(),
+                    watch::Receiver::constant(acp::PromptCapabilities {
+                        image: true,
+                        audio: true,
+                        embedded_context: true,
+                    }),
+                    cx,
                )
            });
            self.sessions.lock().insert(
@@ -348,14 +358,6 @@ mod test_support {
            Task::ready(Ok(thread))
        }

-        fn prompt_capabilities(&self) -> acp::PromptCapabilities {
-            acp::PromptCapabilities {
-                image: true,
-                audio: true,
-                embedded_context: true,
-            }
-        }
-
        fn authenticate(
            &self,
            _method_id: acp::AuthMethodId,
@@ -397,14 +399,15 @@ mod test_support {
                    };
                    let task = cx.spawn(async move |cx| {
                        if let Some((tool_call, options)) = permission_request {
-                            let permission = thread.update(cx, |thread, cx| {
-                                thread.request_tool_call_authorization(
-                                    tool_call.clone().into(),
-                                    options.clone(),
-                                    cx,
-                                )
-                            })?;
-                            permission?.await?;
+                            thread
+                                .update(cx, |thread, cx| {
+                                    thread.request_tool_call_authorization(
+                                        tool_call.clone().into(),
+                                        options.clone(),
+                                        cx,
+                                    )
+                                })??
+                                .await;
                        }
                        thread.update(cx, |thread, cx| {
                            thread.handle_session_update(update.clone(), cx).unwrap();
@@ -439,7 +442,7 @@ mod test_support {
        fn truncate(
            &self,
            _session_id: &agent_client_protocol::SessionId,
-            _cx: &mut App,
+            _cx: &App,
        ) -> Option<Rc<dyn AgentSessionTruncate>> {
            Some(Rc::new(StubAgentSessionEditor))
        }
--- a/crates/acp_thread/src/diff.rs
+++ b/crates/acp_thread/src/diff.rs
@@ -85,27 +85,19 @@ impl Diff {
    }

    pub fn new(buffer: Entity<Buffer>, cx: &mut Context<Self>) -> Self {
-        let buffer_snapshot = buffer.read(cx).snapshot();
-        let base_text = buffer_snapshot.text();
-        let language_registry = buffer.read(cx).language_registry();
-        let text_snapshot = buffer.read(cx).text_snapshot();
+        let buffer_text_snapshot = buffer.read(cx).text_snapshot();
+        let base_text_snapshot = buffer.read(cx).snapshot();
+        let base_text = base_text_snapshot.text();
+        debug_assert_eq!(buffer_text_snapshot.text(), base_text);
        let buffer_diff = cx.new(|cx| {
-            let mut diff = BufferDiff::new(&text_snapshot, cx);
-            let _ = diff.set_base_text(
-                buffer_snapshot.clone(),
-                language_registry,
-                text_snapshot,
-                cx,
-            );
+            let mut diff = BufferDiff::new_unchanged(&buffer_text_snapshot, base_text_snapshot);
            let snapshot = diff.snapshot(cx);
-
            let secondary_diff = cx.new(|cx| {
-                let mut diff = BufferDiff::new(&buffer_snapshot, cx);
-                diff.set_snapshot(snapshot, &buffer_snapshot, cx);
+                let mut diff = BufferDiff::new(&buffer_text_snapshot, cx);
+                diff.set_snapshot(snapshot, &buffer_text_snapshot, cx);
                diff
            });
            diff.set_secondary_diff(secondary_diff);
-
            diff
        });

@@ -412,3 +404,21 @@ async fn build_buffer_diff(
        diff
    })
 }
+
+#[cfg(test)]
+mod tests {
+    use gpui::{AppContext as _, TestAppContext};
+    use language::Buffer;
+
+    use crate::Diff;
+
+    #[gpui::test]
+    async fn test_pending_diff(cx: &mut TestAppContext) {
+        let buffer = cx.new(|cx| Buffer::local("hello!", cx));
+        let _diff = cx.new(|cx| Diff::new(buffer.clone(), cx));
+        buffer.update(cx, |buffer, cx| {
+            buffer.set_text("HELLO!", cx);
+        });
+        cx.run_until_parked();
+    }
+}
--- a/crates/acp_thread/src/mention.rs
+++ b/crates/acp_thread/src/mention.rs
@@ -5,7 +5,7 @@ use prompt_store::{PromptId, UserPromptId};
 use serde::{Deserialize, Serialize};
 use std::{
    fmt,
-    ops::Range,
+    ops::RangeInclusive,
    path::{Path, PathBuf},
    str::FromStr,
 };
@@ -17,13 +17,14 @@ pub enum MentionUri {
    File {
        abs_path: PathBuf,
    },
+    PastedImage,
    Directory {
        abs_path: PathBuf,
    },
    Symbol {
-        path: PathBuf,
+        abs_path: PathBuf,
        name: String,
-        line_range: Range<u32>,
+        line_range: RangeInclusive<u32>,
    },
    Thread {
        id: acp::SessionId,
@@ -38,8 +39,9 @@ pub enum MentionUri {
        name: String,
    },
    Selection {
-        path: PathBuf,
-        line_range: Range<u32>,
+        #[serde(default, skip_serializing_if = "Option::is_none")]
+        abs_path: Option<PathBuf>,
+        line_range: RangeInclusive<u32>,
    },
    Fetch {
        url: Url,
@@ -48,36 +50,44 @@ pub enum MentionUri {

 impl MentionUri {
    pub fn parse(input: &str) -> Result<Self> {
+        fn parse_line_range(fragment: &str) -> Result<RangeInclusive<u32>> {
+            let range = fragment
+                .strip_prefix("L")
+                .context("Line range must start with \"L\"")?;
+            let (start, end) = range
+                .split_once(":")
+                .context("Line range must use colon as separator")?;
+            let range = start
+                .parse::<u32>()
+                .context("Parsing line range start")?
+                .checked_sub(1)
+                .context("Line numbers should be 1-based")?
+                ..=end
+                    .parse::<u32>()
+                    .context("Parsing line range end")?
+                    .checked_sub(1)
+                    .context("Line numbers should be 1-based")?;
+            Ok(range)
+        }
+
        let url = url::Url::parse(input)?;
        let path = url.path();
        match url.scheme() {
            "file" => {
                let path = url.to_file_path().ok().context("Extracting file path")?;
                if let Some(fragment) = url.fragment() {
-                    let range = fragment
-                        .strip_prefix("L")
-                        .context("Line range must start with \"L\"")?;
-                    let (start, end) = range
-                        .split_once(":")
-                        .context("Line range must use colon as separator")?;
-                    let line_range = start
-                        .parse::<u32>()
-                        .context("Parsing line range start")?
-                        .checked_sub(1)
-                        .context("Line numbers should be 1-based")?
-                        ..end
-                            .parse::<u32>()
-                            .context("Parsing line range end")?
-                            .checked_sub(1)
-                            .context("Line numbers should be 1-based")?;
+                    let line_range = parse_line_range(fragment)?;
                    if let Some(name) = single_query_param(&url, "symbol")? {
                        Ok(Self::Symbol {
                            name,
-                            path,
+                            abs_path: path,
                            line_range,
                        })
                    } else {
-                        Ok(Self::Selection { path, line_range })
+                        Ok(Self::Selection {
+                            abs_path: Some(path),
+                            line_range,
+                        })
                    }
                } else if input.ends_with("/") {
                    Ok(Self::Directory { abs_path: path })
@@ -105,6 +115,17 @@ impl MentionUri {
                        id: rule_id.into(),
                        name,
                    })
+                } else if path.starts_with("/agent/pasted-image") {
+                    Ok(Self::PastedImage)
+                } else if path.starts_with("/agent/untitled-buffer") {
+                    let fragment = url
+                        .fragment()
+                        .context("Missing fragment for untitled buffer selection")?;
+                    let line_range = parse_line_range(fragment)?;
+                    Ok(Self::Selection {
+                        abs_path: None,
+                        line_range,
+                    })
                } else {
                    bail!("invalid zed url: {:?}", input);
                }
@@ -121,13 +142,16 @@ impl MentionUri {
                .unwrap_or_default()
                .to_string_lossy()
                .into_owned(),
+            MentionUri::PastedImage => "Image".to_string(),
            MentionUri::Symbol { name, .. } => name.clone(),
            MentionUri::Thread { name, .. } => name.clone(),
            MentionUri::TextThread { name, .. } => name.clone(),
            MentionUri::Rule { name, .. } => name.clone(),
            MentionUri::Selection {
-                path, line_range, ..
-            } => selection_name(path, line_range),
+                abs_path: path,
+                line_range,
+                ..
+            } => selection_name(path.as_deref(), line_range),
            MentionUri::Fetch { url } => url.to_string(),
        }
    }
@@ -137,6 +161,7 @@ impl MentionUri {
            MentionUri::File { abs_path } => {
                FileIcons::get_icon(abs_path, cx).unwrap_or_else(|| IconName::File.path().into())
            }
+            MentionUri::PastedImage => IconName::Image.path().into(),
            MentionUri::Directory { .. } => FileIcons::get_folder_icon(false, cx)
                .unwrap_or_else(|| IconName::Folder.path().into()),
            MentionUri::Symbol { .. } => IconName::Code.path().into(),
@@ -157,29 +182,40 @@ impl MentionUri {
            MentionUri::File { abs_path } => {
                Url::from_file_path(abs_path).expect("mention path should be absolute")
            }
+            MentionUri::PastedImage => Url::parse("zed:///agent/pasted-image").unwrap(),
            MentionUri::Directory { abs_path } => {
                Url::from_directory_path(abs_path).expect("mention path should be absolute")
            }
            MentionUri::Symbol {
-                path,
+                abs_path,
                name,
                line_range,
            } => {
-                let mut url = Url::from_file_path(path).expect("mention path should be absolute");
+                let mut url =
+                    Url::from_file_path(abs_path).expect("mention path should be absolute");
                url.query_pairs_mut().append_pair("symbol", name);
                url.set_fragment(Some(&format!(
                    "L{}:{}",
-                    line_range.start + 1,
-                    line_range.end + 1
+                    line_range.start() + 1,
+                    line_range.end() + 1
                )));
                url
            }
-            MentionUri::Selection { path, line_range } => {
-                let mut url = Url::from_file_path(path).expect("mention path should be absolute");
+            MentionUri::Selection {
+                abs_path: path,
+                line_range,
+            } => {
+                let mut url = if let Some(path) = path {
+                    Url::from_file_path(path).expect("mention path should be absolute")
+                } else {
+                    let mut url = Url::parse("zed:///").unwrap();
+                    url.set_path("/agent/untitled-buffer");
+                    url
+                };
                url.set_fragment(Some(&format!(
                    "L{}:{}",
-                    line_range.start + 1,
-                    line_range.end + 1
+                    line_range.start() + 1,
+                    line_range.end() + 1
                )));
                url
            }
@@ -191,7 +227,10 @@ impl MentionUri {
            }
            MentionUri::TextThread { path, name } => {
                let mut url = Url::parse("zed:///").unwrap();
-                url.set_path(&format!("/agent/text-thread/{}", path.to_string_lossy()));
+                url.set_path(&format!(
+                    "/agent/text-thread/{}",
+                    path.to_string_lossy().trim_start_matches('/')
+                ));
                url.query_pairs_mut().append_pair("name", name);
                url
            }
@@ -237,12 +276,14 @@ fn single_query_param(url: &Url, name: &'static str) -> Result<Option<String>> {
    }
 }

-pub fn selection_name(path: &Path, line_range: &Range<u32>) -> String {
+pub fn selection_name(path: Option<&Path>, line_range: &RangeInclusive<u32>) -> String {
    format!(
        "{} ({}:{})",
-        path.file_name().unwrap_or_default().display(),
-        line_range.start + 1,
-        line_range.end + 1
+        path.and_then(|path| path.file_name())
+            .unwrap_or("Untitled".as_ref())
+            .display(),
+        *line_range.start() + 1,
+        *line_range.end() + 1
    )
 }

@@ -302,14 +343,14 @@ mod tests {
        let parsed = MentionUri::parse(symbol_uri).unwrap();
        match &parsed {
            MentionUri::Symbol {
-                path,
+                abs_path: path,
                name,
                line_range,
            } => {
                assert_eq!(path.to_str().unwrap(), path!("/path/to/file.rs"));
                assert_eq!(name, "MySymbol");
-                assert_eq!(line_range.start, 9);
-                assert_eq!(line_range.end, 19);
+                assert_eq!(line_range.start(), &9);
+                assert_eq!(line_range.end(), &19);
            }
            _ => panic!("Expected Symbol variant"),
        }
@@ -321,16 +362,39 @@ mod tests {
        let selection_uri = uri!("file:///path/to/file.rs#L5:15");
        let parsed = MentionUri::parse(selection_uri).unwrap();
        match &parsed {
-            MentionUri::Selection { path, line_range } => {
-                assert_eq!(path.to_str().unwrap(), path!("/path/to/file.rs"));
-                assert_eq!(line_range.start, 4);
-                assert_eq!(line_range.end, 14);
+            MentionUri::Selection {
+                abs_path: path,
+                line_range,
+            } => {
+                assert_eq!(
+                    path.as_ref().unwrap().to_str().unwrap(),
+                    path!("/path/to/file.rs")
+                );
+                assert_eq!(line_range.start(), &4);
+                assert_eq!(line_range.end(), &14);
            }
            _ => panic!("Expected Selection variant"),
        }
        assert_eq!(parsed.to_uri().to_string(), selection_uri);
    }

+    #[test]
+    fn test_parse_untitled_selection_uri() {
+        let selection_uri = uri!("zed:///agent/untitled-buffer#L1:10");
+        let parsed = MentionUri::parse(selection_uri).unwrap();
+        match &parsed {
+            MentionUri::Selection {
+                abs_path: None,
+                line_range,
+            } => {
+                assert_eq!(line_range.start(), &0);
+                assert_eq!(line_range.end(), &9);
+            }
+            _ => panic!("Expected Selection variant without path"),
+        }
+        assert_eq!(parsed.to_uri().to_string(), selection_uri);
+    }
+
    #[test]
    fn test_parse_thread_uri() {
        let thread_uri = "zed:///agent/thread/session123?name=Thread+name";
--- a/crates/acp_thread/src/terminal.rs
+++ b/crates/acp_thread/src/terminal.rs
@@ -1,34 +1,43 @@
-use gpui::{App, AppContext, Context, Entity};
+use agent_client_protocol as acp;
+
+use futures::{FutureExt as _, future::Shared};
+use gpui::{App, AppContext, Context, Entity, Task};
 use language::LanguageRegistry;
 use markdown::Markdown;
 use std::{path::PathBuf, process::ExitStatus, sync::Arc, time::Instant};

 pub struct Terminal {
+    id: acp::TerminalId,
    command: Entity<Markdown>,
    working_dir: Option<PathBuf>,
    terminal: Entity<terminal::Terminal>,
    started_at: Instant,
    output: Option<TerminalOutput>,
+    output_byte_limit: Option<usize>,
+    _output_task: Shared<Task<acp::TerminalExitStatus>>,
 }

 pub struct TerminalOutput {
    pub ended_at: Instant,
    pub exit_status: Option<ExitStatus>,
-    pub was_content_truncated: bool,
+    pub content: String,
    pub original_content_len: usize,
    pub content_line_count: usize,
-    pub finished_with_empty_output: bool,
 }

 impl Terminal {
    pub fn new(
+        id: acp::TerminalId,
        command: String,
        working_dir: Option<PathBuf>,
+        output_byte_limit: Option<usize>,
        terminal: Entity<terminal::Terminal>,
        language_registry: Arc<LanguageRegistry>,
        cx: &mut Context<Self>,
    ) -> Self {
+        let command_task = terminal.read(cx).wait_for_completed_task(cx);
        Self {
+            id,
            command: cx.new(|cx| {
                Markdown::new(
                    format!("```\n{}\n```", command).into(),
@@ -41,27 +50,93 @@ impl Terminal {
            terminal,
            started_at: Instant::now(),
            output: None,
+            output_byte_limit,
+            _output_task: cx
+                .spawn(async move |this, cx| {
+                    let exit_status = command_task.await;
+
+                    this.update(cx, |this, cx| {
+                        let (content, original_content_len) = this.truncated_output(cx);
+                        let content_line_count = this.terminal.read(cx).total_lines();
+
+                        this.output = Some(TerminalOutput {
+                            ended_at: Instant::now(),
+                            exit_status,
+                            content,
+                            original_content_len,
+                            content_line_count,
+                        });
+                        cx.notify();
+                    })
+                    .ok();
+
+                    let exit_status = exit_status.map(portable_pty::ExitStatus::from);
+
+                    acp::TerminalExitStatus {
+                        exit_code: exit_status.as_ref().map(|e| e.exit_code()),
+                        signal: exit_status.and_then(|e| e.signal().map(Into::into)),
+                    }
+                })
+                .shared(),
        }
    }

-    pub fn finish(
-        &mut self,
-        exit_status: Option<ExitStatus>,
-        original_content_len: usize,
-        truncated_content_len: usize,
-        content_line_count: usize,
-        finished_with_empty_output: bool,
-        cx: &mut Context<Self>,
-    ) {
-        self.output = Some(TerminalOutput {
-            ended_at: Instant::now(),
-            exit_status,
-            was_content_truncated: truncated_content_len < original_content_len,
-            original_content_len,
-            content_line_count,
-            finished_with_empty_output,
+    pub fn id(&self) -> &acp::TerminalId {
+        &self.id
+    }
+
+    pub fn wait_for_exit(&self) -> Shared<Task<acp::TerminalExitStatus>> {
+        self._output_task.clone()
+    }
+
+    pub fn kill(&mut self, cx: &mut App) {
+        self.terminal.update(cx, |terminal, _cx| {
+            terminal.kill_active_task();
        });
-        cx.notify();
+    }
+
+    pub fn current_output(&self, cx: &App) -> acp::TerminalOutputResponse {
+        if let Some(output) = self.output.as_ref() {
+            let exit_status = output.exit_status.map(portable_pty::ExitStatus::from);
+
+            acp::TerminalOutputResponse {
+                output: output.content.clone(),
+                truncated: output.original_content_len > output.content.len(),
+                exit_status: Some(acp::TerminalExitStatus {
+                    exit_code: exit_status.as_ref().map(|e| e.exit_code()),
+                    signal: exit_status.and_then(|e| e.signal().map(Into::into)),
+                }),
+            }
+        } else {
+            let (current_content, original_len) = self.truncated_output(cx);
+
+            acp::TerminalOutputResponse {
+                truncated: current_content.len() < original_len,
+                output: current_content,
+                exit_status: None,
+            }
+        }
+    }
+
+    fn truncated_output(&self, cx: &App) -> (String, usize) {
+        let terminal = self.terminal.read(cx);
+        let mut content = terminal.get_content();
+
+        let original_content_len = content.len();
+
+        if let Some(limit) = self.output_byte_limit
+            && content.len() > limit
+        {
+            let mut end_ix = limit.min(content.len());
+            while !content.is_char_boundary(end_ix) {
+                end_ix -= 1;
+            }
+            // Don't truncate mid-line, clear the remainder of the last line
+            end_ix = content[..end_ix].rfind('\n').unwrap_or(end_ix);
+            content.truncate(end_ix);
+        }
+
+        (content, original_content_len)
    }

    pub fn command(&self) -> &Entity<Markdown> {
--- a/crates/acp_tools/Cargo.toml
+++ b/crates/acp_tools/Cargo.toml
@@ -0,0 +1,30 @@
+[package]
+name = "acp_tools"
+version = "0.1.0"
+edition.workspace = true
+publish.workspace = true
+license = "GPL-3.0-or-later"
+
+
+[lints]
+workspace = true
+
+[lib]
+path = "src/acp_tools.rs"
+doctest = false
+
+[dependencies]
+agent-client-protocol.workspace = true
+collections.workspace = true
+gpui.workspace = true
+language.workspace= true
+markdown.workspace = true
+project.workspace = true
+serde.workspace = true
+serde_json.workspace = true
+settings.workspace = true
+theme.workspace = true
+ui.workspace = true
+util.workspace = true
+workspace-hack.workspace = true
+workspace.workspace = true
--- a/crates/acp_tools/LICENSE-GPL
+++ b/crates/acp_tools/LICENSE-GPL
@@ -0,0 +1 @@
+../../LICENSE-GPL
--- a/crates/acp_tools/src/acp_tools.rs
+++ b/crates/acp_tools/src/acp_tools.rs
@@ -0,0 +1,494 @@
+use std::{
+    cell::RefCell,
+    collections::HashSet,
+    fmt::Display,
+    rc::{Rc, Weak},
+    sync::Arc,
+};
+
+use agent_client_protocol as acp;
+use collections::HashMap;
+use gpui::{
+    App, Empty, Entity, EventEmitter, FocusHandle, Focusable, Global, ListAlignment, ListState,
+    StyleRefinement, Subscription, Task, TextStyleRefinement, Window, actions, list, prelude::*,
+};
+use language::LanguageRegistry;
+use markdown::{CodeBlockRenderer, Markdown, MarkdownElement, MarkdownStyle};
+use project::Project;
+use settings::Settings;
+use theme::ThemeSettings;
+use ui::prelude::*;
+use util::ResultExt as _;
+use workspace::{Item, Workspace};
+
+actions!(dev, [OpenAcpLogs]);
+
+pub fn init(cx: &mut App) {
+    cx.observe_new(
+        |workspace: &mut Workspace, _window, _cx: &mut Context<Workspace>| {
+            workspace.register_action(|workspace, _: &OpenAcpLogs, window, cx| {
+                let acp_tools =
+                    Box::new(cx.new(|cx| AcpTools::new(workspace.project().clone(), cx)));
+                workspace.add_item_to_active_pane(acp_tools, None, true, window, cx);
+            });
+        },
+    )
+    .detach();
+}
+
+struct GlobalAcpConnectionRegistry(Entity<AcpConnectionRegistry>);
+
+impl Global for GlobalAcpConnectionRegistry {}
+
+#[derive(Default)]
+pub struct AcpConnectionRegistry {
+    active_connection: RefCell<Option<ActiveConnection>>,
+}
+
+struct ActiveConnection {
+    server_name: SharedString,
+    connection: Weak<acp::ClientSideConnection>,
+}
+
+impl AcpConnectionRegistry {
+    pub fn default_global(cx: &mut App) -> Entity<Self> {
+        if cx.has_global::<GlobalAcpConnectionRegistry>() {
+            cx.global::<GlobalAcpConnectionRegistry>().0.clone()
+        } else {
+            let registry = cx.new(|_cx| AcpConnectionRegistry::default());
+            cx.set_global(GlobalAcpConnectionRegistry(registry.clone()));
+            registry
+        }
+    }
+
+    pub fn set_active_connection(
+        &self,
+        server_name: impl Into<SharedString>,
+        connection: &Rc<acp::ClientSideConnection>,
+        cx: &mut Context<Self>,
+    ) {
+        self.active_connection.replace(Some(ActiveConnection {
+            server_name: server_name.into(),
+            connection: Rc::downgrade(connection),
+        }));
+        cx.notify();
+    }
+}
+
+struct AcpTools {
+    project: Entity<Project>,
+    focus_handle: FocusHandle,
+    expanded: HashSet<usize>,
+    watched_connection: Option<WatchedConnection>,
+    connection_registry: Entity<AcpConnectionRegistry>,
+    _subscription: Subscription,
+}
+
+struct WatchedConnection {
+    server_name: SharedString,
+    messages: Vec<WatchedConnectionMessage>,
+    list_state: ListState,
+    connection: Weak<acp::ClientSideConnection>,
+    incoming_request_methods: HashMap<i32, Arc<str>>,
+    outgoing_request_methods: HashMap<i32, Arc<str>>,
+    _task: Task<()>,
+}
+
+impl AcpTools {
+    fn new(project: Entity<Project>, cx: &mut Context<Self>) -> Self {
+        let connection_registry = AcpConnectionRegistry::default_global(cx);
+
+        let subscription = cx.observe(&connection_registry, |this, _, cx| {
+            this.update_connection(cx);
+            cx.notify();
+        });
+
+        let mut this = Self {
+            project,
+            focus_handle: cx.focus_handle(),
+            expanded: HashSet::default(),
+            watched_connection: None,
+            connection_registry,
+            _subscription: subscription,
+        };
+        this.update_connection(cx);
+        this
+    }
+
+    fn update_connection(&mut self, cx: &mut Context<Self>) {
+        let active_connection = self.connection_registry.read(cx).active_connection.borrow();
+        let Some(active_connection) = active_connection.as_ref() else {
+            return;
+        };
+
+        if let Some(watched_connection) = self.watched_connection.as_ref() {
+            if Weak::ptr_eq(
+                &watched_connection.connection,
+                &active_connection.connection,
+            ) {
+                return;
+            }
+        }
+
+        if let Some(connection) = active_connection.connection.upgrade() {
+            let mut receiver = connection.subscribe();
+            let task = cx.spawn(async move |this, cx| {
+                while let Ok(message) = receiver.recv().await {
+                    this.update(cx, |this, cx| {
+                        this.push_stream_message(message, cx);
+                    })
+                    .ok();
+                }
+            });
+
+            self.watched_connection = Some(WatchedConnection {
+                server_name: active_connection.server_name.clone(),
+                messages: vec![],
+                list_state: ListState::new(0, ListAlignment::Bottom, px(2048.)),
+                connection: active_connection.connection.clone(),
+                incoming_request_methods: HashMap::default(),
+                outgoing_request_methods: HashMap::default(),
+                _task: task,
+            });
+        }
+    }
+
+    fn push_stream_message(&mut self, stream_message: acp::StreamMessage, cx: &mut Context<Self>) {
+        let Some(connection) = self.watched_connection.as_mut() else {
+            return;
+        };
+        let language_registry = self.project.read(cx).languages().clone();
+        let index = connection.messages.len();
+
+        let (request_id, method, message_type, params) = match stream_message.message {
+            acp::StreamMessageContent::Request { id, method, params } => {
+                let method_map = match stream_message.direction {
+                    acp::StreamMessageDirection::Incoming => {
+                        &mut connection.incoming_request_methods
+                    }
+                    acp::StreamMessageDirection::Outgoing => {
+                        &mut connection.outgoing_request_methods
+                    }
+                };
+
+                method_map.insert(id, method.clone());
+                (Some(id), method.into(), MessageType::Request, Ok(params))
+            }
+            acp::StreamMessageContent::Response { id, result } => {
+                let method_map = match stream_message.direction {
+                    acp::StreamMessageDirection::Incoming => {
+                        &mut connection.outgoing_request_methods
+                    }
+                    acp::StreamMessageDirection::Outgoing => {
+                        &mut connection.incoming_request_methods
+                    }
+                };
+
+                if let Some(method) = method_map.remove(&id) {
+                    (Some(id), method.into(), MessageType::Response, result)
+                } else {
+                    (
+                        Some(id),
+                        "[unrecognized response]".into(),
+                        MessageType::Response,
+                        result,
+                    )
+                }
+            }
+            acp::StreamMessageContent::Notification { method, params } => {
+                (None, method.into(), MessageType::Notification, Ok(params))
+            }
+        };
+
+        let message = WatchedConnectionMessage {
+            name: method,
+            message_type,
+            request_id,
+            direction: stream_message.direction,
+            collapsed_params_md: match params.as_ref() {
+                Ok(params) => params
+                    .as_ref()
+                    .map(|params| collapsed_params_md(params, &language_registry, cx)),
+                Err(err) => {
+                    if let Ok(err) = &serde_json::to_value(err) {
+                        Some(collapsed_params_md(&err, &language_registry, cx))
+                    } else {
+                        None
+                    }
+                }
+            },
+
+            expanded_params_md: None,
+            params,
+        };
+
+        connection.messages.push(message);
+        connection.list_state.splice(index..index, 1);
+        cx.notify();
+    }
+
+    fn render_message(
+        &mut self,
+        index: usize,
+        window: &mut Window,
+        cx: &mut Context<Self>,
+    ) -> AnyElement {
+        let Some(connection) = self.watched_connection.as_ref() else {
+            return Empty.into_any();
+        };
+
+        let Some(message) = connection.messages.get(index) else {
+            return Empty.into_any();
+        };
+
+        let base_size = TextSize::Editor.rems(cx);
+
+        let theme_settings = ThemeSettings::get_global(cx);
+        let text_style = window.text_style();
+
+        let colors = cx.theme().colors();
+        let expanded = self.expanded.contains(&index);
+
+        v_flex()
+            .w_full()
+            .px_4()
+            .py_3()
+            .border_color(colors.border)
+            .border_b_1()
+            .gap_2()
+            .items_start()
+            .font_buffer(cx)
+            .text_size(base_size)
+            .id(index)
+            .group("message")
+            .hover(|this| this.bg(colors.element_background.opacity(0.5)))
+            .on_click(cx.listener(move |this, _, _, cx| {
+                if this.expanded.contains(&index) {
+                    this.expanded.remove(&index);
+                } else {
+                    this.expanded.insert(index);
+                    let Some(connection) = &mut this.watched_connection else {
+                        return;
+                    };
+                    let Some(message) = connection.messages.get_mut(index) else {
+                        return;
+                    };
+                    message.expanded(this.project.read(cx).languages().clone(), cx);
+                    connection.list_state.scroll_to_reveal_item(index);
+                }
+                cx.notify()
+            }))
+            .child(
+                h_flex()
+                    .w_full()
+                    .gap_2()
+                    .items_center()
+                    .flex_shrink_0()
+                    .child(match message.direction {
+                        acp::StreamMessageDirection::Incoming => {
+                            ui::Icon::new(ui::IconName::ArrowDown).color(Color::Error)
+                        }
+                        acp::StreamMessageDirection::Outgoing => {
+                            ui::Icon::new(ui::IconName::ArrowUp).color(Color::Success)
+                        }
+                    })
+                    .child(
+                        Label::new(message.name.clone())
+                            .buffer_font(cx)
+                            .color(Color::Muted),
+                    )
+                    .child(div().flex_1())
+                    .child(
+                        div()
+                            .child(ui::Chip::new(message.message_type.to_string()))
+                            .visible_on_hover("message"),
+                    )
+                    .children(
+                        message
+                            .request_id
+                            .map(|req_id| div().child(ui::Chip::new(req_id.to_string()))),
+                    ),
+            )
+            // I'm aware using markdown is a hack. Trying to get something working for the demo.
+            // Will clean up soon!
+            .when_some(
+                if expanded {
+                    message.expanded_params_md.clone()
+                } else {
+                    message.collapsed_params_md.clone()
+                },
+                |this, params| {
+                    this.child(
+                        div().pl_6().w_full().child(
+                            MarkdownElement::new(
+                                params,
+                                MarkdownStyle {
+                                    base_text_style: text_style,
+                                    selection_background_color: colors.element_selection_background,
+                                    syntax: cx.theme().syntax().clone(),
+                                    code_block_overflow_x_scroll: true,
+                                    code_block: StyleRefinement {
+                                        text: Some(TextStyleRefinement {
+                                            font_family: Some(
+                                                theme_settings.buffer_font.family.clone(),
+                                            ),
+                                            font_size: Some((base_size * 0.8).into()),
+                                            ..Default::default()
+                                        }),
+                                        ..Default::default()
+                                    },
+                                    ..Default::default()
+                                },
+                            )
+                            .code_block_renderer(
+                                CodeBlockRenderer::Default {
+                                    copy_button: false,
+                                    copy_button_on_hover: expanded,
+                                    border: false,
+                                },
+                            ),
+                        ),
+                    )
+                },
+            )
+            .into_any()
+    }
+}
+
+struct WatchedConnectionMessage {
+    name: SharedString,
+    request_id: Option<i32>,
+    direction: acp::StreamMessageDirection,
+    message_type: MessageType,
+    params: Result<Option<serde_json::Value>, acp::Error>,
+    collapsed_params_md: Option<Entity<Markdown>>,
+    expanded_params_md: Option<Entity<Markdown>>,
+}
+
+impl WatchedConnectionMessage {
+    fn expanded(&mut self, language_registry: Arc<LanguageRegistry>, cx: &mut App) {
+        let params_md = match &self.params {
+            Ok(Some(params)) => Some(expanded_params_md(params, &language_registry, cx)),
+            Err(err) => {
+                if let Some(err) = &serde_json::to_value(err).log_err() {
+                    Some(expanded_params_md(&err, &language_registry, cx))
+                } else {
+                    None
+                }
+            }
+            _ => None,
+        };
+        self.expanded_params_md = params_md;
+    }
+}
+
+fn collapsed_params_md(
+    params: &serde_json::Value,
+    language_registry: &Arc<LanguageRegistry>,
+    cx: &mut App,
+) -> Entity<Markdown> {
+    let params_json = serde_json::to_string(params).unwrap_or_default();
+    let mut spaced_out_json = String::with_capacity(params_json.len() + params_json.len() / 4);
+
+    for ch in params_json.chars() {
+        match ch {
+            '{' => spaced_out_json.push_str("{ "),
+            '}' => spaced_out_json.push_str(" }"),
+            ':' => spaced_out_json.push_str(": "),
+            ',' => spaced_out_json.push_str(", "),
+            c => spaced_out_json.push(c),
+        }
+    }
+
+    let params_md = format!("```json\n{}\n```", spaced_out_json);
+    cx.new(|cx| Markdown::new(params_md.into(), Some(language_registry.clone()), None, cx))
+}
+
+fn expanded_params_md(
+    params: &serde_json::Value,
+    language_registry: &Arc<LanguageRegistry>,
+    cx: &mut App,
+) -> Entity<Markdown> {
+    let params_json = serde_json::to_string_pretty(params).unwrap_or_default();
+    let params_md = format!("```json\n{}\n```", params_json);
+    cx.new(|cx| Markdown::new(params_md.into(), Some(language_registry.clone()), None, cx))
+}
+
+enum MessageType {
+    Request,
+    Response,
+    Notification,
+}
+
+impl Display for MessageType {
+    fn fmt(&self, f: &mut std::fmt::Formatter<'_>) -> std::fmt::Result {
+        match self {
+            MessageType::Request => write!(f, "Request"),
+            MessageType::Response => write!(f, "Response"),
+            MessageType::Notification => write!(f, "Notification"),
+        }
+    }
+}
+
+enum AcpToolsEvent {}
+
+impl EventEmitter<AcpToolsEvent> for AcpTools {}
+
+impl Item for AcpTools {
+    type Event = AcpToolsEvent;
+
+    fn tab_content_text(&self, _detail: usize, _cx: &App) -> ui::SharedString {
+        format!(
+            "ACP: {}",
+            self.watched_connection
+                .as_ref()
+                .map_or("Disconnected", |connection| &connection.server_name)
+        )
+        .into()
+    }
+
+    fn tab_icon(&self, _window: &Window, _cx: &App) -> Option<Icon> {
+        Some(ui::Icon::new(IconName::Thread))
+    }
+}
+
+impl Focusable for AcpTools {
+    fn focus_handle(&self, _cx: &App) -> FocusHandle {
+        self.focus_handle.clone()
+    }
+}
+
+impl Render for AcpTools {
+    fn render(&mut self, _window: &mut Window, cx: &mut Context<Self>) -> impl IntoElement {
+        v_flex()
+            .track_focus(&self.focus_handle)
+            .size_full()
+            .bg(cx.theme().colors().editor_background)
+            .child(match self.watched_connection.as_ref() {
+                Some(connection) => {
+                    if connection.messages.is_empty() {
+                        h_flex()
+                            .size_full()
+                            .justify_center()
+                            .items_center()
+                            .child("No messages recorded yet")
+                            .into_any()
+                    } else {
+                        list(
+                            connection.list_state.clone(),
+                            cx.processor(Self::render_message),
+                        )
+                        .with_sizing_behavior(gpui::ListSizingBehavior::Auto)
+                        .flex_grow()
+                        .into_any()
+                    }
+                }
+                None => h_flex()
+                    .size_full()
+                    .justify_center()
+                    .items_center()
+                    .child("No active connection")
+                    .into_any(),
+            })
+    }
+}
--- a/crates/agent/src/thread.rs
+++ b/crates/agent/src/thread.rs
@@ -664,7 +664,7 @@ impl Thread {
    }

    pub fn get_or_init_configured_model(&mut self, cx: &App) -> Option<ConfiguredModel> {
-        if self.configured_model.is_none() || self.messages.is_empty() {
+        if self.configured_model.is_none() {
            self.configured_model = LanguageModelRegistry::read_global(cx).default_model();
        }
        self.configured_model.clone()
@@ -2097,7 +2097,7 @@ impl Thread {
    }

    pub fn summarize(&mut self, cx: &mut Context<Self>) {
-        let Some(model) = LanguageModelRegistry::read_global(cx).thread_summary_model(cx) else {
+        let Some(model) = LanguageModelRegistry::read_global(cx).thread_summary_model() else {
            println!("No thread summary model");
            return;
        };
@@ -2416,7 +2416,7 @@ impl Thread {
        }

        let Some(ConfiguredModel { model, provider }) =
-            LanguageModelRegistry::read_global(cx).thread_summary_model(cx)
+            LanguageModelRegistry::read_global(cx).thread_summary_model()
        else {
            return;
        };
@@ -5410,10 +5410,13 @@ fn main() {{
                    }),
                    cx,
                );
-                registry.set_thread_summary_model(Some(ConfiguredModel {
-                    provider,
-                    model: model.clone(),
-                }));
+                registry.set_thread_summary_model(
+                    Some(ConfiguredModel {
+                        provider,
+                        model: model.clone(),
+                    }),
+                    cx,
+                );
            })
        });

--- a/crates/agent/src/thread_store.rs
+++ b/crates/agent/src/thread_store.rs
@@ -893,8 +893,19 @@ impl ThreadsDatabase {

        let needs_migration_from_heed = mdb_path.exists();

-        let connection = if *ZED_STATELESS || cfg!(any(feature = "test-support", test)) {
+        let connection = if *ZED_STATELESS {
            Connection::open_memory(Some("THREAD_FALLBACK_DB"))
+        } else if cfg!(any(feature = "test-support", test)) {
+            // rust stores the name of the test on the current thread.
+            // We use this to automatically create a database that will
+            // be shared within the test (for the test_retrieve_old_thread)
+            // but not with concurrent tests.
+            let thread = std::thread::current();
+            let test_name = thread.name();
+            Connection::open_memory(Some(&format!(
+                "THREAD_FALLBACK_{}",
+                test_name.unwrap_or_default()
+            )))
        } else {
            Connection::open_file(&sqlite_path.to_string_lossy())
        };
--- a/crates/agent2/Cargo.toml
+++ b/crates/agent2/Cargo.toml
@@ -48,7 +48,6 @@ log.workspace = true
 open.workspace = true
 parking_lot.workspace = true
 paths.workspace = true
-portable-pty.workspace = true
 project.workspace = true
 prompt_store.workspace = true
 rust-embed.workspace = true
@@ -68,7 +67,6 @@ util.workspace = true
 uuid.workspace = true
 watch.workspace = true
 web_search.workspace = true
-which.workspace = true
 workspace-hack.workspace = true
 zstd.workspace = true

--- a/crates/agent2/src/agent.rs
+++ b/crates/agent2/src/agent.rs
@@ -2,7 +2,7 @@ use crate::{
    ContextServerRegistry, Thread, ThreadEvent, ThreadsDatabase, ToolCallAuthorization,
    UserMessageContent, templates::Templates,
 };
-use crate::{HistoryStore, TitleUpdated, TokenUsageUpdated};
+use crate::{HistoryStore, TerminalHandle, ThreadEnvironment, TitleUpdated, TokenUsageUpdated};
 use acp_thread::{AcpThread, AgentModelSelector};
 use action_log::ActionLog;
 use agent_client_protocol as acp;
@@ -10,7 +10,8 @@ use agent_settings::AgentSettings;
 use anyhow::{Context as _, Result, anyhow};
 use collections::{HashSet, IndexMap};
 use fs::Fs;
-use futures::channel::mpsc;
+use futures::channel::{mpsc, oneshot};
+use futures::future::Shared;
 use futures::{StreamExt, future};
 use gpui::{
    App, AppContext, AsyncApp, Context, Entity, SharedString, Subscription, Task, WeakEntity,
@@ -23,7 +24,7 @@ use prompt_store::{
 use settings::update_settings_file;
 use std::any::Any;
 use std::collections::HashMap;
-use std::path::Path;
+use std::path::{Path, PathBuf};
 use std::rc::Rc;
 use std::sync::Arc;
 use util::ResultExt;
@@ -61,16 +62,19 @@ pub struct LanguageModels {
    model_list: acp_thread::AgentModelList,
    refresh_models_rx: watch::Receiver<()>,
    refresh_models_tx: watch::Sender<()>,
+    _authenticate_all_providers_task: Task<()>,
 }

 impl LanguageModels {
-    fn new(cx: &App) -> Self {
+    fn new(cx: &mut App) -> Self {
        let (refresh_models_tx, refresh_models_rx) = watch::channel(());
+
        let mut this = Self {
            models: HashMap::default(),
            model_list: acp_thread::AgentModelList::Grouped(IndexMap::default()),
            refresh_models_rx,
            refresh_models_tx,
+            _authenticate_all_providers_task: Self::authenticate_all_language_model_providers(cx),
        };
        this.refresh_list(cx);
        this
@@ -90,7 +94,7 @@ impl LanguageModels {
        let mut recommended = Vec::new();
        for provider in &providers {
            for model in provider.recommended_models(cx) {
-                recommended_models.insert(model.id());
+                recommended_models.insert((model.provider_id(), model.id()));
                recommended.push(Self::map_language_model_to_info(&model, provider));
            }
        }
@@ -107,7 +111,7 @@ impl LanguageModels {
            for model in provider.provided_models(cx) {
                let model_info = Self::map_language_model_to_info(&model, &provider);
                let model_id = model_info.id.clone();
-                if !recommended_models.contains(&model.id()) {
+                if !recommended_models.contains(&(model.provider_id(), model.id())) {
                    provider_models.push(model_info);
                }
                models.insert(model_id, model);
@@ -150,6 +154,52 @@ impl LanguageModels {
    fn model_id(model: &Arc<dyn LanguageModel>) -> acp_thread::AgentModelId {
        acp_thread::AgentModelId(format!("{}/{}", model.provider_id().0, model.id().0).into())
    }
+
+    fn authenticate_all_language_model_providers(cx: &mut App) -> Task<()> {
+        let authenticate_all_providers = LanguageModelRegistry::global(cx)
+            .read(cx)
+            .providers()
+            .iter()
+            .map(|provider| (provider.id(), provider.name(), provider.authenticate(cx)))
+            .collect::<Vec<_>>();
+
+        cx.background_spawn(async move {
+            for (provider_id, provider_name, authenticate_task) in authenticate_all_providers {
+                if let Err(err) = authenticate_task.await {
+                    if matches!(err, language_model::AuthenticateError::CredentialsNotFound) {
+                        // Since we're authenticating these providers in the
+                        // background for the purposes of populating the
+                        // language selector, we don't care about providers
+                        // where the credentials are not found.
+                    } else {
+                        // Some providers have noisy failure states that we
+                        // don't want to spam the logs with every time the
+                        // language model selector is initialized.
+                        //
+                        // Ideally these should have more clear failure modes
+                        // that we know are safe to ignore here, like what we do
+                        // with `CredentialsNotFound` above.
+                        match provider_id.0.as_ref() {
+                            "lmstudio" | "ollama" => {
+                                // LM Studio and Ollama both make fetch requests to the local APIs to determine if they are "authenticated".
+                                //
+                                // These fail noisily, so we don't log them.
+                            }
+                            "copilot_chat" => {
+                                // Copilot Chat returns an error if Copilot is not enabled, so we don't log those errors.
+                            }
+                            _ => {
+                                log::error!(
+                                    "Failed to authenticate provider: {}: {err}",
+                                    provider_name.0
+                                );
+                            }
+                        }
+                    }
+                }
+            }
+        })
+    }
 }

 pub struct NativeAgent {
@@ -180,7 +230,7 @@ impl NativeAgent {
        fs: Arc<dyn Fs>,
        cx: &mut AsyncApp,
    ) -> Result<Entity<NativeAgent>> {
-        log::info!("Creating new NativeAgent");
+        log::debug!("Creating new NativeAgent");

        let project_context = cx
            .update(|cx| Self::build_project_context(&project, prompt_store.as_ref(), cx))?
@@ -227,28 +277,38 @@ impl NativeAgent {
        cx: &mut Context<Self>,
    ) -> Entity<AcpThread> {
        let connection = Rc::new(NativeAgentConnection(cx.entity()));
-        let registry = LanguageModelRegistry::read_global(cx);
-        let summarization_model = registry.thread_summary_model(cx).map(|c| c.model);
-
-        thread_handle.update(cx, |thread, cx| {
-            thread.set_summarization_model(summarization_model, cx);
-            thread.add_default_tools(cx)
-        });

        let thread = thread_handle.read(cx);
        let session_id = thread.id().clone();
        let title = thread.title();
        let project = thread.project.clone();
        let action_log = thread.action_log.clone();
-        let acp_thread = cx.new(|_cx| {
+        let prompt_capabilities_rx = thread.prompt_capabilities_rx.clone();
+        let acp_thread = cx.new(|cx| {
            acp_thread::AcpThread::new(
                title,
                connection,
                project.clone(),
                action_log.clone(),
                session_id.clone(),
+                prompt_capabilities_rx,
+                cx,
            )
        });
+
+        let registry = LanguageModelRegistry::read_global(cx);
+        let summarization_model = registry.thread_summary_model().map(|c| c.model);
+
+        thread_handle.update(cx, |thread, cx| {
+            thread.set_summarization_model(summarization_model, cx);
+            thread.add_default_tools(
+                Rc::new(AcpThreadEnvironment {
+                    acp_thread: acp_thread.downgrade(),
+                }) as _,
+                cx,
+            )
+        });
+
        let subscriptions = vec![
            cx.observe_release(&acp_thread, |this, acp_thread, _cx| {
                this.sessions.remove(acp_thread.session_id());
@@ -521,7 +581,7 @@ impl NativeAgent {

        let registry = LanguageModelRegistry::read_global(cx);
        let default_model = registry.default_model().map(|m| m.model);
-        let summarization_model = registry.thread_summary_model(cx).map(|m| m.model);
+        let summarization_model = registry.thread_summary_model().map(|m| m.model);

        for session in self.sessions.values_mut() {
            session.thread.update(cx, |thread, cx| {
@@ -710,18 +770,15 @@ impl NativeAgentConnection {
                                options,
                                response,
                            }) => {
-                                let recv = acp_thread.update(cx, |thread, cx| {
+                                let outcome_task = acp_thread.update(cx, |thread, cx| {
                                    thread.request_tool_call_authorization(tool_call, options, cx)
-                                })?;
+                                })??;
                                cx.background_spawn(async move {
-                                    if let Some(recv) = recv.log_err()
-                                        && let Some(option) = recv
-                                            .await
-                                            .context("authorization sender was dropped")
-                                            .log_err()
+                                    if let acp::RequestPermissionOutcome::Selected { option_id } =
+                                        outcome_task.await
                                    {
                                        response
-                                            .send(option)
+                                            .send(option_id)
                                            .map(|_| anyhow!("authorization receiver was dropped"))
                                            .log_err();
                                    }
@@ -756,7 +813,7 @@ impl NativeAgentConnection {
                }
            }

-            log::info!("Response stream completed");
+            log::debug!("Response stream completed");
            anyhow::Ok(acp::PromptResponse {
                stop_reason: acp::StopReason::EndTurn,
            })
@@ -781,7 +838,7 @@ impl AgentModelSelector for NativeAgentConnection {
        model_id: acp_thread::AgentModelId,
        cx: &mut App,
    ) -> Task<Result<()>> {
-        log::info!("Setting model for session {}: {}", session_id, model_id);
+        log::debug!("Setting model for session {}: {}", session_id, model_id);
        let Some(thread) = self
            .0
            .read(cx)
@@ -852,7 +909,7 @@ impl acp_thread::AgentConnection for NativeAgentConnection {
        cx: &mut App,
    ) -> Task<Result<Entity<acp_thread::AcpThread>>> {
        let agent = self.0.clone();
-        log::info!("Creating new thread for project at: {:?}", cwd);
+        log::debug!("Creating new thread for project at: {:?}", cwd);

        cx.spawn(async move |cx| {
            log::debug!("Starting thread creation in async context");
@@ -917,7 +974,7 @@ impl acp_thread::AgentConnection for NativeAgentConnection {
                .into_iter()
                .map(Into::into)
                .collect::<Vec<_>>();
-            log::info!("Converted prompt to message: {} chars", content.len());
+            log::debug!("Converted prompt to message: {} chars", content.len());
            log::debug!("Message id: {:?}", id);
            log::debug!("Message content: {:?}", content);

@@ -925,18 +982,10 @@ impl acp_thread::AgentConnection for NativeAgentConnection {
        })
    }

-    fn prompt_capabilities(&self) -> acp::PromptCapabilities {
-        acp::PromptCapabilities {
-            image: true,
-            audio: false,
-            embedded_context: true,
-        }
-    }
-
    fn resume(
        &self,
        session_id: &acp::SessionId,
-        _cx: &mut App,
+        _cx: &App,
    ) -> Option<Rc<dyn acp_thread::AgentSessionResume>> {
        Some(Rc::new(NativeAgentSessionResume {
            connection: self.clone(),
@@ -956,11 +1005,11 @@ impl acp_thread::AgentConnection for NativeAgentConnection {
    fn truncate(
        &self,
        session_id: &agent_client_protocol::SessionId,
-        cx: &mut App,
+        cx: &App,
    ) -> Option<Rc<dyn acp_thread::AgentSessionTruncate>> {
-        self.0.update(cx, |agent, _cx| {
+        self.0.read_with(cx, |agent, _cx| {
            agent.sessions.get(session_id).map(|session| {
-                Rc::new(NativeAgentSessionEditor {
+                Rc::new(NativeAgentSessionTruncate {
                    thread: session.thread.clone(),
                    acp_thread: session.acp_thread.clone(),
                }) as _
@@ -971,7 +1020,7 @@ impl acp_thread::AgentConnection for NativeAgentConnection {
    fn set_title(
        &self,
        session_id: &acp::SessionId,
-        _cx: &mut App,
+        _cx: &App,
    ) -> Option<Rc<dyn acp_thread::AgentSessionSetTitle>> {
        Some(Rc::new(NativeAgentSessionSetTitle {
            connection: self.clone(),
@@ -1009,12 +1058,12 @@ impl acp_thread::AgentTelemetry for NativeAgentConnection {
    }
 }

-struct NativeAgentSessionEditor {
+struct NativeAgentSessionTruncate {
    thread: Entity<Thread>,
    acp_thread: WeakEntity<AcpThread>,
 }

-impl acp_thread::AgentSessionTruncate for NativeAgentSessionEditor {
+impl acp_thread::AgentSessionTruncate for NativeAgentSessionTruncate {
    fn run(&self, message_id: acp_thread::UserMessageId, cx: &mut App) -> Task<Result<()>> {
        match self.thread.update(cx, |thread, cx| {
            thread.truncate(message_id.clone(), cx)?;
@@ -1063,6 +1112,66 @@ impl acp_thread::AgentSessionSetTitle for NativeAgentSessionSetTitle {
    }
 }

+pub struct AcpThreadEnvironment {
+    acp_thread: WeakEntity<AcpThread>,
+}
+
+impl ThreadEnvironment for AcpThreadEnvironment {
+    fn create_terminal(
+        &self,
+        command: String,
+        cwd: Option<PathBuf>,
+        output_byte_limit: Option<u64>,
+        cx: &mut AsyncApp,
+    ) -> Task<Result<Rc<dyn TerminalHandle>>> {
+        let task = self.acp_thread.update(cx, |thread, cx| {
+            thread.create_terminal(command, vec![], vec![], cwd, output_byte_limit, cx)
+        });
+
+        let acp_thread = self.acp_thread.clone();
+        cx.spawn(async move |cx| {
+            let terminal = task?.await?;
+
+            let (drop_tx, drop_rx) = oneshot::channel();
+            let terminal_id = terminal.read_with(cx, |terminal, _cx| terminal.id().clone())?;
+
+            cx.spawn(async move |cx| {
+                drop_rx.await.ok();
+                acp_thread.update(cx, |thread, cx| thread.release_terminal(terminal_id, cx))
+            })
+            .detach();
+
+            let handle = AcpTerminalHandle {
+                terminal,
+                _drop_tx: Some(drop_tx),
+            };
+
+            Ok(Rc::new(handle) as _)
+        })
+    }
+}
+
+pub struct AcpTerminalHandle {
+    terminal: Entity<acp_thread::Terminal>,
+    _drop_tx: Option<oneshot::Sender<()>>,
+}
+
+impl TerminalHandle for AcpTerminalHandle {
+    fn id(&self, cx: &AsyncApp) -> Result<acp::TerminalId> {
+        self.terminal.read_with(cx, |term, _cx| term.id().clone())
+    }
+
+    fn wait_for_exit(&self, cx: &AsyncApp) -> Result<Shared<Task<acp::TerminalExitStatus>>> {
+        self.terminal
+            .read_with(cx, |term, _cx| term.wait_for_exit())
+    }
+
+    fn current_output(&self, cx: &AsyncApp) -> Result<acp::TerminalOutputResponse> {
+        self.terminal
+            .read_with(cx, |term, cx| term.current_output(cx))
+    }
+}
+
 #[cfg(test)]
 mod tests {
    use crate::HistoryEntryId;
@@ -1406,10 +1515,9 @@ mod tests {
        history: &Entity<HistoryStore>,
        cx: &mut TestAppContext,
    ) -> Vec<(HistoryEntryId, String)> {
-        history.read_with(cx, |history, cx| {
+        history.read_with(cx, |history, _| {
            history
-                .entries(cx)
-                .iter()
+                .entries()
                .map(|e| (e.id(), e.title().to_string()))
                .collect::<Vec<_>>()
        })
--- a/crates/agent2/src/db.rs
+++ b/crates/agent2/src/db.rs
@@ -266,8 +266,19 @@ impl ThreadsDatabase {
    }

    pub fn new(executor: BackgroundExecutor) -> Result<Self> {
-        let connection = if *ZED_STATELESS || cfg!(any(feature = "test-support", test)) {
+        let connection = if *ZED_STATELESS {
            Connection::open_memory(Some("THREAD_FALLBACK_DB"))
+        } else if cfg!(any(feature = "test-support", test)) {
+            // rust stores the name of the test on the current thread.
+            // We use this to automatically create a database that will
+            // be shared within the test (for the test_retrieve_old_thread)
+            // but not with concurrent tests.
+            let thread = std::thread::current();
+            let test_name = thread.name();
+            Connection::open_memory(Some(&format!(
+                "THREAD_FALLBACK_{}",
+                test_name.unwrap_or_default()
+            )))
        } else {
            let threads_dir = paths::data_dir().join("threads");
            std::fs::create_dir_all(&threads_dir)?;
--- a/crates/agent2/src/history_store.rs
+++ b/crates/agent2/src/history_store.rs
@@ -86,6 +86,7 @@ enum SerializedRecentOpen {

 pub struct HistoryStore {
    threads: Vec<DbThreadMetadata>,
+    entries: Vec<HistoryEntry>,
    context_store: Entity<assistant_context::ContextStore>,
    recently_opened_entries: VecDeque<HistoryEntryId>,
    _subscriptions: Vec<gpui::Subscription>,
@@ -97,7 +98,7 @@ impl HistoryStore {
        context_store: Entity<assistant_context::ContextStore>,
        cx: &mut Context<Self>,
    ) -> Self {
-        let subscriptions = vec![cx.observe(&context_store, |_, _, cx| cx.notify())];
+        let subscriptions = vec![cx.observe(&context_store, |this, _, cx| this.update_entries(cx))];

        cx.spawn(async move |this, cx| {
            let entries = Self::load_recently_opened_entries(cx).await;
@@ -116,6 +117,7 @@ impl HistoryStore {
            context_store,
            recently_opened_entries: VecDeque::default(),
            threads: Vec::default(),
+            entries: Vec::default(),
            _subscriptions: subscriptions,
            _save_recently_opened_entries_task: Task::ready(()),
        }
@@ -181,20 +183,18 @@ impl HistoryStore {
                    }
                }
                this.threads = threads;
-                cx.notify();
+                this.update_entries(cx);
            })
        })
        .detach_and_log_err(cx);
    }

-    pub fn entries(&self, cx: &App) -> Vec<HistoryEntry> {
-        let mut history_entries = Vec::new();
-
+    fn update_entries(&mut self, cx: &mut Context<Self>) {
        #[cfg(debug_assertions)]
        if std::env::var("ZED_SIMULATE_NO_THREAD_HISTORY").is_ok() {
-            return history_entries;
+            return;
        }
-
+        let mut history_entries = Vec::new();
        history_entries.extend(self.threads.iter().cloned().map(HistoryEntry::AcpThread));
        history_entries.extend(
            self.context_store
@@ -205,17 +205,12 @@ impl HistoryStore {
        );

        history_entries.sort_unstable_by_key(|entry| std::cmp::Reverse(entry.updated_at()));
-        history_entries
+        self.entries = history_entries;
+        cx.notify()
    }

-    pub fn is_empty(&self, cx: &App) -> bool {
-        self.threads.is_empty()
-            && self
-                .context_store
-                .read(cx)
-                .unordered_contexts()
-                .next()
-                .is_none()
+    pub fn is_empty(&self, _cx: &App) -> bool {
+        self.entries.is_empty()
    }

    pub fn recently_opened_entries(&self, cx: &App) -> Vec<HistoryEntry> {
@@ -356,7 +351,7 @@ impl HistoryStore {
        self.save_recently_opened_entries(cx);
    }

-    pub fn recent_entries(&self, limit: usize, cx: &mut Context<Self>) -> Vec<HistoryEntry> {
-        self.entries(cx).into_iter().take(limit).collect()
+    pub fn entries(&self) -> impl Iterator<Item = HistoryEntry> {
+        self.entries.iter().cloned()
    }
 }
--- a/crates/agent2/src/native_agent_server.rs
+++ b/crates/agent2/src/native_agent_server.rs
@@ -1,10 +1,9 @@
 use std::{any::Any, path::Path, rc::Rc, sync::Arc};

-use agent_servers::AgentServer;
+use agent_servers::{AgentServer, AgentServerDelegate};
 use anyhow::Result;
 use fs::Fs;
-use gpui::{App, Entity, Task};
-use project::Project;
+use gpui::{App, Entity, SharedString, Task};
 use prompt_store::PromptStore;

 use crate::{HistoryStore, NativeAgent, NativeAgentConnection, templates::Templates};
@@ -22,16 +21,12 @@ impl NativeAgentServer {
 }

 impl AgentServer for NativeAgentServer {
-    fn name(&self) -> &'static str {
-        "Native Agent"
+    fn telemetry_id(&self) -> &'static str {
+        "zed"
    }

-    fn empty_state_headline(&self) -> &'static str {
-        "Welcome to the Agent Panel"
-    }
-
-    fn empty_state_message(&self) -> &'static str {
-        ""
+    fn name(&self) -> SharedString {
+        "Zed Agent".into()
    }

    fn logo(&self) -> ui::IconName {
@@ -41,14 +36,14 @@ impl AgentServer for NativeAgentServer {
    fn connect(
        &self,
        _root_dir: &Path,
-        project: &Entity<Project>,
+        delegate: AgentServerDelegate,
        cx: &mut App,
    ) -> Task<Result<Rc<dyn acp_thread::AgentConnection>>> {
-        log::info!(
+        log::debug!(
            "NativeAgentServer::connect called for path: {:?}",
            _root_dir
        );
-        let project = project.clone();
+        let project = delegate.project().clone();
        let fs = self.fs.clone();
        let history = self.history.clone();
        let prompt_store = PromptStore::global(cx);
@@ -63,7 +58,7 @@ impl AgentServer for NativeAgentServer {

            // Create the connection wrapper
            let connection = NativeAgentConnection(agent);
-            log::info!("NativeAgentServer connection established successfully");
+            log::debug!("NativeAgentServer connection established successfully");

            Ok(Rc::new(connection) as Rc<dyn acp_thread::AgentConnection>)
        })
--- a/crates/agent2/src/tests/mod.rs
+++ b/crates/agent2/src/tests/mod.rs
@@ -4,26 +4,37 @@ use agent_client_protocol::{self as acp};
 use agent_settings::AgentProfileId;
 use anyhow::Result;
 use client::{Client, UserStore};
+use cloud_llm_client::CompletionIntent;
+use collections::IndexMap;
+use context_server::{ContextServer, ContextServerCommand, ContextServerId};
 use fs::{FakeFs, Fs};
-use futures::{StreamExt, channel::mpsc::UnboundedReceiver};
+use futures::{
+    StreamExt,
+    channel::{
+        mpsc::{self, UnboundedReceiver},
+        oneshot,
+    },
+};
 use gpui::{
    App, AppContext, Entity, Task, TestAppContext, UpdateGlobal, http_client::FakeHttpClient,
 };
 use indoc::indoc;
 use language_model::{
    LanguageModel, LanguageModelCompletionError, LanguageModelCompletionEvent, LanguageModelId,
-    LanguageModelProviderName, LanguageModelRegistry, LanguageModelRequestMessage,
-    LanguageModelToolResult, LanguageModelToolUse, MessageContent, Role, StopReason,
-    fake_provider::FakeLanguageModel,
+    LanguageModelProviderName, LanguageModelRegistry, LanguageModelRequest,
+    LanguageModelRequestMessage, LanguageModelToolResult, LanguageModelToolSchemaFormat,
+    LanguageModelToolUse, MessageContent, Role, StopReason, fake_provider::FakeLanguageModel,
 };
 use pretty_assertions::assert_eq;
-use project::Project;
+use project::{
+    Project, context_server_store::ContextServerStore, project_settings::ProjectSettings,
+};
 use prompt_store::ProjectContext;
 use reqwest_client::ReqwestClient;
 use schemars::JsonSchema;
 use serde::{Deserialize, Serialize};
 use serde_json::json;
-use settings::SettingsStore;
+use settings::{Settings, SettingsStore};
 use std::{path::Path, rc::Rc, sync::Arc, time::Duration};
 use util::path;

@@ -460,7 +471,7 @@ async fn test_tool_authorization(cx: &mut TestAppContext) {
                tool_name: ToolRequiringPermission::name().into(),
                is_error: true,
                content: "Permission to run tool denied by user".into(),
-                output: None
+                output: Some("Permission to run tool denied by user".into())
            })
        ]
    );
@@ -663,15 +674,6 @@ async fn test_resume_after_tool_use_limit(cx: &mut TestAppContext) {
            "}
        )
    });
-
-    // Ensure we error if calling resume when tool use limit was *not* reached.
-    let error = thread
-        .update(cx, |thread, cx| thread.resume(cx))
-        .unwrap_err();
-    assert_eq!(
-        error.to_string(),
-        "can only resume after tool use limit is reached"
-    )
 }

 #[gpui::test]
@@ -931,6 +933,335 @@ async fn test_profiles(cx: &mut TestAppContext) {
    assert_eq!(tool_names, vec![InfiniteTool::name()]);
 }

+#[gpui::test]
+async fn test_mcp_tools(cx: &mut TestAppContext) {
+    let ThreadTest {
+        model,
+        thread,
+        context_server_store,
+        fs,
+        ..
+    } = setup(cx, TestModel::Fake).await;
+    let fake_model = model.as_fake();
+
+    // Override profiles and wait for settings to be loaded.
+    fs.insert_file(
+        paths::settings_file(),
+        json!({
+            "agent": {
+                "always_allow_tool_actions": true,
+                "profiles": {
+                    "test": {
+                        "name": "Test Profile",
+                        "enable_all_context_servers": true,
+                        "tools": {
+                            EchoTool::name(): true,
+                        }
+                    },
+                }
+            }
+        })
+        .to_string()
+        .into_bytes(),
+    )
+    .await;
+    cx.run_until_parked();
+    thread.update(cx, |thread, _| {
+        thread.set_profile(AgentProfileId("test".into()))
+    });
+
+    let mut mcp_tool_calls = setup_context_server(
+        "test_server",
+        vec![context_server::types::Tool {
+            name: "echo".into(),
+            description: None,
+            input_schema: serde_json::to_value(
+                EchoTool.input_schema(LanguageModelToolSchemaFormat::JsonSchema),
+            )
+            .unwrap(),
+            output_schema: None,
+            annotations: None,
+        }],
+        &context_server_store,
+        cx,
+    );
+
+    let events = thread.update(cx, |thread, cx| {
+        thread.send(UserMessageId::new(), ["Hey"], cx).unwrap()
+    });
+    cx.run_until_parked();
+
+    // Simulate the model calling the MCP tool.
+    let completion = fake_model.pending_completions().pop().unwrap();
+    assert_eq!(tool_names_for_completion(&completion), vec!["echo"]);
+    fake_model.send_last_completion_stream_event(LanguageModelCompletionEvent::ToolUse(
+        LanguageModelToolUse {
+            id: "tool_1".into(),
+            name: "echo".into(),
+            raw_input: json!({"text": "test"}).to_string(),
+            input: json!({"text": "test"}),
+            is_input_complete: true,
+        },
+    ));
+    fake_model.end_last_completion_stream();
+    cx.run_until_parked();
+
+    let (tool_call_params, tool_call_response) = mcp_tool_calls.next().await.unwrap();
+    assert_eq!(tool_call_params.name, "echo");
+    assert_eq!(tool_call_params.arguments, Some(json!({"text": "test"})));
+    tool_call_response
+        .send(context_server::types::CallToolResponse {
+            content: vec![context_server::types::ToolResponseContent::Text {
+                text: "test".into(),
+            }],
+            is_error: None,
+            meta: None,
+            structured_content: None,
+        })
+        .unwrap();
+    cx.run_until_parked();
+
+    assert_eq!(tool_names_for_completion(&completion), vec!["echo"]);
+    fake_model.send_last_completion_stream_text_chunk("Done!");
+    fake_model.end_last_completion_stream();
+    events.collect::<Vec<_>>().await;
+
+    // Send again after adding the echo tool, ensuring the name collision is resolved.
+    let events = thread.update(cx, |thread, cx| {
+        thread.add_tool(EchoTool);
+        thread.send(UserMessageId::new(), ["Go"], cx).unwrap()
+    });
+    cx.run_until_parked();
+    let completion = fake_model.pending_completions().pop().unwrap();
+    assert_eq!(
+        tool_names_for_completion(&completion),
+        vec!["echo", "test_server_echo"]
+    );
+    fake_model.send_last_completion_stream_event(LanguageModelCompletionEvent::ToolUse(
+        LanguageModelToolUse {
+            id: "tool_2".into(),
+            name: "test_server_echo".into(),
+            raw_input: json!({"text": "mcp"}).to_string(),
+            input: json!({"text": "mcp"}),
+            is_input_complete: true,
+        },
+    ));
+    fake_model.send_last_completion_stream_event(LanguageModelCompletionEvent::ToolUse(
+        LanguageModelToolUse {
+            id: "tool_3".into(),
+            name: "echo".into(),
+            raw_input: json!({"text": "native"}).to_string(),
+            input: json!({"text": "native"}),
+            is_input_complete: true,
+        },
+    ));
+    fake_model.end_last_completion_stream();
+    cx.run_until_parked();
+
+    let (tool_call_params, tool_call_response) = mcp_tool_calls.next().await.unwrap();
+    assert_eq!(tool_call_params.name, "echo");
+    assert_eq!(tool_call_params.arguments, Some(json!({"text": "mcp"})));
+    tool_call_response
+        .send(context_server::types::CallToolResponse {
+            content: vec![context_server::types::ToolResponseContent::Text { text: "mcp".into() }],
+            is_error: None,
+            meta: None,
+            structured_content: None,
+        })
+        .unwrap();
+    cx.run_until_parked();
+
+    // Ensure the tool results were inserted with the correct names.
+    let completion = fake_model.pending_completions().pop().unwrap();
+    assert_eq!(
+        completion.messages.last().unwrap().content,
+        vec![
+            MessageContent::ToolResult(LanguageModelToolResult {
+                tool_use_id: "tool_3".into(),
+                tool_name: "echo".into(),
+                is_error: false,
+                content: "native".into(),
+                output: Some("native".into()),
+            },),
+            MessageContent::ToolResult(LanguageModelToolResult {
+                tool_use_id: "tool_2".into(),
+                tool_name: "test_server_echo".into(),
+                is_error: false,
+                content: "mcp".into(),
+                output: Some("mcp".into()),
+            },),
+        ]
+    );
+    fake_model.end_last_completion_stream();
+    events.collect::<Vec<_>>().await;
+}
+
+#[gpui::test]
+async fn test_mcp_tool_truncation(cx: &mut TestAppContext) {
+    let ThreadTest {
+        model,
+        thread,
+        context_server_store,
+        fs,
+        ..
+    } = setup(cx, TestModel::Fake).await;
+    let fake_model = model.as_fake();
+
+    // Set up a profile with all tools enabled
+    fs.insert_file(
+        paths::settings_file(),
+        json!({
+            "agent": {
+                "profiles": {
+                    "test": {
+                        "name": "Test Profile",
+                        "enable_all_context_servers": true,
+                        "tools": {
+                            EchoTool::name(): true,
+                            DelayTool::name(): true,
+                            WordListTool::name(): true,
+                            ToolRequiringPermission::name(): true,
+                            InfiniteTool::name(): true,
+                        }
+                    },
+                }
+            }
+        })
+        .to_string()
+        .into_bytes(),
+    )
+    .await;
+    cx.run_until_parked();
+
+    thread.update(cx, |thread, _| {
+        thread.set_profile(AgentProfileId("test".into()));
+        thread.add_tool(EchoTool);
+        thread.add_tool(DelayTool);
+        thread.add_tool(WordListTool);
+        thread.add_tool(ToolRequiringPermission);
+        thread.add_tool(InfiniteTool);
+    });
+
+    // Set up multiple context servers with some overlapping tool names
+    let _server1_calls = setup_context_server(
+        "xxx",
+        vec![
+            context_server::types::Tool {
+                name: "echo".into(), // Conflicts with native EchoTool
+                description: None,
+                input_schema: serde_json::to_value(
+                    EchoTool.input_schema(LanguageModelToolSchemaFormat::JsonSchema),
+                )
+                .unwrap(),
+                output_schema: None,
+                annotations: None,
+            },
+            context_server::types::Tool {
+                name: "unique_tool_1".into(),
+                description: None,
+                input_schema: json!({"type": "object", "properties": {}}),
+                output_schema: None,
+                annotations: None,
+            },
+        ],
+        &context_server_store,
+        cx,
+    );
+
+    let _server2_calls = setup_context_server(
+        "yyy",
+        vec![
+            context_server::types::Tool {
+                name: "echo".into(), // Also conflicts with native EchoTool
+                description: None,
+                input_schema: serde_json::to_value(
+                    EchoTool.input_schema(LanguageModelToolSchemaFormat::JsonSchema),
+                )
+                .unwrap(),
+                output_schema: None,
+                annotations: None,
+            },
+            context_server::types::Tool {
+                name: "unique_tool_2".into(),
+                description: None,
+                input_schema: json!({"type": "object", "properties": {}}),
+                output_schema: None,
+                annotations: None,
+            },
+            context_server::types::Tool {
+                name: "a".repeat(MAX_TOOL_NAME_LENGTH - 2),
+                description: None,
+                input_schema: json!({"type": "object", "properties": {}}),
+                output_schema: None,
+                annotations: None,
+            },
+            context_server::types::Tool {
+                name: "b".repeat(MAX_TOOL_NAME_LENGTH - 1),
+                description: None,
+                input_schema: json!({"type": "object", "properties": {}}),
+                output_schema: None,
+                annotations: None,
+            },
+        ],
+        &context_server_store,
+        cx,
+    );
+    let _server3_calls = setup_context_server(
+        "zzz",
+        vec![
+            context_server::types::Tool {
+                name: "a".repeat(MAX_TOOL_NAME_LENGTH - 2),
+                description: None,
+                input_schema: json!({"type": "object", "properties": {}}),
+                output_schema: None,
+                annotations: None,
+            },
+            context_server::types::Tool {
+                name: "b".repeat(MAX_TOOL_NAME_LENGTH - 1),
+                description: None,
+                input_schema: json!({"type": "object", "properties": {}}),
+                output_schema: None,
+                annotations: None,
+            },
+            context_server::types::Tool {
+                name: "c".repeat(MAX_TOOL_NAME_LENGTH + 1),
+                description: None,
+                input_schema: json!({"type": "object", "properties": {}}),
+                output_schema: None,
+                annotations: None,
+            },
+        ],
+        &context_server_store,
+        cx,
+    );
+
+    thread
+        .update(cx, |thread, cx| {
+            thread.send(UserMessageId::new(), ["Go"], cx)
+        })
+        .unwrap();
+    cx.run_until_parked();
+    let completion = fake_model.pending_completions().pop().unwrap();
+    assert_eq!(
+        tool_names_for_completion(&completion),
+        vec![
+            "bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb",
+            "cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc",
+            "delay",
+            "echo",
+            "infinite",
+            "tool_requiring_permission",
+            "unique_tool_1",
+            "unique_tool_2",
+            "word_list",
+            "xxx_echo",
+            "y_aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa",
+            "yyy_echo",
+            "z_aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa",
+        ]
+    );
+}
+
 #[gpui::test]
 #[cfg_attr(not(feature = "e2e"), ignore)]
 async fn test_cancellation(cx: &mut TestAppContext) {
@@ -1400,6 +1731,81 @@ async fn test_title_generation(cx: &mut TestAppContext) {
    thread.read_with(cx, |thread, _| assert_eq!(thread.title(), "Hello world"));
 }

+#[gpui::test]
+async fn test_building_request_with_pending_tools(cx: &mut TestAppContext) {
+    let ThreadTest { model, thread, .. } = setup(cx, TestModel::Fake).await;
+    let fake_model = model.as_fake();
+
+    let _events = thread
+        .update(cx, |thread, cx| {
+            thread.add_tool(ToolRequiringPermission);
+            thread.add_tool(EchoTool);
+            thread.send(UserMessageId::new(), ["Hey!"], cx)
+        })
+        .unwrap();
+    cx.run_until_parked();
+
+    let permission_tool_use = LanguageModelToolUse {
+        id: "tool_id_1".into(),
+        name: ToolRequiringPermission::name().into(),
+        raw_input: "{}".into(),
+        input: json!({}),
+        is_input_complete: true,
+    };
+    let echo_tool_use = LanguageModelToolUse {
+        id: "tool_id_2".into(),
+        name: EchoTool::name().into(),
+        raw_input: json!({"text": "test"}).to_string(),
+        input: json!({"text": "test"}),
+        is_input_complete: true,
+    };
+    fake_model.send_last_completion_stream_text_chunk("Hi!");
+    fake_model.send_last_completion_stream_event(LanguageModelCompletionEvent::ToolUse(
+        permission_tool_use,
+    ));
+    fake_model.send_last_completion_stream_event(LanguageModelCompletionEvent::ToolUse(
+        echo_tool_use.clone(),
+    ));
+    fake_model.end_last_completion_stream();
+    cx.run_until_parked();
+
+    // Ensure pending tools are skipped when building a request.
+    let request = thread
+        .read_with(cx, |thread, cx| {
+            thread.build_completion_request(CompletionIntent::EditFile, cx)
+        })
+        .unwrap();
+    assert_eq!(
+        request.messages[1..],
+        vec![
+            LanguageModelRequestMessage {
+                role: Role::User,
+                content: vec!["Hey!".into()],
+                cache: true
+            },
+            LanguageModelRequestMessage {
+                role: Role::Assistant,
+                content: vec![
+                    MessageContent::Text("Hi!".into()),
+                    MessageContent::ToolUse(echo_tool_use.clone())
+                ],
+                cache: false
+            },
+            LanguageModelRequestMessage {
+                role: Role::User,
+                content: vec![MessageContent::ToolResult(LanguageModelToolResult {
+                    tool_use_id: echo_tool_use.id.clone(),
+                    tool_name: echo_tool_use.name,
+                    is_error: false,
+                    content: "test".into(),
+                    output: Some("test".into())
+                })],
+                cache: false
+            },
+        ],
+    );
+}
+
 #[gpui::test]
 async fn test_agent_connection(cx: &mut TestAppContext) {
    cx.update(settings::init);
@@ -1414,11 +1820,11 @@ async fn test_agent_connection(cx: &mut TestAppContext) {
        let clock = Arc::new(clock::FakeSystemClock::new());
        let client = Client::new(clock, http_client, cx);
        let user_store = cx.new(|cx| UserStore::new(client.clone(), cx));
-        Project::init_settings(cx);
-        agent_settings::init(cx);
        language_model::init(client.clone(), cx);
        language_models::init(user_store, client.clone(), cx);
+        Project::init_settings(cx);
        LanguageModelRegistry::test(cx);
+        agent_settings::init(cx);
    });
    cx.executor().forbid_parking();

@@ -1692,6 +2098,7 @@ async fn test_send_retry_on_error(cx: &mut TestAppContext) {
        .unwrap();
    cx.run_until_parked();

+    fake_model.send_last_completion_stream_text_chunk("Hey,");
    fake_model.send_last_completion_stream_error(LanguageModelCompletionError::ServerOverloaded {
        provider: LanguageModelProviderName::new("Anthropic"),
        retry_after: Some(Duration::from_secs(3)),
@@ -1701,8 +2108,9 @@ async fn test_send_retry_on_error(cx: &mut TestAppContext) {
    cx.executor().advance_clock(Duration::from_secs(3));
    cx.run_until_parked();

-    fake_model.send_last_completion_stream_text_chunk("Hey!");
+    fake_model.send_last_completion_stream_text_chunk("there!");
    fake_model.end_last_completion_stream();
+    cx.run_until_parked();

    let mut retry_events = Vec::new();
    while let Some(Ok(event)) = events.next().await {
@@ -1730,12 +2138,94 @@ async fn test_send_retry_on_error(cx: &mut TestAppContext) {

                ## Assistant

-                Hey!
+                Hey,
+
+                [resume]
+
+                ## Assistant
+
+                there!
            "}
        )
    });
 }

+#[gpui::test]
+async fn test_send_retry_finishes_tool_calls_on_error(cx: &mut TestAppContext) {
+    let ThreadTest { thread, model, .. } = setup(cx, TestModel::Fake).await;
+    let fake_model = model.as_fake();
+
+    let events = thread
+        .update(cx, |thread, cx| {
+            thread.set_completion_mode(agent_settings::CompletionMode::Burn, cx);
+            thread.add_tool(EchoTool);
+            thread.send(UserMessageId::new(), ["Call the echo tool!"], cx)
+        })
+        .unwrap();
+    cx.run_until_parked();
+
+    let tool_use_1 = LanguageModelToolUse {
+        id: "tool_1".into(),
+        name: EchoTool::name().into(),
+        raw_input: json!({"text": "test"}).to_string(),
+        input: json!({"text": "test"}),
+        is_input_complete: true,
+    };
+    fake_model.send_last_completion_stream_event(LanguageModelCompletionEvent::ToolUse(
+        tool_use_1.clone(),
+    ));
+    fake_model.send_last_completion_stream_error(LanguageModelCompletionError::ServerOverloaded {
+        provider: LanguageModelProviderName::new("Anthropic"),
+        retry_after: Some(Duration::from_secs(3)),
+    });
+    fake_model.end_last_completion_stream();
+
+    cx.executor().advance_clock(Duration::from_secs(3));
+    let completion = fake_model.pending_completions().pop().unwrap();
+    assert_eq!(
+        completion.messages[1..],
+        vec![
+            LanguageModelRequestMessage {
+                role: Role::User,
+                content: vec!["Call the echo tool!".into()],
+                cache: false
+            },
+            LanguageModelRequestMessage {
+                role: Role::Assistant,
+                content: vec![language_model::MessageContent::ToolUse(tool_use_1.clone())],
+                cache: false
+            },
+            LanguageModelRequestMessage {
+                role: Role::User,
+                content: vec![language_model::MessageContent::ToolResult(
+                    LanguageModelToolResult {
+                        tool_use_id: tool_use_1.id.clone(),
+                        tool_name: tool_use_1.name.clone(),
+                        is_error: false,
+                        content: "test".into(),
+                        output: Some("test".into())
+                    }
+                )],
+                cache: true
+            },
+        ]
+    );
+
+    fake_model.send_last_completion_stream_text_chunk("Done");
+    fake_model.end_last_completion_stream();
+    cx.run_until_parked();
+    events.collect::<Vec<_>>().await;
+    thread.read_with(cx, |thread, _cx| {
+        assert_eq!(
+            thread.last_message(),
+            Some(Message::Agent(AgentMessage {
+                content: vec![AgentMessageContent::Text("Done".into())],
+                tool_results: IndexMap::default()
+            }))
+        );
+    })
+}
+
 #[gpui::test]
 async fn test_send_max_retries_exceeded(cx: &mut TestAppContext) {
    let ThreadTest { thread, model, .. } = setup(cx, TestModel::Fake).await;
@@ -1806,6 +2296,7 @@ struct ThreadTest {
    model: Arc<dyn LanguageModel>,
    thread: Entity<Thread>,
    project_context: Entity<ProjectContext>,
+    context_server_store: Entity<ContextServerStore>,
    fs: Arc<FakeFs>,
 }

@@ -1844,6 +2335,7 @@ async fn setup(cx: &mut TestAppContext, model: TestModel) -> ThreadTest {
                            WordListTool::name(): true,
                            ToolRequiringPermission::name(): true,
                            InfiniteTool::name(): true,
+                            ThinkingTool::name(): true,
                        }
                    }
                }
@@ -1858,15 +2350,20 @@ async fn setup(cx: &mut TestAppContext, model: TestModel) -> ThreadTest {
        settings::init(cx);
        Project::init_settings(cx);
        agent_settings::init(cx);
-        gpui_tokio::init(cx);
-        let http_client = ReqwestClient::user_agent("agent tests").unwrap();
-        cx.set_http_client(Arc::new(http_client));

-        client::init_settings(cx);
-        let client = Client::production(cx);
-        let user_store = cx.new(|cx| UserStore::new(client.clone(), cx));
-        language_model::init(client.clone(), cx);
-        language_models::init(user_store, client.clone(), cx);
+        match model {
+            TestModel::Fake => {}
+            TestModel::Sonnet4 => {
+                gpui_tokio::init(cx);
+                let http_client = ReqwestClient::user_agent("agent tests").unwrap();
+                cx.set_http_client(Arc::new(http_client));
+                client::init_settings(cx);
+                let client = Client::production(cx);
+                let user_store = cx.new(|cx| UserStore::new(client.clone(), cx));
+                language_model::init(client.clone(), cx);
+                language_models::init(user_store, client.clone(), cx);
+            }
+        };

        watch_settings(fs.clone(), cx);
    });
@@ -1900,8 +2397,9 @@ async fn setup(cx: &mut TestAppContext, model: TestModel) -> ThreadTest {
        .await;

    let project_context = cx.new(|_cx| ProjectContext::default());
+    let context_server_store = project.read_with(cx, |project, _| project.context_server_store());
    let context_server_registry =
-        cx.new(|cx| ContextServerRegistry::new(project.read(cx).context_server_store(), cx));
+        cx.new(|cx| ContextServerRegistry::new(context_server_store.clone(), cx));
    let thread = cx.new(|cx| {
        Thread::new(
            project,
@@ -1916,6 +2414,7 @@ async fn setup(cx: &mut TestAppContext, model: TestModel) -> ThreadTest {
        model,
        thread,
        project_context,
+        context_server_store,
        fs,
    }
 }
@@ -1950,3 +2449,89 @@ fn watch_settings(fs: Arc<dyn Fs>, cx: &mut App) {
    })
    .detach();
 }
+
+fn tool_names_for_completion(completion: &LanguageModelRequest) -> Vec<String> {
+    completion
+        .tools
+        .iter()
+        .map(|tool| tool.name.clone())
+        .collect()
+}
+
+fn setup_context_server(
+    name: &'static str,
+    tools: Vec<context_server::types::Tool>,
+    context_server_store: &Entity<ContextServerStore>,
+    cx: &mut TestAppContext,
+) -> mpsc::UnboundedReceiver<(
+    context_server::types::CallToolParams,
+    oneshot::Sender<context_server::types::CallToolResponse>,
+)> {
+    cx.update(|cx| {
+        let mut settings = ProjectSettings::get_global(cx).clone();
+        settings.context_servers.insert(
+            name.into(),
+            project::project_settings::ContextServerSettings::Custom {
+                enabled: true,
+                command: ContextServerCommand {
+                    path: "somebinary".into(),
+                    args: Vec::new(),
+                    env: None,
+                },
+            },
+        );
+        ProjectSettings::override_global(settings, cx);
+    });
+
+    let (mcp_tool_calls_tx, mcp_tool_calls_rx) = mpsc::unbounded();
+    let fake_transport = context_server::test::create_fake_transport(name, cx.executor())
+        .on_request::<context_server::types::requests::Initialize, _>(move |_params| async move {
+            context_server::types::InitializeResponse {
+                protocol_version: context_server::types::ProtocolVersion(
+                    context_server::types::LATEST_PROTOCOL_VERSION.to_string(),
+                ),
+                server_info: context_server::types::Implementation {
+                    name: name.into(),
+                    version: "1.0.0".to_string(),
+                },
+                capabilities: context_server::types::ServerCapabilities {
+                    tools: Some(context_server::types::ToolsCapabilities {
+                        list_changed: Some(true),
+                    }),
+                    ..Default::default()
+                },
+                meta: None,
+            }
+        })
+        .on_request::<context_server::types::requests::ListTools, _>(move |_params| {
+            let tools = tools.clone();
+            async move {
+                context_server::types::ListToolsResponse {
+                    tools,
+                    next_cursor: None,
+                    meta: None,
+                }
+            }
+        })
+        .on_request::<context_server::types::requests::CallTool, _>(move |params| {
+            let mcp_tool_calls_tx = mcp_tool_calls_tx.clone();
+            async move {
+                let (response_tx, response_rx) = oneshot::channel();
+                mcp_tool_calls_tx
+                    .unbounded_send((params, response_tx))
+                    .unwrap();
+                response_rx.await.unwrap()
+            }
+        });
+    context_server_store.update(cx, |store, cx| {
+        store.start_server(
+            Arc::new(ContextServer::new(
+                ContextServerId(name.into()),
+                Arc::new(fake_transport),
+            )),
+            cx,
+        );
+    });
+    cx.run_until_parked();
+    mcp_tool_calls_rx
+}
--- a/crates/agent2/src/thread.rs
+++ b/crates/agent2/src/thread.rs
@@ -9,15 +9,15 @@ use action_log::ActionLog;
 use agent::thread::{GitState, ProjectSnapshot, WorktreeSnapshot};
 use agent_client_protocol as acp;
 use agent_settings::{
-    AgentProfileId, AgentSettings, CompletionMode, SUMMARIZE_THREAD_DETAILED_PROMPT,
-    SUMMARIZE_THREAD_PROMPT,
+    AgentProfileId, AgentProfileSettings, AgentSettings, CompletionMode,
+    SUMMARIZE_THREAD_DETAILED_PROMPT, SUMMARIZE_THREAD_PROMPT,
 };
 use anyhow::{Context as _, Result, anyhow};
 use assistant_tool::adapt_schema_to_format;
 use chrono::{DateTime, Utc};
 use client::{ModelRequestUsage, RequestUsage};
 use cloud_llm_client::{CompletionIntent, CompletionRequestStatus, UsageLimit};
-use collections::{HashMap, IndexMap};
+use collections::{HashMap, HashSet, IndexMap};
 use fs::Fs;
 use futures::{
    FutureExt,
@@ -47,15 +47,18 @@ use settings::{Settings, update_settings_file};
 use smol::stream::StreamExt;
 use std::{
    collections::BTreeMap,
+    ops::RangeInclusive,
    path::Path,
+    rc::Rc,
    sync::Arc,
    time::{Duration, Instant},
 };
-use std::{fmt::Write, ops::Range};
-use util::{ResultExt, markdown::MarkdownCodeBlock};
+use std::{fmt::Write, path::PathBuf};
+use util::{ResultExt, debug_panic, markdown::MarkdownCodeBlock};
 use uuid::Uuid;

 const TOOL_CANCELED_MESSAGE: &str = "Tool canceled by user";
+pub const MAX_TOOL_NAME_LENGTH: usize = 64;

 /// The ID of the user prompt that initiated a request.
 ///
@@ -121,7 +124,7 @@ impl Message {
        match self {
            Message::User(message) => message.to_markdown(),
            Message::Agent(message) => message.to_markdown(),
-            Message::Resume => "[resumed after tool use limit was reached]".into(),
+            Message::Resume => "[resume]\n".into(),
        }
    }

@@ -186,6 +189,7 @@ impl UserMessage {
        const OPEN_FILES_TAG: &str = "<files>";
        const OPEN_DIRECTORIES_TAG: &str = "<directories>";
        const OPEN_SYMBOLS_TAG: &str = "<symbols>";
+        const OPEN_SELECTIONS_TAG: &str = "<selections>";
        const OPEN_THREADS_TAG: &str = "<threads>";
        const OPEN_FETCH_TAG: &str = "<fetched_urls>";
        const OPEN_RULES_TAG: &str =
@@ -194,6 +198,7 @@ impl UserMessage {
        let mut file_context = OPEN_FILES_TAG.to_string();
        let mut directory_context = OPEN_DIRECTORIES_TAG.to_string();
        let mut symbol_context = OPEN_SYMBOLS_TAG.to_string();
+        let mut selection_context = OPEN_SELECTIONS_TAG.to_string();
        let mut thread_context = OPEN_THREADS_TAG.to_string();
        let mut fetch_context = OPEN_FETCH_TAG.to_string();
        let mut rules_context = OPEN_RULES_TAG.to_string();
@@ -210,7 +215,7 @@ impl UserMessage {
                    match uri {
                        MentionUri::File { abs_path } => {
                            write!(
-                                &mut symbol_context,
+                                &mut file_context,
                                "\n{}",
                                MarkdownCodeBlock {
                                    tag: &codeblock_tag(abs_path, None),
@@ -219,17 +224,19 @@ impl UserMessage {
                            )
                            .ok();
                        }
+                        MentionUri::PastedImage => {
+                            debug_panic!("pasted image URI should not be used in mention content")
+                        }
                        MentionUri::Directory { .. } => {
                            write!(&mut directory_context, "\n{}\n", content).ok();
                        }
                        MentionUri::Symbol {
-                            path, line_range, ..
-                        }
-                        | MentionUri::Selection {
-                            path, line_range, ..
+                            abs_path: path,
+                            line_range,
+                            ..
                        } => {
                            write!(
-                                &mut rules_context,
+                                &mut symbol_context,
                                "\n{}",
                                MarkdownCodeBlock {
                                    tag: &codeblock_tag(path, Some(line_range)),
@@ -238,6 +245,24 @@ impl UserMessage {
                            )
                            .ok();
                        }
+                        MentionUri::Selection {
+                            abs_path: path,
+                            line_range,
+                            ..
+                        } => {
+                            write!(
+                                &mut selection_context,
+                                "\n{}",
+                                MarkdownCodeBlock {
+                                    tag: &codeblock_tag(
+                                        path.as_deref().unwrap_or("Untitled".as_ref()),
+                                        Some(line_range)
+                                    ),
+                                    text: content
+                                }
+                            )
+                            .ok();
+                        }
                        MentionUri::Thread { .. } => {
                            write!(&mut thread_context, "\n{}\n", content).ok();
                        }
@@ -290,6 +315,13 @@ impl UserMessage {
                .push(language_model::MessageContent::Text(symbol_context));
        }

+        if selection_context.len() > OPEN_SELECTIONS_TAG.len() {
+            selection_context.push_str("</selections>\n");
+            message
+                .content
+                .push(language_model::MessageContent::Text(selection_context));
+        }
+
        if thread_context.len() > OPEN_THREADS_TAG.len() {
            thread_context.push_str("</threads>\n");
            message
@@ -325,7 +357,7 @@ impl UserMessage {
    }
 }

-fn codeblock_tag(full_path: &Path, line_range: Option<&Range<u32>>) -> String {
+fn codeblock_tag(full_path: &Path, line_range: Option<&RangeInclusive<u32>>) -> String {
    let mut result = String::new();

    if let Some(extension) = full_path.extension().and_then(|ext| ext.to_str()) {
@@ -335,10 +367,10 @@ fn codeblock_tag(full_path: &Path, line_range: Option<&Range<u32>>) -> String {
    let _ = write!(result, "{}", full_path.display());

    if let Some(range) = line_range {
-        if range.start == range.end {
-            let _ = write!(result, ":{}", range.start + 1);
+        if range.start() == range.end() {
+            let _ = write!(result, ":{}", range.start() + 1);
        } else {
-            let _ = write!(result, ":{}-{}", range.start + 1, range.end + 1);
+            let _ = write!(result, ":{}-{}", range.start() + 1, range.end() + 1);
        }
    }

@@ -417,24 +449,33 @@ impl AgentMessage {
            cache: false,
        };
        for chunk in &self.content {
-            let chunk = match chunk {
+            match chunk {
                AgentMessageContent::Text(text) => {
-                    language_model::MessageContent::Text(text.clone())
+                    assistant_message
+                        .content
+                        .push(language_model::MessageContent::Text(text.clone()));
                }
                AgentMessageContent::Thinking { text, signature } => {
-                    language_model::MessageContent::Thinking {
-                        text: text.clone(),
-                        signature: signature.clone(),
-                    }
+                    assistant_message
+                        .content
+                        .push(language_model::MessageContent::Thinking {
+                            text: text.clone(),
+                            signature: signature.clone(),
+                        });
                }
                AgentMessageContent::RedactedThinking(value) => {
-                    language_model::MessageContent::RedactedThinking(value.clone())
+                    assistant_message.content.push(
+                        language_model::MessageContent::RedactedThinking(value.clone()),
+                    );
                }
-                AgentMessageContent::ToolUse(value) => {
-                    language_model::MessageContent::ToolUse(value.clone())
+                AgentMessageContent::ToolUse(tool_use) => {
+                    if self.tool_results.contains_key(&tool_use.id) {
+                        assistant_message
+                            .content
+                            .push(language_model::MessageContent::ToolUse(tool_use.clone()));
+                    }
                }
            };
-            assistant_message.content.push(chunk);
        }

        let mut user_message = LanguageModelRequestMessage {
@@ -444,11 +485,15 @@ impl AgentMessage {
        };

        for tool_result in self.tool_results.values() {
+            let mut tool_result = tool_result.clone();
+            // Surprisingly, the API fails if we return an empty string here.
+            // It thinks we are sending a tool use without a tool result.
+            if tool_result.content.is_empty() {
+                tool_result.content = "<Tool returned an empty string>".into();
+            }
            user_message
                .content
-                .push(language_model::MessageContent::ToolResult(
-                    tool_result.clone(),
-                ));
+                .push(language_model::MessageContent::ToolResult(tool_result));
        }

        let mut messages = Vec::new();
@@ -479,6 +524,22 @@ pub enum AgentMessageContent {
    ToolUse(LanguageModelToolUse),
 }

+pub trait TerminalHandle {
+    fn id(&self, cx: &AsyncApp) -> Result<acp::TerminalId>;
+    fn current_output(&self, cx: &AsyncApp) -> Result<acp::TerminalOutputResponse>;
+    fn wait_for_exit(&self, cx: &AsyncApp) -> Result<Shared<Task<acp::TerminalExitStatus>>>;
+}
+
+pub trait ThreadEnvironment {
+    fn create_terminal(
+        &self,
+        command: String,
+        cwd: Option<PathBuf>,
+        output_byte_limit: Option<u64>,
+        cx: &mut AsyncApp,
+    ) -> Task<Result<Rc<dyn TerminalHandle>>>;
+}
+
 #[derive(Debug)]
 pub enum ThreadEvent {
    UserMessage(UserMessage),
@@ -491,6 +552,14 @@ pub enum ThreadEvent {
    Stop(acp::StopReason),
 }

+#[derive(Debug)]
+pub struct NewTerminal {
+    pub command: String,
+    pub output_byte_limit: Option<u64>,
+    pub cwd: Option<PathBuf>,
+    pub response: oneshot::Sender<Result<Entity<acp_thread::Terminal>>>,
+}
+
 #[derive(Debug)]
 pub struct ToolCallAuthorization {
    pub tool_call: acp::ToolCallUpdate,
@@ -535,11 +604,22 @@ pub struct Thread {
    templates: Arc<Templates>,
    model: Option<Arc<dyn LanguageModel>>,
    summarization_model: Option<Arc<dyn LanguageModel>>,
+    prompt_capabilities_tx: watch::Sender<acp::PromptCapabilities>,
+    pub(crate) prompt_capabilities_rx: watch::Receiver<acp::PromptCapabilities>,
    pub(crate) project: Entity<Project>,
    pub(crate) action_log: Entity<ActionLog>,
 }

 impl Thread {
+    fn prompt_capabilities(model: Option<&dyn LanguageModel>) -> acp::PromptCapabilities {
+        let image = model.map_or(true, |model| model.supports_images());
+        acp::PromptCapabilities {
+            image,
+            audio: false,
+            embedded_context: true,
+        }
+    }
+
    pub fn new(
        project: Entity<Project>,
        project_context: Entity<ProjectContext>,
@@ -550,6 +630,8 @@ impl Thread {
    ) -> Self {
        let profile_id = AgentSettings::get_global(cx).default_profile.clone();
        let action_log = cx.new(|_cx| ActionLog::new(project.clone()));
+        let (prompt_capabilities_tx, prompt_capabilities_rx) =
+            watch::channel(Self::prompt_capabilities(model.as_deref()));
        Self {
            id: acp::SessionId(uuid::Uuid::new_v4().to_string().into()),
            prompt_id: PromptId::new(),
@@ -577,6 +659,8 @@ impl Thread {
            templates,
            model,
            summarization_model: None,
+            prompt_capabilities_tx,
+            prompt_capabilities_rx,
            project,
            action_log,
        }
@@ -627,7 +711,20 @@ impl Thread {
        stream: &ThreadEventStream,
        cx: &mut Context<Self>,
    ) {
-        let Some(tool) = self.tools.get(tool_use.name.as_ref()) else {
+        let tool = self.tools.get(tool_use.name.as_ref()).cloned().or_else(|| {
+            self.context_server_registry
+                .read(cx)
+                .servers()
+                .find_map(|(_, tools)| {
+                    if let Some(tool) = tools.get(tool_use.name.as_ref()) {
+                        Some(tool.clone())
+                    } else {
+                        None
+                    }
+                })
+        });
+
+        let Some(tool) = tool else {
            stream
                .0
                .unbounded_send(Ok(ThreadEvent::ToolCall(acp::ToolCall {
@@ -664,7 +761,17 @@ impl Thread {
        stream.update_tool_call_fields(
            &tool_use.id,
            acp::ToolCallUpdateFields {
-                status: Some(acp::ToolCallStatus::Completed),
+                status: Some(
+                    tool_result
+                        .as_ref()
+                        .map_or(acp::ToolCallStatus::Failed, |result| {
+                            if result.is_error {
+                                acp::ToolCallStatus::Failed
+                            } else {
+                                acp::ToolCallStatus::Completed
+                            }
+                        }),
+                ),
                raw_output: output,
                ..Default::default()
            },
@@ -697,6 +804,8 @@ impl Thread {
                .or_else(|| registry.default_model())
                .map(|model| model.model)
        });
+        let (prompt_capabilities_tx, prompt_capabilities_rx) =
+            watch::channel(Self::prompt_capabilities(model.as_deref()));

        Self {
            id,
@@ -726,6 +835,8 @@ impl Thread {
            project,
            action_log,
            updated_at: db_thread.updated_at,
+            prompt_capabilities_tx,
+            prompt_capabilities_rx,
        }
    }

@@ -893,10 +1004,12 @@ impl Thread {
    pub fn set_model(&mut self, model: Arc<dyn LanguageModel>, cx: &mut Context<Self>) {
        let old_usage = self.latest_token_usage();
        self.model = Some(model);
+        let new_caps = Self::prompt_capabilities(self.model.as_deref());
        let new_usage = self.latest_token_usage();
        if old_usage != new_usage {
            cx.emit(TokenUsageUpdated(new_usage));
        }
+        self.prompt_capabilities_tx.send(new_caps).log_err();
        cx.notify()
    }

@@ -936,7 +1049,11 @@ impl Thread {
        }
    }

-    pub fn add_default_tools(&mut self, cx: &mut Context<Self>) {
+    pub fn add_default_tools(
+        &mut self,
+        environment: Rc<dyn ThreadEnvironment>,
+        cx: &mut Context<Self>,
+    ) {
        let language_registry = self.project.read(cx).languages().clone();
        self.add_tool(CopyPathTool::new(self.project.clone()));
        self.add_tool(CreateDirectoryTool::new(self.project.clone()));
@@ -957,7 +1074,7 @@ impl Thread {
            self.project.clone(),
            self.action_log.clone(),
        ));
-        self.add_tool(TerminalTool::new(self.project.clone(), cx));
+        self.add_tool(TerminalTool::new(self.project.clone(), environment));
        self.add_tool(ThinkingTool);
        self.add_tool(WebSearchTool);
    }
@@ -1032,15 +1149,10 @@ impl Thread {
        &mut self,
        cx: &mut Context<Self>,
    ) -> Result<mpsc::UnboundedReceiver<Result<ThreadEvent>>> {
-        anyhow::ensure!(
-            self.tool_use_limit_reached,
-            "can only resume after tool use limit is reached"
-        );
-
        self.messages.push(Message::Resume);
        cx.notify();

-        log::info!("Total messages in thread: {}", self.messages.len());
+        log::debug!("Total messages in thread: {}", self.messages.len());
        self.run_turn(cx)
    }

@@ -1058,7 +1170,7 @@ impl Thread {
    {
        let model = self.model().context("No language model configured")?;

-        log::info!("Thread::send called with model: {:?}", model.name());
+        log::info!("Thread::send called with model: {}", model.name().0);
        self.advance_prompt_id();

        let content = content.into_iter().map(Into::into).collect::<Vec<_>>();
@@ -1068,7 +1180,7 @@ impl Thread {
            .push(Message::User(UserMessage { id, content }));
        cx.notify();

-        log::info!("Total messages in thread: {}", self.messages.len());
+        log::debug!("Total messages in thread: {}", self.messages.len());
        self.run_turn(cx)
    }

@@ -1079,6 +1191,10 @@ impl Thread {
        self.cancel(cx);

        let model = self.model.clone().context("No language model configured")?;
+        let profile = AgentSettings::get_global(cx)
+            .profiles
+            .get(&self.profile_id)
+            .context("Profile not found")?;
        let (events_tx, events_rx) = mpsc::unbounded::<Result<ThreadEvent>>();
        let event_stream = ThreadEventStream(events_tx);
        let message_ix = self.messages.len().saturating_sub(1);
@@ -1086,45 +1202,16 @@ impl Thread {
        self.summary = None;
        self.running_turn = Some(RunningTurn {
            event_stream: event_stream.clone(),
+            tools: self.enabled_tools(profile, &model, cx),
            _task: cx.spawn(async move |this, cx| {
-                log::info!("Starting agent turn execution");
+                log::debug!("Starting agent turn execution");

-                let turn_result: Result<()> = async {
-                    let mut intent = CompletionIntent::UserPrompt;
-                    loop {
-                        Self::stream_completion(&this, &model, intent, &event_stream, cx).await?;
-
-                        let mut end_turn = true;
-                        this.update(cx, |this, cx| {
-                            // Generate title if needed.
-                            if this.title.is_none() && this.pending_title_generation.is_none() {
-                                this.generate_title(cx);
-                            }
-
-                            // End the turn if the model didn't use tools.
-                            let message = this.pending_message.as_ref();
-                            end_turn =
-                                message.map_or(true, |message| message.tool_results.is_empty());
-                            this.flush_pending_message(cx);
-                        })?;
-
-                        if this.read_with(cx, |this, _| this.tool_use_limit_reached)? {
-                            log::info!("Tool use limit reached, completing turn");
-                            return Err(language_model::ToolUseLimitReachedError.into());
-                        } else if end_turn {
-                            log::info!("No tool uses found, completing turn");
-                            return Ok(());
-                        } else {
-                            intent = CompletionIntent::ToolResults;
-                        }
-                    }
-                }
-                .await;
+                let turn_result = Self::run_turn_internal(&this, model, &event_stream, cx).await;
                _ = this.update(cx, |this, cx| this.flush_pending_message(cx));

                match turn_result {
                    Ok(()) => {
-                        log::info!("Turn execution completed");
+                        log::debug!("Turn execution completed");
                        event_stream.send_stop(acp::StopReason::EndTurn);
                    }
                    Err(error) => {
@@ -1150,20 +1237,18 @@ impl Thread {
        Ok(events_rx)
    }

-    async fn stream_completion(
+    async fn run_turn_internal(
        this: &WeakEntity<Self>,
-        model: &Arc<dyn LanguageModel>,
-        completion_intent: CompletionIntent,
+        model: Arc<dyn LanguageModel>,
        event_stream: &ThreadEventStream,
        cx: &mut AsyncApp,
    ) -> Result<()> {
-        log::debug!("Stream completion started successfully");
-        let request = this.update(cx, |this, cx| {
-            this.build_completion_request(completion_intent, cx)
-        })??;
+        let mut attempt = 0;
+        let mut intent = CompletionIntent::UserPrompt;
+        loop {
+            let request =
+                this.update(cx, |this, cx| this.build_completion_request(intent, cx))??;

-        let mut attempt = None;
-        'retry: loop {
            telemetry::event!(
                "Agent Thread Completion",
                thread_id = this.read_with(cx, |this, _| this.id.to_string())?,
@@ -1173,75 +1258,31 @@ impl Thread {
                attempt
            );

-            log::info!(
-                "Calling model.stream_completion, attempt {}",
-                attempt.unwrap_or(0)
-            );
+            log::debug!("Calling model.stream_completion, attempt {}", attempt);
            let mut events = model
-                .stream_completion(request.clone(), cx)
+                .stream_completion(request, cx)
                .await
                .map_err(|error| anyhow!(error))?;
            let mut tool_results = FuturesUnordered::new();
-
+            let mut error = None;
            while let Some(event) = events.next().await {
+                log::trace!("Received completion event: {:?}", event);
                match event {
                    Ok(event) => {
-                        log::trace!("Received completion event: {:?}", event);
                        tool_results.extend(this.update(cx, |this, cx| {
-                            this.handle_streamed_completion_event(event, event_stream, cx)
+                            this.handle_completion_event(event, event_stream, cx)
                        })??);
                    }
-                    Err(error) => {
-                        let completion_mode =
-                            this.read_with(cx, |thread, _cx| thread.completion_mode())?;
-                        if completion_mode == CompletionMode::Normal {
-                            return Err(anyhow!(error))?;
-                        }
-
-                        let Some(strategy) = Self::retry_strategy_for(&error) else {
-                            return Err(anyhow!(error))?;
-                        };
-
-                        let max_attempts = match &strategy {
-                            RetryStrategy::ExponentialBackoff { max_attempts, .. } => *max_attempts,
-                            RetryStrategy::Fixed { max_attempts, .. } => *max_attempts,
-                        };
-
-                        let attempt = attempt.get_or_insert(0u8);
-
-                        *attempt += 1;
-
-                        let attempt = *attempt;
-                        if attempt > max_attempts {
-                            return Err(anyhow!(error))?;
-                        }
-
-                        let delay = match &strategy {
-                            RetryStrategy::ExponentialBackoff { initial_delay, .. } => {
-                                let delay_secs =
-                                    initial_delay.as_secs() * 2u64.pow((attempt - 1) as u32);
-                                Duration::from_secs(delay_secs)
-                            }
-                            RetryStrategy::Fixed { delay, .. } => *delay,
-                        };
-                        log::debug!("Retry attempt {attempt} with delay {delay:?}");
-
-                        event_stream.send_retry(acp_thread::RetryStatus {
-                            last_error: error.to_string().into(),
-                            attempt: attempt as usize,
-                            max_attempts: max_attempts as usize,
-                            started_at: Instant::now(),
-                            duration: delay,
-                        });
-
-                        cx.background_executor().timer(delay).await;
-                        continue 'retry;
+                    Err(err) => {
+                        error = Some(err);
+                        break;
                    }
                }
            }

+            let end_turn = tool_results.is_empty();
            while let Some(tool_result) = tool_results.next().await {
-                log::info!("Tool finished {:?}", tool_result);
+                log::debug!("Tool finished {:?}", tool_result);

                event_stream.update_tool_call_fields(
                    &tool_result.tool_use_id,
@@ -1262,31 +1303,83 @@ impl Thread {
                })?;
            }

-            return Ok(());
+            this.update(cx, |this, cx| {
+                this.flush_pending_message(cx);
+                if this.title.is_none() && this.pending_title_generation.is_none() {
+                    this.generate_title(cx);
+                }
+            })?;
+
+            if let Some(error) = error {
+                attempt += 1;
+                let retry =
+                    this.update(cx, |this, _| this.handle_completion_error(error, attempt))??;
+                let timer = cx.background_executor().timer(retry.duration);
+                event_stream.send_retry(retry);
+                timer.await;
+                this.update(cx, |this, _cx| {
+                    if let Some(Message::Agent(message)) = this.messages.last() {
+                        if message.tool_results.is_empty() {
+                            intent = CompletionIntent::UserPrompt;
+                            this.messages.push(Message::Resume);
+                        }
+                    }
+                })?;
+            } else if this.read_with(cx, |this, _| this.tool_use_limit_reached)? {
+                return Err(language_model::ToolUseLimitReachedError.into());
+            } else if end_turn {
+                return Ok(());
+            } else {
+                intent = CompletionIntent::ToolResults;
+                attempt = 0;
+            }
        }
    }

-    pub fn build_system_message(&self, cx: &App) -> LanguageModelRequestMessage {
-        log::debug!("Building system message");
-        let prompt = SystemPromptTemplate {
-            project: self.project_context.read(cx),
-            available_tools: self.tools.keys().cloned().collect(),
+    fn handle_completion_error(
+        &mut self,
+        error: LanguageModelCompletionError,
+        attempt: u8,
+    ) -> Result<acp_thread::RetryStatus> {
+        if self.completion_mode == CompletionMode::Normal {
+            return Err(anyhow!(error));
        }
-        .render(&self.templates)
-        .context("failed to build system prompt")
-        .expect("Invalid template");
-        log::debug!("System message built");
-        LanguageModelRequestMessage {
-            role: Role::System,
-            content: vec![prompt.into()],
-            cache: true,
+
+        let Some(strategy) = Self::retry_strategy_for(&error) else {
+            return Err(anyhow!(error));
+        };
+
+        let max_attempts = match &strategy {
+            RetryStrategy::ExponentialBackoff { max_attempts, .. } => *max_attempts,
+            RetryStrategy::Fixed { max_attempts, .. } => *max_attempts,
+        };
+
+        if attempt > max_attempts {
+            return Err(anyhow!(error));
        }
+
+        let delay = match &strategy {
+            RetryStrategy::ExponentialBackoff { initial_delay, .. } => {
+                let delay_secs = initial_delay.as_secs() * 2u64.pow((attempt - 1) as u32);
+                Duration::from_secs(delay_secs)
+            }
+            RetryStrategy::Fixed { delay, .. } => *delay,
+        };
+        log::debug!("Retry attempt {attempt} with delay {delay:?}");
+
+        Ok(acp_thread::RetryStatus {
+            last_error: error.to_string().into(),
+            attempt: attempt as usize,
+            max_attempts: max_attempts as usize,
+            started_at: Instant::now(),
+            duration: delay,
+        })
    }

    /// A helper method that's called on every streamed completion event.
    /// Returns an optional tool result task, which the main agentic loop will
    /// send back to the model when it resolves.
-    fn handle_streamed_completion_event(
+    fn handle_completion_event(
        &mut self,
        event: LanguageModelCompletionEvent,
        event_stream: &ThreadEventStream,
@@ -1417,7 +1510,7 @@ impl Thread {
    ) -> Option<Task<LanguageModelToolResult>> {
        cx.notify();

-        let tool = self.tools.get(tool_use.name.as_ref()).cloned();
+        let tool = self.tool(tool_use.name.as_ref());
        let mut title = SharedString::from(&tool_use.name);
        let mut kind = acp::ToolKind::Other;
        if let Some(tool) = tool.as_ref() {
@@ -1481,7 +1574,7 @@ impl Thread {
        });
        let supports_images = self.model().is_some_and(|model| model.supports_images());
        let tool_result = tool.run(tool_use.input, tool_event_stream, cx);
-        log::info!("Running tool {}", tool_use.name);
+        log::debug!("Running tool {}", tool_use.name);
        Some(cx.foreground_executor().spawn(async move {
            let tool_result = tool_result.await.and_then(|output| {
                if let LanguageModelToolResultContent::Image(_) = &output.llm_output
@@ -1507,7 +1600,7 @@ impl Thread {
                    tool_name: tool_use.name,
                    is_error: true,
                    content: LanguageModelToolResultContent::Text(Arc::from(error.to_string())),
-                    output: None,
+                    output: Some(error.to_string().into()),
                },
            }
        }))
@@ -1593,7 +1686,7 @@ impl Thread {
                summary.extend(lines.next());
            }

-            log::info!("Setting summary: {}", summary);
+            log::debug!("Setting summary: {}", summary);
            let summary = SharedString::from(summary);

            this.update(cx, |this, cx| {
@@ -1610,7 +1703,7 @@ impl Thread {
            return;
        };

-        log::info!(
+        log::debug!(
            "Generating title with model: {:?}",
            self.summarization_model.as_ref().map(|model| model.name())
        );
@@ -1696,6 +1789,10 @@ impl Thread {
            return;
        };

+        if message.content.is_empty() {
+            return;
+        }
+
        for content in &message.content {
            let AgentMessageContent::ToolUse(tool_use) = content else {
                continue;
@@ -1724,34 +1821,32 @@ impl Thread {
    pub(crate) fn build_completion_request(
        &self,
        completion_intent: CompletionIntent,
-        cx: &mut App,
+        cx: &App,
    ) -> Result<LanguageModelRequest> {
        let model = self.model().context("No language model configured")?;
+        let tools = if let Some(turn) = self.running_turn.as_ref() {
+            turn.tools
+                .iter()
+                .filter_map(|(tool_name, tool)| {
+                    log::trace!("Including tool: {}", tool_name);
+                    Some(LanguageModelRequestTool {
+                        name: tool_name.to_string(),
+                        description: tool.description().to_string(),
+                        input_schema: tool.input_schema(model.tool_input_format()).log_err()?,
+                    })
+                })
+                .collect::<Vec<_>>()
+        } else {
+            Vec::new()
+        };

        log::debug!("Building completion request");
        log::debug!("Completion intent: {:?}", completion_intent);
        log::debug!("Completion mode: {:?}", self.completion_mode);

        let messages = self.build_request_messages(cx);
-        log::info!("Request will include {} messages", messages.len());
-
-        let tools = if let Some(tools) = self.tools(cx).log_err() {
-            tools
-                .filter_map(|tool| {
-                    let tool_name = tool.name().to_string();
-                    log::trace!("Including tool: {}", tool_name);
-                    Some(LanguageModelRequestTool {
-                        name: tool_name,
-                        description: tool.description().to_string(),
-                        input_schema: tool.input_schema(model.tool_input_format()).log_err()?,
-                    })
-                })
-                .collect()
-        } else {
-            Vec::new()
-        };
-
-        log::info!("Request includes {} tools", tools.len());
+        log::debug!("Request will include {} messages", messages.len());
+        log::debug!("Request includes {} tools", tools.len());

        let request = LanguageModelRequest {
            thread_id: Some(self.id.to_string()),
@@ -1770,37 +1865,76 @@ impl Thread {
        Ok(request)
    }

-    fn tools<'a>(&'a self, cx: &'a App) -> Result<impl Iterator<Item = &'a Arc<dyn AnyAgentTool>>> {
-        let model = self.model().context("No language model configured")?;
+    fn enabled_tools(
+        &self,
+        profile: &AgentProfileSettings,
+        model: &Arc<dyn LanguageModel>,
+        cx: &App,
+    ) -> BTreeMap<SharedString, Arc<dyn AnyAgentTool>> {
+        fn truncate(tool_name: &SharedString) -> SharedString {
+            if tool_name.len() > MAX_TOOL_NAME_LENGTH {
+                let mut truncated = tool_name.to_string();
+                truncated.truncate(MAX_TOOL_NAME_LENGTH);
+                truncated.into()
+            } else {
+                tool_name.clone()
+            }
+        }

-        let profile = AgentSettings::get_global(cx)
-            .profiles
-            .get(&self.profile_id)
-            .context("profile not found")?;
-        let provider_id = model.provider_id();
-
-        Ok(self
+        let mut tools = self
            .tools
            .iter()
-            .filter(move |(_, tool)| tool.supported_provider(&provider_id))
            .filter_map(|(tool_name, tool)| {
-                if profile.is_tool_enabled(tool_name) {
-                    Some(tool)
+                if tool.supported_provider(&model.provider_id())
+                    && profile.is_tool_enabled(tool_name)
+                {
+                    Some((truncate(tool_name), tool.clone()))
                } else {
                    None
                }
            })
-            .chain(self.context_server_registry.read(cx).servers().flat_map(
-                |(server_id, tools)| {
-                    tools.iter().filter_map(|(tool_name, tool)| {
-                        if profile.is_context_server_tool_enabled(&server_id.0, tool_name) {
-                            Some(tool)
-                        } else {
-                            None
-                        }
-                    })
-                },
-            )))
+            .collect::<BTreeMap<_, _>>();
+
+        let mut context_server_tools = Vec::new();
+        let mut seen_tools = tools.keys().cloned().collect::<HashSet<_>>();
+        let mut duplicate_tool_names = HashSet::default();
+        for (server_id, server_tools) in self.context_server_registry.read(cx).servers() {
+            for (tool_name, tool) in server_tools {
+                if profile.is_context_server_tool_enabled(&server_id.0, &tool_name) {
+                    let tool_name = truncate(tool_name);
+                    if !seen_tools.insert(tool_name.clone()) {
+                        duplicate_tool_names.insert(tool_name.clone());
+                    }
+                    context_server_tools.push((server_id.clone(), tool_name, tool.clone()));
+                }
+            }
+        }
+
+        // When there are duplicate tool names, disambiguate by prefixing them
+        // with the server ID. In the rare case there isn't enough space for the
+        // disambiguated tool name, keep only the last tool with this name.
+        for (server_id, tool_name, tool) in context_server_tools {
+            if duplicate_tool_names.contains(&tool_name) {
+                let available = MAX_TOOL_NAME_LENGTH.saturating_sub(tool_name.len());
+                if available >= 2 {
+                    let mut disambiguated = server_id.0.to_string();
+                    disambiguated.truncate(available - 1);
+                    disambiguated.push('_');
+                    disambiguated.push_str(&tool_name);
+                    tools.insert(disambiguated.into(), tool.clone());
+                } else {
+                    tools.insert(tool_name, tool.clone());
+                }
+            } else {
+                tools.insert(tool_name, tool.clone());
+            }
+        }
+
+        tools
+    }
+
+    fn tool(&self, name: &str) -> Option<Arc<dyn AnyAgentTool>> {
+        self.running_turn.as_ref()?.tools.get(name).cloned()
    }

    fn build_request_messages(&self, cx: &App) -> Vec<LanguageModelRequestMessage> {
@@ -1808,21 +1942,29 @@ impl Thread {
            "Building request messages from {} thread messages",
            self.messages.len()
        );
-        let mut messages = vec![self.build_system_message(cx)];
+
+        let system_prompt = SystemPromptTemplate {
+            project: self.project_context.read(cx),
+            available_tools: self.tools.keys().cloned().collect(),
+        }
+        .render(&self.templates)
+        .context("failed to build system prompt")
+        .expect("Invalid template");
+        let mut messages = vec![LanguageModelRequestMessage {
+            role: Role::System,
+            content: vec![system_prompt.into()],
+            cache: false,
+        }];
        for message in &self.messages {
            messages.extend(message.to_request());
        }

-        if let Some(message) = self.pending_message.as_ref() {
-            messages.extend(message.to_request());
+        if let Some(last_message) = messages.last_mut() {
+            last_message.cache = true;
        }

-        if let Some(last_user_message) = messages
-            .iter_mut()
-            .rev()
-            .find(|message| message.role == Role::User)
-        {
-            last_user_message.cache = true;
+        if let Some(message) = self.pending_message.as_ref() {
+            messages.extend(message.to_request());
        }

        messages
@@ -1965,6 +2107,8 @@ struct RunningTurn {
    /// The current event stream for the running turn. Used to report a final
    /// cancellation event if we cancel the turn.
    event_stream: ThreadEventStream,
+    /// The tools that were enabled for this turn.
+    tools: BTreeMap<SharedString, Arc<dyn AnyAgentTool>>,
 }

 impl RunningTurn {
@@ -2274,19 +2418,6 @@ impl ToolCallEventStream {
            .ok();
    }

-    pub fn update_terminal(&self, terminal: Entity<acp_thread::Terminal>) {
-        self.stream
-            .0
-            .unbounded_send(Ok(ThreadEvent::ToolCallUpdate(
-                acp_thread::ToolCallUpdateTerminal {
-                    id: acp::ToolCallId(self.tool_use_id.to_string().into()),
-                    terminal,
-                }
-                .into(),
-            )))
-            .ok();
-    }
-
    pub fn authorize(&self, title: impl Into<String>, cx: &mut App) -> Task<Result<()>> {
        if agent_settings::AgentSettings::get_global(cx).always_allow_tool_actions {
            return Task::ready(Ok(()));
@@ -2358,6 +2489,30 @@ impl ToolCallEventStreamReceiver {
        }
    }

+    pub async fn expect_update_fields(&mut self) -> acp::ToolCallUpdateFields {
+        let event = self.0.next().await;
+        if let Some(Ok(ThreadEvent::ToolCallUpdate(acp_thread::ToolCallUpdate::UpdateFields(
+            update,
+        )))) = event
+        {
+            update.fields
+        } else {
+            panic!("Expected update fields but got: {:?}", event);
+        }
+    }
+
+    pub async fn expect_diff(&mut self) -> Entity<acp_thread::Diff> {
+        let event = self.0.next().await;
+        if let Some(Ok(ThreadEvent::ToolCallUpdate(acp_thread::ToolCallUpdate::UpdateDiff(
+            update,
+        )))) = event
+        {
+            update.diff
+        } else {
+            panic!("Expected diff but got: {:?}", event);
+        }
+    }
+
    pub async fn expect_terminal(&mut self) -> Entity<acp_thread::Terminal> {
        let event = self.0.next().await;
        if let Some(Ok(ThreadEvent::ToolCallUpdate(acp_thread::ToolCallUpdate::UpdateTerminal(
--- a/crates/agent2/src/tools/context_server_registry.rs
+++ b/crates/agent2/src/tools/context_server_registry.rs
@@ -169,15 +169,18 @@ impl AnyAgentTool for ContextServerTool {
    fn run(
        self: Arc<Self>,
        input: serde_json::Value,
-        _event_stream: ToolCallEventStream,
+        event_stream: ToolCallEventStream,
        cx: &mut App,
    ) -> Task<Result<AgentToolOutput>> {
        let Some(server) = self.store.read(cx).get_running_server(&self.server_id) else {
            return Task::ready(Err(anyhow!("Context server not found")));
        };
        let tool_name = self.tool.name.clone();
+        let authorize = event_stream.authorize(self.initial_title(input.clone()), cx);

        cx.spawn(async move |_cx| {
+            authorize.await?;
+
            let Some(protocol) = server.client() else {
                bail!("Context server not initialized");
            };
--- a/crates/agent2/src/tools/edit_file_tool.rs
+++ b/crates/agent2/src/tools/edit_file_tool.rs
@@ -273,6 +273,13 @@ impl AgentTool for EditFileTool {

            let diff = cx.new(|cx| Diff::new(buffer.clone(), cx))?;
            event_stream.update_diff(diff.clone());
+            let _finalize_diff = util::defer({
+               let diff = diff.downgrade();
+               let mut cx = cx.clone();
+               move || {
+                   diff.update(&mut cx, |diff, cx| diff.finalize(cx)).ok();
+               }
+            });

            let old_snapshot = buffer.read_with(cx, |buffer, _cx| buffer.snapshot())?;
            let old_text = cx
@@ -389,8 +396,6 @@ impl AgentTool for EditFileTool {
                })
                .await;

-            diff.update(cx, |diff, cx| diff.finalize(cx)).ok();
-
            let input_path = input.path.display();
            if unified_diff.is_empty() {
                anyhow::ensure!(
@@ -1545,6 +1550,100 @@ mod tests {
        );
    }

+    #[gpui::test]
+    async fn test_diff_finalization(cx: &mut TestAppContext) {
+        init_test(cx);
+        let fs = project::FakeFs::new(cx.executor());
+        fs.insert_tree("/", json!({"main.rs": ""})).await;
+
+        let project = Project::test(fs.clone(), [path!("/").as_ref()], cx).await;
+        let languages = project.read_with(cx, |project, _cx| project.languages().clone());
+        let context_server_registry =
+            cx.new(|cx| ContextServerRegistry::new(project.read(cx).context_server_store(), cx));
+        let model = Arc::new(FakeLanguageModel::default());
+        let thread = cx.new(|cx| {
+            Thread::new(
+                project.clone(),
+                cx.new(|_cx| ProjectContext::default()),
+                context_server_registry.clone(),
+                Templates::new(),
+                Some(model.clone()),
+                cx,
+            )
+        });
+
+        // Ensure the diff is finalized after the edit completes.
+        {
+            let tool = Arc::new(EditFileTool::new(thread.downgrade(), languages.clone()));
+            let (stream_tx, mut stream_rx) = ToolCallEventStream::test();
+            let edit = cx.update(|cx| {
+                tool.run(
+                    EditFileToolInput {
+                        display_description: "Edit file".into(),
+                        path: path!("/main.rs").into(),
+                        mode: EditFileMode::Edit,
+                    },
+                    stream_tx,
+                    cx,
+                )
+            });
+            stream_rx.expect_update_fields().await;
+            let diff = stream_rx.expect_diff().await;
+            diff.read_with(cx, |diff, _| assert!(matches!(diff, Diff::Pending(_))));
+            cx.run_until_parked();
+            model.end_last_completion_stream();
+            edit.await.unwrap();
+            diff.read_with(cx, |diff, _| assert!(matches!(diff, Diff::Finalized(_))));
+        }
+
+        // Ensure the diff is finalized if an error occurs while editing.
+        {
+            model.forbid_requests();
+            let tool = Arc::new(EditFileTool::new(thread.downgrade(), languages.clone()));
+            let (stream_tx, mut stream_rx) = ToolCallEventStream::test();
+            let edit = cx.update(|cx| {
+                tool.run(
+                    EditFileToolInput {
+                        display_description: "Edit file".into(),
+                        path: path!("/main.rs").into(),
+                        mode: EditFileMode::Edit,
+                    },
+                    stream_tx,
+                    cx,
+                )
+            });
+            stream_rx.expect_update_fields().await;
+            let diff = stream_rx.expect_diff().await;
+            diff.read_with(cx, |diff, _| assert!(matches!(diff, Diff::Pending(_))));
+            edit.await.unwrap_err();
+            diff.read_with(cx, |diff, _| assert!(matches!(diff, Diff::Finalized(_))));
+            model.allow_requests();
+        }
+
+        // Ensure the diff is finalized if the tool call gets dropped.
+        {
+            let tool = Arc::new(EditFileTool::new(thread.downgrade(), languages.clone()));
+            let (stream_tx, mut stream_rx) = ToolCallEventStream::test();
+            let edit = cx.update(|cx| {
+                tool.run(
+                    EditFileToolInput {
+                        display_description: "Edit file".into(),
+                        path: path!("/main.rs").into(),
+                        mode: EditFileMode::Edit,
+                    },
+                    stream_tx,
+                    cx,
+                )
+            });
+            stream_rx.expect_update_fields().await;
+            let diff = stream_rx.expect_diff().await;
+            diff.read_with(cx, |diff, _| assert!(matches!(diff, Diff::Pending(_))));
+            drop(edit);
+            cx.run_until_parked();
+            diff.read_with(cx, |diff, _| assert!(matches!(diff, Diff::Finalized(_))));
+        }
+    }
+
    fn init_test(cx: &mut TestAppContext) {
        cx.update(|cx| {
            let settings_store = SettingsStore::test(cx);
--- a/crates/agent2/src/tools/fetch_tool.rs
+++ b/crates/agent2/src/tools/fetch_tool.rs
@@ -136,12 +136,17 @@ impl AgentTool for FetchTool {
    fn run(
        self: Arc<Self>,
        input: Self::Input,
-        _event_stream: ToolCallEventStream,
+        event_stream: ToolCallEventStream,
        cx: &mut App,
    ) -> Task<Result<Self::Output>> {
+        let authorize = event_stream.authorize(input.url.clone(), cx);
+
        let text = cx.background_spawn({
            let http_client = self.http_client.clone();
-            async move { Self::build_message(http_client, &input.url).await }
+            async move {
+                authorize.await?;
+                Self::build_message(http_client, &input.url).await
+            }
        });

        cx.foreground_executor().spawn(async move {
--- a/crates/agent2/src/tools/find_path_tool.rs
+++ b/crates/agent2/src/tools/find_path_tool.rs
@@ -165,16 +165,17 @@ fn search_paths(glob: &str, project: Entity<Project>, cx: &mut App) -> Task<Resu
        .collect();

    cx.background_spawn(async move {
-        Ok(snapshots
-            .iter()
-            .flat_map(|snapshot| {
+        let mut results = Vec::new();
+        for snapshot in snapshots {
+            for entry in snapshot.entries(false, 0) {
                let root_name = PathBuf::from(snapshot.root_name());
-                snapshot
-                    .entries(false, 0)
-                    .map(move |entry| root_name.join(&entry.path))
-                    .filter(|path| path_matcher.is_match(&path))
-            })
-            .collect())
+                if path_matcher.is_match(root_name.join(&entry.path)) {
+                    results.push(snapshot.abs_path().join(entry.path.as_ref()));
+                }
+            }
+        }
+
+        Ok(results)
    })
 }

@@ -215,8 +216,8 @@ mod test {
        assert_eq!(
            matches,
            &[
-                PathBuf::from("root/apple/banana/carrot"),
-                PathBuf::from("root/apple/bandana/carbonara")
+                PathBuf::from(path!("/root/apple/banana/carrot")),
+                PathBuf::from(path!("/root/apple/bandana/carbonara"))
            ]
        );

@@ -227,8 +228,8 @@ mod test {
        assert_eq!(
            matches,
            &[
-                PathBuf::from("root/apple/banana/carrot"),
-                PathBuf::from("root/apple/bandana/carbonara")
+                PathBuf::from(path!("/root/apple/banana/carrot")),
+                PathBuf::from(path!("/root/apple/bandana/carbonara"))
            ]
        );
    }
--- a/crates/agent2/src/tools/read_file_tool.rs
+++ b/crates/agent2/src/tools/read_file_tool.rs
@@ -10,7 +10,8 @@ use project::{AgentLocation, ImageItem, Project, WorktreeSettings, image_store};
 use schemars::JsonSchema;
 use serde::{Deserialize, Serialize};
 use settings::Settings;
-use std::sync::Arc;
+use std::{path::Path, sync::Arc};
+use util::markdown::MarkdownCodeBlock;

 use crate::{AgentTool, ToolCallEventStream};

@@ -68,27 +69,12 @@ impl AgentTool for ReadFileTool {
    }

    fn initial_title(&self, input: Result<Self::Input, serde_json::Value>) -> SharedString {
-        if let Ok(input) = input {
-            let path = &input.path;
-            match (input.start_line, input.end_line) {
-                (Some(start), Some(end)) => {
-                    format!(
-                        "[Read file `{}` (lines {}-{})](@selection:{}:({}-{}))",
-                        path, start, end, path, start, end
-                    )
-                }
-                (Some(start), None) => {
-                    format!(
-                        "[Read file `{}` (from line {})](@selection:{}:({}-{}))",
-                        path, start, path, start, start
-                    )
-                }
-                _ => format!("[Read file `{}`](@file:{})", path, path),
-            }
-            .into()
-        } else {
-            "Read file".into()
-        }
+        input
+            .ok()
+            .as_ref()
+            .and_then(|input| Path::new(&input.path).file_name())
+            .map(|file_name| file_name.to_string_lossy().to_string().into())
+            .unwrap_or_default()
    }

    fn run(
@@ -258,6 +244,19 @@ impl AgentTool for ReadFileTool {
                        }]),
                        ..Default::default()
                    });
+                    if let Ok(LanguageModelToolResultContent::Text(text)) = &result {
+                        let markdown = MarkdownCodeBlock {
+                            tag: &input.path,
+                            text,
+                        }
+                        .to_string();
+                        event_stream.update_fields(ToolCallUpdateFields {
+                            content: Some(vec![acp::ToolCallContent::Content {
+                                content: markdown.into(),
+                            }]),
+                            ..Default::default()
+                        })
+                    }
                }
            })?;

--- a/crates/agent2/src/tools/terminal_tool.rs
+++ b/crates/agent2/src/tools/terminal_tool.rs
@@ -1,19 +1,19 @@
 use agent_client_protocol as acp;
 use anyhow::Result;
-use futures::{FutureExt as _, future::Shared};
-use gpui::{App, AppContext, Entity, SharedString, Task};
-use project::{Project, terminals::TerminalKind};
+use gpui::{App, Entity, SharedString, Task};
+use project::Project;
 use schemars::JsonSchema;
 use serde::{Deserialize, Serialize};
 use std::{
    path::{Path, PathBuf},
+    rc::Rc,
    sync::Arc,
 };
-use util::{ResultExt, get_system_shell, markdown::MarkdownInlineCode};
+use util::markdown::MarkdownInlineCode;

-use crate::{AgentTool, ToolCallEventStream};
+use crate::{AgentTool, ThreadEnvironment, ToolCallEventStream};

-const COMMAND_OUTPUT_LIMIT: usize = 16 * 1024;
+const COMMAND_OUTPUT_LIMIT: u64 = 16 * 1024;

 /// Executes a shell one-liner and returns the combined output.
 ///
@@ -36,25 +36,14 @@ pub struct TerminalToolInput {

 pub struct TerminalTool {
    project: Entity<Project>,
-    determine_shell: Shared<Task<String>>,
+    environment: Rc<dyn ThreadEnvironment>,
 }

 impl TerminalTool {
-    pub fn new(project: Entity<Project>, cx: &mut App) -> Self {
-        let determine_shell = cx.background_spawn(async move {
-            if cfg!(windows) {
-                return get_system_shell();
-            }
-
-            if which::which("bash").is_ok() {
-                "bash".into()
-            } else {
-                get_system_shell()
-            }
-        });
+    pub fn new(project: Entity<Project>, environment: Rc<dyn ThreadEnvironment>) -> Self {
        Self {
            project,
-            determine_shell: determine_shell.shared(),
+            environment,
        }
    }
 }
@@ -99,128 +88,49 @@ impl AgentTool for TerminalTool {
        event_stream: ToolCallEventStream,
        cx: &mut App,
    ) -> Task<Result<Self::Output>> {
-        let language_registry = self.project.read(cx).languages().clone();
        let working_dir = match working_dir(&input, &self.project, cx) {
            Ok(dir) => dir,
            Err(err) => return Task::ready(Err(err)),
        };
-        let program = self.determine_shell.clone();
-        let command = if cfg!(windows) {
-            format!("$null | & {{{}}}", input.command.replace("\"", "'"))
-        } else if let Some(cwd) = working_dir
-            .as_ref()
-            .and_then(|cwd| cwd.as_os_str().to_str())
-        {
-            // Make sure once we're *inside* the shell, we cd into `cwd`
-            format!("(cd {cwd}; {}) </dev/null", input.command)
-        } else {
-            format!("({}) </dev/null", input.command)
-        };
-        let args = vec!["-c".into(), command];
-
-        let env = match &working_dir {
-            Some(dir) => self.project.update(cx, |project, cx| {
-                project.directory_environment(dir.as_path().into(), cx)
-            }),
-            None => Task::ready(None).shared(),
-        };
-
-        let env = cx.spawn(async move |_| {
-            let mut env = env.await.unwrap_or_default();
-            if cfg!(unix) {
-                env.insert("PAGER".into(), "cat".into());
-            }
-            env
-        });

        let authorize = event_stream.authorize(self.initial_title(Ok(input.clone())), cx);
+        cx.spawn(async move |cx| {
+            authorize.await?;

-        cx.spawn({
-            async move |cx| {
-                authorize.await?;
+            let terminal = self
+                .environment
+                .create_terminal(
+                    input.command.clone(),
+                    working_dir,
+                    Some(COMMAND_OUTPUT_LIMIT),
+                    cx,
+                )
+                .await?;

-                let program = program.await;
-                let env = env.await;
-                let terminal = self
-                    .project
-                    .update(cx, |project, cx| {
-                        project.create_terminal(
-                            TerminalKind::Task(task::SpawnInTerminal {
-                                command: Some(program),
-                                args,
-                                cwd: working_dir.clone(),
-                                env,
-                                ..Default::default()
-                            }),
-                            cx,
-                        )
-                    })?
-                    .await?;
-                let acp_terminal = cx.new(|cx| {
-                    acp_thread::Terminal::new(
-                        input.command.clone(),
-                        working_dir.clone(),
-                        terminal.clone(),
-                        language_registry,
-                        cx,
-                    )
-                })?;
-                event_stream.update_terminal(acp_terminal.clone());
+            let terminal_id = terminal.id(cx)?;
+            event_stream.update_fields(acp::ToolCallUpdateFields {
+                content: Some(vec![acp::ToolCallContent::Terminal { terminal_id }]),
+                ..Default::default()
+            });

-                let exit_status = terminal
-                    .update(cx, |terminal, cx| terminal.wait_for_completed_task(cx))?
-                    .await;
-                let (content, content_line_count) = terminal.read_with(cx, |terminal, _| {
-                    (terminal.get_content(), terminal.total_lines())
-                })?;
+            let exit_status = terminal.wait_for_exit(cx)?.await;
+            let output = terminal.current_output(cx)?;

-                let (processed_content, finished_with_empty_output) = process_content(
-                    &content,
-                    &input.command,
-                    exit_status.map(portable_pty::ExitStatus::from),
-                );
-
-                acp_terminal
-                    .update(cx, |terminal, cx| {
-                        terminal.finish(
-                            exit_status,
-                            content.len(),
-                            processed_content.len(),
-                            content_line_count,
-                            finished_with_empty_output,
-                            cx,
-                        );
-                    })
-                    .log_err();
-
-                Ok(processed_content)
-            }
+            Ok(process_content(output, &input.command, exit_status))
        })
    }
 }

 fn process_content(
-    content: &str,
+    output: acp::TerminalOutputResponse,
    command: &str,
-    exit_status: Option<portable_pty::ExitStatus>,
-) -> (String, bool) {
-    let should_truncate = content.len() > COMMAND_OUTPUT_LIMIT;
-
-    let content = if should_truncate {
-        let mut end_ix = COMMAND_OUTPUT_LIMIT.min(content.len());
-        while !content.is_char_boundary(end_ix) {
-            end_ix -= 1;
-        }
-        // Don't truncate mid-line, clear the remainder of the last line
-        end_ix = content[..end_ix].rfind('\n').unwrap_or(end_ix);
-        &content[..end_ix]
-    } else {
-        content
-    };
-    let content = content.trim();
+    exit_status: acp::TerminalExitStatus,
+) -> String {
+    let content = output.output.trim();
    let is_empty = content.is_empty();
+
    let content = format!("```\n{content}\n```");
-    let content = if should_truncate {
+    let content = if output.truncated {
        format!(
            "Command output too long. The first {} bytes:\n\n{content}",
            content.len(),
@@ -229,24 +139,21 @@ fn process_content(
        content
    };

-    let content = match exit_status {
-        Some(exit_status) if exit_status.success() => {
+    let content = match exit_status.exit_code {
+        Some(0) => {
            if is_empty {
                "Command executed successfully.".to_string()
            } else {
                content
            }
        }
-        Some(exit_status) => {
+        Some(exit_code) => {
            if is_empty {
-                format!(
-                    "Command \"{command}\" failed with exit code {}.",
-                    exit_status.exit_code()
-                )
+                format!("Command \"{command}\" failed with exit code {}.", exit_code)
            } else {
                format!(
                    "Command \"{command}\" failed with exit code {}.\n\n{content}",
-                    exit_status.exit_code()
+                    exit_code
                )
            }
        }
@@ -257,7 +164,7 @@ fn process_content(
            )
        }
    };
-    (content, is_empty)
+    content
 }

 fn working_dir(
@@ -300,169 +207,3 @@ fn working_dir(
        anyhow::bail!("`cd` directory {cd:?} was not in any of the project's worktrees.");
    }
 }
-
-#[cfg(test)]
-mod tests {
-    use agent_settings::AgentSettings;
-    use editor::EditorSettings;
-    use fs::RealFs;
-    use gpui::{BackgroundExecutor, TestAppContext};
-    use pretty_assertions::assert_eq;
-    use serde_json::json;
-    use settings::{Settings, SettingsStore};
-    use terminal::terminal_settings::TerminalSettings;
-    use theme::ThemeSettings;
-    use util::test::TempTree;
-
-    use crate::ThreadEvent;
-
-    use super::*;
-
-    fn init_test(executor: &BackgroundExecutor, cx: &mut TestAppContext) {
-        zlog::init_test();
-
-        executor.allow_parking();
-        cx.update(|cx| {
-            let settings_store = SettingsStore::test(cx);
-            cx.set_global(settings_store);
-            language::init(cx);
-            Project::init_settings(cx);
-            ThemeSettings::register(cx);
-            TerminalSettings::register(cx);
-            EditorSettings::register(cx);
-            AgentSettings::register(cx);
-        });
-    }
-
-    #[gpui::test]
-    async fn test_interactive_command(executor: BackgroundExecutor, cx: &mut TestAppContext) {
-        if cfg!(windows) {
-            return;
-        }
-
-        init_test(&executor, cx);
-
-        let fs = Arc::new(RealFs::new(None, executor));
-        let tree = TempTree::new(json!({
-            "project": {},
-        }));
-        let project: Entity<Project> =
-            Project::test(fs, [tree.path().join("project").as_path()], cx).await;
-
-        let input = TerminalToolInput {
-            command: "cat".to_owned(),
-            cd: tree
-                .path()
-                .join("project")
-                .as_path()
-                .to_string_lossy()
-                .to_string(),
-        };
-        let (event_stream_tx, mut event_stream_rx) = ToolCallEventStream::test();
-        let result = cx
-            .update(|cx| Arc::new(TerminalTool::new(project, cx)).run(input, event_stream_tx, cx));
-
-        let auth = event_stream_rx.expect_authorization().await;
-        auth.response.send(auth.options[0].id.clone()).unwrap();
-        event_stream_rx.expect_terminal().await;
-        assert_eq!(result.await.unwrap(), "Command executed successfully.");
-    }
-
-    #[gpui::test]
-    async fn test_working_directory(executor: BackgroundExecutor, cx: &mut TestAppContext) {
-        if cfg!(windows) {
-            return;
-        }
-
-        init_test(&executor, cx);
-
-        let fs = Arc::new(RealFs::new(None, executor));
-        let tree = TempTree::new(json!({
-            "project": {},
-            "other-project": {},
-        }));
-        let project: Entity<Project> =
-            Project::test(fs, [tree.path().join("project").as_path()], cx).await;
-
-        let check = |input, expected, cx: &mut TestAppContext| {
-            let (stream_tx, mut stream_rx) = ToolCallEventStream::test();
-            let result = cx.update(|cx| {
-                Arc::new(TerminalTool::new(project.clone(), cx)).run(input, stream_tx, cx)
-            });
-            cx.run_until_parked();
-            let event = stream_rx.try_next();
-            if let Ok(Some(Ok(ThreadEvent::ToolCallAuthorization(auth)))) = event {
-                auth.response.send(auth.options[0].id.clone()).unwrap();
-            }
-
-            cx.spawn(async move |_| {
-                let output = result.await;
-                assert_eq!(output.ok(), expected);
-            })
-        };
-
-        check(
-            TerminalToolInput {
-                command: "pwd".into(),
-                cd: ".".into(),
-            },
-            Some(format!(
-                "```\n{}\n```",
-                tree.path().join("project").display()
-            )),
-            cx,
-        )
-        .await;
-
-        check(
-            TerminalToolInput {
-                command: "pwd".into(),
-                cd: "other-project".into(),
-            },
-            None, // other-project is a dir, but *not* a worktree (yet)
-            cx,
-        )
-        .await;
-
-        // Absolute path above the worktree root
-        check(
-            TerminalToolInput {
-                command: "pwd".into(),
-                cd: tree.path().to_string_lossy().into(),
-            },
-            None,
-            cx,
-        )
-        .await;
-
-        project
-            .update(cx, |project, cx| {
-                project.create_worktree(tree.path().join("other-project"), true, cx)
-            })
-            .await
-            .unwrap();
-
-        check(
-            TerminalToolInput {
-                command: "pwd".into(),
-                cd: "other-project".into(),
-            },
-            Some(format!(
-                "```\n{}\n```",
-                tree.path().join("other-project").display()
-            )),
-            cx,
-        )
-        .await;
-
-        check(
-            TerminalToolInput {
-                command: "pwd".into(),
-                cd: ".".into(),
-            },
-            None,
-            cx,
-        )
-        .await;
-    }
-}
--- a/crates/agent_servers/Cargo.toml
+++ b/crates/agent_servers/Cargo.toml
@@ -6,7 +6,7 @@ publish.workspace = true
 license = "GPL-3.0-or-later"

 [features]
-test-support = ["acp_thread/test-support", "gpui/test-support", "project/test-support", "dep:env_logger", "fs", "client/test-support", "dep:gpui_tokio", "reqwest_client/test-support"]
+test-support = ["acp_thread/test-support", "gpui/test-support", "project/test-support", "dep:env_logger", "client/test-support", "dep:gpui_tokio", "reqwest_client/test-support"]
 e2e = []

 [lints]
@@ -17,29 +17,27 @@ path = "src/agent_servers.rs"
 doctest = false

 [dependencies]
+acp_tools.workspace = true
 acp_thread.workspace = true
 action_log.workspace = true
 agent-client-protocol.workspace = true
 agent_settings.workspace = true
-agentic-coding-protocol.workspace = true
 anyhow.workspace = true
 client = { workspace = true, optional = true }
 collections.workspace = true
-context_server.workspace = true
 env_logger = { workspace = true, optional = true }
-fs = { workspace = true, optional = true }
+fs.workspace = true
 futures.workspace = true
 gpui.workspace = true
 gpui_tokio = { workspace = true, optional = true }
 indoc.workspace = true
-itertools.workspace = true
 language.workspace = true
 language_model.workspace = true
 language_models.workspace = true
 log.workspace = true
+node_runtime.workspace = true
 paths.workspace = true
 project.workspace = true
-rand.workspace = true
 reqwest_client = { workspace = true, optional = true }
 schemars.workspace = true
 semver.workspace = true
@@ -47,12 +45,10 @@ serde.workspace = true
 serde_json.workspace = true
 settings.workspace = true
 smol.workspace = true
-strum.workspace = true
 tempfile.workspace = true
 thiserror.workspace = true
 ui.workspace = true
 util.workspace = true
-uuid.workspace = true
 watch.workspace = true
 which.workspace = true
 workspace-hack.workspace = true
--- a/crates/agent_servers/src/acp.rs
+++ b/crates/agent_servers/src/acp.rs
@@ -1,34 +1,482 @@
-use std::{path::Path, rc::Rc};
-
 use crate::AgentServerCommand;
 use acp_thread::AgentConnection;
-use anyhow::Result;
-use gpui::AsyncApp;
+use acp_tools::AcpConnectionRegistry;
+use action_log::ActionLog;
+use agent_client_protocol::{self as acp, Agent as _, ErrorCode};
+use anyhow::anyhow;
+use collections::HashMap;
+use futures::AsyncBufReadExt as _;
+use futures::io::BufReader;
+use project::Project;
+use serde::Deserialize;
+
+use std::{any::Any, cell::RefCell};
+use std::{path::Path, rc::Rc};
 use thiserror::Error;

-mod v0;
-mod v1;
+use anyhow::{Context as _, Result};
+use gpui::{App, AppContext as _, AsyncApp, Entity, SharedString, Task, WeakEntity};
+
+use acp_thread::{AcpThread, AuthRequired, LoadError};

 #[derive(Debug, Error)]
 #[error("Unsupported version")]
 pub struct UnsupportedVersion;

+pub struct AcpConnection {
+    server_name: SharedString,
+    connection: Rc<acp::ClientSideConnection>,
+    sessions: Rc<RefCell<HashMap<acp::SessionId, AcpSession>>>,
+    auth_methods: Vec<acp::AuthMethod>,
+    agent_capabilities: acp::AgentCapabilities,
+    _io_task: Task<Result<()>>,
+    _wait_task: Task<Result<()>>,
+    _stderr_task: Task<Result<()>>,
+}
+
+pub struct AcpSession {
+    thread: WeakEntity<AcpThread>,
+    suppress_abort_err: bool,
+}
+
 pub async fn connect(
-    server_name: &'static str,
+    server_name: SharedString,
    command: AgentServerCommand,
    root_dir: &Path,
    cx: &mut AsyncApp,
 ) -> Result<Rc<dyn AgentConnection>> {
-    let conn = v1::AcpConnection::stdio(server_name, command.clone(), root_dir, cx).await;
+    let conn = AcpConnection::stdio(server_name, command.clone(), root_dir, cx).await?;
+    Ok(Rc::new(conn) as _)
+}

-    match conn {
-        Ok(conn) => Ok(Rc::new(conn) as _),
-        Err(err) if err.is::<UnsupportedVersion>() => {
-            // Consider re-using initialize response and subprocess when adding another version here
-            let conn: Rc<dyn AgentConnection> =
-                Rc::new(v0::AcpConnection::stdio(server_name, command, root_dir, cx).await?);
-            Ok(conn)
+const MINIMUM_SUPPORTED_VERSION: acp::ProtocolVersion = acp::V1;
+
+impl AcpConnection {
+    pub async fn stdio(
+        server_name: SharedString,
+        command: AgentServerCommand,
+        root_dir: &Path,
+        cx: &mut AsyncApp,
+    ) -> Result<Self> {
+        let mut child = util::command::new_smol_command(command.path)
+            .args(command.args.iter().map(|arg| arg.as_str()))
+            .envs(command.env.iter().flatten())
+            .current_dir(root_dir)
+            .stdin(std::process::Stdio::piped())
+            .stdout(std::process::Stdio::piped())
+            .stderr(std::process::Stdio::piped())
+            .kill_on_drop(true)
+            .spawn()?;
+
+        let stdout = child.stdout.take().context("Failed to take stdout")?;
+        let stdin = child.stdin.take().context("Failed to take stdin")?;
+        let stderr = child.stderr.take().context("Failed to take stderr")?;
+        log::trace!("Spawned (pid: {})", child.id());
+
+        let sessions = Rc::new(RefCell::new(HashMap::default()));
+
+        let client = ClientDelegate {
+            sessions: sessions.clone(),
+            cx: cx.clone(),
+        };
+        let (connection, io_task) = acp::ClientSideConnection::new(client, stdin, stdout, {
+            let foreground_executor = cx.foreground_executor().clone();
+            move |fut| {
+                foreground_executor.spawn(fut).detach();
+            }
+        });
+
+        let io_task = cx.background_spawn(io_task);
+
+        let stderr_task = cx.background_spawn(async move {
+            let mut stderr = BufReader::new(stderr);
+            let mut line = String::new();
+            while let Ok(n) = stderr.read_line(&mut line).await
+                && n > 0
+            {
+                log::warn!("agent stderr: {}", &line);
+                line.clear();
+            }
+            Ok(())
+        });
+
+        let wait_task = cx.spawn({
+            let sessions = sessions.clone();
+            async move |cx| {
+                let status = child.status().await?;
+
+                for session in sessions.borrow().values() {
+                    session
+                        .thread
+                        .update(cx, |thread, cx| {
+                            thread.emit_load_error(LoadError::Exited { status }, cx)
+                        })
+                        .ok();
+                }
+
+                anyhow::Ok(())
+            }
+        });
+
+        let connection = Rc::new(connection);
+
+        cx.update(|cx| {
+            AcpConnectionRegistry::default_global(cx).update(cx, |registry, cx| {
+                registry.set_active_connection(server_name.clone(), &connection, cx)
+            });
+        })?;
+
+        let response = connection
+            .initialize(acp::InitializeRequest {
+                protocol_version: acp::VERSION,
+                client_capabilities: acp::ClientCapabilities {
+                    fs: acp::FileSystemCapability {
+                        read_text_file: true,
+                        write_text_file: true,
+                    },
+                    terminal: true,
+                },
+            })
+            .await?;
+
+        if response.protocol_version < MINIMUM_SUPPORTED_VERSION {
+            return Err(UnsupportedVersion.into());
        }
-        Err(err) => Err(err),
+
+        Ok(Self {
+            auth_methods: response.auth_methods,
+            connection,
+            server_name,
+            sessions,
+            agent_capabilities: response.agent_capabilities,
+            _io_task: io_task,
+            _wait_task: wait_task,
+            _stderr_task: stderr_task,
+        })
+    }
+
+    pub fn prompt_capabilities(&self) -> &acp::PromptCapabilities {
+        &self.agent_capabilities.prompt_capabilities
+    }
+}
+
+impl AgentConnection for AcpConnection {
+    fn new_thread(
+        self: Rc<Self>,
+        project: Entity<Project>,
+        cwd: &Path,
+        cx: &mut App,
+    ) -> Task<Result<Entity<AcpThread>>> {
+        let conn = self.connection.clone();
+        let sessions = self.sessions.clone();
+        let cwd = cwd.to_path_buf();
+        let context_server_store = project.read(cx).context_server_store().read(cx);
+        let mcp_servers = context_server_store
+            .configured_server_ids()
+            .iter()
+            .filter_map(|id| {
+                let configuration = context_server_store.configuration_for_server(id)?;
+                let command = configuration.command();
+                Some(acp::McpServer {
+                    name: id.0.to_string(),
+                    command: command.path.clone(),
+                    args: command.args.clone(),
+                    env: if let Some(env) = command.env.as_ref() {
+                        env.iter()
+                            .map(|(name, value)| acp::EnvVariable {
+                                name: name.clone(),
+                                value: value.clone(),
+                            })
+                            .collect()
+                    } else {
+                        vec![]
+                    },
+                })
+            })
+            .collect();
+
+        cx.spawn(async move |cx| {
+            let response = conn
+                .new_session(acp::NewSessionRequest { mcp_servers, cwd })
+                .await
+                .map_err(|err| {
+                    if err.code == acp::ErrorCode::AUTH_REQUIRED.code {
+                        let mut error = AuthRequired::new();
+
+                        if err.message != acp::ErrorCode::AUTH_REQUIRED.message {
+                            error = error.with_description(err.message);
+                        }
+
+                        anyhow!(error)
+                    } else {
+                        anyhow!(err)
+                    }
+                })?;
+
+            let session_id = response.session_id;
+            let action_log = cx.new(|_| ActionLog::new(project.clone()))?;
+            let thread = cx.new(|cx| {
+                AcpThread::new(
+                    self.server_name.clone(),
+                    self.clone(),
+                    project,
+                    action_log,
+                    session_id.clone(),
+                    // ACP doesn't currently support per-session prompt capabilities or changing capabilities dynamically.
+                    watch::Receiver::constant(self.agent_capabilities.prompt_capabilities),
+                    cx,
+                )
+            })?;
+
+            let session = AcpSession {
+                thread: thread.downgrade(),
+                suppress_abort_err: false,
+            };
+            sessions.borrow_mut().insert(session_id, session);
+
+            Ok(thread)
+        })
+    }
+
+    fn auth_methods(&self) -> &[acp::AuthMethod] {
+        &self.auth_methods
+    }
+
+    fn authenticate(&self, method_id: acp::AuthMethodId, cx: &mut App) -> Task<Result<()>> {
+        let conn = self.connection.clone();
+        cx.foreground_executor().spawn(async move {
+            let result = conn
+                .authenticate(acp::AuthenticateRequest {
+                    method_id: method_id.clone(),
+                })
+                .await?;
+
+            Ok(result)
+        })
+    }
+
+    fn prompt(
+        &self,
+        _id: Option<acp_thread::UserMessageId>,
+        params: acp::PromptRequest,
+        cx: &mut App,
+    ) -> Task<Result<acp::PromptResponse>> {
+        let conn = self.connection.clone();
+        let sessions = self.sessions.clone();
+        let session_id = params.session_id.clone();
+        cx.foreground_executor().spawn(async move {
+            let result = conn.prompt(params).await;
+
+            let mut suppress_abort_err = false;
+
+            if let Some(session) = sessions.borrow_mut().get_mut(&session_id) {
+                suppress_abort_err = session.suppress_abort_err;
+                session.suppress_abort_err = false;
+            }
+
+            match result {
+                Ok(response) => Ok(response),
+                Err(err) => {
+                    if err.code != ErrorCode::INTERNAL_ERROR.code {
+                        anyhow::bail!(err)
+                    }
+
+                    let Some(data) = &err.data else {
+                        anyhow::bail!(err)
+                    };
+
+                    // Temporary workaround until the following PR is generally available:
+                    // https://github.com/google-gemini/gemini-cli/pull/6656
+
+                    #[derive(Deserialize)]
+                    #[serde(deny_unknown_fields)]
+                    struct ErrorDetails {
+                        details: Box<str>,
+                    }
+
+                    match serde_json::from_value(data.clone()) {
+                        Ok(ErrorDetails { details }) => {
+                            if suppress_abort_err
+                                && (details.contains("This operation was aborted")
+                                    || details.contains("The user aborted a request"))
+                            {
+                                Ok(acp::PromptResponse {
+                                    stop_reason: acp::StopReason::Cancelled,
+                                })
+                            } else {
+                                Err(anyhow!(details))
+                            }
+                        }
+                        Err(_) => Err(anyhow!(err)),
+                    }
+                }
+            }
+        })
+    }
+
+    fn cancel(&self, session_id: &acp::SessionId, cx: &mut App) {
+        if let Some(session) = self.sessions.borrow_mut().get_mut(session_id) {
+            session.suppress_abort_err = true;
+        }
+        let conn = self.connection.clone();
+        let params = acp::CancelNotification {
+            session_id: session_id.clone(),
+        };
+        cx.foreground_executor()
+            .spawn(async move { conn.cancel(params).await })
+            .detach();
+    }
+
+    fn into_any(self: Rc<Self>) -> Rc<dyn Any> {
+        self
+    }
+}
+
+struct ClientDelegate {
+    sessions: Rc<RefCell<HashMap<acp::SessionId, AcpSession>>>,
+    cx: AsyncApp,
+}
+
+impl acp::Client for ClientDelegate {
+    async fn request_permission(
+        &self,
+        arguments: acp::RequestPermissionRequest,
+    ) -> Result<acp::RequestPermissionResponse, acp::Error> {
+        let cx = &mut self.cx.clone();
+
+        let task = self
+            .session_thread(&arguments.session_id)?
+            .update(cx, |thread, cx| {
+                thread.request_tool_call_authorization(arguments.tool_call, arguments.options, cx)
+            })??;
+
+        let outcome = task.await;
+
+        Ok(acp::RequestPermissionResponse { outcome })
+    }
+
+    async fn write_text_file(
+        &self,
+        arguments: acp::WriteTextFileRequest,
+    ) -> Result<(), acp::Error> {
+        let cx = &mut self.cx.clone();
+        let task = self
+            .session_thread(&arguments.session_id)?
+            .update(cx, |thread, cx| {
+                thread.write_text_file(arguments.path, arguments.content, cx)
+            })?;
+
+        task.await?;
+
+        Ok(())
+    }
+
+    async fn read_text_file(
+        &self,
+        arguments: acp::ReadTextFileRequest,
+    ) -> Result<acp::ReadTextFileResponse, acp::Error> {
+        let task = self.session_thread(&arguments.session_id)?.update(
+            &mut self.cx.clone(),
+            |thread, cx| {
+                thread.read_text_file(arguments.path, arguments.line, arguments.limit, false, cx)
+            },
+        )?;
+
+        let content = task.await?;
+
+        Ok(acp::ReadTextFileResponse { content })
+    }
+
+    async fn session_notification(
+        &self,
+        notification: acp::SessionNotification,
+    ) -> Result<(), acp::Error> {
+        self.session_thread(&notification.session_id)?
+            .update(&mut self.cx.clone(), |thread, cx| {
+                thread.handle_session_update(notification.update, cx)
+            })??;
+
+        Ok(())
+    }
+
+    async fn create_terminal(
+        &self,
+        args: acp::CreateTerminalRequest,
+    ) -> Result<acp::CreateTerminalResponse, acp::Error> {
+        let terminal = self
+            .session_thread(&args.session_id)?
+            .update(&mut self.cx.clone(), |thread, cx| {
+                thread.create_terminal(
+                    args.command,
+                    args.args,
+                    args.env,
+                    args.cwd,
+                    args.output_byte_limit,
+                    cx,
+                )
+            })?
+            .await?;
+        Ok(
+            terminal.read_with(&self.cx, |terminal, _| acp::CreateTerminalResponse {
+                terminal_id: terminal.id().clone(),
+            })?,
+        )
+    }
+
+    async fn kill_terminal(&self, args: acp::KillTerminalRequest) -> Result<(), acp::Error> {
+        self.session_thread(&args.session_id)?
+            .update(&mut self.cx.clone(), |thread, cx| {
+                thread.kill_terminal(args.terminal_id, cx)
+            })??;
+
+        Ok(())
+    }
+
+    async fn release_terminal(&self, args: acp::ReleaseTerminalRequest) -> Result<(), acp::Error> {
+        self.session_thread(&args.session_id)?
+            .update(&mut self.cx.clone(), |thread, cx| {
+                thread.release_terminal(args.terminal_id, cx)
+            })??;
+
+        Ok(())
+    }
+
+    async fn terminal_output(
+        &self,
+        args: acp::TerminalOutputRequest,
+    ) -> Result<acp::TerminalOutputResponse, acp::Error> {
+        self.session_thread(&args.session_id)?
+            .read_with(&mut self.cx.clone(), |thread, cx| {
+                let out = thread
+                    .terminal(args.terminal_id)?
+                    .read(cx)
+                    .current_output(cx);
+
+                Ok(out)
+            })?
+    }
+
+    async fn wait_for_terminal_exit(
+        &self,
+        args: acp::WaitForTerminalExitRequest,
+    ) -> Result<acp::WaitForTerminalExitResponse, acp::Error> {
+        let exit_status = self
+            .session_thread(&args.session_id)?
+            .update(&mut self.cx.clone(), |thread, cx| {
+                anyhow::Ok(thread.terminal(args.terminal_id)?.read(cx).wait_for_exit())
+            })??
+            .await;
+
+        Ok(acp::WaitForTerminalExitResponse { exit_status })
+    }
+}
+
+impl ClientDelegate {
+    fn session_thread(&self, session_id: &acp::SessionId) -> Result<WeakEntity<AcpThread>> {
+        let sessions = self.sessions.borrow();
+        sessions
+            .get(session_id)
+            .context("Failed to get session")
+            .map(|session| session.thread.clone())
    }
 }
--- a/crates/agent_servers/src/acp/v0.rs
+++ b/crates/agent_servers/src/acp/v0.rs
@@ -1,524 +0,0 @@
-// Translates old acp agents into the new schema
-use action_log::ActionLog;
-use agent_client_protocol as acp;
-use agentic_coding_protocol::{self as acp_old, AgentRequest as _};
-use anyhow::{Context as _, Result, anyhow};
-use futures::channel::oneshot;
-use gpui::{AppContext as _, AsyncApp, Entity, Task, WeakEntity};
-use project::Project;
-use std::{any::Any, cell::RefCell, path::Path, rc::Rc};
-use ui::App;
-use util::ResultExt as _;
-
-use crate::AgentServerCommand;
-use acp_thread::{AcpThread, AgentConnection, AuthRequired};
-
-#[derive(Clone)]
-struct OldAcpClientDelegate {
-    thread: Rc<RefCell<WeakEntity<AcpThread>>>,
-    cx: AsyncApp,
-    next_tool_call_id: Rc<RefCell<u64>>,
-    // sent_buffer_versions: HashMap<Entity<Buffer>, HashMap<u64, BufferSnapshot>>,
-}
-
-impl OldAcpClientDelegate {
-    fn new(thread: Rc<RefCell<WeakEntity<AcpThread>>>, cx: AsyncApp) -> Self {
-        Self {
-            thread,
-            cx,
-            next_tool_call_id: Rc::new(RefCell::new(0)),
-        }
-    }
-}
-
-impl acp_old::Client for OldAcpClientDelegate {
-    async fn stream_assistant_message_chunk(
-        &self,
-        params: acp_old::StreamAssistantMessageChunkParams,
-    ) -> Result<(), acp_old::Error> {
-        let cx = &mut self.cx.clone();
-
-        cx.update(|cx| {
-            self.thread
-                .borrow()
-                .update(cx, |thread, cx| match params.chunk {
-                    acp_old::AssistantMessageChunk::Text { text } => {
-                        thread.push_assistant_content_block(text.into(), false, cx)
-                    }
-                    acp_old::AssistantMessageChunk::Thought { thought } => {
-                        thread.push_assistant_content_block(thought.into(), true, cx)
-                    }
-                })
-                .log_err();
-        })?;
-
-        Ok(())
-    }
-
-    async fn request_tool_call_confirmation(
-        &self,
-        request: acp_old::RequestToolCallConfirmationParams,
-    ) -> Result<acp_old::RequestToolCallConfirmationResponse, acp_old::Error> {
-        let cx = &mut self.cx.clone();
-
-        let old_acp_id = *self.next_tool_call_id.borrow() + 1;
-        self.next_tool_call_id.replace(old_acp_id);
-
-        let tool_call = into_new_tool_call(
-            acp::ToolCallId(old_acp_id.to_string().into()),
-            request.tool_call,
-        );
-
-        let mut options = match request.confirmation {
-            acp_old::ToolCallConfirmation::Edit { .. } => vec![(
-                acp_old::ToolCallConfirmationOutcome::AlwaysAllow,
-                acp::PermissionOptionKind::AllowAlways,
-                "Always Allow Edits".to_string(),
-            )],
-            acp_old::ToolCallConfirmation::Execute { root_command, .. } => vec![(
-                acp_old::ToolCallConfirmationOutcome::AlwaysAllow,
-                acp::PermissionOptionKind::AllowAlways,
-                format!("Always Allow {}", root_command),
-            )],
-            acp_old::ToolCallConfirmation::Mcp {
-                server_name,
-                tool_name,
-                ..
-            } => vec![
-                (
-                    acp_old::ToolCallConfirmationOutcome::AlwaysAllowMcpServer,
-                    acp::PermissionOptionKind::AllowAlways,
-                    format!("Always Allow {}", server_name),
-                ),
-                (
-                    acp_old::ToolCallConfirmationOutcome::AlwaysAllowTool,
-                    acp::PermissionOptionKind::AllowAlways,
-                    format!("Always Allow {}", tool_name),
-                ),
-            ],
-            acp_old::ToolCallConfirmation::Fetch { .. } => vec![(
-                acp_old::ToolCallConfirmationOutcome::AlwaysAllow,
-                acp::PermissionOptionKind::AllowAlways,
-                "Always Allow".to_string(),
-            )],
-            acp_old::ToolCallConfirmation::Other { .. } => vec![(
-                acp_old::ToolCallConfirmationOutcome::AlwaysAllow,
-                acp::PermissionOptionKind::AllowAlways,
-                "Always Allow".to_string(),
-            )],
-        };
-
-        options.extend([
-            (
-                acp_old::ToolCallConfirmationOutcome::Allow,
-                acp::PermissionOptionKind::AllowOnce,
-                "Allow".to_string(),
-            ),
-            (
-                acp_old::ToolCallConfirmationOutcome::Reject,
-                acp::PermissionOptionKind::RejectOnce,
-                "Reject".to_string(),
-            ),
-        ]);
-
-        let mut outcomes = Vec::with_capacity(options.len());
-        let mut acp_options = Vec::with_capacity(options.len());
-
-        for (index, (outcome, kind, label)) in options.into_iter().enumerate() {
-            outcomes.push(outcome);
-            acp_options.push(acp::PermissionOption {
-                id: acp::PermissionOptionId(index.to_string().into()),
-                name: label,
-                kind,
-            })
-        }
-
-        let response = cx
-            .update(|cx| {
-                self.thread.borrow().update(cx, |thread, cx| {
-                    thread.request_tool_call_authorization(tool_call.into(), acp_options, cx)
-                })
-            })??
-            .context("Failed to update thread")?
-            .await;
-
-        let outcome = match response {
-            Ok(option_id) => outcomes[option_id.0.parse::<usize>().unwrap_or(0)],
-            Err(oneshot::Canceled) => acp_old::ToolCallConfirmationOutcome::Cancel,
-        };
-
-        Ok(acp_old::RequestToolCallConfirmationResponse {
-            id: acp_old::ToolCallId(old_acp_id),
-            outcome,
-        })
-    }
-
-    async fn push_tool_call(
-        &self,
-        request: acp_old::PushToolCallParams,
-    ) -> Result<acp_old::PushToolCallResponse, acp_old::Error> {
-        let cx = &mut self.cx.clone();
-
-        let old_acp_id = *self.next_tool_call_id.borrow() + 1;
-        self.next_tool_call_id.replace(old_acp_id);
-
-        cx.update(|cx| {
-            self.thread.borrow().update(cx, |thread, cx| {
-                thread.upsert_tool_call(
-                    into_new_tool_call(acp::ToolCallId(old_acp_id.to_string().into()), request),
-                    cx,
-                )
-            })
-        })??
-        .context("Failed to update thread")?;
-
-        Ok(acp_old::PushToolCallResponse {
-            id: acp_old::ToolCallId(old_acp_id),
-        })
-    }
-
-    async fn update_tool_call(
-        &self,
-        request: acp_old::UpdateToolCallParams,
-    ) -> Result<(), acp_old::Error> {
-        let cx = &mut self.cx.clone();
-
-        cx.update(|cx| {
-            self.thread.borrow().update(cx, |thread, cx| {
-                thread.update_tool_call(
-                    acp::ToolCallUpdate {
-                        id: acp::ToolCallId(request.tool_call_id.0.to_string().into()),
-                        fields: acp::ToolCallUpdateFields {
-                            status: Some(into_new_tool_call_status(request.status)),
-                            content: Some(
-                                request
-                                    .content
-                                    .into_iter()
-                                    .map(into_new_tool_call_content)
-                                    .collect::<Vec<_>>(),
-                            ),
-                            ..Default::default()
-                        },
-                    },
-                    cx,
-                )
-            })
-        })?
-        .context("Failed to update thread")??;
-
-        Ok(())
-    }
-
-    async fn update_plan(&self, request: acp_old::UpdatePlanParams) -> Result<(), acp_old::Error> {
-        let cx = &mut self.cx.clone();
-
-        cx.update(|cx| {
-            self.thread.borrow().update(cx, |thread, cx| {
-                thread.update_plan(
-                    acp::Plan {
-                        entries: request
-                            .entries
-                            .into_iter()
-                            .map(into_new_plan_entry)
-                            .collect(),
-                    },
-                    cx,
-                )
-            })
-        })?
-        .context("Failed to update thread")?;
-
-        Ok(())
-    }
-
-    async fn read_text_file(
-        &self,
-        acp_old::ReadTextFileParams { path, line, limit }: acp_old::ReadTextFileParams,
-    ) -> Result<acp_old::ReadTextFileResponse, acp_old::Error> {
-        let content = self
-            .cx
-            .update(|cx| {
-                self.thread.borrow().update(cx, |thread, cx| {
-                    thread.read_text_file(path, line, limit, false, cx)
-                })
-            })?
-            .context("Failed to update thread")?
-            .await?;
-        Ok(acp_old::ReadTextFileResponse { content })
-    }
-
-    async fn write_text_file(
-        &self,
-        acp_old::WriteTextFileParams { path, content }: acp_old::WriteTextFileParams,
-    ) -> Result<(), acp_old::Error> {
-        self.cx
-            .update(|cx| {
-                self.thread
-                    .borrow()
-                    .update(cx, |thread, cx| thread.write_text_file(path, content, cx))
-            })?
-            .context("Failed to update thread")?
-            .await?;
-
-        Ok(())
-    }
-}
-
-fn into_new_tool_call(id: acp::ToolCallId, request: acp_old::PushToolCallParams) -> acp::ToolCall {
-    acp::ToolCall {
-        id,
-        title: request.label,
-        kind: acp_kind_from_old_icon(request.icon),
-        status: acp::ToolCallStatus::InProgress,
-        content: request
-            .content
-            .into_iter()
-            .map(into_new_tool_call_content)
-            .collect(),
-        locations: request
-            .locations
-            .into_iter()
-            .map(into_new_tool_call_location)
-            .collect(),
-        raw_input: None,
-        raw_output: None,
-    }
-}
-
-fn acp_kind_from_old_icon(icon: acp_old::Icon) -> acp::ToolKind {
-    match icon {
-        acp_old::Icon::FileSearch => acp::ToolKind::Search,
-        acp_old::Icon::Folder => acp::ToolKind::Search,
-        acp_old::Icon::Globe => acp::ToolKind::Search,
-        acp_old::Icon::Hammer => acp::ToolKind::Other,
-        acp_old::Icon::LightBulb => acp::ToolKind::Think,
-        acp_old::Icon::Pencil => acp::ToolKind::Edit,
-        acp_old::Icon::Regex => acp::ToolKind::Search,
-        acp_old::Icon::Terminal => acp::ToolKind::Execute,
-    }
-}
-
-fn into_new_tool_call_status(status: acp_old::ToolCallStatus) -> acp::ToolCallStatus {
-    match status {
-        acp_old::ToolCallStatus::Running => acp::ToolCallStatus::InProgress,
-        acp_old::ToolCallStatus::Finished => acp::ToolCallStatus::Completed,
-        acp_old::ToolCallStatus::Error => acp::ToolCallStatus::Failed,
-    }
-}
-
-fn into_new_tool_call_content(content: acp_old::ToolCallContent) -> acp::ToolCallContent {
-    match content {
-        acp_old::ToolCallContent::Markdown { markdown } => markdown.into(),
-        acp_old::ToolCallContent::Diff { diff } => acp::ToolCallContent::Diff {
-            diff: into_new_diff(diff),
-        },
-    }
-}
-
-fn into_new_diff(diff: acp_old::Diff) -> acp::Diff {
-    acp::Diff {
-        path: diff.path,
-        old_text: diff.old_text,
-        new_text: diff.new_text,
-    }
-}
-
-fn into_new_tool_call_location(location: acp_old::ToolCallLocation) -> acp::ToolCallLocation {
-    acp::ToolCallLocation {
-        path: location.path,
-        line: location.line,
-    }
-}
-
-fn into_new_plan_entry(entry: acp_old::PlanEntry) -> acp::PlanEntry {
-    acp::PlanEntry {
-        content: entry.content,
-        priority: into_new_plan_priority(entry.priority),
-        status: into_new_plan_status(entry.status),
-    }
-}
-
-fn into_new_plan_priority(priority: acp_old::PlanEntryPriority) -> acp::PlanEntryPriority {
-    match priority {
-        acp_old::PlanEntryPriority::Low => acp::PlanEntryPriority::Low,
-        acp_old::PlanEntryPriority::Medium => acp::PlanEntryPriority::Medium,
-        acp_old::PlanEntryPriority::High => acp::PlanEntryPriority::High,
-    }
-}
-
-fn into_new_plan_status(status: acp_old::PlanEntryStatus) -> acp::PlanEntryStatus {
-    match status {
-        acp_old::PlanEntryStatus::Pending => acp::PlanEntryStatus::Pending,
-        acp_old::PlanEntryStatus::InProgress => acp::PlanEntryStatus::InProgress,
-        acp_old::PlanEntryStatus::Completed => acp::PlanEntryStatus::Completed,
-    }
-}
-
-pub struct AcpConnection {
-    pub name: &'static str,
-    pub connection: acp_old::AgentConnection,
-    pub _child_status: Task<Result<()>>,
-    pub current_thread: Rc<RefCell<WeakEntity<AcpThread>>>,
-}
-
-impl AcpConnection {
-    pub fn stdio(
-        name: &'static str,
-        command: AgentServerCommand,
-        root_dir: &Path,
-        cx: &mut AsyncApp,
-    ) -> Task<Result<Self>> {
-        let root_dir = root_dir.to_path_buf();
-
-        cx.spawn(async move |cx| {
-            let mut child = util::command::new_smol_command(&command.path)
-                .args(command.args.iter())
-                .current_dir(root_dir)
-                .stdin(std::process::Stdio::piped())
-                .stdout(std::process::Stdio::piped())
-                .stderr(std::process::Stdio::inherit())
-                .kill_on_drop(true)
-                .spawn()?;
-
-            let stdin = child.stdin.take().unwrap();
-            let stdout = child.stdout.take().unwrap();
-            log::trace!("Spawned (pid: {})", child.id());
-
-            let foreground_executor = cx.foreground_executor().clone();
-
-            let thread_rc = Rc::new(RefCell::new(WeakEntity::new_invalid()));
-
-            let (connection, io_fut) = acp_old::AgentConnection::connect_to_agent(
-                OldAcpClientDelegate::new(thread_rc.clone(), cx.clone()),
-                stdin,
-                stdout,
-                move |fut| foreground_executor.spawn(fut).detach(),
-            );
-
-            let io_task = cx.background_spawn(async move {
-                io_fut.await.log_err();
-            });
-
-            let child_status = cx.background_spawn(async move {
-                let result = match child.status().await {
-                    Err(e) => Err(anyhow!(e)),
-                    Ok(result) if result.success() => Ok(()),
-                    Ok(result) => Err(anyhow!(result)),
-                };
-                drop(io_task);
-                result
-            });
-
-            Ok(Self {
-                name,
-                connection,
-                _child_status: child_status,
-                current_thread: thread_rc,
-            })
-        })
-    }
-}
-
-impl AgentConnection for AcpConnection {
-    fn new_thread(
-        self: Rc<Self>,
-        project: Entity<Project>,
-        _cwd: &Path,
-        cx: &mut App,
-    ) -> Task<Result<Entity<AcpThread>>> {
-        let task = self.connection.request_any(
-            acp_old::InitializeParams {
-                protocol_version: acp_old::ProtocolVersion::latest(),
-            }
-            .into_any(),
-        );
-        let current_thread = self.current_thread.clone();
-        cx.spawn(async move |cx| {
-            let result = task.await?;
-            let result = acp_old::InitializeParams::response_from_any(result)?;
-
-            if !result.is_authenticated {
-                anyhow::bail!(AuthRequired::new())
-            }
-
-            cx.update(|cx| {
-                let thread = cx.new(|cx| {
-                    let session_id = acp::SessionId("acp-old-no-id".into());
-                    let action_log = cx.new(|_| ActionLog::new(project.clone()));
-                    AcpThread::new(self.name, self.clone(), project, action_log, session_id)
-                });
-                current_thread.replace(thread.downgrade());
-                thread
-            })
-        })
-    }
-
-    fn auth_methods(&self) -> &[acp::AuthMethod] {
-        &[]
-    }
-
-    fn authenticate(&self, _method_id: acp::AuthMethodId, cx: &mut App) -> Task<Result<()>> {
-        let task = self
-            .connection
-            .request_any(acp_old::AuthenticateParams.into_any());
-        cx.foreground_executor().spawn(async move {
-            task.await?;
-            Ok(())
-        })
-    }
-
-    fn prompt(
-        &self,
-        _id: Option<acp_thread::UserMessageId>,
-        params: acp::PromptRequest,
-        cx: &mut App,
-    ) -> Task<Result<acp::PromptResponse>> {
-        let chunks = params
-            .prompt
-            .into_iter()
-            .filter_map(|block| match block {
-                acp::ContentBlock::Text(text) => {
-                    Some(acp_old::UserMessageChunk::Text { text: text.text })
-                }
-                acp::ContentBlock::ResourceLink(link) => Some(acp_old::UserMessageChunk::Path {
-                    path: link.uri.into(),
-                }),
-                _ => None,
-            })
-            .collect();
-
-        let task = self
-            .connection
-            .request_any(acp_old::SendUserMessageParams { chunks }.into_any());
-        cx.foreground_executor().spawn(async move {
-            task.await?;
-            anyhow::Ok(acp::PromptResponse {
-                stop_reason: acp::StopReason::EndTurn,
-            })
-        })
-    }
-
-    fn prompt_capabilities(&self) -> acp::PromptCapabilities {
-        acp::PromptCapabilities {
-            image: false,
-            audio: false,
-            embedded_context: false,
-        }
-    }
-
-    fn cancel(&self, _session_id: &acp::SessionId, cx: &mut App) {
-        let task = self
-            .connection
-            .request_any(acp_old::CancelSendMessageParams.into_any());
-        cx.foreground_executor()
-            .spawn(async move {
-                task.await?;
-                anyhow::Ok(())
-            })
-            .detach_and_log_err(cx)
-    }
-
-    fn into_any(self: Rc<Self>) -> Rc<dyn Any> {
-        self
-    }
-}
--- a/crates/agent_servers/src/acp/v1.rs
+++ b/crates/agent_servers/src/acp/v1.rs
@@ -1,367 +0,0 @@
-use action_log::ActionLog;
-use agent_client_protocol::{self as acp, Agent as _, ErrorCode};
-use anyhow::anyhow;
-use collections::HashMap;
-use futures::AsyncBufReadExt as _;
-use futures::channel::oneshot;
-use futures::io::BufReader;
-use project::Project;
-use serde::Deserialize;
-use std::path::Path;
-use std::rc::Rc;
-use std::{any::Any, cell::RefCell};
-
-use anyhow::{Context as _, Result};
-use gpui::{App, AppContext as _, AsyncApp, Entity, Task, WeakEntity};
-
-use crate::{AgentServerCommand, acp::UnsupportedVersion};
-use acp_thread::{AcpThread, AgentConnection, AuthRequired, LoadError};
-
-pub struct AcpConnection {
-    server_name: &'static str,
-    connection: Rc<acp::ClientSideConnection>,
-    sessions: Rc<RefCell<HashMap<acp::SessionId, AcpSession>>>,
-    auth_methods: Vec<acp::AuthMethod>,
-    prompt_capabilities: acp::PromptCapabilities,
-    _io_task: Task<Result<()>>,
-}
-
-pub struct AcpSession {
-    thread: WeakEntity<AcpThread>,
-    suppress_abort_err: bool,
-}
-
-const MINIMUM_SUPPORTED_VERSION: acp::ProtocolVersion = acp::V1;
-
-impl AcpConnection {
-    pub async fn stdio(
-        server_name: &'static str,
-        command: AgentServerCommand,
-        root_dir: &Path,
-        cx: &mut AsyncApp,
-    ) -> Result<Self> {
-        let mut child = util::command::new_smol_command(&command.path)
-            .args(command.args.iter().map(|arg| arg.as_str()))
-            .envs(command.env.iter().flatten())
-            .current_dir(root_dir)
-            .stdin(std::process::Stdio::piped())
-            .stdout(std::process::Stdio::piped())
-            .stderr(std::process::Stdio::piped())
-            .kill_on_drop(true)
-            .spawn()?;
-
-        let stdout = child.stdout.take().context("Failed to take stdout")?;
-        let stdin = child.stdin.take().context("Failed to take stdin")?;
-        let stderr = child.stderr.take().context("Failed to take stderr")?;
-        log::trace!("Spawned (pid: {})", child.id());
-
-        let sessions = Rc::new(RefCell::new(HashMap::default()));
-
-        let client = ClientDelegate {
-            sessions: sessions.clone(),
-            cx: cx.clone(),
-        };
-        let (connection, io_task) = acp::ClientSideConnection::new(client, stdin, stdout, {
-            let foreground_executor = cx.foreground_executor().clone();
-            move |fut| {
-                foreground_executor.spawn(fut).detach();
-            }
-        });
-
-        let io_task = cx.background_spawn(io_task);
-
-        cx.background_spawn(async move {
-            let mut stderr = BufReader::new(stderr);
-            let mut line = String::new();
-            while let Ok(n) = stderr.read_line(&mut line).await
-                && n > 0
-            {
-                log::warn!("agent stderr: {}", &line);
-                line.clear();
-            }
-        })
-        .detach();
-
-        cx.spawn({
-            let sessions = sessions.clone();
-            async move |cx| {
-                let status = child.status().await?;
-
-                for session in sessions.borrow().values() {
-                    session
-                        .thread
-                        .update(cx, |thread, cx| {
-                            thread.emit_load_error(LoadError::Exited { status }, cx)
-                        })
-                        .ok();
-                }
-
-                anyhow::Ok(())
-            }
-        })
-        .detach();
-
-        let response = connection
-            .initialize(acp::InitializeRequest {
-                protocol_version: acp::VERSION,
-                client_capabilities: acp::ClientCapabilities {
-                    fs: acp::FileSystemCapability {
-                        read_text_file: true,
-                        write_text_file: true,
-                    },
-                },
-            })
-            .await?;
-
-        if response.protocol_version < MINIMUM_SUPPORTED_VERSION {
-            return Err(UnsupportedVersion.into());
-        }
-
-        Ok(Self {
-            auth_methods: response.auth_methods,
-            connection: connection.into(),
-            server_name,
-            sessions,
-            prompt_capabilities: response.agent_capabilities.prompt_capabilities,
-            _io_task: io_task,
-        })
-    }
-}
-
-impl AgentConnection for AcpConnection {
-    fn new_thread(
-        self: Rc<Self>,
-        project: Entity<Project>,
-        cwd: &Path,
-        cx: &mut App,
-    ) -> Task<Result<Entity<AcpThread>>> {
-        let conn = self.connection.clone();
-        let sessions = self.sessions.clone();
-        let cwd = cwd.to_path_buf();
-        cx.spawn(async move |cx| {
-            let response = conn
-                .new_session(acp::NewSessionRequest {
-                    mcp_servers: vec![],
-                    cwd,
-                })
-                .await
-                .map_err(|err| {
-                    if err.code == acp::ErrorCode::AUTH_REQUIRED.code {
-                        let mut error = AuthRequired::new();
-
-                        if err.message != acp::ErrorCode::AUTH_REQUIRED.message {
-                            error = error.with_description(err.message);
-                        }
-
-                        anyhow!(error)
-                    } else {
-                        anyhow!(err)
-                    }
-                })?;
-
-            let session_id = response.session_id;
-            let action_log = cx.new(|_| ActionLog::new(project.clone()))?;
-            let thread = cx.new(|_cx| {
-                AcpThread::new(
-                    self.server_name,
-                    self.clone(),
-                    project,
-                    action_log,
-                    session_id.clone(),
-                )
-            })?;
-
-            let session = AcpSession {
-                thread: thread.downgrade(),
-                suppress_abort_err: false,
-            };
-            sessions.borrow_mut().insert(session_id, session);
-
-            Ok(thread)
-        })
-    }
-
-    fn auth_methods(&self) -> &[acp::AuthMethod] {
-        &self.auth_methods
-    }
-
-    fn authenticate(&self, method_id: acp::AuthMethodId, cx: &mut App) -> Task<Result<()>> {
-        let conn = self.connection.clone();
-        cx.foreground_executor().spawn(async move {
-            let result = conn
-                .authenticate(acp::AuthenticateRequest {
-                    method_id: method_id.clone(),
-                })
-                .await?;
-
-            Ok(result)
-        })
-    }
-
-    fn prompt(
-        &self,
-        _id: Option<acp_thread::UserMessageId>,
-        params: acp::PromptRequest,
-        cx: &mut App,
-    ) -> Task<Result<acp::PromptResponse>> {
-        let conn = self.connection.clone();
-        let sessions = self.sessions.clone();
-        let session_id = params.session_id.clone();
-        cx.foreground_executor().spawn(async move {
-            let result = conn.prompt(params).await;
-
-            let mut suppress_abort_err = false;
-
-            if let Some(session) = sessions.borrow_mut().get_mut(&session_id) {
-                suppress_abort_err = session.suppress_abort_err;
-                session.suppress_abort_err = false;
-            }
-
-            match result {
-                Ok(response) => Ok(response),
-                Err(err) => {
-                    if err.code != ErrorCode::INTERNAL_ERROR.code {
-                        anyhow::bail!(err)
-                    }
-
-                    let Some(data) = &err.data else {
-                        anyhow::bail!(err)
-                    };
-
-                    // Temporary workaround until the following PR is generally available:
-                    // https://github.com/google-gemini/gemini-cli/pull/6656
-
-                    #[derive(Deserialize)]
-                    #[serde(deny_unknown_fields)]
-                    struct ErrorDetails {
-                        details: Box<str>,
-                    }
-
-                    match serde_json::from_value(data.clone()) {
-                        Ok(ErrorDetails { details }) => {
-                            if suppress_abort_err && details.contains("This operation was aborted")
-                            {
-                                Ok(acp::PromptResponse {
-                                    stop_reason: acp::StopReason::Cancelled,
-                                })
-                            } else {
-                                Err(anyhow!(details))
-                            }
-                        }
-                        Err(_) => Err(anyhow!(err)),
-                    }
-                }
-            }
-        })
-    }
-
-    fn prompt_capabilities(&self) -> acp::PromptCapabilities {
-        self.prompt_capabilities
-    }
-
-    fn cancel(&self, session_id: &acp::SessionId, cx: &mut App) {
-        if let Some(session) = self.sessions.borrow_mut().get_mut(session_id) {
-            session.suppress_abort_err = true;
-        }
-        let conn = self.connection.clone();
-        let params = acp::CancelNotification {
-            session_id: session_id.clone(),
-        };
-        cx.foreground_executor()
-            .spawn(async move { conn.cancel(params).await })
-            .detach();
-    }
-
-    fn into_any(self: Rc<Self>) -> Rc<dyn Any> {
-        self
-    }
-}
-
-struct ClientDelegate {
-    sessions: Rc<RefCell<HashMap<acp::SessionId, AcpSession>>>,
-    cx: AsyncApp,
-}
-
-impl acp::Client for ClientDelegate {
-    async fn request_permission(
-        &self,
-        arguments: acp::RequestPermissionRequest,
-    ) -> Result<acp::RequestPermissionResponse, acp::Error> {
-        let cx = &mut self.cx.clone();
-        let rx = self
-            .sessions
-            .borrow()
-            .get(&arguments.session_id)
-            .context("Failed to get session")?
-            .thread
-            .update(cx, |thread, cx| {
-                thread.request_tool_call_authorization(arguments.tool_call, arguments.options, cx)
-            })?;
-
-        let result = rx?.await;
-
-        let outcome = match result {
-            Ok(option) => acp::RequestPermissionOutcome::Selected { option_id: option },
-            Err(oneshot::Canceled) => acp::RequestPermissionOutcome::Cancelled,
-        };
-
-        Ok(acp::RequestPermissionResponse { outcome })
-    }
-
-    async fn write_text_file(
-        &self,
-        arguments: acp::WriteTextFileRequest,
-    ) -> Result<(), acp::Error> {
-        let cx = &mut self.cx.clone();
-        let task = self
-            .sessions
-            .borrow()
-            .get(&arguments.session_id)
-            .context("Failed to get session")?
-            .thread
-            .update(cx, |thread, cx| {
-                thread.write_text_file(arguments.path, arguments.content, cx)
-            })?;
-
-        task.await?;
-
-        Ok(())
-    }
-
-    async fn read_text_file(
-        &self,
-        arguments: acp::ReadTextFileRequest,
-    ) -> Result<acp::ReadTextFileResponse, acp::Error> {
-        let cx = &mut self.cx.clone();
-        let task = self
-            .sessions
-            .borrow()
-            .get(&arguments.session_id)
-            .context("Failed to get session")?
-            .thread
-            .update(cx, |thread, cx| {
-                thread.read_text_file(arguments.path, arguments.line, arguments.limit, false, cx)
-            })?;
-
-        let content = task.await?;
-
-        Ok(acp::ReadTextFileResponse { content })
-    }
-
-    async fn session_notification(
-        &self,
-        notification: acp::SessionNotification,
-    ) -> Result<(), acp::Error> {
-        let cx = &mut self.cx.clone();
-        let sessions = self.sessions.borrow();
-        let session = sessions
-            .get(&notification.session_id)
-            .context("Failed to get session")?;
-
-        session.thread.update(cx, |thread, cx| {
-            thread.handle_session_update(notification.update, cx)
-        })??;
-
-        Ok(())
-    }
-}
--- a/crates/agent_servers/src/agent_servers.rs
+++ b/crates/agent_servers/src/agent_servers.rs
@@ -1,22 +1,35 @@
 mod acp;
 mod claude;
+mod custom;
 mod gemini;
 mod settings;

 #[cfg(any(test, feature = "test-support"))]
 pub mod e2e_tests;

+use anyhow::Context as _;
 pub use claude::*;
+pub use custom::*;
+use fs::Fs;
+use fs::RemoveOptions;
+use fs::RenameOptions;
+use futures::StreamExt as _;
 pub use gemini::*;
+use gpui::AppContext;
+use node_runtime::NodeRuntime;
 pub use settings::*;

 use acp_thread::AgentConnection;
+use acp_thread::LoadError;
 use anyhow::Result;
+use anyhow::anyhow;
 use collections::HashMap;
 use gpui::{App, AsyncApp, Entity, SharedString, Task};
 use project::Project;
 use schemars::JsonSchema;
+use semver::Version;
 use serde::{Deserialize, Serialize};
+use std::str::FromStr as _;
 use std::{
    any::Any,
    path::{Path, PathBuf},
@@ -29,16 +42,221 @@ pub fn init(cx: &mut App) {
    settings::init(cx);
 }

+pub struct AgentServerDelegate {
+    project: Entity<Project>,
+    status_tx: Option<watch::Sender<SharedString>>,
+    new_version_available: Option<watch::Sender<Option<String>>>,
+}
+
+impl AgentServerDelegate {
+    pub fn new(
+        project: Entity<Project>,
+        status_tx: Option<watch::Sender<SharedString>>,
+        new_version_tx: Option<watch::Sender<Option<String>>>,
+    ) -> Self {
+        Self {
+            project,
+            status_tx,
+            new_version_available: new_version_tx,
+        }
+    }
+
+    pub fn project(&self) -> &Entity<Project> {
+        &self.project
+    }
+
+    fn get_or_npm_install_builtin_agent(
+        self,
+        binary_name: SharedString,
+        package_name: SharedString,
+        entrypoint_path: PathBuf,
+        ignore_system_version: bool,
+        minimum_version: Option<Version>,
+        cx: &mut App,
+    ) -> Task<Result<AgentServerCommand>> {
+        let project = self.project;
+        let fs = project.read(cx).fs().clone();
+        let Some(node_runtime) = project.read(cx).node_runtime().cloned() else {
+            return Task::ready(Err(anyhow!(
+                "External agents are not yet available in remote projects."
+            )));
+        };
+        let status_tx = self.status_tx;
+        let new_version_available = self.new_version_available;
+
+        cx.spawn(async move |cx| {
+            if !ignore_system_version {
+                if let Some(bin) = find_bin_in_path(binary_name.clone(), &project, cx).await {
+                    return Ok(AgentServerCommand {
+                        path: bin,
+                        args: Vec::new(),
+                        env: Default::default(),
+                    });
+                }
+            }
+
+            cx.spawn(async move |cx| {
+                let node_path = node_runtime.binary_path().await?;
+                let dir = paths::data_dir()
+                    .join("external_agents")
+                    .join(binary_name.as_str());
+                fs.create_dir(&dir).await?;
+
+                let mut stream = fs.read_dir(&dir).await?;
+                let mut versions = Vec::new();
+                let mut to_delete = Vec::new();
+                while let Some(entry) = stream.next().await {
+                    let Ok(entry) = entry else { continue };
+                    let Some(file_name) = entry.file_name() else {
+                        continue;
+                    };
+
+                    if let Some(name) = file_name.to_str()
+                        && let Some(version) = semver::Version::from_str(name).ok()
+                        && fs
+                            .is_file(&dir.join(file_name).join(&entrypoint_path))
+                            .await
+                    {
+                        versions.push((version, file_name.to_owned()));
+                    } else {
+                        to_delete.push(file_name.to_owned())
+                    }
+                }
+
+                versions.sort();
+                let newest_version = if let Some((version, file_name)) = versions.last().cloned()
+                    && minimum_version.is_none_or(|minimum_version| version >= minimum_version)
+                {
+                    versions.pop();
+                    Some(file_name)
+                } else {
+                    None
+                };
+                log::debug!("existing version of {package_name}: {newest_version:?}");
+                to_delete.extend(versions.into_iter().map(|(_, file_name)| file_name));
+
+                cx.background_spawn({
+                    let fs = fs.clone();
+                    let dir = dir.clone();
+                    async move {
+                        for file_name in to_delete {
+                            fs.remove_dir(
+                                &dir.join(file_name),
+                                RemoveOptions {
+                                    recursive: true,
+                                    ignore_if_not_exists: false,
+                                },
+                            )
+                            .await
+                            .ok();
+                        }
+                    }
+                })
+                .detach();
+
+                let version = if let Some(file_name) = newest_version {
+                    cx.background_spawn({
+                        let file_name = file_name.clone();
+                        let dir = dir.clone();
+                        let fs = fs.clone();
+                        async move {
+                            let latest_version =
+                                node_runtime.npm_package_latest_version(&package_name).await;
+                            if let Ok(latest_version) = latest_version
+                                && &latest_version != &file_name.to_string_lossy()
+                            {
+                                Self::download_latest_version(
+                                    fs,
+                                    dir.clone(),
+                                    node_runtime,
+                                    package_name,
+                                )
+                                .await
+                                .log_err();
+                                if let Some(mut new_version_available) = new_version_available {
+                                    new_version_available.send(Some(latest_version)).ok();
+                                }
+                            }
+                        }
+                    })
+                    .detach();
+                    file_name
+                } else {
+                    if let Some(mut status_tx) = status_tx {
+                        status_tx.send("Installing…".into()).ok();
+                    }
+                    let dir = dir.clone();
+                    cx.background_spawn(Self::download_latest_version(
+                        fs.clone(),
+                        dir.clone(),
+                        node_runtime,
+                        package_name,
+                    ))
+                    .await?
+                    .into()
+                };
+
+                let agent_server_path = dir.join(version).join(entrypoint_path);
+                let agent_server_path_exists = fs.is_file(&agent_server_path).await;
+                anyhow::ensure!(
+                    agent_server_path_exists,
+                    "Missing entrypoint path {} after installation",
+                    agent_server_path.to_string_lossy()
+                );
+
+                anyhow::Ok(AgentServerCommand {
+                    path: node_path,
+                    args: vec![agent_server_path.to_string_lossy().to_string()],
+                    env: Default::default(),
+                })
+            })
+            .await
+            .map_err(|e| LoadError::FailedToInstall(e.to_string().into()).into())
+        })
+    }
+
+    async fn download_latest_version(
+        fs: Arc<dyn Fs>,
+        dir: PathBuf,
+        node_runtime: NodeRuntime,
+        package_name: SharedString,
+    ) -> Result<String> {
+        log::debug!("downloading latest version of {package_name}");
+
+        let tmp_dir = tempfile::tempdir_in(&dir)?;
+
+        node_runtime
+            .npm_install_packages(tmp_dir.path(), &[(&package_name, "latest")])
+            .await?;
+
+        let version = node_runtime
+            .npm_package_installed_version(tmp_dir.path(), &package_name)
+            .await?
+            .context("expected package to be installed")?;
+
+        fs.rename(
+            &tmp_dir.keep(),
+            &dir.join(&version),
+            RenameOptions {
+                ignore_if_exists: true,
+                overwrite: false,
+            },
+        )
+        .await?;
+
+        anyhow::Ok(version)
+    }
+}
+
 pub trait AgentServer: Send {
    fn logo(&self) -> ui::IconName;
-    fn name(&self) -> &'static str;
-    fn empty_state_headline(&self) -> &'static str;
-    fn empty_state_message(&self) -> &'static str;
+    fn name(&self) -> SharedString;
+    fn telemetry_id(&self) -> &'static str;

    fn connect(
        &self,
        root_dir: &Path,
-        project: &Entity<Project>,
+        delegate: AgentServerDelegate,
        cx: &mut App,
    ) -> Task<Result<Rc<dyn AgentConnection>>>;

@@ -76,15 +294,6 @@ impl std::fmt::Debug for AgentServerCommand {
    }
 }

-pub enum AgentServerVersion {
-    Supported,
-    Unsupported {
-        error_message: SharedString,
-        upgrade_message: SharedString,
-        upgrade_command: String,
-    },
-}
-
 #[derive(Deserialize, Serialize, Clone, PartialEq, Eq, JsonSchema)]
 pub struct AgentServerCommand {
    #[serde(rename = "command")]
@@ -95,27 +304,20 @@ pub struct AgentServerCommand {
 }

 impl AgentServerCommand {
-    pub(crate) async fn resolve(
+    pub async fn resolve(
        path_bin_name: &'static str,
        extra_args: &[&'static str],
        fallback_path: Option<&Path>,
-        settings: Option<AgentServerSettings>,
+        settings: Option<BuiltinAgentServerSettings>,
        project: &Entity<Project>,
        cx: &mut AsyncApp,
    ) -> Option<Self> {
-        if let Some(agent_settings) = settings {
-            Some(Self {
-                path: agent_settings.command.path,
-                args: agent_settings
-                    .command
-                    .args
-                    .into_iter()
-                    .chain(extra_args.iter().map(|arg| arg.to_string()))
-                    .collect(),
-                env: agent_settings.command.env,
-            })
+        if let Some(settings) = settings
+            && let Some(command) = settings.custom_command()
+        {
+            Some(command)
        } else {
-            match find_bin_in_path(path_bin_name, project, cx).await {
+            match find_bin_in_path(path_bin_name.into(), project, cx).await {
                Some(path) => Some(Self {
                    path,
                    args: extra_args.iter().map(|arg| arg.to_string()).collect(),
@@ -138,7 +340,7 @@ impl AgentServerCommand {
 }

 async fn find_bin_in_path(
-    bin_name: &'static str,
+    bin_name: SharedString,
    project: &Entity<Project>,
    cx: &mut AsyncApp,
 ) -> Option<PathBuf> {
@@ -168,11 +370,11 @@ async fn find_bin_in_path(
    cx.background_executor()
        .spawn(async move {
            let which_result = if cfg!(windows) {
-                which::which(bin_name)
+                which::which(bin_name.as_str())
            } else {
                let env = env_task.await.unwrap_or_default();
                let shell_path = env.get("PATH").cloned();
-                which::which_in(bin_name, shell_path.as_ref(), root_dir.as_ref())
+                which::which_in(bin_name.as_str(), shell_path.as_ref(), root_dir.as_ref())
            };

            if let Err(which::Error::CannotFindBinaryPath) = which_result {
--- a/crates/agent_servers/src/claude.rs
+++ b/crates/agent_servers/src/claude.rs
--- a/crates/agent_servers/src/claude/edit_tool.rs
+++ b/crates/agent_servers/src/claude/edit_tool.rs
@@ -1,178 +0,0 @@
-use acp_thread::AcpThread;
-use anyhow::Result;
-use context_server::{
-    listener::{McpServerTool, ToolResponse},
-    types::{ToolAnnotations, ToolResponseContent},
-};
-use gpui::{AsyncApp, WeakEntity};
-use language::unified_diff;
-use util::markdown::MarkdownCodeBlock;
-
-use crate::tools::EditToolParams;
-
-#[derive(Clone)]
-pub struct EditTool {
-    thread_rx: watch::Receiver<WeakEntity<AcpThread>>,
-}
-
-impl EditTool {
-    pub fn new(thread_rx: watch::Receiver<WeakEntity<AcpThread>>) -> Self {
-        Self { thread_rx }
-    }
-}
-
-impl McpServerTool for EditTool {
-    type Input = EditToolParams;
-    type Output = ();
-
-    const NAME: &'static str = "Edit";
-
-    fn annotations(&self) -> ToolAnnotations {
-        ToolAnnotations {
-            title: Some("Edit file".to_string()),
-            read_only_hint: Some(false),
-            destructive_hint: Some(false),
-            open_world_hint: Some(false),
-            idempotent_hint: Some(false),
-        }
-    }
-
-    async fn run(
-        &self,
-        input: Self::Input,
-        cx: &mut AsyncApp,
-    ) -> Result<ToolResponse<Self::Output>> {
-        let mut thread_rx = self.thread_rx.clone();
-        let Some(thread) = thread_rx.recv().await?.upgrade() else {
-            anyhow::bail!("Thread closed");
-        };
-
-        let content = thread
-            .update(cx, |thread, cx| {
-                thread.read_text_file(input.abs_path.clone(), None, None, true, cx)
-            })?
-            .await?;
-
-        let (new_content, diff) = cx
-            .background_executor()
-            .spawn(async move {
-                let new_content = content.replace(&input.old_text, &input.new_text);
-                if new_content == content {
-                    return Err(anyhow::anyhow!("Failed to find `old_text`",));
-                }
-                let diff = unified_diff(&content, &new_content);
-
-                Ok((new_content, diff))
-            })
-            .await?;
-
-        thread
-            .update(cx, |thread, cx| {
-                thread.write_text_file(input.abs_path, new_content, cx)
-            })?
-            .await?;
-
-        Ok(ToolResponse {
-            content: vec![ToolResponseContent::Text {
-                text: MarkdownCodeBlock {
-                    tag: "diff",
-                    text: diff.as_str().trim_end_matches('\n'),
-                }
-                .to_string(),
-            }],
-            structured_content: (),
-        })
-    }
-}
-
-#[cfg(test)]
-mod tests {
-    use std::rc::Rc;
-
-    use acp_thread::{AgentConnection, StubAgentConnection};
-    use gpui::{Entity, TestAppContext};
-    use indoc::indoc;
-    use project::{FakeFs, Project};
-    use serde_json::json;
-    use settings::SettingsStore;
-    use util::path;
-
-    use super::*;
-
-    #[gpui::test]
-    async fn old_text_not_found(cx: &mut TestAppContext) {
-        let (_thread, tool) = init_test(cx).await;
-
-        let result = tool
-            .run(
-                EditToolParams {
-                    abs_path: path!("/root/file.txt").into(),
-                    old_text: "hi".into(),
-                    new_text: "bye".into(),
-                },
-                &mut cx.to_async(),
-            )
-            .await;
-
-        assert_eq!(result.unwrap_err().to_string(), "Failed to find `old_text`");
-    }
-
-    #[gpui::test]
-    async fn found_and_replaced(cx: &mut TestAppContext) {
-        let (_thread, tool) = init_test(cx).await;
-
-        let result = tool
-            .run(
-                EditToolParams {
-                    abs_path: path!("/root/file.txt").into(),
-                    old_text: "hello".into(),
-                    new_text: "hi".into(),
-                },
-                &mut cx.to_async(),
-            )
-            .await;
-
-        assert_eq!(
-            result.unwrap().content[0].text().unwrap(),
-            indoc! {
-                r"
-                ```diff
-                @@ -1,1 +1,1 @@
-                -hello
-                +hi
-                ```
-                "
-            }
-        );
-    }
-
-    async fn init_test(cx: &mut TestAppContext) -> (Entity<AcpThread>, EditTool) {
-        cx.update(|cx| {
-            let settings_store = SettingsStore::test(cx);
-            cx.set_global(settings_store);
-            language::init(cx);
-            Project::init_settings(cx);
-        });
-
-        let connection = Rc::new(StubAgentConnection::new());
-        let fs = FakeFs::new(cx.executor());
-        fs.insert_tree(
-            path!("/root"),
-            json!({
-                "file.txt": "hello"
-            }),
-        )
-        .await;
-        let project = Project::test(fs, [path!("/root").as_ref()], cx).await;
-        let (mut thread_tx, thread_rx) = watch::channel(WeakEntity::new_invalid());
-
-        let thread = cx
-            .update(|cx| connection.new_thread(project, path!("/test").as_ref(), cx))
-            .await
-            .unwrap();
-
-        thread_tx.send(thread.downgrade()).unwrap();
-
-        (thread, EditTool::new(thread_rx))
-    }
-}
--- a/crates/agent_servers/src/claude/mcp_server.rs
+++ b/crates/agent_servers/src/claude/mcp_server.rs
@@ -1,99 +0,0 @@
-use std::path::PathBuf;
-use std::sync::Arc;
-
-use crate::claude::edit_tool::EditTool;
-use crate::claude::permission_tool::PermissionTool;
-use crate::claude::read_tool::ReadTool;
-use crate::claude::write_tool::WriteTool;
-use acp_thread::AcpThread;
-#[cfg(not(test))]
-use anyhow::Context as _;
-use anyhow::Result;
-use collections::HashMap;
-use context_server::types::{
-    Implementation, InitializeParams, InitializeResponse, ProtocolVersion, ServerCapabilities,
-    ToolsCapabilities, requests,
-};
-use gpui::{App, AsyncApp, Task, WeakEntity};
-use project::Fs;
-use serde::Serialize;
-
-pub struct ClaudeZedMcpServer {
-    server: context_server::listener::McpServer,
-}
-
-pub const SERVER_NAME: &str = "zed";
-
-impl ClaudeZedMcpServer {
-    pub async fn new(
-        thread_rx: watch::Receiver<WeakEntity<AcpThread>>,
-        fs: Arc<dyn Fs>,
-        cx: &AsyncApp,
-    ) -> Result<Self> {
-        let mut mcp_server = context_server::listener::McpServer::new(cx).await?;
-        mcp_server.handle_request::<requests::Initialize>(Self::handle_initialize);
-
-        mcp_server.add_tool(PermissionTool::new(fs.clone(), thread_rx.clone()));
-        mcp_server.add_tool(ReadTool::new(thread_rx.clone()));
-        mcp_server.add_tool(EditTool::new(thread_rx.clone()));
-        mcp_server.add_tool(WriteTool::new(thread_rx.clone()));
-
-        Ok(Self { server: mcp_server })
-    }
-
-    pub fn server_config(&self) -> Result<McpServerConfig> {
-        #[cfg(not(test))]
-        let zed_path = std::env::current_exe()
-            .context("finding current executable path for use in mcp_server")?;
-
-        #[cfg(test)]
-        let zed_path = crate::e2e_tests::get_zed_path();
-
-        Ok(McpServerConfig {
-            command: zed_path,
-            args: vec![
-                "--nc".into(),
-                self.server.socket_path().display().to_string(),
-            ],
-            env: None,
-        })
-    }
-
-    fn handle_initialize(_: InitializeParams, cx: &App) -> Task<Result<InitializeResponse>> {
-        cx.foreground_executor().spawn(async move {
-            Ok(InitializeResponse {
-                protocol_version: ProtocolVersion("2025-06-18".into()),
-                capabilities: ServerCapabilities {
-                    experimental: None,
-                    logging: None,
-                    completions: None,
-                    prompts: None,
-                    resources: None,
-                    tools: Some(ToolsCapabilities {
-                        list_changed: Some(false),
-                    }),
-                },
-                server_info: Implementation {
-                    name: SERVER_NAME.into(),
-                    version: "0.1.0".into(),
-                },
-                meta: None,
-            })
-        })
-    }
-}
-
-#[derive(Serialize)]
-#[serde(rename_all = "camelCase")]
-pub struct McpConfig {
-    pub mcp_servers: HashMap<String, McpServerConfig>,
-}
-
-#[derive(Serialize, Clone)]
-#[serde(rename_all = "camelCase")]
-pub struct McpServerConfig {
-    pub command: PathBuf,
-    pub args: Vec<String>,
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub env: Option<HashMap<String, String>>,
-}
--- a/crates/agent_servers/src/claude/permission_tool.rs
+++ b/crates/agent_servers/src/claude/permission_tool.rs
@@ -1,158 +0,0 @@
-use std::sync::Arc;
-
-use acp_thread::AcpThread;
-use agent_client_protocol as acp;
-use agent_settings::AgentSettings;
-use anyhow::{Context as _, Result};
-use context_server::{
-    listener::{McpServerTool, ToolResponse},
-    types::ToolResponseContent,
-};
-use gpui::{AsyncApp, WeakEntity};
-use project::Fs;
-use schemars::JsonSchema;
-use serde::{Deserialize, Serialize};
-use settings::{Settings as _, update_settings_file};
-use util::debug_panic;
-
-use crate::tools::ClaudeTool;
-
-#[derive(Clone)]
-pub struct PermissionTool {
-    fs: Arc<dyn Fs>,
-    thread_rx: watch::Receiver<WeakEntity<AcpThread>>,
-}
-
-/// Request permission for tool calls
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct PermissionToolParams {
-    tool_name: String,
-    input: serde_json::Value,
-    tool_use_id: Option<String>,
-}
-
-#[derive(Serialize)]
-#[serde(rename_all = "camelCase")]
-pub struct PermissionToolResponse {
-    behavior: PermissionToolBehavior,
-    updated_input: serde_json::Value,
-}
-
-#[derive(Serialize)]
-#[serde(rename_all = "snake_case")]
-enum PermissionToolBehavior {
-    Allow,
-    Deny,
-}
-
-impl PermissionTool {
-    pub fn new(fs: Arc<dyn Fs>, thread_rx: watch::Receiver<WeakEntity<AcpThread>>) -> Self {
-        Self { fs, thread_rx }
-    }
-}
-
-impl McpServerTool for PermissionTool {
-    type Input = PermissionToolParams;
-    type Output = ();
-
-    const NAME: &'static str = "Confirmation";
-
-    async fn run(
-        &self,
-        input: Self::Input,
-        cx: &mut AsyncApp,
-    ) -> Result<ToolResponse<Self::Output>> {
-        if agent_settings::AgentSettings::try_read_global(cx, |settings| {
-            settings.always_allow_tool_actions
-        })
-        .unwrap_or(false)
-        {
-            let response = PermissionToolResponse {
-                behavior: PermissionToolBehavior::Allow,
-                updated_input: input.input,
-            };
-
-            return Ok(ToolResponse {
-                content: vec![ToolResponseContent::Text {
-                    text: serde_json::to_string(&response)?,
-                }],
-                structured_content: (),
-            });
-        }
-
-        let mut thread_rx = self.thread_rx.clone();
-        let Some(thread) = thread_rx.recv().await?.upgrade() else {
-            anyhow::bail!("Thread closed");
-        };
-
-        let claude_tool = ClaudeTool::infer(&input.tool_name, input.input.clone());
-        let tool_call_id = acp::ToolCallId(input.tool_use_id.context("Tool ID required")?.into());
-
-        const ALWAYS_ALLOW: &str = "always_allow";
-        const ALLOW: &str = "allow";
-        const REJECT: &str = "reject";
-
-        let chosen_option = thread
-            .update(cx, |thread, cx| {
-                thread.request_tool_call_authorization(
-                    claude_tool.as_acp(tool_call_id).into(),
-                    vec![
-                        acp::PermissionOption {
-                            id: acp::PermissionOptionId(ALWAYS_ALLOW.into()),
-                            name: "Always Allow".into(),
-                            kind: acp::PermissionOptionKind::AllowAlways,
-                        },
-                        acp::PermissionOption {
-                            id: acp::PermissionOptionId(ALLOW.into()),
-                            name: "Allow".into(),
-                            kind: acp::PermissionOptionKind::AllowOnce,
-                        },
-                        acp::PermissionOption {
-                            id: acp::PermissionOptionId(REJECT.into()),
-                            name: "Reject".into(),
-                            kind: acp::PermissionOptionKind::RejectOnce,
-                        },
-                    ],
-                    cx,
-                )
-            })??
-            .await?;
-
-        let response = match chosen_option.0.as_ref() {
-            ALWAYS_ALLOW => {
-                cx.update(|cx| {
-                    update_settings_file::<AgentSettings>(self.fs.clone(), cx, |settings, _| {
-                        settings.set_always_allow_tool_actions(true);
-                    });
-                })?;
-
-                PermissionToolResponse {
-                    behavior: PermissionToolBehavior::Allow,
-                    updated_input: input.input,
-                }
-            }
-            ALLOW => PermissionToolResponse {
-                behavior: PermissionToolBehavior::Allow,
-                updated_input: input.input,
-            },
-            REJECT => PermissionToolResponse {
-                behavior: PermissionToolBehavior::Deny,
-                updated_input: input.input,
-            },
-            opt => {
-                debug_panic!("Unexpected option: {}", opt);
-                PermissionToolResponse {
-                    behavior: PermissionToolBehavior::Deny,
-                    updated_input: input.input,
-                }
-            }
-        };
-
-        Ok(ToolResponse {
-            content: vec![ToolResponseContent::Text {
-                text: serde_json::to_string(&response)?,
-            }],
-            structured_content: (),
-        })
-    }
-}
--- a/crates/agent_servers/src/claude/read_tool.rs
+++ b/crates/agent_servers/src/claude/read_tool.rs
@@ -1,59 +0,0 @@
-use acp_thread::AcpThread;
-use anyhow::Result;
-use context_server::{
-    listener::{McpServerTool, ToolResponse},
-    types::{ToolAnnotations, ToolResponseContent},
-};
-use gpui::{AsyncApp, WeakEntity};
-
-use crate::tools::ReadToolParams;
-
-#[derive(Clone)]
-pub struct ReadTool {
-    thread_rx: watch::Receiver<WeakEntity<AcpThread>>,
-}
-
-impl ReadTool {
-    pub fn new(thread_rx: watch::Receiver<WeakEntity<AcpThread>>) -> Self {
-        Self { thread_rx }
-    }
-}
-
-impl McpServerTool for ReadTool {
-    type Input = ReadToolParams;
-    type Output = ();
-
-    const NAME: &'static str = "Read";
-
-    fn annotations(&self) -> ToolAnnotations {
-        ToolAnnotations {
-            title: Some("Read file".to_string()),
-            read_only_hint: Some(true),
-            destructive_hint: Some(false),
-            open_world_hint: Some(false),
-            idempotent_hint: None,
-        }
-    }
-
-    async fn run(
-        &self,
-        input: Self::Input,
-        cx: &mut AsyncApp,
-    ) -> Result<ToolResponse<Self::Output>> {
-        let mut thread_rx = self.thread_rx.clone();
-        let Some(thread) = thread_rx.recv().await?.upgrade() else {
-            anyhow::bail!("Thread closed");
-        };
-
-        let content = thread
-            .update(cx, |thread, cx| {
-                thread.read_text_file(input.abs_path, input.offset, input.limit, false, cx)
-            })?
-            .await?;
-
-        Ok(ToolResponse {
-            content: vec![ToolResponseContent::Text { text: content }],
-            structured_content: (),
-        })
-    }
-}
--- a/crates/agent_servers/src/claude/tools.rs
+++ b/crates/agent_servers/src/claude/tools.rs
@@ -1,688 +0,0 @@
-use std::path::PathBuf;
-
-use agent_client_protocol as acp;
-use itertools::Itertools;
-use schemars::JsonSchema;
-use serde::{Deserialize, Serialize};
-use util::ResultExt;
-
-pub enum ClaudeTool {
-    Task(Option<TaskToolParams>),
-    NotebookRead(Option<NotebookReadToolParams>),
-    NotebookEdit(Option<NotebookEditToolParams>),
-    Edit(Option<EditToolParams>),
-    MultiEdit(Option<MultiEditToolParams>),
-    ReadFile(Option<ReadToolParams>),
-    Write(Option<WriteToolParams>),
-    Ls(Option<LsToolParams>),
-    Glob(Option<GlobToolParams>),
-    Grep(Option<GrepToolParams>),
-    Terminal(Option<BashToolParams>),
-    WebFetch(Option<WebFetchToolParams>),
-    WebSearch(Option<WebSearchToolParams>),
-    TodoWrite(Option<TodoWriteToolParams>),
-    ExitPlanMode(Option<ExitPlanModeToolParams>),
-    Other {
-        name: String,
-        input: serde_json::Value,
-    },
-}
-
-impl ClaudeTool {
-    pub fn infer(tool_name: &str, input: serde_json::Value) -> Self {
-        match tool_name {
-            // Known tools
-            "mcp__zed__Read" => Self::ReadFile(serde_json::from_value(input).log_err()),
-            "mcp__zed__Edit" => Self::Edit(serde_json::from_value(input).log_err()),
-            "mcp__zed__Write" => Self::Write(serde_json::from_value(input).log_err()),
-            "MultiEdit" => Self::MultiEdit(serde_json::from_value(input).log_err()),
-            "Write" => Self::Write(serde_json::from_value(input).log_err()),
-            "LS" => Self::Ls(serde_json::from_value(input).log_err()),
-            "Glob" => Self::Glob(serde_json::from_value(input).log_err()),
-            "Grep" => Self::Grep(serde_json::from_value(input).log_err()),
-            "Bash" => Self::Terminal(serde_json::from_value(input).log_err()),
-            "WebFetch" => Self::WebFetch(serde_json::from_value(input).log_err()),
-            "WebSearch" => Self::WebSearch(serde_json::from_value(input).log_err()),
-            "TodoWrite" => Self::TodoWrite(serde_json::from_value(input).log_err()),
-            "exit_plan_mode" => Self::ExitPlanMode(serde_json::from_value(input).log_err()),
-            "Task" => Self::Task(serde_json::from_value(input).log_err()),
-            "NotebookRead" => Self::NotebookRead(serde_json::from_value(input).log_err()),
-            "NotebookEdit" => Self::NotebookEdit(serde_json::from_value(input).log_err()),
-            // Inferred from name
-            _ => {
-                let tool_name = tool_name.to_lowercase();
-
-                if tool_name.contains("edit") || tool_name.contains("write") {
-                    Self::Edit(None)
-                } else if tool_name.contains("terminal") {
-                    Self::Terminal(None)
-                } else {
-                    Self::Other {
-                        name: tool_name,
-                        input,
-                    }
-                }
-            }
-        }
-    }
-
-    pub fn label(&self) -> String {
-        match &self {
-            Self::Task(Some(params)) => params.description.clone(),
-            Self::Task(None) => "Task".into(),
-            Self::NotebookRead(Some(params)) => {
-                format!("Read Notebook {}", params.notebook_path.display())
-            }
-            Self::NotebookRead(None) => "Read Notebook".into(),
-            Self::NotebookEdit(Some(params)) => {
-                format!("Edit Notebook {}", params.notebook_path.display())
-            }
-            Self::NotebookEdit(None) => "Edit Notebook".into(),
-            Self::Terminal(Some(params)) => format!("`{}`", params.command),
-            Self::Terminal(None) => "Terminal".into(),
-            Self::ReadFile(_) => "Read File".into(),
-            Self::Ls(Some(params)) => {
-                format!("List Directory {}", params.path.display())
-            }
-            Self::Ls(None) => "List Directory".into(),
-            Self::Edit(Some(params)) => {
-                format!("Edit {}", params.abs_path.display())
-            }
-            Self::Edit(None) => "Edit".into(),
-            Self::MultiEdit(Some(params)) => {
-                format!("Multi Edit {}", params.file_path.display())
-            }
-            Self::MultiEdit(None) => "Multi Edit".into(),
-            Self::Write(Some(params)) => {
-                format!("Write {}", params.abs_path.display())
-            }
-            Self::Write(None) => "Write".into(),
-            Self::Glob(Some(params)) => {
-                format!("Glob `{params}`")
-            }
-            Self::Glob(None) => "Glob".into(),
-            Self::Grep(Some(params)) => format!("`{params}`"),
-            Self::Grep(None) => "Grep".into(),
-            Self::WebFetch(Some(params)) => format!("Fetch {}", params.url),
-            Self::WebFetch(None) => "Fetch".into(),
-            Self::WebSearch(Some(params)) => format!("Web Search: {}", params),
-            Self::WebSearch(None) => "Web Search".into(),
-            Self::TodoWrite(Some(params)) => format!(
-                "Update TODOs: {}",
-                params.todos.iter().map(|todo| &todo.content).join(", ")
-            ),
-            Self::TodoWrite(None) => "Update TODOs".into(),
-            Self::ExitPlanMode(_) => "Exit Plan Mode".into(),
-            Self::Other { name, .. } => name.clone(),
-        }
-    }
-    pub fn content(&self) -> Vec<acp::ToolCallContent> {
-        match &self {
-            Self::Other { input, .. } => vec![
-                format!(
-                    "```json\n{}```",
-                    serde_json::to_string_pretty(&input).unwrap_or("{}".to_string())
-                )
-                .into(),
-            ],
-            Self::Task(Some(params)) => vec![params.prompt.clone().into()],
-            Self::NotebookRead(Some(params)) => {
-                vec![params.notebook_path.display().to_string().into()]
-            }
-            Self::NotebookEdit(Some(params)) => vec![params.new_source.clone().into()],
-            Self::Terminal(Some(params)) => vec![
-                format!(
-                    "`{}`\n\n{}",
-                    params.command,
-                    params.description.as_deref().unwrap_or_default()
-                )
-                .into(),
-            ],
-            Self::ReadFile(Some(params)) => vec![params.abs_path.display().to_string().into()],
-            Self::Ls(Some(params)) => vec![params.path.display().to_string().into()],
-            Self::Glob(Some(params)) => vec![params.to_string().into()],
-            Self::Grep(Some(params)) => vec![format!("`{params}`").into()],
-            Self::WebFetch(Some(params)) => vec![params.prompt.clone().into()],
-            Self::WebSearch(Some(params)) => vec![params.to_string().into()],
-            Self::ExitPlanMode(Some(params)) => vec![params.plan.clone().into()],
-            Self::Edit(Some(params)) => vec![acp::ToolCallContent::Diff {
-                diff: acp::Diff {
-                    path: params.abs_path.clone(),
-                    old_text: Some(params.old_text.clone()),
-                    new_text: params.new_text.clone(),
-                },
-            }],
-            Self::Write(Some(params)) => vec![acp::ToolCallContent::Diff {
-                diff: acp::Diff {
-                    path: params.abs_path.clone(),
-                    old_text: None,
-                    new_text: params.content.clone(),
-                },
-            }],
-            Self::MultiEdit(Some(params)) => {
-                // todo: show multiple edits in a multibuffer?
-                params
-                    .edits
-                    .first()
-                    .map(|edit| {
-                        vec![acp::ToolCallContent::Diff {
-                            diff: acp::Diff {
-                                path: params.file_path.clone(),
-                                old_text: Some(edit.old_string.clone()),
-                                new_text: edit.new_string.clone(),
-                            },
-                        }]
-                    })
-                    .unwrap_or_default()
-            }
-            Self::TodoWrite(Some(_)) => {
-                // These are mapped to plan updates later
-                vec![]
-            }
-            Self::Task(None)
-            | Self::NotebookRead(None)
-            | Self::NotebookEdit(None)
-            | Self::Terminal(None)
-            | Self::ReadFile(None)
-            | Self::Ls(None)
-            | Self::Glob(None)
-            | Self::Grep(None)
-            | Self::WebFetch(None)
-            | Self::WebSearch(None)
-            | Self::TodoWrite(None)
-            | Self::ExitPlanMode(None)
-            | Self::Edit(None)
-            | Self::Write(None)
-            | Self::MultiEdit(None) => vec![],
-        }
-    }
-
-    pub fn kind(&self) -> acp::ToolKind {
-        match self {
-            Self::Task(_) => acp::ToolKind::Think,
-            Self::NotebookRead(_) => acp::ToolKind::Read,
-            Self::NotebookEdit(_) => acp::ToolKind::Edit,
-            Self::Edit(_) => acp::ToolKind::Edit,
-            Self::MultiEdit(_) => acp::ToolKind::Edit,
-            Self::Write(_) => acp::ToolKind::Edit,
-            Self::ReadFile(_) => acp::ToolKind::Read,
-            Self::Ls(_) => acp::ToolKind::Search,
-            Self::Glob(_) => acp::ToolKind::Search,
-            Self::Grep(_) => acp::ToolKind::Search,
-            Self::Terminal(_) => acp::ToolKind::Execute,
-            Self::WebSearch(_) => acp::ToolKind::Search,
-            Self::WebFetch(_) => acp::ToolKind::Fetch,
-            Self::TodoWrite(_) => acp::ToolKind::Think,
-            Self::ExitPlanMode(_) => acp::ToolKind::Think,
-            Self::Other { .. } => acp::ToolKind::Other,
-        }
-    }
-
-    pub fn locations(&self) -> Vec<acp::ToolCallLocation> {
-        match &self {
-            Self::Edit(Some(EditToolParams { abs_path, .. })) => vec![acp::ToolCallLocation {
-                path: abs_path.clone(),
-                line: None,
-            }],
-            Self::MultiEdit(Some(MultiEditToolParams { file_path, .. })) => {
-                vec![acp::ToolCallLocation {
-                    path: file_path.clone(),
-                    line: None,
-                }]
-            }
-            Self::Write(Some(WriteToolParams {
-                abs_path: file_path,
-                ..
-            })) => {
-                vec![acp::ToolCallLocation {
-                    path: file_path.clone(),
-                    line: None,
-                }]
-            }
-            Self::ReadFile(Some(ReadToolParams {
-                abs_path, offset, ..
-            })) => vec![acp::ToolCallLocation {
-                path: abs_path.clone(),
-                line: *offset,
-            }],
-            Self::NotebookRead(Some(NotebookReadToolParams { notebook_path, .. })) => {
-                vec![acp::ToolCallLocation {
-                    path: notebook_path.clone(),
-                    line: None,
-                }]
-            }
-            Self::NotebookEdit(Some(NotebookEditToolParams { notebook_path, .. })) => {
-                vec![acp::ToolCallLocation {
-                    path: notebook_path.clone(),
-                    line: None,
-                }]
-            }
-            Self::Glob(Some(GlobToolParams {
-                path: Some(path), ..
-            })) => vec![acp::ToolCallLocation {
-                path: path.clone(),
-                line: None,
-            }],
-            Self::Ls(Some(LsToolParams { path, .. })) => vec![acp::ToolCallLocation {
-                path: path.clone(),
-                line: None,
-            }],
-            Self::Grep(Some(GrepToolParams {
-                path: Some(path), ..
-            })) => vec![acp::ToolCallLocation {
-                path: PathBuf::from(path),
-                line: None,
-            }],
-            Self::Task(_)
-            | Self::NotebookRead(None)
-            | Self::NotebookEdit(None)
-            | Self::Edit(None)
-            | Self::MultiEdit(None)
-            | Self::Write(None)
-            | Self::ReadFile(None)
-            | Self::Ls(None)
-            | Self::Glob(_)
-            | Self::Grep(_)
-            | Self::Terminal(_)
-            | Self::WebFetch(_)
-            | Self::WebSearch(_)
-            | Self::TodoWrite(_)
-            | Self::ExitPlanMode(_)
-            | Self::Other { .. } => vec![],
-        }
-    }
-
-    pub fn as_acp(&self, id: acp::ToolCallId) -> acp::ToolCall {
-        acp::ToolCall {
-            id,
-            kind: self.kind(),
-            status: acp::ToolCallStatus::InProgress,
-            title: self.label(),
-            content: self.content(),
-            locations: self.locations(),
-            raw_input: None,
-            raw_output: None,
-        }
-    }
-}
-
-/// Edit a file.
-///
-/// In sessions with mcp__zed__Edit always use it instead of Edit as it will
-/// allow the user to conveniently review changes.
-///
-/// File editing instructions:
-/// - The `old_text` param must match existing file content, including indentation.
-/// - The `old_text` param must come from the actual file, not an outline.
-/// - The `old_text` section must not be empty.
-/// - Be minimal with replacements:
-///     - For unique lines, include only those lines.
-///     - For non-unique lines, include enough context to identify them.
-/// - Do not escape quotes, newlines, or other characters.
-/// - Only edit the specified file.
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct EditToolParams {
-    /// The absolute path to the file to read.
-    pub abs_path: PathBuf,
-    /// The old text to replace (must be unique in the file)
-    pub old_text: String,
-    /// The new text.
-    pub new_text: String,
-}
-
-/// Reads the content of the given file in the project.
-///
-/// Never attempt to read a path that hasn't been previously mentioned.
-///
-/// In sessions with mcp__zed__Read always use it instead of Read as it contains the most up-to-date contents.
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct ReadToolParams {
-    /// The absolute path to the file to read.
-    pub abs_path: PathBuf,
-    /// Which line to start reading from. Omit to start from the beginning.
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub offset: Option<u32>,
-    /// How many lines to read. Omit for the whole file.
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub limit: Option<u32>,
-}
-
-/// Writes content to the specified file in the project.
-///
-/// In sessions with mcp__zed__Write always use it instead of Write as it will
-/// allow the user to conveniently review changes.
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct WriteToolParams {
-    /// The absolute path of the file to write.
-    pub abs_path: PathBuf,
-    /// The full content to write.
-    pub content: String,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct BashToolParams {
-    /// Shell command to execute
-    pub command: String,
-    /// 5-10 word description of what command does
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub description: Option<String>,
-    /// Timeout in ms (max 600000ms/10min, default 120000ms)
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub timeout: Option<u32>,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct GlobToolParams {
-    /// Glob pattern like **/*.js or src/**/*.ts
-    pub pattern: String,
-    /// Directory to search in (omit for current directory)
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub path: Option<PathBuf>,
-}
-
-impl std::fmt::Display for GlobToolParams {
-    fn fmt(&self, f: &mut std::fmt::Formatter<'_>) -> std::fmt::Result {
-        if let Some(path) = &self.path {
-            write!(f, "{}", path.display())?;
-        }
-        write!(f, "{}", self.pattern)
-    }
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct LsToolParams {
-    /// Absolute path to directory
-    pub path: PathBuf,
-    /// Array of glob patterns to ignore
-    #[serde(default, skip_serializing_if = "Vec::is_empty")]
-    pub ignore: Vec<String>,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct GrepToolParams {
-    /// Regex pattern to search for
-    pub pattern: String,
-    /// File/directory to search (defaults to current directory)
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub path: Option<String>,
-    /// "content" (shows lines), "files_with_matches" (default), "count"
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub output_mode: Option<GrepOutputMode>,
-    /// Filter files with glob pattern like "*.js"
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub glob: Option<String>,
-    /// File type filter like "js", "py", "rust"
-    #[serde(rename = "type", skip_serializing_if = "Option::is_none")]
-    pub file_type: Option<String>,
-    /// Case insensitive search
-    #[serde(rename = "-i", default, skip_serializing_if = "is_false")]
-    pub case_insensitive: bool,
-    /// Show line numbers (content mode only)
-    #[serde(rename = "-n", default, skip_serializing_if = "is_false")]
-    pub line_numbers: bool,
-    /// Lines after match (content mode only)
-    #[serde(rename = "-A", skip_serializing_if = "Option::is_none")]
-    pub after_context: Option<u32>,
-    /// Lines before match (content mode only)
-    #[serde(rename = "-B", skip_serializing_if = "Option::is_none")]
-    pub before_context: Option<u32>,
-    /// Lines before and after match (content mode only)
-    #[serde(rename = "-C", skip_serializing_if = "Option::is_none")]
-    pub context: Option<u32>,
-    /// Enable multiline/cross-line matching
-    #[serde(default, skip_serializing_if = "is_false")]
-    pub multiline: bool,
-    /// Limit output to first N results
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub head_limit: Option<u32>,
-}
-
-impl std::fmt::Display for GrepToolParams {
-    fn fmt(&self, f: &mut std::fmt::Formatter<'_>) -> std::fmt::Result {
-        write!(f, "grep")?;
-
-        // Boolean flags
-        if self.case_insensitive {
-            write!(f, " -i")?;
-        }
-        if self.line_numbers {
-            write!(f, " -n")?;
-        }
-
-        // Context options
-        if let Some(after) = self.after_context {
-            write!(f, " -A {}", after)?;
-        }
-        if let Some(before) = self.before_context {
-            write!(f, " -B {}", before)?;
-        }
-        if let Some(context) = self.context {
-            write!(f, " -C {}", context)?;
-        }
-
-        // Output mode
-        if let Some(mode) = &self.output_mode {
-            match mode {
-                GrepOutputMode::FilesWithMatches => write!(f, " -l")?,
-                GrepOutputMode::Count => write!(f, " -c")?,
-                GrepOutputMode::Content => {} // Default mode
-            }
-        }
-
-        // Head limit
-        if let Some(limit) = self.head_limit {
-            write!(f, " | head -{}", limit)?;
-        }
-
-        // Glob pattern
-        if let Some(glob) = &self.glob {
-            write!(f, " --include=\"{}\"", glob)?;
-        }
-
-        // File type
-        if let Some(file_type) = &self.file_type {
-            write!(f, " --type={}", file_type)?;
-        }
-
-        // Multiline
-        if self.multiline {
-            write!(f, " -P")?; // Perl-compatible regex for multiline
-        }
-
-        // Pattern (escaped if contains special characters)
-        write!(f, " \"{}\"", self.pattern)?;
-
-        // Path
-        if let Some(path) = &self.path {
-            write!(f, " {}", path)?;
-        }
-
-        Ok(())
-    }
-}
-
-#[derive(Default, Deserialize, Serialize, JsonSchema, strum::Display, Debug)]
-#[serde(rename_all = "snake_case")]
-pub enum TodoPriority {
-    High,
-    #[default]
-    Medium,
-    Low,
-}
-
-impl Into<acp::PlanEntryPriority> for TodoPriority {
-    fn into(self) -> acp::PlanEntryPriority {
-        match self {
-            TodoPriority::High => acp::PlanEntryPriority::High,
-            TodoPriority::Medium => acp::PlanEntryPriority::Medium,
-            TodoPriority::Low => acp::PlanEntryPriority::Low,
-        }
-    }
-}
-
-#[derive(Deserialize, Serialize, JsonSchema, Debug)]
-#[serde(rename_all = "snake_case")]
-pub enum TodoStatus {
-    Pending,
-    InProgress,
-    Completed,
-}
-
-impl Into<acp::PlanEntryStatus> for TodoStatus {
-    fn into(self) -> acp::PlanEntryStatus {
-        match self {
-            TodoStatus::Pending => acp::PlanEntryStatus::Pending,
-            TodoStatus::InProgress => acp::PlanEntryStatus::InProgress,
-            TodoStatus::Completed => acp::PlanEntryStatus::Completed,
-        }
-    }
-}
-
-#[derive(Deserialize, Serialize, JsonSchema, Debug)]
-pub struct Todo {
-    /// Task description
-    pub content: String,
-    /// Current status of the todo
-    pub status: TodoStatus,
-    /// Priority level of the todo
-    #[serde(default)]
-    pub priority: TodoPriority,
-}
-
-impl Into<acp::PlanEntry> for Todo {
-    fn into(self) -> acp::PlanEntry {
-        acp::PlanEntry {
-            content: self.content,
-            priority: self.priority.into(),
-            status: self.status.into(),
-        }
-    }
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct TodoWriteToolParams {
-    pub todos: Vec<Todo>,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct ExitPlanModeToolParams {
-    /// Implementation plan in markdown format
-    pub plan: String,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct TaskToolParams {
-    /// Short 3-5 word description of task
-    pub description: String,
-    /// Detailed task for agent to perform
-    pub prompt: String,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct NotebookReadToolParams {
-    /// Absolute path to .ipynb file
-    pub notebook_path: PathBuf,
-    /// Specific cell ID to read
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub cell_id: Option<String>,
-}
-
-#[derive(Deserialize, Serialize, JsonSchema, Debug)]
-#[serde(rename_all = "snake_case")]
-pub enum CellType {
-    Code,
-    Markdown,
-}
-
-#[derive(Deserialize, Serialize, JsonSchema, Debug)]
-#[serde(rename_all = "snake_case")]
-pub enum EditMode {
-    Replace,
-    Insert,
-    Delete,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct NotebookEditToolParams {
-    /// Absolute path to .ipynb file
-    pub notebook_path: PathBuf,
-    /// New cell content
-    pub new_source: String,
-    /// Cell ID to edit
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub cell_id: Option<String>,
-    /// Type of cell (code or markdown)
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub cell_type: Option<CellType>,
-    /// Edit operation mode
-    #[serde(skip_serializing_if = "Option::is_none")]
-    pub edit_mode: Option<EditMode>,
-}
-
-#[derive(Deserialize, Serialize, JsonSchema, Debug)]
-pub struct MultiEditItem {
-    /// The text to search for and replace
-    pub old_string: String,
-    /// The replacement text
-    pub new_string: String,
-    /// Whether to replace all occurrences or just the first
-    #[serde(default, skip_serializing_if = "is_false")]
-    pub replace_all: bool,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct MultiEditToolParams {
-    /// Absolute path to file
-    pub file_path: PathBuf,
-    /// List of edits to apply
-    pub edits: Vec<MultiEditItem>,
-}
-
-fn is_false(v: &bool) -> bool {
-    !*v
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-#[serde(rename_all = "snake_case")]
-pub enum GrepOutputMode {
-    Content,
-    FilesWithMatches,
-    Count,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct WebFetchToolParams {
-    /// Valid URL to fetch
-    #[serde(rename = "url")]
-    pub url: String,
-    /// What to extract from content
-    pub prompt: String,
-}
-
-#[derive(Deserialize, JsonSchema, Debug)]
-pub struct WebSearchToolParams {
-    /// Search query (min 2 chars)
-    pub query: String,
-    /// Only include these domains
-    #[serde(default, skip_serializing_if = "Vec::is_empty")]
-    pub allowed_domains: Vec<String>,
-    /// Exclude these domains
-    #[serde(default, skip_serializing_if = "Vec::is_empty")]
-    pub blocked_domains: Vec<String>,
-}
-
-impl std::fmt::Display for WebSearchToolParams {
-    fn fmt(&self, f: &mut std::fmt::Formatter<'_>) -> std::fmt::Result {
-        write!(f, "\"{}\"", self.query)?;
-
-        if !self.allowed_domains.is_empty() {
-            write!(f, " (allowed: {})", self.allowed_domains.join(", "))?;
-        }
-
-        if !self.blocked_domains.is_empty() {
-            write!(f, " (blocked: {})", self.blocked_domains.join(", "))?;
-        }
-
-        Ok(())
-    }
-}
--- a/crates/agent_servers/src/claude/write_tool.rs
+++ b/crates/agent_servers/src/claude/write_tool.rs
@@ -1,59 +0,0 @@
-use acp_thread::AcpThread;
-use anyhow::Result;
-use context_server::{
-    listener::{McpServerTool, ToolResponse},
-    types::ToolAnnotations,
-};
-use gpui::{AsyncApp, WeakEntity};
-
-use crate::tools::WriteToolParams;
-
-#[derive(Clone)]
-pub struct WriteTool {
-    thread_rx: watch::Receiver<WeakEntity<AcpThread>>,
-}
-
-impl WriteTool {
-    pub fn new(thread_rx: watch::Receiver<WeakEntity<AcpThread>>) -> Self {
-        Self { thread_rx }
-    }
-}
-
-impl McpServerTool for WriteTool {
-    type Input = WriteToolParams;
-    type Output = ();
-
-    const NAME: &'static str = "Write";
-
-    fn annotations(&self) -> ToolAnnotations {
-        ToolAnnotations {
-            title: Some("Write file".to_string()),
-            read_only_hint: Some(false),
-            destructive_hint: Some(false),
-            open_world_hint: Some(false),
-            idempotent_hint: Some(false),
-        }
-    }
-
-    async fn run(
-        &self,
-        input: Self::Input,
-        cx: &mut AsyncApp,
-    ) -> Result<ToolResponse<Self::Output>> {
-        let mut thread_rx = self.thread_rx.clone();
-        let Some(thread) = thread_rx.recv().await?.upgrade() else {
-            anyhow::bail!("Thread closed");
-        };
-
-        thread
-            .update(cx, |thread, cx| {
-                thread.write_text_file(input.abs_path, input.content, cx)
-            })?
-            .await?;
-
-        Ok(ToolResponse {
-            content: vec![],
-            structured_content: (),
-        })
-    }
-}
--- a/crates/agent_servers/src/custom.rs
+++ b/crates/agent_servers/src/custom.rs
@@ -0,0 +1,48 @@
+use crate::{AgentServerCommand, AgentServerDelegate};
+use acp_thread::AgentConnection;
+use anyhow::Result;
+use gpui::{App, SharedString, Task};
+use std::{path::Path, rc::Rc};
+use ui::IconName;
+
+/// A generic agent server implementation for custom user-defined agents
+pub struct CustomAgentServer {
+    name: SharedString,
+    command: AgentServerCommand,
+}
+
+impl CustomAgentServer {
+    pub fn new(name: SharedString, command: AgentServerCommand) -> Self {
+        Self { name, command }
+    }
+}
+
+impl crate::AgentServer for CustomAgentServer {
+    fn telemetry_id(&self) -> &'static str {
+        "custom"
+    }
+
+    fn name(&self) -> SharedString {
+        self.name.clone()
+    }
+
+    fn logo(&self) -> IconName {
+        IconName::Terminal
+    }
+
+    fn connect(
+        &self,
+        root_dir: &Path,
+        _delegate: AgentServerDelegate,
+        cx: &mut App,
+    ) -> Task<Result<Rc<dyn AgentConnection>>> {
+        let server_name = self.name();
+        let command = self.command.clone();
+        let root_dir = root_dir.to_path_buf();
+        cx.spawn(async move |cx| crate::acp::connect(server_name, command, &root_dir, cx).await)
+    }
+
+    fn into_any(self: Rc<Self>) -> Rc<dyn std::any::Any> {
+        self
+    }
+}
--- a/crates/agent_servers/src/e2e_tests.rs
+++ b/crates/agent_servers/src/e2e_tests.rs
@@ -1,17 +1,17 @@
+use crate::{AgentServer, AgentServerDelegate};
+#[cfg(test)]
+use crate::{AgentServerCommand, CustomAgentServerSettings};
+use acp_thread::{AcpThread, AgentThreadEntry, ToolCall, ToolCallStatus};
+use agent_client_protocol as acp;
+use futures::{FutureExt, StreamExt, channel::mpsc, select};
+use gpui::{AppContext, Entity, TestAppContext};
+use indoc::indoc;
+use project::{FakeFs, Project};
 use std::{
    path::{Path, PathBuf},
    sync::Arc,
    time::Duration,
 };
-
-use crate::AgentServer;
-use acp_thread::{AcpThread, AgentThreadEntry, ToolCall, ToolCallStatus};
-use agent_client_protocol as acp;
-
-use futures::{FutureExt, StreamExt, channel::mpsc, select};
-use gpui::{AppContext, Entity, TestAppContext};
-use indoc::indoc;
-use project::{FakeFs, Project};
 use util::path;

 pub async fn test_basic<T, F>(server: F, cx: &mut TestAppContext)
@@ -473,12 +473,15 @@ pub async fn init_test(cx: &mut TestAppContext) -> Arc<FakeFs> {
        #[cfg(test)]
        crate::AllAgentServersSettings::override_global(
            crate::AllAgentServersSettings {
-                claude: Some(crate::AgentServerSettings {
-                    command: crate::claude::tests::local_command(),
-                }),
-                gemini: Some(crate::AgentServerSettings {
-                    command: crate::gemini::tests::local_command(),
+                claude: Some(CustomAgentServerSettings {
+                    command: AgentServerCommand {
+                        path: "claude-code-acp".into(),
+                        args: vec![],
+                        env: None,
+                    },
                }),
+                gemini: Some(crate::gemini::tests::local_command().into()),
+                custom: collections::HashMap::default(),
            },
            cx,
        );
@@ -495,8 +498,10 @@ pub async fn new_test_thread(
    current_dir: impl AsRef<Path>,
    cx: &mut TestAppContext,
 ) -> Entity<AcpThread> {
+    let delegate = AgentServerDelegate::new(project.clone(), None, None);
+
    let connection = cx
-        .update(|cx| server.connect(current_dir.as_ref(), &project, cx))
+        .update(|cx| server.connect(current_dir.as_ref(), delegate, cx))
        .await
        .unwrap();

--- a/crates/agent_servers/src/gemini.rs
+++ b/crates/agent_servers/src/gemini.rs
@@ -1,14 +1,13 @@
 use std::rc::Rc;
 use std::{any::Any, path::Path};

-use crate::{AgentServer, AgentServerCommand};
+use crate::acp::AcpConnection;
+use crate::{AgentServer, AgentServerDelegate};
 use acp_thread::{AgentConnection, LoadError};
 use anyhow::Result;
-use gpui::{Entity, Task};
+use gpui::{App, AppContext as _, SharedString, Task};
 use language_models::provider::google::GoogleLanguageModelProvider;
-use project::Project;
 use settings::SettingsStore;
-use ui::App;

 use crate::AllAgentServersSettings;

@@ -18,16 +17,12 @@ pub struct Gemini;
 const ACP_ARG: &str = "--experimental-acp";

 impl AgentServer for Gemini {
-    fn name(&self) -> &'static str {
-        "Gemini CLI"
+    fn telemetry_id(&self) -> &'static str {
+        "gemini-cli"
    }

-    fn empty_state_headline(&self) -> &'static str {
-        "Welcome to Gemini CLI"
-    }
-
-    fn empty_state_message(&self) -> &'static str {
-        "Ask questions, edit files, run commands"
+    fn name(&self) -> SharedString {
+        "Gemini CLI".into()
    }

    fn logo(&self) -> ui::IconName {
@@ -37,60 +32,122 @@ impl AgentServer for Gemini {
    fn connect(
        &self,
        root_dir: &Path,
-        project: &Entity<Project>,
+        delegate: AgentServerDelegate,
        cx: &mut App,
    ) -> Task<Result<Rc<dyn AgentConnection>>> {
-        let project = project.clone();
        let root_dir = root_dir.to_path_buf();
+        let fs = delegate.project().read(cx).fs().clone();
        let server_name = self.name();
+        let settings = cx.read_global(|settings: &SettingsStore, _| {
+            settings.get::<AllAgentServersSettings>(None).gemini.clone()
+        });
+        let project = delegate.project().clone();
+
        cx.spawn(async move |cx| {
-            let settings = cx.read_global(|settings: &SettingsStore, _| {
-                settings.get::<AllAgentServersSettings>(None).gemini.clone()
-            })?;
-
-            let Some(mut command) =
-                AgentServerCommand::resolve("gemini", &[ACP_ARG], None, settings, &project, cx).await
-            else {
-                return Err(LoadError::NotInstalled {
-                    error_message: "Failed to find Gemini CLI binary".into(),
-                    install_message: "Install Gemini CLI".into(),
-                    install_command: "npm install -g @google/gemini-cli@preview".into()
-                }.into());
+            let ignore_system_version = settings
+                .as_ref()
+                .and_then(|settings| settings.ignore_system_version)
+                .unwrap_or(true);
+            let mut project_env = project
+                .update(cx, |project, cx| {
+                    project.directory_environment(root_dir.as_path().into(), cx)
+                })?
+                .await
+                .unwrap_or_default();
+            let mut command = if let Some(settings) = settings
+                && let Some(command) = settings.custom_command()
+            {
+                command
+            } else {
+                cx.update(|cx| {
+                    delegate.get_or_npm_install_builtin_agent(
+                        Self::BINARY_NAME.into(),
+                        Self::PACKAGE_NAME.into(),
+                        format!("node_modules/{}/dist/index.js", Self::PACKAGE_NAME).into(),
+                        ignore_system_version,
+                        Some(Self::MINIMUM_VERSION.parse().unwrap()),
+                        cx,
+                    )
+                })?
+                .await?
            };
-
-            if let Some(api_key)= cx.update(GoogleLanguageModelProvider::api_key)?.await.ok() {
-                command.env.get_or_insert_default().insert("GEMINI_API_KEY".to_owned(), api_key.key);
+            if !command.args.contains(&ACP_ARG.into()) {
+                command.args.push(ACP_ARG.into());
            }
+            if let Some(api_key) = cx.update(GoogleLanguageModelProvider::api_key)?.await.ok() {
+                project_env
+                    .insert("GEMINI_API_KEY".to_owned(), api_key.key);
+            }
+            project_env.extend(command.env.take().unwrap_or_default());
+            command.env = Some(project_env);
+
+            let root_dir_exists = fs.is_dir(&root_dir).await;
+            anyhow::ensure!(
+                root_dir_exists,
+                "Session root {} does not exist or is not a directory",
+                root_dir.to_string_lossy()
+            );

            let result = crate::acp::connect(server_name, command.clone(), &root_dir, cx).await;
-            if result.is_err() {
-                let version_fut = util::command::new_smol_command(&command.path)
-                    .args(command.args.iter())
-                    .arg("--version")
-                    .kill_on_drop(true)
-                    .output();
+            match &result {
+                Ok(connection) => {
+                    if let Some(connection) = connection.clone().downcast::<AcpConnection>()
+                        && !connection.prompt_capabilities().image
+                    {
+                        let version_output = util::command::new_smol_command(&command.path)
+                            .args(command.args.iter())
+                            .arg("--version")
+                            .kill_on_drop(true)
+                            .output()
+                            .await;
+                        let current_version =
+                            String::from_utf8(version_output?.stdout)?.trim().to_owned();

-                let help_fut = util::command::new_smol_command(&command.path)
-                    .args(command.args.iter())
-                    .arg("--help")
-                    .kill_on_drop(true)
-                    .output();
+                        log::error!("connected to gemini, but missing prompt_capabilities.image (version is {current_version})");
+                        return Err(LoadError::Unsupported {
+                            current_version: current_version.into(),
+                            command: (command.path.to_string_lossy().to_string() + " " + &command.args.join(" ")).into(),
+                            minimum_version: Self::MINIMUM_VERSION.into(),
+                        }
+                        .into());
+                    }
+                }
+                Err(e) => {
+                    let version_fut = util::command::new_smol_command(&command.path)
+                        .args(command.args.iter())
+                        .arg("--version")
+                        .kill_on_drop(true)
+                        .output();

-                let (version_output, help_output) = futures::future::join(version_fut, help_fut).await;
+                    let help_fut = util::command::new_smol_command(&command.path)
+                        .args(command.args.iter())
+                        .arg("--help")
+                        .kill_on_drop(true)
+                        .output();

-                let current_version = String::from_utf8(version_output?.stdout)?;
-                let supported = String::from_utf8(help_output?.stdout)?.contains(ACP_ARG);
+                    let (version_output, help_output) =
+                        futures::future::join(version_fut, help_fut).await;
+                    let Some(version_output) = version_output.ok().and_then(|output| String::from_utf8(output.stdout).ok()) else {
+                        return result;
+                    };
+                    let Some((help_stdout, help_stderr)) = help_output.ok().and_then(|output| String::from_utf8(output.stdout).ok().zip(String::from_utf8(output.stderr).ok())) else  {
+                        return result;
+                    };

-                if !supported {
-                    return Err(LoadError::Unsupported {
-                        error_message: format!(
-                            "Your installed version of Gemini CLI ({}, version {}) doesn't support the Agentic Coding Protocol (ACP).",
-                            command.path.to_string_lossy(),
-                            current_version
-                        ).into(),
-                        upgrade_message: "Upgrade Gemini CLI to latest".into(),
-                        upgrade_command: "npm install -g @google/gemini-cli@preview".into(),
-                    }.into())
+                    let current_version = version_output.trim().to_string();
+                    let supported = help_stdout.contains(ACP_ARG) || current_version.parse::<semver::Version>().is_ok_and(|version| version >= Self::MINIMUM_VERSION.parse::<semver::Version>().unwrap());
+
+                    log::error!("failed to create ACP connection to gemini (version is {current_version}, supported: {supported}): {e}");
+                    log::debug!("gemini --help stdout: {help_stdout:?}");
+                    log::debug!("gemini --help stderr: {help_stderr:?}");
+                    if !supported {
+                        return Err(LoadError::Unsupported {
+                            current_version: current_version.into(),
+                            command: (command.path.to_string_lossy().to_string() + " " + &command.args.join(" ")).into(),
+                            minimum_version: Self::MINIMUM_VERSION.into(),
+                        }
+                        .into());
+                    }
                }
            }
            result
@@ -102,6 +159,14 @@ impl AgentServer for Gemini {
    }
 }

+impl Gemini {
+    const PACKAGE_NAME: &str = "@google/gemini-cli";
+
+    const MINIMUM_VERSION: &str = "0.2.1";
+
+    const BINARY_NAME: &str = "gemini";
+}
+
 #[cfg(test)]
 pub(crate) mod tests {
    use super::*;
--- a/crates/agent_servers/src/settings.rs
+++ b/crates/agent_servers/src/settings.rs
@@ -1,6 +1,9 @@
+use std::path::PathBuf;
+
 use crate::AgentServerCommand;
 use anyhow::Result;
-use gpui::App;
+use collections::HashMap;
+use gpui::{App, SharedString};
 use schemars::JsonSchema;
 use serde::{Deserialize, Serialize};
 use settings::{Settings, SettingsSources};
@@ -11,12 +14,62 @@ pub fn init(cx: &mut App) {

 #[derive(Default, Deserialize, Serialize, Clone, JsonSchema, Debug)]
 pub struct AllAgentServersSettings {
-    pub gemini: Option<AgentServerSettings>,
-    pub claude: Option<AgentServerSettings>,
+    pub gemini: Option<BuiltinAgentServerSettings>,
+    pub claude: Option<CustomAgentServerSettings>,
+
+    /// Custom agent servers configured by the user
+    #[serde(flatten)]
+    pub custom: HashMap<SharedString, CustomAgentServerSettings>,
 }

-#[derive(Deserialize, Serialize, Clone, JsonSchema, Debug)]
-pub struct AgentServerSettings {
+#[derive(Default, Deserialize, Serialize, Clone, JsonSchema, Debug, PartialEq)]
+pub struct BuiltinAgentServerSettings {
+    /// Absolute path to a binary to be used when launching this agent.
+    ///
+    /// This can be used to run a specific binary without automatic downloads or searching `$PATH`.
+    #[serde(rename = "command")]
+    pub path: Option<PathBuf>,
+    /// If a binary is specified in `command`, it will be passed these arguments.
+    pub args: Option<Vec<String>>,
+    /// If a binary is specified in `command`, it will be passed these environment variables.
+    pub env: Option<HashMap<String, String>>,
+    /// Whether to skip searching `$PATH` for an agent server binary when
+    /// launching this agent.
+    ///
+    /// This has no effect if a `command` is specified. Otherwise, when this is
+    /// `false`, Zed will search `$PATH` for an agent server binary and, if one
+    /// is found, use it for threads with this agent. If no agent binary is
+    /// found on `$PATH`, Zed will automatically install and use its own binary.
+    /// When this is `true`, Zed will not search `$PATH`, and will always use
+    /// its own binary.
+    ///
+    /// Default: true
+    pub ignore_system_version: Option<bool>,
+}
+
+impl BuiltinAgentServerSettings {
+    pub(crate) fn custom_command(self) -> Option<AgentServerCommand> {
+        self.path.map(|path| AgentServerCommand {
+            path,
+            args: self.args.unwrap_or_default(),
+            env: self.env,
+        })
+    }
+}
+
+impl From<AgentServerCommand> for BuiltinAgentServerSettings {
+    fn from(value: AgentServerCommand) -> Self {
+        BuiltinAgentServerSettings {
+            path: Some(value.path),
+            args: Some(value.args),
+            env: value.env,
+            ..Default::default()
+        }
+    }
+}
+
+#[derive(Deserialize, Serialize, Clone, JsonSchema, Debug, PartialEq)]
+pub struct CustomAgentServerSettings {
    #[serde(flatten)]
    pub command: AgentServerCommand,
 }
@@ -29,13 +82,26 @@ impl settings::Settings for AllAgentServersSettings {
    fn load(sources: SettingsSources<Self::FileContent>, _: &mut App) -> Result<Self> {
        let mut settings = AllAgentServersSettings::default();

-        for AllAgentServersSettings { gemini, claude } in sources.defaults_and_customizations() {
+        for AllAgentServersSettings {
+            gemini,
+            claude,
+            custom,
+        } in sources.defaults_and_customizations()
+        {
            if gemini.is_some() {
                settings.gemini = gemini.clone();
            }
            if claude.is_some() {
                settings.claude = claude.clone();
            }
+
+            // Merge custom agents
+            for (name, config) in custom {
+                // Skip built-in agent names to avoid conflicts
+                if name != "gemini" && name != "claude" {
+                    settings.custom.insert(name.clone(), config.clone());
+                }
+            }
        }

        Ok(settings)
--- a/crates/agent_settings/src/agent_settings.rs
+++ b/crates/agent_settings/src/agent_settings.rs
@@ -352,18 +352,19 @@ impl JsonSchema for LanguageModelProviderSetting {
    fn json_schema(_: &mut schemars::SchemaGenerator) -> schemars::Schema {
        json_schema!({
            "enum": [
-                "anthropic",
                "amazon-bedrock",
-                "google",
-                "lmstudio",
-                "ollama",
-                "openai",
-                "zed.dev",
+                "anthropic",
                "copilot_chat",
                "deepseek",
-                "openrouter",
+                "google",
+                "lmstudio",
                "mistral",
-                "vercel"
+                "ollama",
+                "openai",
+                "openrouter",
+                "vercel",
+                "x_ai",
+                "zed.dev"
            ]
        })
    }
--- a/crates/agent_ui/Cargo.toml
+++ b/crates/agent_ui/Cargo.toml
@@ -67,6 +67,7 @@ ordered-float.workspace = true
 parking_lot.workspace = true
 paths.workspace = true
 picker.workspace = true
+postage.workspace = true
 project.workspace = true
 prompt_store.workspace = true
 proto.workspace = true
@@ -79,6 +80,7 @@ serde.workspace = true
 serde_json.workspace = true
 serde_json_lenient.workspace = true
 settings.workspace = true
+shlex.workspace = true
 smol.workspace = true
 streaming_diff.workspace = true
 task.workspace = true
--- a/crates/agent_ui/src/acp/completion_provider.rs
+++ b/crates/agent_ui/src/acp/completion_provider.rs
@@ -1,4 +1,4 @@
-use std::cell::Cell;
+use std::cell::{Cell, RefCell};
 use std::ops::Range;
 use std::rc::Rc;
 use std::sync::Arc;
@@ -13,8 +13,10 @@ use fuzzy::{StringMatch, StringMatchCandidate};
 use gpui::{App, Entity, Task, WeakEntity};
 use language::{Buffer, CodeLabel, HighlightId};
 use lsp::CompletionContext;
+use project::lsp_store::CompletionDocumentation;
 use project::{
-    Completion, CompletionIntent, CompletionResponse, Project, ProjectPath, Symbol, WorktreeId,
+    Completion, CompletionDisplayOptions, CompletionIntent, CompletionResponse, Project,
+    ProjectPath, Symbol, WorktreeId,
 };
 use prompt_store::PromptStore;
 use rope::Point;
@@ -23,7 +25,7 @@ use ui::prelude::*;
 use workspace::Workspace;

 use crate::AgentPanel;
-use crate::acp::message_editor::MessageEditor;
+use crate::acp::message_editor::{MessageEditor, MessageEditorEvent};
 use crate::context_picker::file_context_picker::{FileMatch, search_files};
 use crate::context_picker::rules_context_picker::{RulesContextEntry, search_rules};
 use crate::context_picker::symbol_context_picker::SymbolMatch;
@@ -67,6 +69,7 @@ pub struct ContextPickerCompletionProvider {
    history_store: Entity<HistoryStore>,
    prompt_store: Option<Entity<PromptStore>>,
    prompt_capabilities: Rc<Cell<acp::PromptCapabilities>>,
+    available_commands: Rc<RefCell<Vec<acp::AvailableCommand>>>,
 }

 impl ContextPickerCompletionProvider {
@@ -76,6 +79,7 @@ impl ContextPickerCompletionProvider {
        history_store: Entity<HistoryStore>,
        prompt_store: Option<Entity<PromptStore>>,
        prompt_capabilities: Rc<Cell<acp::PromptCapabilities>>,
+        available_commands: Rc<RefCell<Vec<acp::AvailableCommand>>>,
    ) -> Self {
        Self {
            message_editor,
@@ -83,6 +87,7 @@ impl ContextPickerCompletionProvider {
            history_store,
            prompt_store,
            prompt_capabilities,
+            available_commands,
        }
    }

@@ -247,9 +252,9 @@ impl ContextPickerCompletionProvider {

        let abs_path = project.read(cx).absolute_path(&symbol.path, cx)?;
        let uri = MentionUri::Symbol {
-            path: abs_path,
+            abs_path,
            name: symbol.name.clone(),
-            line_range: symbol.range.start.0.row..symbol.range.end.0.row,
+            line_range: symbol.range.start.0.row..=symbol.range.end.0.row,
        };
        let new_text = format!("{} ", uri.as_link());
        let new_text_len = new_text.len();
@@ -369,7 +374,42 @@ impl ContextPickerCompletionProvider {
        })
    }

-    fn search(
+    fn search_slash_commands(
+        &self,
+        query: String,
+        cx: &mut App,
+    ) -> Task<Vec<acp::AvailableCommand>> {
+        let commands = self.available_commands.borrow().clone();
+        if commands.is_empty() {
+            return Task::ready(Vec::new());
+        }
+
+        cx.spawn(async move |cx| {
+            let candidates = commands
+                .iter()
+                .enumerate()
+                .map(|(id, command)| StringMatchCandidate::new(id, &command.name))
+                .collect::<Vec<_>>();
+
+            let matches = fuzzy::match_strings(
+                &candidates,
+                &query,
+                false,
+                true,
+                100,
+                &Arc::new(AtomicBool::default()),
+                cx.background_executor().clone(),
+            )
+            .await;
+
+            matches
+                .into_iter()
+                .map(|mat| commands[mat.candidate_id].clone())
+                .collect()
+        })
+    }
+
+    fn search_mentions(
        &self,
        mode: Option<ContextPickerMode>,
        query: String,
@@ -651,10 +691,10 @@ impl CompletionProvider for ContextPickerCompletionProvider {
            let offset_to_line = buffer.point_to_offset(line_start);
            let mut lines = buffer.text_for_range(line_start..position).lines();
            let line = lines.next()?;
-            MentionCompletion::try_parse(
-                self.prompt_capabilities.get().embedded_context,
+            ContextCompletion::try_parse(
                line,
                offset_to_line,
+                self.prompt_capabilities.get().embedded_context,
            )
        });
        let Some(state) = state else {
@@ -667,97 +707,175 @@ impl CompletionProvider for ContextPickerCompletionProvider {

        let project = workspace.read(cx).project().clone();
        let snapshot = buffer.read(cx).snapshot();
-        let source_range = snapshot.anchor_before(state.source_range.start)
-            ..snapshot.anchor_after(state.source_range.end);
+        let source_range = snapshot.anchor_before(state.source_range().start)
+            ..snapshot.anchor_after(state.source_range().end);

        let editor = self.message_editor.clone();

-        let MentionCompletion { mode, argument, .. } = state;
-        let query = argument.unwrap_or_else(|| "".to_string());
-
-        let search_task = self.search(mode, query, Arc::<AtomicBool>::default(), cx);
-
-        cx.spawn(async move |_, cx| {
-            let matches = search_task.await;
-
-            let completions = cx.update(|cx| {
-                matches
-                    .into_iter()
-                    .filter_map(|mat| match mat {
-                        Match::File(FileMatch { mat, is_recent }) => {
-                            let project_path = ProjectPath {
-                                worktree_id: WorktreeId::from_usize(mat.worktree_id),
-                                path: mat.path.clone(),
+        match state {
+            ContextCompletion::SlashCommand(SlashCommandCompletion {
+                command, argument, ..
+            }) => {
+                let search_task = self.search_slash_commands(command.unwrap_or_default(), cx);
+                cx.background_spawn(async move {
+                    let completions = search_task
+                        .await
+                        .into_iter()
+                        .map(|command| {
+                            let new_text = if let Some(argument) = argument.as_ref() {
+                                format!("/{} {}", command.name, argument)
+                            } else {
+                                format!("/{} ", command.name)
                            };

-                            Self::completion_for_path(
-                                project_path,
-                                &mat.path_prefix,
-                                is_recent,
-                                mat.is_dir,
-                                source_range.clone(),
-                                editor.clone(),
-                                project.clone(),
-                                cx,
-                            )
-                        }
+                            let is_missing_argument = argument.is_none() && command.input.is_some();
+                            Completion {
+                                replace_range: source_range.clone(),
+                                new_text,
+                                label: CodeLabel::plain(command.name.to_string(), None),
+                                documentation: Some(CompletionDocumentation::MultiLinePlainText(
+                                    command.description.into(),
+                                )),
+                                source: project::CompletionSource::Custom,
+                                icon_path: None,
+                                insert_text_mode: None,
+                                confirm: Some(Arc::new({
+                                    let editor = editor.clone();
+                                    move |intent, _window, cx| {
+                                        if !is_missing_argument {
+                                            cx.defer({
+                                                let editor = editor.clone();
+                                                move |cx| {
+                                                    editor
+                                                        .update(cx, |_editor, cx| {
+                                                            match intent {
+                                                                CompletionIntent::Complete
+                                                                | CompletionIntent::CompleteWithInsert
+                                                                | CompletionIntent::CompleteWithReplace => {
+                                                                    if !is_missing_argument {
+                                                                        cx.emit(MessageEditorEvent::Send);
+                                                                    }
+                                                                }
+                                                                CompletionIntent::Compose => {}
+                                                            }
+                                                        })
+                                                        .ok();
+                                                }
+                                            });
+                                        }
+                                        is_missing_argument
+                                    }
+                                })),
+                            }
+                        })
+                        .collect();

-                        Match::Symbol(SymbolMatch { symbol, .. }) => Self::completion_for_symbol(
-                            symbol,
-                            source_range.clone(),
-                            editor.clone(),
-                            workspace.clone(),
-                            cx,
-                        ),
+                    Ok(vec![CompletionResponse {
+                        completions,
+                        display_options: CompletionDisplayOptions {
+                            dynamic_width: true,
+                        },
+                        // Since this does its own filtering (see `filter_completions()` returns false),
+                        // there is no benefit to computing whether this set of completions is incomplete.
+                        is_incomplete: true,
+                    }])
+                })
+            }
+            ContextCompletion::Mention(MentionCompletion { mode, argument, .. }) => {
+                let query = argument.unwrap_or_default();
+                let search_task =
+                    self.search_mentions(mode, query, Arc::<AtomicBool>::default(), cx);

-                        Match::Thread(thread) => Some(Self::completion_for_thread(
-                            thread,
-                            source_range.clone(),
-                            false,
-                            editor.clone(),
-                            cx,
-                        )),
+                cx.spawn(async move |_, cx| {
+                    let matches = search_task.await;

-                        Match::RecentThread(thread) => Some(Self::completion_for_thread(
-                            thread,
-                            source_range.clone(),
-                            true,
-                            editor.clone(),
-                            cx,
-                        )),
+                    let completions = cx.update(|cx| {
+                        matches
+                            .into_iter()
+                            .filter_map(|mat| match mat {
+                                Match::File(FileMatch { mat, is_recent }) => {
+                                    let project_path = ProjectPath {
+                                        worktree_id: WorktreeId::from_usize(mat.worktree_id),
+                                        path: mat.path.clone(),
+                                    };

-                        Match::Rules(user_rules) => Some(Self::completion_for_rules(
-                            user_rules,
-                            source_range.clone(),
-                            editor.clone(),
-                            cx,
-                        )),
+                                    Self::completion_for_path(
+                                        project_path,
+                                        &mat.path_prefix,
+                                        is_recent,
+                                        mat.is_dir,
+                                        source_range.clone(),
+                                        editor.clone(),
+                                        project.clone(),
+                                        cx,
+                                    )
+                                }

-                        Match::Fetch(url) => Self::completion_for_fetch(
-                            source_range.clone(),
-                            url,
-                            editor.clone(),
-                            cx,
-                        ),
+                                Match::Symbol(SymbolMatch { symbol, .. }) => {
+                                    Self::completion_for_symbol(
+                                        symbol,
+                                        source_range.clone(),
+                                        editor.clone(),
+                                        workspace.clone(),
+                                        cx,
+                                    )
+                                }

-                        Match::Entry(EntryMatch { entry, .. }) => Self::completion_for_entry(
-                            entry,
-                            source_range.clone(),
-                            editor.clone(),
-                            &workspace,
-                            cx,
-                        ),
-                    })
-                    .collect()
-            })?;
+                                Match::Thread(thread) => Some(Self::completion_for_thread(
+                                    thread,
+                                    source_range.clone(),
+                                    false,
+                                    editor.clone(),
+                                    cx,
+                                )),

-            Ok(vec![CompletionResponse {
-                completions,
-                // Since this does its own filtering (see `filter_completions()` returns false),
-                // there is no benefit to computing whether this set of completions is incomplete.
-                is_incomplete: true,
-            }])
-        })
+                                Match::RecentThread(thread) => Some(Self::completion_for_thread(
+                                    thread,
+                                    source_range.clone(),
+                                    true,
+                                    editor.clone(),
+                                    cx,
+                                )),
+
+                                Match::Rules(user_rules) => Some(Self::completion_for_rules(
+                                    user_rules,
+                                    source_range.clone(),
+                                    editor.clone(),
+                                    cx,
+                                )),
+
+                                Match::Fetch(url) => Self::completion_for_fetch(
+                                    source_range.clone(),
+                                    url,
+                                    editor.clone(),
+                                    cx,
+                                ),
+
+                                Match::Entry(EntryMatch { entry, .. }) => {
+                                    Self::completion_for_entry(
+                                        entry,
+                                        source_range.clone(),
+                                        editor.clone(),
+                                        &workspace,
+                                        cx,
+                                    )
+                                }
+                            })
+                            .collect()
+                    })?;
+
+                    Ok(vec![CompletionResponse {
+                        completions,
+                        display_options: CompletionDisplayOptions {
+                            dynamic_width: true,
+                        },
+                        // Since this does its own filtering (see `filter_completions()` returns false),
+                        // there is no benefit to computing whether this set of completions is incomplete.
+                        is_incomplete: true,
+                    }])
+                })
+            }
+        }
    }

    fn is_completion_trigger(
@@ -775,14 +893,14 @@ impl CompletionProvider for ContextPickerCompletionProvider {
        let offset_to_line = buffer.point_to_offset(line_start);
        let mut lines = buffer.text_for_range(line_start..position).lines();
        if let Some(line) = lines.next() {
-            MentionCompletion::try_parse(
-                self.prompt_capabilities.get().embedded_context,
+            ContextCompletion::try_parse(
                line,
                offset_to_line,
+                self.prompt_capabilities.get().embedded_context,
            )
            .map(|completion| {
-                completion.source_range.start <= offset_to_line + position.column as usize
-                    && completion.source_range.end >= offset_to_line + position.column as usize
+                completion.source_range().start <= offset_to_line + position.column as usize
+                    && completion.source_range().end >= offset_to_line + position.column as usize
            })
            .unwrap_or(false)
        } else {
@@ -805,7 +923,7 @@ pub(crate) fn search_threads(
    history_store: &Entity<HistoryStore>,
    cx: &mut App,
 ) -> Task<Vec<HistoryEntry>> {
-    let threads = history_store.read(cx).entries(cx);
+    let threads = history_store.read(cx).entries().collect();
    if query.is_empty() {
        return Task::ready(threads);
    }
@@ -851,7 +969,7 @@ fn confirm_completion_callback(
                .clone()
                .update(cx, |message_editor, cx| {
                    message_editor
-                        .confirm_completion(
+                        .confirm_mention_completion(
                            crease_text,
                            start,
                            content_len,
@@ -867,6 +985,89 @@ fn confirm_completion_callback(
    })
 }

+enum ContextCompletion {
+    SlashCommand(SlashCommandCompletion),
+    Mention(MentionCompletion),
+}
+
+impl ContextCompletion {
+    fn source_range(&self) -> Range<usize> {
+        match self {
+            Self::SlashCommand(completion) => completion.source_range.clone(),
+            Self::Mention(completion) => completion.source_range.clone(),
+        }
+    }
+
+    fn try_parse(line: &str, offset_to_line: usize, allow_non_file_mentions: bool) -> Option<Self> {
+        if let Some(command) = SlashCommandCompletion::try_parse(line, offset_to_line) {
+            Some(Self::SlashCommand(command))
+        } else if let Some(mention) =
+            MentionCompletion::try_parse(allow_non_file_mentions, line, offset_to_line)
+        {
+            Some(Self::Mention(mention))
+        } else {
+            None
+        }
+    }
+}
+
+#[derive(Debug, Default, PartialEq)]
+pub struct SlashCommandCompletion {
+    pub source_range: Range<usize>,
+    pub command: Option<String>,
+    pub argument: Option<String>,
+}
+
+impl SlashCommandCompletion {
+    pub fn try_parse(line: &str, offset_to_line: usize) -> Option<Self> {
+        // If we decide to support commands that are not at the beginning of the prompt, we can remove this check
+        if !line.starts_with('/') || offset_to_line != 0 {
+            return None;
+        }
+
+        let last_command_start = line.rfind('/')?;
+        if last_command_start >= line.len() {
+            return Some(Self::default());
+        }
+        if last_command_start > 0
+            && line
+                .chars()
+                .nth(last_command_start - 1)
+                .is_some_and(|c| !c.is_whitespace())
+        {
+            return None;
+        }
+
+        let rest_of_line = &line[last_command_start + 1..];
+
+        let mut command = None;
+        let mut argument = None;
+        let mut end = last_command_start + 1;
+
+        if let Some(command_text) = rest_of_line.split_whitespace().next() {
+            command = Some(command_text.to_string());
+            end += command_text.len();
+
+            // Find the start of arguments after the command
+            if let Some(args_start) =
+                rest_of_line[command_text.len()..].find(|c: char| !c.is_whitespace())
+            {
+                let args = &rest_of_line[command_text.len() + args_start..].trim_end();
+                if !args.is_empty() {
+                    argument = Some(args.to_string());
+                    end += args.len() + 1;
+                }
+            }
+        }
+
+        Some(Self {
+            source_range: last_command_start + offset_to_line..end + offset_to_line,
+            command,
+            argument,
+        })
+    }
+}
+
 #[derive(Debug, Default, PartialEq)]
 struct MentionCompletion {
    source_range: Range<usize>,
@@ -932,6 +1133,62 @@ impl MentionCompletion {
 mod tests {
    use super::*;

+    #[test]
+    fn test_slash_command_completion_parse() {
+        assert_eq!(
+            SlashCommandCompletion::try_parse("/", 0),
+            Some(SlashCommandCompletion {
+                source_range: 0..1,
+                command: None,
+                argument: None,
+            })
+        );
+
+        assert_eq!(
+            SlashCommandCompletion::try_parse("/help", 0),
+            Some(SlashCommandCompletion {
+                source_range: 0..5,
+                command: Some("help".to_string()),
+                argument: None,
+            })
+        );
+
+        assert_eq!(
+            SlashCommandCompletion::try_parse("/help ", 0),
+            Some(SlashCommandCompletion {
+                source_range: 0..5,
+                command: Some("help".to_string()),
+                argument: None,
+            })
+        );
+
+        assert_eq!(
+            SlashCommandCompletion::try_parse("/help arg1", 0),
+            Some(SlashCommandCompletion {
+                source_range: 0..10,
+                command: Some("help".to_string()),
+                argument: Some("arg1".to_string()),
+            })
+        );
+
+        assert_eq!(
+            SlashCommandCompletion::try_parse("/help arg1 arg2", 0),
+            Some(SlashCommandCompletion {
+                source_range: 0..15,
+                command: Some("help".to_string()),
+                argument: Some("arg1 arg2".to_string()),
+            })
+        );
+
+        assert_eq!(SlashCommandCompletion::try_parse("Lorem Ipsum", 0), None);
+
+        assert_eq!(SlashCommandCompletion::try_parse("Lorem /", 0), None);
+
+        assert_eq!(SlashCommandCompletion::try_parse("Lorem /help", 0), None);
+
+        assert_eq!(SlashCommandCompletion::try_parse("Lorem/", 0), None);
+    }
+
    #[test]
    fn test_mention_completion_parse() {
        assert_eq!(MentionCompletion::try_parse(true, "Lorem Ipsum", 0), None);
--- a/crates/agent_ui/src/acp/entry_view_state.rs
+++ b/crates/agent_ui/src/acp/entry_view_state.rs
@@ -1,13 +1,17 @@
-use std::{cell::Cell, ops::Range, rc::Rc};
+use std::{
+    cell::{Cell, RefCell},
+    ops::Range,
+    rc::Rc,
+};

 use acp_thread::{AcpThread, AgentThreadEntry};
-use agent_client_protocol::{PromptCapabilities, ToolCallId};
+use agent_client_protocol::{self as acp, ToolCallId};
 use agent2::HistoryStore;
 use collections::HashMap;
 use editor::{Editor, EditorMode, MinimapVisibility};
 use gpui::{
-    AnyEntity, App, AppContext as _, Entity, EntityId, EventEmitter, Focusable,
-    TextStyleRefinement, WeakEntity, Window,
+    AnyEntity, App, AppContext as _, Entity, EntityId, EventEmitter, FocusHandle, Focusable,
+    ScrollHandle, SharedString, TextStyleRefinement, WeakEntity, Window,
 };
 use language::language_settings::SoftWrap;
 use project::Project;
@@ -26,8 +30,9 @@ pub struct EntryViewState {
    history_store: Entity<HistoryStore>,
    prompt_store: Option<Entity<PromptStore>>,
    entries: Vec<Entry>,
-    prevent_slash_commands: bool,
-    prompt_capabilities: Rc<Cell<PromptCapabilities>>,
+    prompt_capabilities: Rc<Cell<acp::PromptCapabilities>>,
+    available_commands: Rc<RefCell<Vec<acp::AvailableCommand>>>,
+    agent_name: SharedString,
 }

 impl EntryViewState {
@@ -36,8 +41,9 @@ impl EntryViewState {
        project: Entity<Project>,
        history_store: Entity<HistoryStore>,
        prompt_store: Option<Entity<PromptStore>>,
-        prompt_capabilities: Rc<Cell<PromptCapabilities>>,
-        prevent_slash_commands: bool,
+        prompt_capabilities: Rc<Cell<acp::PromptCapabilities>>,
+        available_commands: Rc<RefCell<Vec<acp::AvailableCommand>>>,
+        agent_name: SharedString,
    ) -> Self {
        Self {
            workspace,
@@ -45,8 +51,9 @@ impl EntryViewState {
            history_store,
            prompt_store,
            entries: Vec::new(),
-            prevent_slash_commands,
            prompt_capabilities,
+            available_commands,
+            agent_name,
        }
    }

@@ -85,8 +92,9 @@ impl EntryViewState {
                            self.history_store.clone(),
                            self.prompt_store.clone(),
                            self.prompt_capabilities.clone(),
+                            self.available_commands.clone(),
+                            self.agent_name.clone(),
                            "Edit message － @ to include context",
-                            self.prevent_slash_commands,
                            editor::EditorMode::AutoHeight {
                                min_lines: 1,
                                max_lines: None,
@@ -125,22 +133,35 @@ impl EntryViewState {
                    views
                };

+                let is_tool_call_completed =
+                    matches!(tool_call.status, acp_thread::ToolCallStatus::Completed);
+
                for terminal in terminals {
-                    views.entry(terminal.entity_id()).or_insert_with(|| {
-                        let element = create_terminal(
-                            self.workspace.clone(),
-                            self.project.clone(),
-                            terminal.clone(),
-                            window,
-                            cx,
-                        )
-                        .into_any();
-                        cx.emit(EntryViewEvent {
-                            entry_index: index,
-                            view_event: ViewEvent::NewTerminal(id.clone()),
-                        });
-                        element
-                    });
+                    match views.entry(terminal.entity_id()) {
+                        collections::hash_map::Entry::Vacant(entry) => {
+                            let element = create_terminal(
+                                self.workspace.clone(),
+                                self.project.clone(),
+                                terminal.clone(),
+                                window,
+                                cx,
+                            )
+                            .into_any();
+                            cx.emit(EntryViewEvent {
+                                entry_index: index,
+                                view_event: ViewEvent::NewTerminal(id.clone()),
+                            });
+                            entry.insert(element);
+                        }
+                        collections::hash_map::Entry::Occupied(_entry) => {
+                            if is_tool_call_completed && terminal.read(cx).output().is_none() {
+                                cx.emit(EntryViewEvent {
+                                    entry_index: index,
+                                    view_event: ViewEvent::TerminalMovedToBackground(id.clone()),
+                                });
+                            }
+                        }
+                    }
                }

                for diff in diffs {
@@ -154,10 +175,22 @@ impl EntryViewState {
                    });
                }
            }
-            AgentThreadEntry::AssistantMessage(_) => {
-                if index == self.entries.len() {
-                    self.entries.push(Entry::empty())
-                }
+            AgentThreadEntry::AssistantMessage(message) => {
+                let entry = if let Some(Entry::AssistantMessage(entry)) =
+                    self.entries.get_mut(index)
+                {
+                    entry
+                } else {
+                    self.set_entry(
+                        index,
+                        Entry::AssistantMessage(AssistantMessageEntry::default()),
+                    );
+                    let Some(Entry::AssistantMessage(entry)) = self.entries.get_mut(index) else {
+                        unreachable!()
+                    };
+                    entry
+                };
+                entry.sync(message);
            }
        };
    }
@@ -174,10 +207,10 @@ impl EntryViewState {
        self.entries.drain(range);
    }

-    pub fn settings_changed(&mut self, cx: &mut App) {
+    pub fn agent_font_size_changed(&mut self, cx: &mut App) {
        for entry in self.entries.iter() {
            match entry {
-                Entry::UserMessage { .. } => {}
+                Entry::UserMessage { .. } | Entry::AssistantMessage { .. } => {}
                Entry::Content(response_views) => {
                    for view in response_views.values() {
                        if let Ok(diff_editor) = view.clone().downcast::<Editor>() {
@@ -205,20 +238,48 @@ pub struct EntryViewEvent {
 pub enum ViewEvent {
    NewDiff(ToolCallId),
    NewTerminal(ToolCallId),
+    TerminalMovedToBackground(ToolCallId),
    MessageEditorEvent(Entity<MessageEditor>, MessageEditorEvent),
 }

+#[derive(Default, Debug)]
+pub struct AssistantMessageEntry {
+    scroll_handles_by_chunk_index: HashMap<usize, ScrollHandle>,
+}
+
+impl AssistantMessageEntry {
+    pub fn scroll_handle_for_chunk(&self, ix: usize) -> Option<ScrollHandle> {
+        self.scroll_handles_by_chunk_index.get(&ix).cloned()
+    }
+
+    pub fn sync(&mut self, message: &acp_thread::AssistantMessage) {
+        if let Some(acp_thread::AssistantMessageChunk::Thought { .. }) = message.chunks.last() {
+            let ix = message.chunks.len() - 1;
+            let handle = self.scroll_handles_by_chunk_index.entry(ix).or_default();
+            handle.scroll_to_bottom();
+        }
+    }
+}
+
 #[derive(Debug)]
 pub enum Entry {
    UserMessage(Entity<MessageEditor>),
+    AssistantMessage(AssistantMessageEntry),
    Content(HashMap<EntityId, AnyEntity>),
 }

 impl Entry {
+    pub fn focus_handle(&self, cx: &App) -> Option<FocusHandle> {
+        match self {
+            Self::UserMessage(editor) => Some(editor.read(cx).focus_handle(cx)),
+            Self::AssistantMessage(_) | Self::Content(_) => None,
+        }
+    }
+
    pub fn message_editor(&self) -> Option<&Entity<MessageEditor>> {
        match self {
            Self::UserMessage(editor) => Some(editor),
-            Entry::Content(_) => None,
+            Self::AssistantMessage(_) | Self::Content(_) => None,
        }
    }

@@ -239,6 +300,16 @@ impl Entry {
            .map(|entity| entity.downcast::<TerminalView>().unwrap())
    }

+    pub fn scroll_handle_for_assistant_message_chunk(
+        &self,
+        chunk_ix: usize,
+    ) -> Option<ScrollHandle> {
+        match self {
+            Self::AssistantMessage(message) => message.scroll_handle_for_chunk(chunk_ix),
+            Self::UserMessage(_) | Self::Content(_) => None,
+        }
+    }
+
    fn content_map(&self) -> Option<&HashMap<EntityId, AnyEntity>> {
        match self {
            Self::Content(map) => Some(map),
@@ -254,7 +325,7 @@ impl Entry {
    pub fn has_content(&self) -> bool {
        match self {
            Self::Content(map) => !map.is_empty(),
-            Self::UserMessage(_) => false,
+            Self::UserMessage(_) | Self::AssistantMessage(_) => false,
        }
    }
 }
@@ -408,7 +479,8 @@ mod tests {
                history_store,
                None,
                Default::default(),
-                false,
+                Default::default(),
+                "Test Agent".into(),
            )
        });

--- a/crates/agent_ui/src/acp/message_editor.rs
+++ b/crates/agent_ui/src/acp/message_editor.rs
--- a/crates/agent_ui/src/acp/model_selector.rs
+++ b/crates/agent_ui/src/acp/model_selector.rs
@@ -71,13 +71,10 @@ impl AcpModelPickerDelegate {
                    let (models, selected_model) = futures::join!(models_task, selected_model_task);

                    this.update_in(cx, |this, window, cx| {
-                        this.delegate.models = models.ok();
+                        this.delegate.models = models.log_err();
                        this.delegate.selected_model = selected_model.ok();
-                        this.delegate.update_matches(this.query(cx), window, cx)
-                    })?
-                    .await;
-
-                    Ok(())
+                        this.refresh(window, cx)
+                    })
                }

                refresh(&this, &session_id, cx).await.log_err();
@@ -144,6 +141,11 @@ impl PickerDelegate for AcpModelPickerDelegate {
        cx.spawn_in(window, async move |this, cx| {
            let filtered_models = match this
                .read_with(cx, |this, cx| {
+                    if let Some(models) = this.delegate.models.as_ref() {
+                        log::debug!("Filtering {} models.", models.len());
+                    } else {
+                        log::debug!("No models available.");
+                    }
                    this.delegate.models.clone().map(move |models| {
                        fuzzy_search(models, query, cx.background_executor().clone())
                    })
@@ -155,6 +157,8 @@ impl PickerDelegate for AcpModelPickerDelegate {
                None => AgentModelList::Flat(vec![]),
            };

+            log::debug!("Filtered models. {} available.", filtered_models.len());
+
            this.update_in(cx, |this, window, cx| {
                this.delegate.filtered_entries =
                    info_list_to_picker_entries(filtered_models).collect();
--- a/crates/agent_ui/src/acp/model_selector_popover.rs
+++ b/crates/agent_ui/src/acp/model_selector_popover.rs
@@ -36,6 +36,14 @@ impl AcpModelSelectorPopover {
    pub fn toggle(&self, window: &mut Window, cx: &mut Context<Self>) {
        self.menu_handle.toggle(window, cx);
    }
+
+    pub fn active_model_name(&self, cx: &App) -> Option<SharedString> {
+        self.selector
+            .read(cx)
+            .delegate
+            .active_model()
+            .map(|model| model.name.clone())
+    }
 }

 impl Render for AcpModelSelectorPopover {
--- a/crates/agent_ui/src/acp/thread_history.rs
+++ b/crates/agent_ui/src/acp/thread_history.rs
@@ -3,18 +3,18 @@ use crate::{AgentPanel, RemoveSelectedThread};
 use agent2::{HistoryEntry, HistoryStore};
 use chrono::{Datelike as _, Local, NaiveDate, TimeDelta};
 use editor::{Editor, EditorEvent};
-use fuzzy::{StringMatch, StringMatchCandidate};
+use fuzzy::StringMatchCandidate;
 use gpui::{
-    App, Empty, Entity, EventEmitter, FocusHandle, Focusable, ScrollStrategy, Stateful, Task,
+    App, Entity, EventEmitter, FocusHandle, Focusable, ScrollStrategy, Stateful, Task,
    UniformListScrollHandle, WeakEntity, Window, uniform_list,
 };
-use std::{fmt::Display, ops::Range, sync::Arc};
+use std::{fmt::Display, ops::Range};
+use text::Bias;
 use time::{OffsetDateTime, UtcOffset};
 use ui::{
    HighlightedLabel, IconButtonShape, ListItem, ListItemSpacing, Scrollbar, ScrollbarState,
    Tooltip, prelude::*,
 };
-use util::ResultExt;

 pub struct AcpThreadHistory {
    pub(crate) history_store: Entity<HistoryStore>,
@@ -22,38 +22,38 @@ pub struct AcpThreadHistory {
    selected_index: usize,
    hovered_index: Option<usize>,
    search_editor: Entity<Editor>,
-    all_entries: Arc<Vec<HistoryEntry>>,
-    // When the search is empty, we display date separators between history entries
-    // This vector contains an enum of either a separator or an actual entry
-    separated_items: Vec<ListItemType>,
-    // Maps entry indexes to list item indexes
-    separated_item_indexes: Vec<u32>,
-    _separated_items_task: Option<Task<()>>,
-    search_state: SearchState,
+    search_query: SharedString,
+
+    visible_items: Vec<ListItemType>,
+
    scrollbar_visibility: bool,
    scrollbar_state: ScrollbarState,
    local_timezone: UtcOffset,
-    _subscriptions: Vec<gpui::Subscription>,
-}

-enum SearchState {
-    Empty,
-    Searching {
-        query: SharedString,
-        _task: Task<()>,
-    },
-    Searched {
-        query: SharedString,
-        matches: Vec<StringMatch>,
-    },
+    _update_task: Task<()>,
+    _subscriptions: Vec<gpui::Subscription>,
 }

 enum ListItemType {
    BucketSeparator(TimeBucket),
    Entry {
-        index: usize,
+        entry: HistoryEntry,
        format: EntryTimeFormat,
    },
+    SearchResult {
+        entry: HistoryEntry,
+        positions: Vec<usize>,
+    },
+}
+
+impl ListItemType {
+    fn history_entry(&self) -> Option<&HistoryEntry> {
+        match self {
+            ListItemType::Entry { entry, .. } => Some(entry),
+            ListItemType::SearchResult { entry, .. } => Some(entry),
+            _ => None,
+        }
+    }
 }

 pub enum ThreadHistoryEvent {
@@ -78,12 +78,15 @@ impl AcpThreadHistory {
            cx.subscribe(&search_editor, |this, search_editor, event, cx| {
                if let EditorEvent::BufferEdited = event {
                    let query = search_editor.read(cx).text(cx);
-                    this.search(query.into(), cx);
+                    if this.search_query != query {
+                        this.search_query = query.into();
+                        this.update_visible_items(false, cx);
+                    }
                }
            });

        let history_store_subscription = cx.observe(&history_store, |this, _, cx| {
-            this.update_all_entries(cx);
+            this.update_visible_items(true, cx);
        });

        let scroll_handle = UniformListScrollHandle::default();
@@ -94,10 +97,7 @@ impl AcpThreadHistory {
            scroll_handle,
            selected_index: 0,
            hovered_index: None,
-            search_state: SearchState::Empty,
-            all_entries: Default::default(),
-            separated_items: Default::default(),
-            separated_item_indexes: Default::default(),
+            visible_items: Default::default(),
            search_editor,
            scrollbar_visibility: true,
            scrollbar_state,
@@ -105,29 +105,61 @@ impl AcpThreadHistory {
                chrono::Local::now().offset().local_minus_utc(),
            )
            .unwrap(),
+            search_query: SharedString::default(),
            _subscriptions: vec![search_editor_subscription, history_store_subscription],
-            _separated_items_task: None,
+            _update_task: Task::ready(()),
        };
-        this.update_all_entries(cx);
+        this.update_visible_items(false, cx);
        this
    }

-    fn update_all_entries(&mut self, cx: &mut Context<Self>) {
-        let new_entries: Arc<Vec<HistoryEntry>> = self
+    fn update_visible_items(&mut self, preserve_selected_item: bool, cx: &mut Context<Self>) {
+        let entries = self
            .history_store
-            .update(cx, |store, cx| store.entries(cx))
-            .into();
+            .update(cx, |store, _| store.entries().collect());
+        let new_list_items = if self.search_query.is_empty() {
+            self.add_list_separators(entries, cx)
+        } else {
+            self.filter_search_results(entries, cx)
+        };
+        let selected_history_entry = if preserve_selected_item {
+            self.selected_history_entry().cloned()
+        } else {
+            None
+        };

-        self._separated_items_task.take();
+        self._update_task = cx.spawn(async move |this, cx| {
+            let new_visible_items = new_list_items.await;
+            this.update(cx, |this, cx| {
+                let new_selected_index = if let Some(history_entry) = selected_history_entry {
+                    let history_entry_id = history_entry.id();
+                    new_visible_items
+                        .iter()
+                        .position(|visible_entry| {
+                            visible_entry
+                                .history_entry()
+                                .is_some_and(|entry| entry.id() == history_entry_id)
+                        })
+                        .unwrap_or(0)
+                } else {
+                    0
+                };

-        let mut items = Vec::with_capacity(new_entries.len() + 1);
-        let mut indexes = Vec::with_capacity(new_entries.len() + 1);
+                this.visible_items = new_visible_items;
+                this.set_selected_index(new_selected_index, Bias::Right, cx);
+                cx.notify();
+            })
+            .ok();
+        });
+    }

-        let bg_task = cx.background_spawn(async move {
+    fn add_list_separators(&self, entries: Vec<HistoryEntry>, cx: &App) -> Task<Vec<ListItemType>> {
+        cx.background_spawn(async move {
+            let mut items = Vec::with_capacity(entries.len() + 1);
            let mut bucket = None;
            let today = Local::now().naive_local().date();

-            for (index, entry) in new_entries.iter().enumerate() {
+            for entry in entries.into_iter() {
                let entry_date = entry
                    .updated_at()
                    .with_timezone(&Local)
@@ -140,75 +172,33 @@ impl AcpThreadHistory {
                    items.push(ListItemType::BucketSeparator(entry_bucket));
                }

-                indexes.push(items.len() as u32);
                items.push(ListItemType::Entry {
-                    index,
+                    entry,
                    format: entry_bucket.into(),
                });
            }
-            (new_entries, items, indexes)
-        });
-
-        let task = cx.spawn(async move |this, cx| {
-            let (new_entries, items, indexes) = bg_task.await;
-            this.update(cx, |this, cx| {
-                let previously_selected_entry =
-                    this.all_entries.get(this.selected_index).map(|e| e.id());
-
-                this.all_entries = new_entries;
-                this.separated_items = items;
-                this.separated_item_indexes = indexes;
-
-                match &this.search_state {
-                    SearchState::Empty => {
-                        if this.selected_index >= this.all_entries.len() {
-                            this.set_selected_entry_index(
-                                this.all_entries.len().saturating_sub(1),
-                                cx,
-                            );
-                        } else if let Some(prev_id) = previously_selected_entry
-                            && let Some(new_ix) = this
-                                .all_entries
-                                .iter()
-                                .position(|probe| probe.id() == prev_id)
-                        {
-                            this.set_selected_entry_index(new_ix, cx);
-                        }
-                    }
-                    SearchState::Searching { query, .. } | SearchState::Searched { query, .. } => {
-                        this.search(query.clone(), cx);
-                    }
-                }
-
-                cx.notify();
-            })
-            .log_err();
-        });
-        self._separated_items_task = Some(task);
+            items
+        })
    }

-    fn search(&mut self, query: SharedString, cx: &mut Context<Self>) {
-        if query.is_empty() {
-            self.search_state = SearchState::Empty;
-            cx.notify();
-            return;
-        }
-
-        let all_entries = self.all_entries.clone();
-
-        let fuzzy_search_task = cx.background_spawn({
-            let query = query.clone();
+    fn filter_search_results(
+        &self,
+        entries: Vec<HistoryEntry>,
+        cx: &App,
+    ) -> Task<Vec<ListItemType>> {
+        let query = self.search_query.clone();
+        cx.background_spawn({
            let executor = cx.background_executor().clone();
            async move {
-                let mut candidates = Vec::with_capacity(all_entries.len());
+                let mut candidates = Vec::with_capacity(entries.len());

-                for (idx, entry) in all_entries.iter().enumerate() {
+                for (idx, entry) in entries.iter().enumerate() {
                    candidates.push(StringMatchCandidate::new(idx, entry.title()));
                }

                const MAX_MATCHES: usize = 100;

-                fuzzy::match_strings(
+                let matches = fuzzy::match_strings(
                    &candidates,
                    &query,
                    false,
@@ -217,74 +207,61 @@ impl AcpThreadHistory {
                    &Default::default(),
                    executor,
                )
-                .await
+                .await;
+
+                matches
+                    .into_iter()
+                    .map(|search_match| ListItemType::SearchResult {
+                        entry: entries[search_match.candidate_id].clone(),
+                        positions: search_match.positions,
+                    })
+                    .collect()
            }
-        });
-
-        let task = cx.spawn({
-            let query = query.clone();
-            async move |this, cx| {
-                let matches = fuzzy_search_task.await;
-
-                this.update(cx, |this, cx| {
-                    let SearchState::Searching {
-                        query: current_query,
-                        _task,
-                    } = &this.search_state
-                    else {
-                        return;
-                    };
-
-                    if &query == current_query {
-                        this.search_state = SearchState::Searched {
-                            query: query.clone(),
-                            matches,
-                        };
-
-                        this.set_selected_entry_index(0, cx);
-                        cx.notify();
-                    };
-                })
-                .log_err();
-            }
-        });
-
-        self.search_state = SearchState::Searching { query, _task: task };
-        cx.notify();
-    }
-
-    fn matched_count(&self) -> usize {
-        match &self.search_state {
-            SearchState::Empty => self.all_entries.len(),
-            SearchState::Searching { .. } => 0,
-            SearchState::Searched { matches, .. } => matches.len(),
-        }
-    }
-
-    fn list_item_count(&self) -> usize {
-        match &self.search_state {
-            SearchState::Empty => self.separated_items.len(),
-            SearchState::Searching { .. } => 0,
-            SearchState::Searched { matches, .. } => matches.len(),
-        }
+        })
    }

    fn search_produced_no_matches(&self) -> bool {
-        match &self.search_state {
-            SearchState::Empty => false,
-            SearchState::Searching { .. } => false,
-            SearchState::Searched { matches, .. } => matches.is_empty(),
-        }
+        self.visible_items.is_empty() && !self.search_query.is_empty()
    }

-    fn get_match(&self, ix: usize) -> Option<&HistoryEntry> {
-        match &self.search_state {
-            SearchState::Empty => self.all_entries.get(ix),
-            SearchState::Searching { .. } => None,
-            SearchState::Searched { matches, .. } => matches
-                .get(ix)
-                .and_then(|m| self.all_entries.get(m.candidate_id)),
+    fn selected_history_entry(&self) -> Option<&HistoryEntry> {
+        self.get_history_entry(self.selected_index)
+    }
+
+    fn get_history_entry(&self, visible_items_ix: usize) -> Option<&HistoryEntry> {
+        self.visible_items.get(visible_items_ix)?.history_entry()
+    }
+
+    fn set_selected_index(&mut self, mut index: usize, bias: Bias, cx: &mut Context<Self>) {
+        if self.visible_items.len() == 0 {
+            self.selected_index = 0;
+            return;
        }
+        while matches!(
+            self.visible_items.get(index),
+            None | Some(ListItemType::BucketSeparator(..))
+        ) {
+            index = match bias {
+                Bias::Left => {
+                    if index == 0 {
+                        self.visible_items.len() - 1
+                    } else {
+                        index - 1
+                    }
+                }
+                Bias::Right => {
+                    if index >= self.visible_items.len() - 1 {
+                        0
+                    } else {
+                        index + 1
+                    }
+                }
+            };
+        }
+        self.selected_index = index;
+        self.scroll_handle
+            .scroll_to_item(index, ScrollStrategy::Top);
+        cx.notify()
    }

    pub fn select_previous(
@@ -293,13 +270,10 @@ impl AcpThreadHistory {
        _window: &mut Window,
        cx: &mut Context<Self>,
    ) {
-        let count = self.matched_count();
-        if count > 0 {
-            if self.selected_index == 0 {
-                self.set_selected_entry_index(count - 1, cx);
-            } else {
-                self.set_selected_entry_index(self.selected_index - 1, cx);
-            }
+        if self.selected_index == 0 {
+            self.set_selected_index(self.visible_items.len() - 1, Bias::Left, cx);
+        } else {
+            self.set_selected_index(self.selected_index - 1, Bias::Left, cx);
        }
    }

@@ -309,13 +283,10 @@ impl AcpThreadHistory {
        _window: &mut Window,
        cx: &mut Context<Self>,
    ) {
-        let count = self.matched_count();
-        if count > 0 {
-            if self.selected_index == count - 1 {
-                self.set_selected_entry_index(0, cx);
-            } else {
-                self.set_selected_entry_index(self.selected_index + 1, cx);
-            }
+        if self.selected_index == self.visible_items.len() - 1 {
+            self.set_selected_index(0, Bias::Right, cx);
+        } else {
+            self.set_selected_index(self.selected_index + 1, Bias::Right, cx);
        }
    }

@@ -325,35 +296,47 @@ impl AcpThreadHistory {
        _window: &mut Window,
        cx: &mut Context<Self>,
    ) {
-        let count = self.matched_count();
-        if count > 0 {
-            self.set_selected_entry_index(0, cx);
-        }
+        self.set_selected_index(0, Bias::Right, cx);
    }

    fn select_last(&mut self, _: &menu::SelectLast, _window: &mut Window, cx: &mut Context<Self>) {
-        let count = self.matched_count();
-        if count > 0 {
-            self.set_selected_entry_index(count - 1, cx);
-        }
+        self.set_selected_index(self.visible_items.len() - 1, Bias::Left, cx);
    }

-    fn set_selected_entry_index(&mut self, entry_index: usize, cx: &mut Context<Self>) {
-        self.selected_index = entry_index;
+    fn confirm(&mut self, _: &menu::Confirm, _window: &mut Window, cx: &mut Context<Self>) {
+        self.confirm_entry(self.selected_index, cx);
+    }

-        let scroll_ix = match self.search_state {
-            SearchState::Empty | SearchState::Searching { .. } => self
-                .separated_item_indexes
-                .get(entry_index)
-                .map(|ix| *ix as usize)
-                .unwrap_or(entry_index + 1),
-            SearchState::Searched { .. } => entry_index,
+    fn confirm_entry(&mut self, ix: usize, cx: &mut Context<Self>) {
+        let Some(entry) = self.get_history_entry(ix) else {
+            return;
+        };
+        cx.emit(ThreadHistoryEvent::Open(entry.clone()));
+    }
+
+    fn remove_selected_thread(
+        &mut self,
+        _: &RemoveSelectedThread,
+        _window: &mut Window,
+        cx: &mut Context<Self>,
+    ) {
+        self.remove_thread(self.selected_index, cx)
+    }
+
+    fn remove_thread(&mut self, visible_item_ix: usize, cx: &mut Context<Self>) {
+        let Some(entry) = self.get_history_entry(visible_item_ix) else {
+            return;
        };

-        self.scroll_handle
-            .scroll_to_item(scroll_ix, ScrollStrategy::Top);
-
-        cx.notify();
+        let task = match entry {
+            HistoryEntry::AcpThread(thread) => self
+                .history_store
+                .update(cx, |this, cx| this.delete_thread(thread.id.clone(), cx)),
+            HistoryEntry::TextThread(context) => self.history_store.update(cx, |this, cx| {
+                this.delete_text_thread(context.path.clone(), cx)
+            }),
+        };
+        task.detach_and_log_err(cx);
    }

    fn render_scrollbar(&self, cx: &mut Context<Self>) -> Option<Stateful<Div>> {
@@ -393,91 +376,33 @@ impl AcpThreadHistory {
        )
    }

-    fn confirm(&mut self, _: &menu::Confirm, _window: &mut Window, cx: &mut Context<Self>) {
-        self.confirm_entry(self.selected_index, cx);
-    }
-
-    fn confirm_entry(&mut self, ix: usize, cx: &mut Context<Self>) {
-        let Some(entry) = self.get_match(ix) else {
-            return;
-        };
-        cx.emit(ThreadHistoryEvent::Open(entry.clone()));
-    }
-
-    fn remove_selected_thread(
-        &mut self,
-        _: &RemoveSelectedThread,
-        _window: &mut Window,
-        cx: &mut Context<Self>,
-    ) {
-        self.remove_thread(self.selected_index, cx)
-    }
-
-    fn remove_thread(&mut self, ix: usize, cx: &mut Context<Self>) {
-        let Some(entry) = self.get_match(ix) else {
-            return;
-        };
-
-        let task = match entry {
-            HistoryEntry::AcpThread(thread) => self
-                .history_store
-                .update(cx, |this, cx| this.delete_thread(thread.id.clone(), cx)),
-            HistoryEntry::TextThread(context) => self.history_store.update(cx, |this, cx| {
-                this.delete_text_thread(context.path.clone(), cx)
-            }),
-        };
-        task.detach_and_log_err(cx);
-    }
-
-    fn list_items(
+    fn render_list_items(
        &mut self,
        range: Range<usize>,
        _window: &mut Window,
        cx: &mut Context<Self>,
    ) -> Vec<AnyElement> {
-        match &self.search_state {
-            SearchState::Empty => self
-                .separated_items
-                .get(range)
-                .iter()
-                .flat_map(|items| {
-                    items
-                        .iter()
-                        .map(|item| self.render_list_item(item, vec![], cx))
-                })
-                .collect(),
-            SearchState::Searched { matches, .. } => matches[range]
-                .iter()
-                .filter_map(|m| {
-                    let entry = self.all_entries.get(m.candidate_id)?;
-                    Some(self.render_history_entry(
-                        entry,
-                        EntryTimeFormat::DateAndTime,
-                        m.candidate_id,
-                        m.positions.clone(),
-                        cx,
-                    ))
-                })
-                .collect(),
-            SearchState::Searching { .. } => {
-                vec![]
-            }
-        }
+        self.visible_items
+            .get(range.clone())
+            .into_iter()
+            .flatten()
+            .enumerate()
+            .map(|(ix, item)| self.render_list_item(item, range.start + ix, cx))
+            .collect()
    }

-    fn render_list_item(
-        &self,
-        item: &ListItemType,
-        highlight_positions: Vec<usize>,
-        cx: &Context<Self>,
-    ) -> AnyElement {
+    fn render_list_item(&self, item: &ListItemType, ix: usize, cx: &Context<Self>) -> AnyElement {
        match item {
-            ListItemType::Entry { index, format } => match self.all_entries.get(*index) {
-                Some(entry) => self
-                    .render_history_entry(entry, *format, *index, highlight_positions, cx)
-                    .into_any(),
-                None => Empty.into_any_element(),
-            },
+            ListItemType::Entry { entry, format } => self
+                .render_history_entry(entry, *format, ix, Vec::default(), cx)
+                .into_any(),
+            ListItemType::SearchResult { entry, positions } => self.render_history_entry(
+                entry,
+                EntryTimeFormat::DateAndTime,
+                ix,
+                positions.clone(),
+                cx,
+            ),
            ListItemType::BucketSeparator(bucket) => div()
                .px(DynamicSpacing::Base06.rems(cx))
                .pt_2()
@@ -495,12 +420,12 @@ impl AcpThreadHistory {
        &self,
        entry: &HistoryEntry,
        format: EntryTimeFormat,
-        list_entry_ix: usize,
+        ix: usize,
        highlight_positions: Vec<usize>,
        cx: &Context<Self>,
    ) -> AnyElement {
-        let selected = list_entry_ix == self.selected_index;
-        let hovered = Some(list_entry_ix) == self.hovered_index;
+        let selected = ix == self.selected_index;
+        let hovered = Some(ix) == self.hovered_index;
        let timestamp = entry.updated_at().timestamp();
        let thread_timestamp = format.format_timestamp(timestamp, self.local_timezone);

@@ -508,7 +433,7 @@ impl AcpThreadHistory {
            .w_full()
            .pb_1()
            .child(
-                ListItem::new(list_entry_ix)
+                ListItem::new(ix)
                    .rounded()
                    .toggle_state(selected)
                    .spacing(ListItemSpacing::Sparse)
@@ -530,14 +455,14 @@ impl AcpThreadHistory {
                    )
                    .on_hover(cx.listener(move |this, is_hovered, _window, cx| {
                        if *is_hovered {
-                            this.hovered_index = Some(list_entry_ix);
-                        } else if this.hovered_index == Some(list_entry_ix) {
+                            this.hovered_index = Some(ix);
+                        } else if this.hovered_index == Some(ix) {
                            this.hovered_index = None;
                        }

                        cx.notify();
                    }))
-                    .end_slot::<IconButton>(if hovered || selected {
+                    .end_slot::<IconButton>(if hovered {
                        Some(
                            IconButton::new("delete", IconName::Trash)
                                .shape(IconButtonShape::Square)
@@ -546,16 +471,14 @@ impl AcpThreadHistory {
                                .tooltip(move |window, cx| {
                                    Tooltip::for_action("Delete", &RemoveSelectedThread, window, cx)
                                })
-                                .on_click(cx.listener(move |this, _, _, cx| {
-                                    this.remove_thread(list_entry_ix, cx)
-                                })),
+                                .on_click(
+                                    cx.listener(move |this, _, _, cx| this.remove_thread(ix, cx)),
+                                ),
                        )
                    } else {
                        None
                    })
-                    .on_click(
-                        cx.listener(move |this, _, _, cx| this.confirm_entry(list_entry_ix, cx)),
-                    ),
+                    .on_click(cx.listener(move |this, _, _, cx| this.confirm_entry(ix, cx))),
            )
            .into_any_element()
    }
@@ -578,7 +501,7 @@ impl Render for AcpThreadHistory {
            .on_action(cx.listener(Self::select_last))
            .on_action(cx.listener(Self::confirm))
            .on_action(cx.listener(Self::remove_selected_thread))
-            .when(!self.all_entries.is_empty(), |parent| {
+            .when(!self.history_store.read(cx).is_empty(cx), |parent| {
                parent.child(
                    h_flex()
                        .h(px(41.)) // Match the toolbar perfectly
@@ -604,7 +527,7 @@ impl Render for AcpThreadHistory {
                    .overflow_hidden()
                    .flex_grow();

-                if self.all_entries.is_empty() {
+                if self.history_store.read(cx).is_empty(cx) {
                    view.justify_center()
                        .child(
                            h_flex().w_full().justify_center().child(
@@ -623,9 +546,9 @@ impl Render for AcpThreadHistory {
                        .child(
                            uniform_list(
                                "thread-history",
-                                self.list_item_count(),
+                                self.visible_items.len(),
                                cx.processor(|this, range: Range<usize>, window, cx| {
-                                    this.list_items(range, window, cx)
+                                    this.render_list_items(range, window, cx)
                                }),
                            )
                            .p_1()
--- a/crates/agent_ui/src/acp/thread_view.rs
+++ b/crates/agent_ui/src/acp/thread_view.rs
--- a/crates/agent_ui/src/active_thread.rs
+++ b/crates/agent_ui/src/active_thread.rs
@@ -1002,8 +1002,22 @@ impl ActiveThread {
                        // Don't notify for intermediate tool use
                    }
                    Ok(StopReason::Refusal) => {
+                        let model_name = self
+                            .thread
+                            .read(cx)
+                            .configured_model()
+                            .map(|configured| configured.model.name().0.to_string())
+                            .unwrap_or_else(|| "The model".to_string());
+                        let refusal_message = format!(
+                            "{} refused to respond to this prompt. This can happen when a model believes the prompt violates its content policy or safety guidelines, so rephrasing it can sometimes address the issue.",
+                            model_name
+                        );
+                        self.last_error = Some(ThreadError::Message {
+                            header: SharedString::from("Request Refused"),
+                            message: SharedString::from(refusal_message),
+                        });
                        self.notify_with_sound(
-                            "Language model refused to respond",
+                            format!("{} refused to respond", model_name),
                            IconName::Warning,
                            window,
                            cx,
@@ -1595,11 +1609,6 @@ impl ActiveThread {
            return;
        };

-        if model.provider.must_accept_terms(cx) {
-            cx.notify();
-            return;
-        }
-
        let edited_text = state.editor.read(cx).text(cx);

        let creases = state.editor.update(cx, extract_message_creases);
--- a/crates/agent_ui/src/agent_configuration.rs
+++ b/crates/agent_ui/src/agent_configuration.rs
@@ -3,19 +3,23 @@ mod configure_context_server_modal;
 mod manage_profiles_modal;
 mod tool_picker;

-use std::{sync::Arc, time::Duration};
+use std::{ops::Range, sync::Arc, time::Duration};

+use agent_servers::{AgentServerCommand, AllAgentServersSettings, CustomAgentServerSettings};
 use agent_settings::AgentSettings;
+use anyhow::Result;
 use assistant_tool::{ToolSource, ToolWorkingSet};
 use cloud_llm_client::Plan;
 use collections::HashMap;
 use context_server::ContextServerId;
+use editor::{Editor, SelectionEffects, scroll::Autoscroll};
 use extension::ExtensionManifest;
 use extension_host::ExtensionStore;
 use fs::Fs;
 use gpui::{
-    Action, Animation, AnimationExt as _, AnyView, App, Corner, Entity, EventEmitter, FocusHandle,
-    Focusable, ScrollHandle, Subscription, Task, Transformation, WeakEntity, percentage,
+    Action, Animation, AnimationExt as _, AnyView, App, AsyncWindowContext, Corner, Entity,
+    EventEmitter, FocusHandle, Focusable, Hsla, ScrollHandle, Subscription, Task, Transformation,
+    WeakEntity, percentage,
 };
 use language::LanguageRegistry;
 use language_model::{
@@ -26,20 +30,20 @@ use project::{
    context_server_store::{ContextServerConfiguration, ContextServerStatus, ContextServerStore},
    project_settings::{ContextServerSettings, ProjectSettings},
 };
-use settings::{Settings, update_settings_file};
+use settings::{Settings, SettingsStore, update_settings_file};
 use ui::{
    Chip, ContextMenu, Disclosure, Divider, DividerColor, ElevationIndex, Indicator, PopoverMenu,
    Scrollbar, ScrollbarState, Switch, SwitchColor, SwitchField, Tooltip, prelude::*,
 };
 use util::ResultExt as _;
-use workspace::Workspace;
+use workspace::{Workspace, create_and_open_local_file};
 use zed_actions::ExtensionCategoryFilter;

 pub(crate) use configure_context_server_modal::ConfigureContextServerModal;
 pub(crate) use manage_profiles_modal::ManageProfilesModal;

 use crate::{
-    AddContextServer,
+    AddContextServer, ExternalAgent, NewExternalAgentThread,
    agent_configuration::add_llm_provider_modal::{AddLlmProviderModal, LlmCompatibleProvider},
 };

@@ -56,6 +60,7 @@ pub struct AgentConfiguration {
    _registry_subscription: Subscription,
    scroll_handle: ScrollHandle,
    scrollbar_state: ScrollbarState,
+    _check_for_gemini: Task<()>,
 }

 impl AgentConfiguration {
@@ -93,14 +98,6 @@ impl AgentConfiguration {
        let scroll_handle = ScrollHandle::new();
        let scrollbar_state = ScrollbarState::new(scroll_handle.clone());

-        let mut expanded_provider_configurations = HashMap::default();
-        if LanguageModelRegistry::read_global(cx)
-            .provider(&ZED_CLOUD_PROVIDER_ID)
-            .is_some_and(|cloud_provider| cloud_provider.must_accept_terms(cx))
-        {
-            expanded_provider_configurations.insert(ZED_CLOUD_PROVIDER_ID, true);
-        }
-
        let mut this = Self {
            fs,
            language_registry,
@@ -109,11 +106,12 @@ impl AgentConfiguration {
            configuration_views_by_provider: HashMap::default(),
            context_server_store,
            expanded_context_server_tools: HashMap::default(),
-            expanded_provider_configurations,
+            expanded_provider_configurations: HashMap::default(),
            tools,
            _registry_subscription: registry_subscription,
            scroll_handle,
            scrollbar_state,
+            _check_for_gemini: Task::ready(()),
        };
        this.build_provider_configuration_views(window, cx);
        this
@@ -219,7 +217,6 @@ impl AgentConfiguration {
                    .child(
                        h_flex()
                            .id(provider_id_string.clone())
-                            .cursor_pointer()
                            .px_2()
                            .py_0p5()
                            .w_full()
@@ -239,10 +236,7 @@ impl AgentConfiguration {
                                        h_flex()
                                            .w_full()
                                            .gap_1()
-                                            .child(
-                                                Label::new(provider_name.clone())
-                                                    .size(LabelSize::Large),
-                                            )
+                                            .child(Label::new(provider_name.clone()))
                                            .map(|this| {
                                                if is_zed_provider && is_signed_in {
                                                    this.child(
@@ -287,7 +281,7 @@ impl AgentConfiguration {
                                "Start New Thread",
                            )
                            .icon_position(IconPosition::Start)
-                            .icon(IconName::Plus)
+                            .icon(IconName::Thread)
                            .icon_size(IconSize::Small)
                            .icon_color(Color::Muted)
                            .label_size(LabelSize::Small)
@@ -337,6 +331,7 @@ impl AgentConfiguration {
                            .gap_0p5()
                            .child(
                                h_flex()
+                                    .pr_1()
                                    .w_full()
                                    .gap_2()
                                    .justify_between()
@@ -386,7 +381,7 @@ impl AgentConfiguration {
                                    ),
                            )
                            .child(
-                                Label::new("Add at least one provider to use AI-powered features.")
+                                Label::new("Add at least one provider to use AI-powered features with Zed's native agent.")
                                    .color(Color::Muted),
                            ),
                    ),
@@ -527,6 +522,14 @@ impl AgentConfiguration {
        }
    }

+    fn card_item_bg_color(&self, cx: &mut Context<Self>) -> Hsla {
+        cx.theme().colors().background.opacity(0.25)
+    }
+
+    fn card_item_border_color(&self, cx: &mut Context<Self>) -> Hsla {
+        cx.theme().colors().border.opacity(0.6)
+    }
+
    fn render_context_servers_section(
        &mut self,
        window: &mut Window,
@@ -544,7 +547,12 @@ impl AgentConfiguration {
                v_flex()
                    .gap_0p5()
                    .child(Headline::new("Model Context Protocol (MCP) Servers"))
-                    .child(Label::new("Connect to context servers through the Model Context Protocol, either using Zed extensions or directly.").color(Color::Muted)),
+                    .child(
+                        Label::new(
+                            "All context servers connected through the Model Context Protocol.",
+                        )
+                        .color(Color::Muted),
+                    ),
            )
            .children(
                context_server_ids.into_iter().map(|context_server_id| {
@@ -554,7 +562,7 @@ impl AgentConfiguration {
            .child(
                h_flex()
                    .justify_between()
-                    .gap_2()
+                    .gap_1p5()
                    .child(
                        h_flex().w_full().child(
                            Button::new("add-context-server", "Add Custom Server")
@@ -645,8 +653,6 @@ impl AgentConfiguration {
            .map_or([].as_slice(), |tools| tools.as_slice());
        let tool_count = tools.len();

-        let border_color = cx.theme().colors().border.opacity(0.6);
-
        let (source_icon, source_tooltip) = if is_from_extension {
            (
                IconName::ZedMcpExtension,
@@ -789,8 +795,8 @@ impl AgentConfiguration {
            .id(item_id.clone())
            .border_1()
            .rounded_md()
-            .border_color(border_color)
-            .bg(cx.theme().colors().background.opacity(0.2))
+            .border_color(self.card_item_border_color(cx))
+            .bg(self.card_item_bg_color(cx))
            .overflow_hidden()
            .child(
                h_flex()
@@ -798,7 +804,11 @@ impl AgentConfiguration {
                    .justify_between()
                    .when(
                        error.is_some() || are_tools_expanded && tool_count >= 1,
-                        |element| element.border_b_1().border_color(border_color),
+                        |element| {
+                            element
+                                .border_b_1()
+                                .border_color(self.card_item_border_color(cx))
+                        },
                    )
                    .child(
                        h_flex()
@@ -980,6 +990,136 @@ impl AgentConfiguration {
                ))
            })
    }
+
+    fn render_agent_servers_section(&mut self, cx: &mut Context<Self>) -> impl IntoElement {
+        let settings = AllAgentServersSettings::get_global(cx).clone();
+        let user_defined_agents = settings
+            .custom
+            .iter()
+            .map(|(name, settings)| {
+                self.render_agent_server(
+                    IconName::Ai,
+                    name.clone(),
+                    ExternalAgent::Custom {
+                        name: name.clone(),
+                        command: settings.command.clone(),
+                    },
+                    cx,
+                )
+                .into_any_element()
+            })
+            .collect::<Vec<_>>();
+
+        v_flex()
+            .border_b_1()
+            .border_color(cx.theme().colors().border)
+            .child(
+                v_flex()
+                    .p(DynamicSpacing::Base16.rems(cx))
+                    .pr(DynamicSpacing::Base20.rems(cx))
+                    .gap_2()
+                    .child(
+                        v_flex()
+                            .gap_0p5()
+                            .child(
+                                h_flex()
+                                    .pr_1()
+                                    .w_full()
+                                    .gap_2()
+                                    .justify_between()
+                                    .child(Headline::new("External Agents"))
+                                    .child(
+                                        Button::new("add-agent", "Add Agent")
+                                            .icon_position(IconPosition::Start)
+                                            .icon(IconName::Plus)
+                                            .icon_size(IconSize::Small)
+                                            .icon_color(Color::Muted)
+                                            .label_size(LabelSize::Small)
+                                            .on_click(
+                                                move |_, window, cx| {
+                                                    if let Some(workspace) = window.root().flatten() {
+                                                        let workspace = workspace.downgrade();
+                                                        window
+                                                            .spawn(cx, async |cx| {
+                                                                open_new_agent_servers_entry_in_settings_editor(
+                                                                    workspace,
+                                                                    cx,
+                                                                ).await
+                                                            })
+                                                            .detach_and_log_err(cx);
+                                                    }
+                                                }
+                                            ),
+                                    )
+                            )
+                            .child(
+                                Label::new(
+                                    "All agents connected through the Agent Client Protocol.",
+                                )
+                                .color(Color::Muted),
+                            ),
+                    )
+                    .child(self.render_agent_server(
+                        IconName::AiGemini,
+                        "Gemini CLI",
+                        ExternalAgent::Gemini,
+                        cx,
+                    ))
+                    .child(self.render_agent_server(
+                        IconName::AiClaude,
+                        "Claude Code",
+                        ExternalAgent::ClaudeCode,
+                        cx,
+                    ))
+                    .children(user_defined_agents),
+            )
+    }
+
+    fn render_agent_server(
+        &self,
+        icon: IconName,
+        name: impl Into<SharedString>,
+        agent: ExternalAgent,
+        cx: &mut Context<Self>,
+    ) -> impl IntoElement {
+        let name = name.into();
+        h_flex()
+            .p_1()
+            .pl_2()
+            .gap_1p5()
+            .justify_between()
+            .border_1()
+            .rounded_md()
+            .border_color(self.card_item_border_color(cx))
+            .bg(self.card_item_bg_color(cx))
+            .overflow_hidden()
+            .child(
+                h_flex()
+                    .gap_1p5()
+                    .child(Icon::new(icon).size(IconSize::Small).color(Color::Muted))
+                    .child(Label::new(name.clone())),
+            )
+            .child(
+                Button::new(
+                    SharedString::from(format!("start_acp_thread-{name}")),
+                    "Start New Thread",
+                )
+                .label_size(LabelSize::Small)
+                .icon(IconName::Thread)
+                .icon_position(IconPosition::Start)
+                .icon_size(IconSize::XSmall)
+                .icon_color(Color::Muted)
+                .on_click(move |_, window, cx| {
+                    window.dispatch_action(
+                        NewExternalAgentThread {
+                            agent: Some(agent.clone()),
+                        }
+                        .boxed_clone(),
+                        cx,
+                    );
+                }),
+            )
+    }
 }

 impl Render for AgentConfiguration {
@@ -999,6 +1139,7 @@ impl Render for AgentConfiguration {
                    .size_full()
                    .overflow_y_scroll()
                    .child(self.render_general_settings_section(cx))
+                    .child(self.render_agent_servers_section(cx))
                    .child(self.render_context_servers_section(window, cx))
                    .child(self.render_provider_configuration_section(cx)),
            )
@@ -1117,3 +1258,109 @@ fn show_unable_to_uninstall_extension_with_context_server(

    workspace.toggle_status_toast(status_toast, cx);
 }
+
+async fn open_new_agent_servers_entry_in_settings_editor(
+    workspace: WeakEntity<Workspace>,
+    cx: &mut AsyncWindowContext,
+) -> Result<()> {
+    let settings_editor = workspace
+        .update_in(cx, |_, window, cx| {
+            create_and_open_local_file(paths::settings_file(), window, cx, || {
+                settings::initial_user_settings_content().as_ref().into()
+            })
+        })?
+        .await?
+        .downcast::<Editor>()
+        .unwrap();
+
+    settings_editor
+        .downgrade()
+        .update_in(cx, |item, window, cx| {
+            let text = item.buffer().read(cx).snapshot(cx).text();
+
+            let settings = cx.global::<SettingsStore>();
+
+            let mut unique_server_name = None;
+            let edits = settings.edits_for_update::<AllAgentServersSettings>(&text, |file| {
+                let server_name: Option<SharedString> = (0..u8::MAX)
+                    .map(|i| {
+                        if i == 0 {
+                            "your_agent".into()
+                        } else {
+                            format!("your_agent_{}", i).into()
+                        }
+                    })
+                    .find(|name| !file.custom.contains_key(name));
+                if let Some(server_name) = server_name {
+                    unique_server_name = Some(server_name.clone());
+                    file.custom.insert(
+                        server_name,
+                        CustomAgentServerSettings {
+                            command: AgentServerCommand {
+                                path: "path_to_executable".into(),
+                                args: vec![],
+                                env: Some(HashMap::default()),
+                            },
+                        },
+                    );
+                }
+            });
+
+            if edits.is_empty() {
+                return;
+            }
+
+            let ranges = edits
+                .iter()
+                .map(|(range, _)| range.clone())
+                .collect::<Vec<_>>();
+
+            item.edit(edits, cx);
+            if let Some((unique_server_name, buffer)) =
+                unique_server_name.zip(item.buffer().read(cx).as_singleton())
+            {
+                let snapshot = buffer.read(cx).snapshot();
+                if let Some(range) =
+                    find_text_in_buffer(&unique_server_name, ranges[0].start, &snapshot)
+                {
+                    item.change_selections(
+                        SelectionEffects::scroll(Autoscroll::newest()),
+                        window,
+                        cx,
+                        |selections| {
+                            selections.select_ranges(vec![range]);
+                        },
+                    );
+                }
+            }
+        })
+}
+
+fn find_text_in_buffer(
+    text: &str,
+    start: usize,
+    snapshot: &language::BufferSnapshot,
+) -> Option<Range<usize>> {
+    let chars = text.chars().collect::<Vec<char>>();
+
+    let mut offset = start;
+    let mut char_offset = 0;
+    for c in snapshot.chars_at(start) {
+        if char_offset >= chars.len() {
+            break;
+        }
+        offset += 1;
+
+        if c == chars[char_offset] {
+            char_offset += 1;
+        } else {
+            char_offset = 0;
+        }
+    }
+
+    if char_offset == chars.len() {
+        Some(offset.saturating_sub(chars.len())..offset)
+    } else {
+        None
+    }
+}
--- a/crates/agent_ui/src/agent_diff.rs
+++ b/crates/agent_ui/src/agent_diff.rs
@@ -1522,13 +1522,18 @@ impl AgentDiff {
                    self.update_reviewing_editors(workspace, window, cx);
                }
            }
-            AcpThreadEvent::Stopped | AcpThreadEvent::Error | AcpThreadEvent::LoadError(_) => {
+            AcpThreadEvent::Stopped
+            | AcpThreadEvent::Error
+            | AcpThreadEvent::LoadError(_)
+            | AcpThreadEvent::Refusal => {
                self.update_reviewing_editors(workspace, window, cx);
            }
            AcpThreadEvent::TitleUpdated
            | AcpThreadEvent::TokenUsageUpdated
            | AcpThreadEvent::EntriesRemoved(_)
            | AcpThreadEvent::ToolAuthorizationRequired
+            | AcpThreadEvent::PromptCapabilitiesUpdated
+            | AcpThreadEvent::AvailableCommandsUpdated(_)
            | AcpThreadEvent::Retry(_) => {}
        }
    }
--- a/crates/agent_ui/src/agent_panel.rs
+++ b/crates/agent_ui/src/agent_panel.rs
@@ -5,12 +5,16 @@ use std::sync::Arc;
 use std::time::Duration;

 use acp_thread::AcpThread;
+use agent_servers::AgentServerCommand;
 use agent2::{DbThreadMetadata, HistoryEntry};
 use db::kvp::{Dismissable, KEY_VALUE_STORE};
 use serde::{Deserialize, Serialize};
+use zed_actions::OpenBrowser;
+use zed_actions::agent::{OpenClaudeCodeOnboardingModal, ReauthenticateAgent};

 use crate::acp::{AcpThreadHistory, ThreadHistoryEvent};
 use crate::agent_diff::AgentDiffThread;
+use crate::ui::{AcpOnboardingModal, ClaudeCodeOnboardingModal};
 use crate::{
    AddContextServer, AgentDiffPane, ContinueThread, ContinueWithBurnMode,
    DeleteRecentlyOpenThread, ExpandMessageEditor, Follow, InlineAssistant, NewTextThread,
@@ -25,7 +29,6 @@ use crate::{
    slash_command::SlashCommandCompletionProvider,
    text_thread_editor::{
        AgentPanelDelegate, TextThreadEditor, humanize_token_count, make_lsp_adapter_delegate,
-        render_remaining_tokens,
    },
    thread_history::{HistoryEntryElement, ThreadHistory},
    ui::{AgentOnboardingModal, EndTrialUpsell},
@@ -54,9 +57,7 @@ use gpui::{
    Pixels, Subscription, Task, UpdateGlobal, WeakEntity, prelude::*, pulsating_between,
 };
 use language::LanguageRegistry;
-use language_model::{
-    ConfigurationError, ConfiguredModel, LanguageModelProviderTosView, LanguageModelRegistry,
-};
+use language_model::{ConfigurationError, ConfiguredModel, LanguageModelRegistry};
 use project::{DisableAiSettings, Project, ProjectPath, Worktree};
 use prompt_store::{PromptBuilder, PromptStore, UserPromptId};
 use rules_library::{RulesLibrary, open_rules_library};
@@ -76,13 +77,16 @@ use workspace::{
 };
 use zed_actions::{
    DecreaseBufferFontSize, IncreaseBufferFontSize, ResetBufferFontSize,
-    agent::{OpenOnboardingModal, OpenSettings, ResetOnboarding, ToggleModelSelector},
+    agent::{
+        OpenAcpOnboardingModal, OpenOnboardingModal, OpenSettings, ResetOnboarding,
+        ToggleModelSelector,
+    },
    assistant::{OpenRulesLibrary, ToggleFocus},
 };

 const AGENT_PANEL_KEY: &str = "agent_panel";

-#[derive(Serialize, Deserialize)]
+#[derive(Serialize, Deserialize, Debug)]
 struct SerializedAgentPanel {
    width: Option<Pixels>,
    selected_agent: Option<AgentType>,
@@ -130,7 +134,7 @@ pub fn init(cx: &mut App) {
                    if let Some(panel) = workspace.panel::<AgentPanel>(cx) {
                        workspace.focus_panel::<AgentPanel>(window, cx);
                        panel.update(cx, |panel, cx| {
-                            panel.external_thread(action.agent, None, None, window, cx)
+                            panel.external_thread(action.agent.clone(), None, None, window, cx)
                        });
                    }
                })
@@ -200,6 +204,12 @@ pub fn init(cx: &mut App) {
                .register_action(|workspace, _: &OpenOnboardingModal, window, cx| {
                    AgentOnboardingModal::toggle(workspace, window, cx)
                })
+                .register_action(|workspace, _: &OpenAcpOnboardingModal, window, cx| {
+                    AcpOnboardingModal::toggle(workspace, window, cx)
+                })
+                .register_action(|workspace, _: &OpenClaudeCodeOnboardingModal, window, cx| {
+                    ClaudeCodeOnboardingModal::toggle(workspace, window, cx)
+                })
                .register_action(|_workspace, _: &ResetOnboarding, window, cx| {
                    window.dispatch_action(workspace::RestoreBanner.boxed_clone(), cx);
                    window.refresh();
@@ -241,7 +251,8 @@ enum WhichFontSize {
    None,
 }

-#[derive(Debug, Default, Clone, Copy, PartialEq, Eq, Serialize, Deserialize)]
+// TODO unify this with ExternalAgent
+#[derive(Debug, Default, Clone, PartialEq, Serialize, Deserialize)]
 pub enum AgentType {
    #[default]
    Zed,
@@ -249,23 +260,40 @@ pub enum AgentType {
    Gemini,
    ClaudeCode,
    NativeAgent,
+    Custom {
+        name: SharedString,
+        command: AgentServerCommand,
+    },
 }

 impl AgentType {
-    fn label(self) -> impl Into<SharedString> {
+    fn label(&self) -> SharedString {
        match self {
-            Self::Zed | Self::TextThread => "Zed Agent",
-            Self::NativeAgent => "Agent 2",
-            Self::Gemini => "Gemini CLI",
-            Self::ClaudeCode => "Claude Code",
+            Self::Zed | Self::TextThread => "Zed Agent".into(),
+            Self::NativeAgent => "Agent 2".into(),
+            Self::Gemini => "Gemini CLI".into(),
+            Self::ClaudeCode => "Claude Code".into(),
+            Self::Custom { name, .. } => name.into(),
        }
    }

-    fn icon(self) -> Option<IconName> {
+    fn icon(&self) -> Option<IconName> {
        match self {
            Self::Zed | Self::NativeAgent | Self::TextThread => None,
            Self::Gemini => Some(IconName::AiGemini),
            Self::ClaudeCode => Some(IconName::AiClaude),
+            Self::Custom { .. } => Some(IconName::Terminal),
+        }
+    }
+}
+
+impl From<ExternalAgent> for AgentType {
+    fn from(value: ExternalAgent) -> Self {
+        match value {
+            ExternalAgent::Gemini => Self::Gemini,
+            ExternalAgent::ClaudeCode => Self::ClaudeCode,
+            ExternalAgent::Custom { name, command } => Self::Custom { name, command },
+            ExternalAgent::NativeAgent => Self::NativeAgent,
        }
    }
 }
@@ -519,7 +547,7 @@ pub struct AgentPanel {
 impl AgentPanel {
    fn serialize(&mut self, cx: &mut Context<Self>) {
        let width = self.width;
-        let selected_agent = self.selected_agent;
+        let selected_agent = self.selected_agent.clone();
        self.pending_serialization = Some(cx.background_spawn(async move {
            KEY_VALUE_STORE
                .write_kvp(
@@ -578,22 +606,11 @@ impl AgentPanel {
                .log_err()
                .flatten()
            {
-                Some(serde_json::from_str::<SerializedAgentPanel>(&panel)?)
+                serde_json::from_str::<SerializedAgentPanel>(&panel).log_err()
            } else {
                None
            };

-            // Wait for the Gemini/Native feature flag to be available.
-            let client = workspace.read_with(cx, |workspace, _| workspace.client().clone())?;
-            if !client.status().borrow().is_signed_out() {
-                cx.update(|_, cx| {
-                    cx.wait_for_flag_or_timeout::<feature_flags::GeminiAndNativeFeatureFlag>(
-                        Duration::from_secs(2),
-                    )
-                })?
-                .await;
-            }
-
            let panel = workspace.update_in(cx, |workspace, window, cx| {
                let panel = cx.new(|cx| {
                    Self::new(
@@ -609,11 +626,15 @@ impl AgentPanel {
                    panel.update(cx, |panel, cx| {
                        panel.width = serialized_panel.width.map(|w| w.round());
                        if let Some(selected_agent) = serialized_panel.selected_agent {
-                            panel.selected_agent = selected_agent;
+                            panel.selected_agent = selected_agent.clone();
                            panel.new_agent_thread(selected_agent, window, cx);
                        }
                        cx.notify();
                    });
+                } else {
+                    panel.update(cx, |panel, cx| {
+                        panel.new_agent_thread(AgentType::NativeAgent, window, cx);
+                    });
                }
                panel
            })?;
@@ -1019,6 +1040,8 @@ impl AgentPanel {
    }

    fn new_prompt_editor(&mut self, window: &mut Window, cx: &mut Context<Self>) {
+        telemetry::event!("Agent Thread Started", agent = "zed-text");
+
        let context = self
            .context_store
            .update(cx, |context_store, cx| context_store.create(cx));
@@ -1040,6 +1063,11 @@ impl AgentPanel {
            editor
        });

+        if self.selected_agent != AgentType::TextThread {
+            self.selected_agent = AgentType::TextThread;
+            self.serialize(cx);
+        }
+
        self.set_active_view(
            ActiveView::prompt_editor(
                context_editor.clone(),
@@ -1066,6 +1094,7 @@ impl AgentPanel {
        let workspace = self.workspace.clone();
        let project = self.project.clone();
        let fs = self.fs.clone();
+        let is_not_local = !self.project.read(cx).is_local();

        const LAST_USED_EXTERNAL_AGENT_KEY: &str = "agent_panel__last_used_external_agent";

@@ -1079,14 +1108,17 @@ impl AgentPanel {
        cx.spawn_in(window, async move |this, cx| {
            let ext_agent = match agent_choice {
                Some(agent) => {
-                    cx.background_spawn(async move {
-                        if let Some(serialized) =
-                            serde_json::to_string(&LastUsedExternalAgent { agent }).log_err()
-                        {
-                            KEY_VALUE_STORE
-                                .write_kvp(LAST_USED_EXTERNAL_AGENT_KEY.to_string(), serialized)
-                                .await
-                                .log_err();
+                    cx.background_spawn({
+                        let agent = agent.clone();
+                        async move {
+                            if let Some(serialized) =
+                                serde_json::to_string(&LastUsedExternalAgent { agent }).log_err()
+                            {
+                                KEY_VALUE_STORE
+                                    .write_kvp(LAST_USED_EXTERNAL_AGENT_KEY.to_string(), serialized)
+                                    .await
+                                    .log_err();
+                            }
                        }
                    })
                    .detach();
@@ -1094,25 +1126,33 @@ impl AgentPanel {
                    agent
                }
                None => {
-                    cx.background_spawn(async move {
-                        KEY_VALUE_STORE.read_kvp(LAST_USED_EXTERNAL_AGENT_KEY)
-                    })
-                    .await
-                    .log_err()
-                    .flatten()
-                    .and_then(|value| {
-                        serde_json::from_str::<LastUsedExternalAgent>(&value).log_err()
-                    })
-                    .unwrap_or_default()
-                    .agent
+                    if is_not_local {
+                        ExternalAgent::NativeAgent
+                    } else {
+                        cx.background_spawn(async move {
+                            KEY_VALUE_STORE.read_kvp(LAST_USED_EXTERNAL_AGENT_KEY)
+                        })
+                        .await
+                        .log_err()
+                        .flatten()
+                        .and_then(|value| {
+                            serde_json::from_str::<LastUsedExternalAgent>(&value).log_err()
+                        })
+                        .unwrap_or_default()
+                        .agent
+                    }
                }
            };

+            telemetry::event!("Agent Thread Started", agent = ext_agent.name());
+
            let server = ext_agent.server(fs, history);

            this.update_in(cx, |this, window, cx| {
                match ext_agent {
-                    crate::ExternalAgent::Gemini | crate::ExternalAgent::NativeAgent => {
+                    crate::ExternalAgent::Gemini
+                    | crate::ExternalAgent::NativeAgent
+                    | crate::ExternalAgent::Custom { .. } => {
                        if !cx.has_flag::<GeminiAndNativeFeatureFlag>() {
                            return;
                        }
@@ -1124,6 +1164,12 @@ impl AgentPanel {
                    }
                }

+                let selected_agent = ext_agent.into();
+                if this.selected_agent != selected_agent {
+                    this.selected_agent = selected_agent;
+                    this.serialize(cx);
+                }
+
                let thread_view = cx.new(|cx| {
                    crate::acp::AcpThreadView::new(
                        server,
@@ -1219,6 +1265,12 @@ impl AgentPanel {
                cx,
            )
        });
+
+        if self.selected_agent != AgentType::TextThread {
+            self.selected_agent = AgentType::TextThread;
+            self.serialize(cx);
+        }
+
        self.set_active_view(
            ActiveView::prompt_editor(
                editor,
@@ -1834,21 +1886,8 @@ impl AgentPanel {
        menu
    }

-    pub fn set_selected_agent(
-        &mut self,
-        agent: AgentType,
-        window: &mut Window,
-        cx: &mut Context<Self>,
-    ) {
-        if self.selected_agent != agent {
-            self.selected_agent = agent;
-            self.serialize(cx);
-        }
-        self.new_agent_thread(agent, window, cx);
-    }
-
    pub fn selected_agent(&self) -> AgentType {
-        self.selected_agent
+        self.selected_agent.clone()
    }

    pub fn new_agent_thread(
@@ -1880,8 +1919,19 @@ impl AgentPanel {
            AgentType::Gemini => {
                self.external_thread(Some(crate::ExternalAgent::Gemini), None, None, window, cx)
            }
-            AgentType::ClaudeCode => self.external_thread(
-                Some(crate::ExternalAgent::ClaudeCode),
+            AgentType::ClaudeCode => {
+                self.selected_agent = AgentType::ClaudeCode;
+                self.serialize(cx);
+                self.external_thread(
+                    Some(crate::ExternalAgent::ClaudeCode),
+                    None,
+                    None,
+                    window,
+                    cx,
+                )
+            }
+            AgentType::Custom { name, command } => self.external_thread(
+                Some(crate::ExternalAgent::Custom { name, command }),
                None,
                None,
                window,
@@ -2041,9 +2091,11 @@ impl AgentPanel {
                match state {
                    ThreadSummary::Pending => Label::new(ThreadSummary::DEFAULT)
                        .truncate()
+                        .color(Color::Muted)
                        .into_any_element(),
                    ThreadSummary::Generating => Label::new(LOADING_SUMMARY_PLACEHOLDER)
                        .truncate()
+                        .color(Color::Muted)
                        .into_any_element(),
                    ThreadSummary::Ready(_) => div()
                        .w_full()
@@ -2098,6 +2150,7 @@ impl AgentPanel {
                        .into_any_element()
                } else {
                    Label::new(thread_view.read(cx).title(cx))
+                        .color(Color::Muted)
                        .truncate()
                        .into_any_element()
                }
@@ -2111,6 +2164,7 @@ impl AgentPanel {

                match summary {
                    ContextSummary::Pending => Label::new(ContextSummary::DEFAULT)
+                        .color(Color::Muted)
                        .truncate()
                        .into_any_element(),
                    ContextSummary::Content(summary) => {
@@ -2122,6 +2176,7 @@ impl AgentPanel {
                        } else {
                            Label::new(LOADING_SUMMARY_PLACEHOLDER)
                                .truncate()
+                                .color(Color::Muted)
                                .into_any_element()
                        }
                    }
@@ -2182,6 +2237,8 @@ impl AgentPanel {
            "Enable Full Screen"
        };

+        let selected_agent = self.selected_agent.clone();
+
        PopoverMenu::new("agent-options-menu")
            .trigger_with_tooltip(
                IconButton::new("agent-options-menu", IconName::Ellipsis)
@@ -2261,6 +2318,11 @@ impl AgentPanel {
                            .action("Settings", Box::new(OpenSettings))
                            .separator()
                            .action(full_screen_label, Box::new(ToggleZoom));
+
+                        if selected_agent == AgentType::Gemini {
+                            menu = menu.action("Reauthenticate", Box::new(ReauthenticateAgent))
+                        }
+
                        menu
                    }))
                }
@@ -2295,6 +2357,8 @@ impl AgentPanel {
            .menu({
                let menu = self.assistant_navigation_menu.clone();
                move |window, cx| {
+                    telemetry::event!("View Thread History Clicked");
+
                    if let Some(menu) = menu.as_ref() {
                        menu.update(cx, |_, cx| {
                            cx.defer_in(window, |menu, window, cx| {
@@ -2471,8 +2535,13 @@ impl AgentPanel {
            .with_handle(self.new_thread_menu_handle.clone())
            .menu({
                let workspace = self.workspace.clone();
+                let is_not_local = workspace
+                    .update(cx, |workspace, cx| !workspace.project().read(cx).is_local())
+                    .unwrap_or_default();

                move |window, cx| {
+                    telemetry::event!("New Thread Clicked");
+
                    let active_thread = active_thread.clone();
                    Some(ContextMenu::build(window, cx, |mut menu, _window, cx| {
                        menu = menu
@@ -2514,7 +2583,7 @@ impl AgentPanel {
                                                        workspace.panel::<AgentPanel>(cx)
                                                    {
                                                        panel.update(cx, |panel, cx| {
-                                                            panel.set_selected_agent(
+                                                            panel.new_agent_thread(
                                                                AgentType::NativeAgent,
                                                                window,
                                                                cx,
@@ -2540,7 +2609,7 @@ impl AgentPanel {
                                                        workspace.panel::<AgentPanel>(cx)
                                                    {
                                                        panel.update(cx, |panel, cx| {
-                                                            panel.set_selected_agent(
+                                                            panel.new_agent_thread(
                                                                AgentType::TextThread,
                                                                window,
                                                                cx,
@@ -2559,6 +2628,7 @@ impl AgentPanel {
                                    ContextMenuEntry::new("New Gemini CLI Thread")
                                        .icon(IconName::AiGemini)
                                        .icon_color(Color::Muted)
+                                        .disabled(is_not_local)
                                        .handler({
                                            let workspace = workspace.clone();
                                            move |window, cx| {
@@ -2568,7 +2638,7 @@ impl AgentPanel {
                                                            workspace.panel::<AgentPanel>(cx)
                                                        {
                                                            panel.update(cx, |panel, cx| {
-                                                                panel.set_selected_agent(
+                                                                panel.new_agent_thread(
                                                                    AgentType::Gemini,
                                                                    window,
                                                                    cx,
@@ -2585,6 +2655,7 @@ impl AgentPanel {
                                menu.item(
                                    ContextMenuEntry::new("New Claude Code Thread")
                                        .icon(IconName::AiClaude)
+                                        .disabled(is_not_local)
                                        .icon_color(Color::Muted)
                                        .handler({
                                            let workspace = workspace.clone();
@@ -2595,7 +2666,7 @@ impl AgentPanel {
                                                            workspace.panel::<AgentPanel>(cx)
                                                        {
                                                            panel.update(cx, |panel, cx| {
-                                                                panel.set_selected_agent(
+                                                                panel.new_agent_thread(
                                                                    AgentType::ClaudeCode,
                                                                    window,
                                                                    cx,
@@ -2607,13 +2678,65 @@ impl AgentPanel {
                                            }
                                        }),
                                )
+                            })
+                            .when(cx.has_flag::<GeminiAndNativeFeatureFlag>(), |mut menu| {
+                                // Add custom agents from settings
+                                let settings =
+                                    agent_servers::AllAgentServersSettings::get_global(cx);
+                                for (agent_name, agent_settings) in &settings.custom {
+                                    menu = menu.item(
+                                        ContextMenuEntry::new(format!("New {} Thread", agent_name))
+                                            .icon(IconName::Terminal)
+                                            .icon_color(Color::Muted)
+                                            .disabled(is_not_local)
+                                            .handler({
+                                                let workspace = workspace.clone();
+                                                let agent_name = agent_name.clone();
+                                                let agent_settings = agent_settings.clone();
+                                                move |window, cx| {
+                                                    if let Some(workspace) = workspace.upgrade() {
+                                                        workspace.update(cx, |workspace, cx| {
+                                                            if let Some(panel) =
+                                                                workspace.panel::<AgentPanel>(cx)
+                                                            {
+                                                                panel.update(cx, |panel, cx| {
+                                                                    panel.new_agent_thread(
+                                                                        AgentType::Custom {
+                                                                            name: agent_name
+                                                                                .clone(),
+                                                                            command: agent_settings
+                                                                                .command
+                                                                                .clone(),
+                                                                        },
+                                                                        window,
+                                                                        cx,
+                                                                    );
+                                                                });
+                                                            }
+                                                        });
+                                                    }
+                                                }
+                                            }),
+                                    );
+                                }
+
+                                menu
+                            })
+                            .when(cx.has_flag::<GeminiAndNativeFeatureFlag>(), |menu| {
+                                menu.separator().link(
+                                    "Add Other Agents",
+                                    OpenBrowser {
+                                        url: zed_urls::external_agents_docs(cx),
+                                    }
+                                    .boxed_clone(),
+                                )
                            });
                        menu
                    }))
                }
            });

-        let selected_agent_label = self.selected_agent.label().into();
+        let selected_agent_label = self.selected_agent.label();
        let selected_agent = div()
            .id("selected_agent_icon")
            .when_some(self.selected_agent.icon(), |this, icon| {
@@ -2791,12 +2914,8 @@ impl AgentPanel {

                Some(token_count)
            }
-            ActiveView::TextThread { context_editor, .. } => {
-                let element = render_remaining_tokens(context_editor, cx)?;
-
-                Some(element.into_any_element())
-            }
            ActiveView::ExternalAgentThread { .. }
+            | ActiveView::TextThread { .. }
            | ActiveView::History
            | ActiveView::Configuration => None,
        }
@@ -3198,17 +3317,6 @@ impl AgentPanel {
            ConfigurationError::ModelNotFound
            | ConfigurationError::ProviderNotAuthenticated(_)
            | ConfigurationError::NoProvider => callout.into_any_element(),
-            ConfigurationError::ProviderPendingTermsAcceptance(provider) => {
-                Banner::new()
-                    .severity(Severity::Warning)
-                    .child(h_flex().w_full().children(
-                        provider.render_accept_terms(
-                            LanguageModelProviderTosView::ThreadEmptyState,
-                            cx,
-                        ),
-                    ))
-                    .into_any_element()
-            }
        }
    }

@@ -3427,6 +3535,11 @@ impl AgentPanel {
    ) -> AnyElement {
        let message_with_header = format!("{}\n{}", header, message);

+        // Don't show Retry button for refusals
+        let is_refusal = header == "Request Refused";
+        let retry_button = self.render_retry_button(thread);
+        let copy_button = self.create_copy_button(message_with_header);
+
        Callout::new()
            .severity(Severity::Error)
            .icon(IconName::XCircle)
@@ -3435,8 +3548,8 @@ impl AgentPanel {
            .actions_slot(
                h_flex()
                    .gap_0p5()
-                    .child(self.render_retry_button(thread))
-                    .child(self.create_copy_button(message_with_header)),
+                    .when(!is_refusal, |this| this.child(retry_button))
+                    .child(copy_button),
            )
            .dismiss_action(self.dismiss_error_button(thread, cx))
            .into_any_element()
@@ -3698,6 +3811,11 @@ impl Render for AgentPanel {
                }
            }))
            .on_action(cx.listener(Self::toggle_burn_mode))
+            .on_action(cx.listener(|this, _: &ReauthenticateAgent, window, cx| {
+                if let Some(thread_view) = this.active_thread_view() {
+                    thread_view.update(cx, |thread_view, cx| thread_view.reauthenticate(window, cx))
+                }
+            }))
            .child(self.render_toolbar(window, cx))
            .children(self.render_onboarding(window, cx))
            .map(|parent| match &self.active_view {
--- a/crates/agent_ui/src/agent_ui.rs
+++ b/crates/agent_ui/src/agent_ui.rs
@@ -28,13 +28,14 @@ use std::rc::Rc;
 use std::sync::Arc;

 use agent::{Thread, ThreadId};
+use agent_servers::AgentServerCommand;
 use agent_settings::{AgentProfileId, AgentSettings, LanguageModelSelection};
 use assistant_slash_command::SlashCommandRegistry;
 use client::Client;
 use command_palette_hooks::CommandPaletteFilter;
 use feature_flags::FeatureFlagAppExt as _;
 use fs::Fs;
-use gpui::{Action, App, Entity, actions};
+use gpui::{Action, App, Entity, SharedString, actions};
 use language::LanguageRegistry;
 use language_model::{
    ConfiguredModel, LanguageModel, LanguageModelId, LanguageModelProviderId, LanguageModelRegistry,
@@ -159,25 +160,43 @@ pub struct NewNativeAgentThreadFromSummary {
    from_session_id: agent_client_protocol::SessionId,
 }

-#[derive(Default, Debug, Clone, Copy, PartialEq, Serialize, Deserialize, JsonSchema)]
+// TODO unify this with AgentType
+#[derive(Default, Debug, Clone, PartialEq, Serialize, Deserialize, JsonSchema)]
 #[serde(rename_all = "snake_case")]
 enum ExternalAgent {
    #[default]
    Gemini,
    ClaudeCode,
    NativeAgent,
+    Custom {
+        name: SharedString,
+        command: AgentServerCommand,
+    },
 }

 impl ExternalAgent {
+    fn name(&self) -> &'static str {
+        match self {
+            Self::NativeAgent => "zed",
+            Self::Gemini => "gemini-cli",
+            Self::ClaudeCode => "claude-code",
+            Self::Custom { .. } => "custom",
+        }
+    }
+
    pub fn server(
        &self,
        fs: Arc<dyn fs::Fs>,
        history: Entity<agent2::HistoryStore>,
    ) -> Rc<dyn agent_servers::AgentServer> {
        match self {
-            ExternalAgent::Gemini => Rc::new(agent_servers::Gemini),
-            ExternalAgent::ClaudeCode => Rc::new(agent_servers::ClaudeCode),
-            ExternalAgent::NativeAgent => Rc::new(agent2::NativeAgentServer::new(fs, history)),
+            Self::Gemini => Rc::new(agent_servers::Gemini),
+            Self::ClaudeCode => Rc::new(agent_servers::ClaudeCode),
+            Self::NativeAgent => Rc::new(agent2::NativeAgentServer::new(fs, history)),
+            Self::Custom { name, command } => Rc::new(agent_servers::CustomAgentServer::new(
+                name.clone(),
+                command.clone(),
+            )),
        }
    }
 }
--- a/crates/agent_ui/src/context_picker/completion_provider.rs
+++ b/crates/agent_ui/src/context_picker/completion_provider.rs
@@ -13,7 +13,10 @@ use http_client::HttpClientWithUrl;
 use itertools::Itertools;
 use language::{Buffer, CodeLabel, HighlightId};
 use lsp::CompletionContext;
-use project::{Completion, CompletionIntent, CompletionResponse, ProjectPath, Symbol, WorktreeId};
+use project::{
+    Completion, CompletionDisplayOptions, CompletionIntent, CompletionResponse, ProjectPath,
+    Symbol, WorktreeId,
+};
 use prompt_store::PromptStore;
 use rope::Point;
 use text::{Anchor, OffsetRangeExt, ToPoint};
@@ -897,6 +900,7 @@ impl CompletionProvider for ContextPickerCompletionProvider {

            Ok(vec![CompletionResponse {
                completions,
+                display_options: CompletionDisplayOptions::default(),
                // Since this does its own filtering (see `filter_completions()` returns false),
                // there is no benefit to computing whether this set of completions is incomplete.
                is_incomplete: true,
--- a/crates/agent_ui/src/inline_prompt_editor.rs
+++ b/crates/agent_ui/src/inline_prompt_editor.rs
@@ -334,7 +334,7 @@ impl<T: 'static> PromptEditor<T> {
            EditorEvent::Edited { .. } => {
                if let Some(workspace) = window.root::<Workspace>().flatten() {
                    workspace.update(cx, |workspace, cx| {
-                        let is_via_ssh = workspace.project().read(cx).is_via_ssh();
+                        let is_via_ssh = workspace.project().read(cx).is_via_remote_server();

                        workspace
                            .client()
--- a/crates/agent_ui/src/language_model_selector.rs
+++ b/crates/agent_ui/src/language_model_selector.rs
@@ -6,7 +6,8 @@ use feature_flags::ZedProFeatureFlag;
 use fuzzy::{StringMatch, StringMatchCandidate, match_strings};
 use gpui::{Action, AnyElement, App, BackgroundExecutor, DismissEvent, Subscription, Task};
 use language_model::{
-    ConfiguredModel, LanguageModel, LanguageModelProviderId, LanguageModelRegistry,
+    AuthenticateError, ConfiguredModel, LanguageModel, LanguageModelProviderId,
+    LanguageModelRegistry,
 };
 use ordered_float::OrderedFloat;
 use picker::{Picker, PickerDelegate};
@@ -76,6 +77,7 @@ pub struct LanguageModelPickerDelegate {
    all_models: Arc<GroupedModels>,
    filtered_entries: Vec<LanguageModelPickerEntry>,
    selected_index: usize,
+    _authenticate_all_providers_task: Task<()>,
    _subscriptions: Vec<Subscription>,
 }

@@ -96,6 +98,7 @@ impl LanguageModelPickerDelegate {
            selected_index: Self::get_active_model_index(&entries, get_active_model(cx)),
            filtered_entries: entries,
            get_active_model: Arc::new(get_active_model),
+            _authenticate_all_providers_task: Self::authenticate_all_providers(cx),
            _subscriptions: vec![cx.subscribe_in(
                &LanguageModelRegistry::global(cx),
                window,
@@ -139,6 +142,56 @@ impl LanguageModelPickerDelegate {
            .unwrap_or(0)
    }

+    /// Authenticates all providers in the [`LanguageModelRegistry`].
+    ///
+    /// We do this so that we can populate the language selector with all of the
+    /// models from the configured providers.
+    fn authenticate_all_providers(cx: &mut App) -> Task<()> {
+        let authenticate_all_providers = LanguageModelRegistry::global(cx)
+            .read(cx)
+            .providers()
+            .iter()
+            .map(|provider| (provider.id(), provider.name(), provider.authenticate(cx)))
+            .collect::<Vec<_>>();
+
+        cx.spawn(async move |_cx| {
+            for (provider_id, provider_name, authenticate_task) in authenticate_all_providers {
+                if let Err(err) = authenticate_task.await {
+                    if matches!(err, AuthenticateError::CredentialsNotFound) {
+                        // Since we're authenticating these providers in the
+                        // background for the purposes of populating the
+                        // language selector, we don't care about providers
+                        // where the credentials are not found.
+                    } else {
+                        // Some providers have noisy failure states that we
+                        // don't want to spam the logs with every time the
+                        // language model selector is initialized.
+                        //
+                        // Ideally these should have more clear failure modes
+                        // that we know are safe to ignore here, like what we do
+                        // with `CredentialsNotFound` above.
+                        match provider_id.0.as_ref() {
+                            "lmstudio" | "ollama" => {
+                                // LM Studio and Ollama both make fetch requests to the local APIs to determine if they are "authenticated".
+                                //
+                                // These fail noisily, so we don't log them.
+                            }
+                            "copilot_chat" => {
+                                // Copilot Chat returns an error if Copilot is not enabled, so we don't log those errors.
+                            }
+                            _ => {
+                                log::error!(
+                                    "Failed to authenticate provider: {}: {err}",
+                                    provider_name.0
+                                );
+                            }
+                        }
+                    }
+                }
+            }
+        })
+    }
+
    pub fn active_model(&self, cx: &App) -> Option<ConfiguredModel> {
        (self.get_active_model)(cx)
    }
--- a/crates/agent_ui/src/message_editor.rs
+++ b/crates/agent_ui/src/message_editor.rs
@@ -378,18 +378,13 @@ impl MessageEditor {
    }

    fn send_to_model(&mut self, window: &mut Window, cx: &mut Context<Self>) {
-        let Some(ConfiguredModel { model, provider }) = self
+        let Some(ConfiguredModel { model, .. }) = self
            .thread
            .update(cx, |thread, cx| thread.get_or_init_configured_model(cx))
        else {
            return;
        };

-        if provider.must_accept_terms(cx) {
-            cx.notify();
-            return;
-        }
-
        let (user_message, user_message_creases) = self.editor.update(cx, |editor, cx| {
            let creases = extract_message_creases(editor, cx);
            let text = editor.text(cx);
--- a/crates/agent_ui/src/slash_command.rs
+++ b/crates/agent_ui/src/slash_command.rs
@@ -7,7 +7,10 @@ use fuzzy::{StringMatchCandidate, match_strings};
 use gpui::{App, AppContext as _, Context, Entity, Task, WeakEntity, Window};
 use language::{Anchor, Buffer, ToPoint};
 use parking_lot::Mutex;
-use project::{CompletionIntent, CompletionSource, lsp_store::CompletionDocumentation};
+use project::{
+    CompletionDisplayOptions, CompletionIntent, CompletionSource,
+    lsp_store::CompletionDocumentation,
+};
 use rope::Point;
 use std::{
    ops::Range,
@@ -133,6 +136,7 @@ impl SlashCommandCompletionProvider {

                vec![project::CompletionResponse {
                    completions,
+                    display_options: CompletionDisplayOptions::default(),
                    is_incomplete: false,
                }]
            })
@@ -237,6 +241,7 @@ impl SlashCommandCompletionProvider {

                Ok(vec![project::CompletionResponse {
                    completions,
+                    display_options: CompletionDisplayOptions::default(),
                    // TODO: Could have slash commands indicate whether their completions are incomplete.
                    is_incomplete: true,
                }])
@@ -244,6 +249,7 @@ impl SlashCommandCompletionProvider {
        } else {
            Task::ready(Ok(vec![project::CompletionResponse {
                completions: Vec::new(),
+                display_options: CompletionDisplayOptions::default(),
                is_incomplete: true,
            }]))
        }
@@ -305,6 +311,7 @@ impl CompletionProvider for SlashCommandCompletionProvider {
        else {
            return Task::ready(Ok(vec![project::CompletionResponse {
                completions: Vec::new(),
+                display_options: CompletionDisplayOptions::default(),
                is_incomplete: false,
            }]));
        };
--- a/crates/agent_ui/src/text_thread_editor.rs
+++ b/crates/agent_ui/src/text_thread_editor.rs
@@ -190,7 +190,6 @@ pub struct TextThreadEditor {
    invoked_slash_command_creases: HashMap<InvokedSlashCommandId, CreaseId>,
    _subscriptions: Vec<Subscription>,
    last_error: Option<AssistError>,
-    show_accept_terms: bool,
    pub(crate) slash_menu_handle:
        PopoverMenuHandle<Picker<slash_command_picker::SlashCommandDelegate>>,
    // dragged_file_worktrees is used to keep references to worktrees that were added
@@ -289,7 +288,6 @@ impl TextThreadEditor {
            invoked_slash_command_creases: HashMap::default(),
            _subscriptions,
            last_error: None,
-            show_accept_terms: false,
            slash_menu_handle: Default::default(),
            dragged_file_worktrees: Vec::new(),
            language_model_selector: cx.new(|cx| {
@@ -363,24 +361,12 @@ impl TextThreadEditor {
        if self.sending_disabled(cx) {
            return;
        }
+        telemetry::event!("Agent Message Sent", agent = "zed-text");
        self.send_to_model(window, cx);
    }

    fn send_to_model(&mut self, window: &mut Window, cx: &mut Context<Self>) {
-        let provider = LanguageModelRegistry::read_global(cx)
-            .default_model()
-            .map(|default| default.provider);
-        if provider
-            .as_ref()
-            .is_some_and(|provider| provider.must_accept_terms(cx))
-        {
-            self.show_accept_terms = true;
-            cx.notify();
-            return;
-        }
-
        self.last_error = None;
-
        if let Some(user_message) = self.context.update(cx, |context, cx| context.assist(cx)) {
            let new_selection = {
                let cursor = user_message
@@ -1871,6 +1857,53 @@ impl TextThreadEditor {
            .update(cx, |context, cx| context.summarize(true, cx));
    }

+    fn render_remaining_tokens(&self, cx: &App) -> Option<impl IntoElement + use<>> {
+        let (token_count_color, token_count, max_token_count, tooltip) =
+            match token_state(&self.context, cx)? {
+                TokenState::NoTokensLeft {
+                    max_token_count,
+                    token_count,
+                } => (
+                    Color::Error,
+                    token_count,
+                    max_token_count,
+                    Some("Token Limit Reached"),
+                ),
+                TokenState::HasMoreTokens {
+                    max_token_count,
+                    token_count,
+                    over_warn_threshold,
+                } => {
+                    let (color, tooltip) = if over_warn_threshold {
+                        (Color::Warning, Some("Token Limit is Close to Exhaustion"))
+                    } else {
+                        (Color::Muted, None)
+                    };
+                    (color, token_count, max_token_count, tooltip)
+                }
+            };
+
+        Some(
+            h_flex()
+                .id("token-count")
+                .gap_0p5()
+                .child(
+                    Label::new(humanize_token_count(token_count))
+                        .size(LabelSize::Small)
+                        .color(token_count_color),
+                )
+                .child(Label::new("/").size(LabelSize::Small).color(Color::Muted))
+                .child(
+                    Label::new(humanize_token_count(max_token_count))
+                        .size(LabelSize::Small)
+                        .color(Color::Muted),
+                )
+                .when_some(tooltip, |element, tooltip| {
+                    element.tooltip(Tooltip::text(tooltip))
+                }),
+        )
+    }
+
    fn render_send_button(&self, window: &mut Window, cx: &mut Context<Self>) -> impl IntoElement {
        let focus_handle = self.focus_handle(cx);

@@ -1930,7 +1963,6 @@ impl TextThreadEditor {
            ConfigurationError::NoProvider
            | ConfigurationError::ModelNotFound
            | ConfigurationError::ProviderNotAuthenticated(_) => true,
-            ConfigurationError::ProviderPendingTermsAcceptance(_) => self.show_accept_terms,
        }
    }

@@ -2435,9 +2467,14 @@ impl Render for TextThreadEditor {
                    )
                    .child(
                        h_flex()
-                            .gap_1()
-                            .child(self.render_language_model_selector(window, cx))
-                            .child(self.render_send_button(window, cx)),
+                            .gap_2p5()
+                            .children(self.render_remaining_tokens(cx))
+                            .child(
+                                h_flex()
+                                    .gap_1()
+                                    .child(self.render_language_model_selector(window, cx))
+                                    .child(self.render_send_button(window, cx)),
+                            ),
                    ),
            )
    }
@@ -2725,58 +2762,6 @@ impl FollowableItem for TextThreadEditor {
    }
 }

-pub fn render_remaining_tokens(
-    context_editor: &Entity<TextThreadEditor>,
-    cx: &App,
-) -> Option<impl IntoElement + use<>> {
-    let context = &context_editor.read(cx).context;
-
-    let (token_count_color, token_count, max_token_count, tooltip) = match token_state(context, cx)?
-    {
-        TokenState::NoTokensLeft {
-            max_token_count,
-            token_count,
-        } => (
-            Color::Error,
-            token_count,
-            max_token_count,
-            Some("Token Limit Reached"),
-        ),
-        TokenState::HasMoreTokens {
-            max_token_count,
-            token_count,
-            over_warn_threshold,
-        } => {
-            let (color, tooltip) = if over_warn_threshold {
-                (Color::Warning, Some("Token Limit is Close to Exhaustion"))
-            } else {
-                (Color::Muted, None)
-            };
-            (color, token_count, max_token_count, tooltip)
-        }
-    };
-
-    Some(
-        h_flex()
-            .id("token-count")
-            .gap_0p5()
-            .child(
-                Label::new(humanize_token_count(token_count))
-                    .size(LabelSize::Small)
-                    .color(token_count_color),
-            )
-            .child(Label::new("/").size(LabelSize::Small).color(Color::Muted))
-            .child(
-                Label::new(humanize_token_count(max_token_count))
-                    .size(LabelSize::Small)
-                    .color(Color::Muted),
-            )
-            .when_some(tooltip, |element, tooltip| {
-                element.tooltip(Tooltip::text(tooltip))
-            }),
-    )
-}
-
 enum PendingSlashCommand {}

 fn invoked_slash_command_fold_placeholder(
--- a/crates/agent_ui/src/ui.rs
+++ b/crates/agent_ui/src/ui.rs
@@ -1,12 +1,18 @@
+mod acp_onboarding_modal;
 mod agent_notification;
 mod burn_mode_tooltip;
+mod claude_code_onboarding_modal;
 mod context_pill;
 mod end_trial_upsell;
 mod onboarding_modal;
 pub mod preview;
+mod unavailable_editing_tooltip;

+pub use acp_onboarding_modal::*;
 pub use agent_notification::*;
 pub use burn_mode_tooltip::*;
+pub use claude_code_onboarding_modal::*;
 pub use context_pill::*;
 pub use end_trial_upsell::*;
 pub use onboarding_modal::*;
+pub use unavailable_editing_tooltip::*;
--- a/crates/agent_ui/src/ui/acp_onboarding_modal.rs
+++ b/crates/agent_ui/src/ui/acp_onboarding_modal.rs
@@ -0,0 +1,246 @@
+use client::zed_urls;
+use gpui::{
+    ClickEvent, DismissEvent, Entity, EventEmitter, FocusHandle, Focusable, MouseDownEvent, Render,
+    linear_color_stop, linear_gradient,
+};
+use ui::{TintColor, Vector, VectorName, prelude::*};
+use workspace::{ModalView, Workspace};
+
+use crate::agent_panel::{AgentPanel, AgentType};
+
+macro_rules! acp_onboarding_event {
+    ($name:expr) => {
+        telemetry::event!($name, source = "ACP Onboarding");
+    };
+    ($name:expr, $($key:ident $(= $value:expr)?),+ $(,)?) => {
+        telemetry::event!($name, source = "ACP Onboarding", $($key $(= $value)?),+);
+    };
+}
+
+pub struct AcpOnboardingModal {
+    focus_handle: FocusHandle,
+    workspace: Entity<Workspace>,
+}
+
+impl AcpOnboardingModal {
+    pub fn toggle(workspace: &mut Workspace, window: &mut Window, cx: &mut Context<Workspace>) {
+        let workspace_entity = cx.entity();
+        workspace.toggle_modal(window, cx, |_window, cx| Self {
+            workspace: workspace_entity,
+            focus_handle: cx.focus_handle(),
+        });
+    }
+
+    fn open_panel(&mut self, _: &ClickEvent, window: &mut Window, cx: &mut Context<Self>) {
+        self.workspace.update(cx, |workspace, cx| {
+            workspace.focus_panel::<AgentPanel>(window, cx);
+
+            if let Some(panel) = workspace.panel::<AgentPanel>(cx) {
+                panel.update(cx, |panel, cx| {
+                    panel.new_agent_thread(AgentType::Gemini, window, cx);
+                });
+            }
+        });
+
+        cx.emit(DismissEvent);
+
+        acp_onboarding_event!("Open Panel Clicked");
+    }
+
+    fn view_docs(&mut self, _: &ClickEvent, _: &mut Window, cx: &mut Context<Self>) {
+        cx.open_url(&zed_urls::external_agents_docs(cx));
+        cx.notify();
+
+        acp_onboarding_event!("Documentation Link Clicked");
+    }
+
+    fn cancel(&mut self, _: &menu::Cancel, _: &mut Window, cx: &mut Context<Self>) {
+        cx.emit(DismissEvent);
+    }
+}
+
+impl EventEmitter<DismissEvent> for AcpOnboardingModal {}
+
+impl Focusable for AcpOnboardingModal {
+    fn focus_handle(&self, _cx: &App) -> FocusHandle {
+        self.focus_handle.clone()
+    }
+}
+
+impl ModalView for AcpOnboardingModal {}
+
+impl Render for AcpOnboardingModal {
+    fn render(&mut self, _: &mut Window, cx: &mut Context<Self>) -> impl IntoElement {
+        let illustration_element = |label: bool, opacity: f32| {
+            h_flex()
+                .px_1()
+                .py_0p5()
+                .gap_1()
+                .rounded_sm()
+                .bg(cx.theme().colors().element_active.opacity(0.05))
+                .border_1()
+                .border_color(cx.theme().colors().border)
+                .border_dashed()
+                .child(
+                    Icon::new(IconName::Stop)
+                        .size(IconSize::Small)
+                        .color(Color::Custom(cx.theme().colors().text_muted.opacity(0.15))),
+                )
+                .map(|this| {
+                    if label {
+                        this.child(
+                            Label::new("Your Agent Here")
+                                .size(LabelSize::Small)
+                                .color(Color::Muted),
+                        )
+                    } else {
+                        this.child(
+                            div().w_16().h_1().rounded_full().bg(cx
+                                .theme()
+                                .colors()
+                                .element_active
+                                .opacity(0.6)),
+                        )
+                    }
+                })
+                .opacity(opacity)
+        };
+
+        let illustration = h_flex()
+            .relative()
+            .h(rems_from_px(126.))
+            .bg(cx.theme().colors().editor_background)
+            .border_b_1()
+            .border_color(cx.theme().colors().border_variant)
+            .justify_center()
+            .gap_8()
+            .rounded_t_md()
+            .overflow_hidden()
+            .child(
+                div().absolute().inset_0().w(px(515.)).h(px(126.)).child(
+                    Vector::new(VectorName::AcpGrid, rems_from_px(515.), rems_from_px(126.))
+                        .color(ui::Color::Custom(cx.theme().colors().text.opacity(0.02))),
+                ),
+            )
+            .child(div().absolute().inset_0().size_full().bg(linear_gradient(
+                0.,
+                linear_color_stop(
+                    cx.theme().colors().elevated_surface_background.opacity(0.1),
+                    0.9,
+                ),
+                linear_color_stop(
+                    cx.theme().colors().elevated_surface_background.opacity(0.),
+                    0.,
+                ),
+            )))
+            .child(
+                div()
+                    .absolute()
+                    .inset_0()
+                    .size_full()
+                    .bg(gpui::black().opacity(0.15)),
+            )
+            .child(
+                Vector::new(
+                    VectorName::AcpLogoSerif,
+                    rems_from_px(257.),
+                    rems_from_px(47.),
+                )
+                .color(ui::Color::Custom(cx.theme().colors().text.opacity(0.8))),
+            )
+            .child(
+                v_flex()
+                    .gap_1p5()
+                    .child(illustration_element(false, 0.15))
+                    .child(illustration_element(true, 0.3))
+                    .child(
+                        h_flex()
+                            .pl_1()
+                            .pr_2()
+                            .py_0p5()
+                            .gap_1()
+                            .rounded_sm()
+                            .bg(cx.theme().colors().element_active.opacity(0.2))
+                            .border_1()
+                            .border_color(cx.theme().colors().border)
+                            .child(
+                                Icon::new(IconName::AiGemini)
+                                    .size(IconSize::Small)
+                                    .color(Color::Muted),
+                            )
+                            .child(Label::new("New Gemini CLI Thread").size(LabelSize::Small)),
+                    )
+                    .child(illustration_element(true, 0.3))
+                    .child(illustration_element(false, 0.15)),
+            );
+
+        let heading = v_flex()
+            .w_full()
+            .gap_1()
+            .child(
+                Label::new("Now Available")
+                    .size(LabelSize::Small)
+                    .color(Color::Muted),
+            )
+            .child(Headline::new("Bring Your Own Agent to Zed").size(HeadlineSize::Large));
+
+        let copy = "Bring the agent of your choice to Zed via our new Agent Client Protocol (ACP), starting with Google's Gemini CLI integration.";
+
+        let open_panel_button = Button::new("open-panel", "Start with Gemini CLI")
+            .icon_size(IconSize::Indicator)
+            .style(ButtonStyle::Tinted(TintColor::Accent))
+            .full_width()
+            .on_click(cx.listener(Self::open_panel));
+
+        let docs_button = Button::new("add-other-agents", "Add Other Agents")
+            .icon(IconName::ArrowUpRight)
+            .icon_size(IconSize::Indicator)
+            .icon_color(Color::Muted)
+            .full_width()
+            .on_click(cx.listener(Self::view_docs));
+
+        let close_button = h_flex().absolute().top_2().right_2().child(
+            IconButton::new("cancel", IconName::Close).on_click(cx.listener(
+                |_, _: &ClickEvent, _window, cx| {
+                    acp_onboarding_event!("Canceled", trigger = "X click");
+                    cx.emit(DismissEvent);
+                },
+            )),
+        );
+
+        v_flex()
+            .id("acp-onboarding")
+            .key_context("AcpOnboardingModal")
+            .relative()
+            .w(rems(34.))
+            .h_full()
+            .elevation_3(cx)
+            .track_focus(&self.focus_handle(cx))
+            .overflow_hidden()
+            .on_action(cx.listener(Self::cancel))
+            .on_action(cx.listener(|_, _: &menu::Cancel, _window, cx| {
+                acp_onboarding_event!("Canceled", trigger = "Action");
+                cx.emit(DismissEvent);
+            }))
+            .on_any_mouse_down(cx.listener(|this, _: &MouseDownEvent, window, _cx| {
+                this.focus_handle.focus(window);
+            }))
+            .child(illustration)
+            .child(
+                v_flex()
+                    .p_4()
+                    .gap_2()
+                    .child(heading)
+                    .child(Label::new(copy).color(Color::Muted))
+                    .child(
+                        v_flex()
+                            .w_full()
+                            .mt_2()
+                            .gap_1()
+                            .child(open_panel_button)
+                            .child(docs_button),
+                    ),
+            )
+            .child(close_button)
+    }
+}
--- a/crates/agent_ui/src/ui/claude_code_onboarding_modal.rs
+++ b/crates/agent_ui/src/ui/claude_code_onboarding_modal.rs
@@ -0,0 +1,254 @@
+use client::zed_urls;
+use gpui::{
+    ClickEvent, DismissEvent, Entity, EventEmitter, FocusHandle, Focusable, MouseDownEvent, Render,
+    linear_color_stop, linear_gradient,
+};
+use ui::{TintColor, Vector, VectorName, prelude::*};
+use workspace::{ModalView, Workspace};
+
+use crate::agent_panel::{AgentPanel, AgentType};
+
+macro_rules! claude_code_onboarding_event {
+    ($name:expr) => {
+        telemetry::event!($name, source = "ACP Claude Code Onboarding");
+    };
+    ($name:expr, $($key:ident $(= $value:expr)?),+ $(,)?) => {
+        telemetry::event!($name, source = "ACP Claude Code Onboarding", $($key $(= $value)?),+);
+    };
+}
+
+pub struct ClaudeCodeOnboardingModal {
+    focus_handle: FocusHandle,
+    workspace: Entity<Workspace>,
+}
+
+impl ClaudeCodeOnboardingModal {
+    pub fn toggle(workspace: &mut Workspace, window: &mut Window, cx: &mut Context<Workspace>) {
+        let workspace_entity = cx.entity();
+        workspace.toggle_modal(window, cx, |_window, cx| Self {
+            workspace: workspace_entity,
+            focus_handle: cx.focus_handle(),
+        });
+    }
+
+    fn open_panel(&mut self, _: &ClickEvent, window: &mut Window, cx: &mut Context<Self>) {
+        self.workspace.update(cx, |workspace, cx| {
+            workspace.focus_panel::<AgentPanel>(window, cx);
+
+            if let Some(panel) = workspace.panel::<AgentPanel>(cx) {
+                panel.update(cx, |panel, cx| {
+                    panel.new_agent_thread(AgentType::ClaudeCode, window, cx);
+                });
+            }
+        });
+
+        cx.emit(DismissEvent);
+
+        claude_code_onboarding_event!("Open Panel Clicked");
+    }
+
+    fn view_docs(&mut self, _: &ClickEvent, _: &mut Window, cx: &mut Context<Self>) {
+        cx.open_url(&zed_urls::external_agents_docs(cx));
+        cx.notify();
+
+        claude_code_onboarding_event!("Documentation Link Clicked");
+    }
+
+    fn cancel(&mut self, _: &menu::Cancel, _: &mut Window, cx: &mut Context<Self>) {
+        cx.emit(DismissEvent);
+    }
+}
+
+impl EventEmitter<DismissEvent> for ClaudeCodeOnboardingModal {}
+
+impl Focusable for ClaudeCodeOnboardingModal {
+    fn focus_handle(&self, _cx: &App) -> FocusHandle {
+        self.focus_handle.clone()
+    }
+}
+
+impl ModalView for ClaudeCodeOnboardingModal {}
+
+impl Render for ClaudeCodeOnboardingModal {
+    fn render(&mut self, _: &mut Window, cx: &mut Context<Self>) -> impl IntoElement {
+        let illustration_element = |icon: IconName, label: Option<SharedString>, opacity: f32| {
+            h_flex()
+                .px_1()
+                .py_0p5()
+                .gap_1()
+                .rounded_sm()
+                .bg(cx.theme().colors().element_active.opacity(0.05))
+                .border_1()
+                .border_color(cx.theme().colors().border)
+                .border_dashed()
+                .child(
+                    Icon::new(icon)
+                        .size(IconSize::Small)
+                        .color(Color::Custom(cx.theme().colors().text_muted.opacity(0.15))),
+                )
+                .map(|this| {
+                    if let Some(label_text) = label {
+                        this.child(
+                            Label::new(label_text)
+                                .size(LabelSize::Small)
+                                .color(Color::Muted),
+                        )
+                    } else {
+                        this.child(
+                            div().w_16().h_1().rounded_full().bg(cx
+                                .theme()
+                                .colors()
+                                .element_active
+                                .opacity(0.6)),
+                        )
+                    }
+                })
+                .opacity(opacity)
+        };
+
+        let illustration = h_flex()
+            .relative()
+            .h(rems_from_px(126.))
+            .bg(cx.theme().colors().editor_background)
+            .border_b_1()
+            .border_color(cx.theme().colors().border_variant)
+            .justify_center()
+            .gap_8()
+            .rounded_t_md()
+            .overflow_hidden()
+            .child(
+                div().absolute().inset_0().w(px(515.)).h(px(126.)).child(
+                    Vector::new(VectorName::AcpGrid, rems_from_px(515.), rems_from_px(126.))
+                        .color(ui::Color::Custom(cx.theme().colors().text.opacity(0.02))),
+                ),
+            )
+            .child(div().absolute().inset_0().size_full().bg(linear_gradient(
+                0.,
+                linear_color_stop(
+                    cx.theme().colors().elevated_surface_background.opacity(0.1),
+                    0.9,
+                ),
+                linear_color_stop(
+                    cx.theme().colors().elevated_surface_background.opacity(0.),
+                    0.,
+                ),
+            )))
+            .child(
+                div()
+                    .absolute()
+                    .inset_0()
+                    .size_full()
+                    .bg(gpui::black().opacity(0.15)),
+            )
+            .child(
+                Vector::new(
+                    VectorName::AcpLogoSerif,
+                    rems_from_px(257.),
+                    rems_from_px(47.),
+                )
+                .color(ui::Color::Custom(cx.theme().colors().text.opacity(0.8))),
+            )
+            .child(
+                v_flex()
+                    .gap_1p5()
+                    .child(illustration_element(IconName::Stop, None, 0.15))
+                    .child(illustration_element(
+                        IconName::AiGemini,
+                        Some("New Gemini CLI Thread".into()),
+                        0.3,
+                    ))
+                    .child(
+                        h_flex()
+                            .pl_1()
+                            .pr_2()
+                            .py_0p5()
+                            .gap_1()
+                            .rounded_sm()
+                            .bg(cx.theme().colors().element_active.opacity(0.2))
+                            .border_1()
+                            .border_color(cx.theme().colors().border)
+                            .child(
+                                Icon::new(IconName::AiClaude)
+                                    .size(IconSize::Small)
+                                    .color(Color::Muted),
+                            )
+                            .child(Label::new("New Claude Code Thread").size(LabelSize::Small)),
+                    )
+                    .child(illustration_element(
+                        IconName::Stop,
+                        Some("Your Agent Here".into()),
+                        0.3,
+                    ))
+                    .child(illustration_element(IconName::Stop, None, 0.15)),
+            );
+
+        let heading = v_flex()
+            .w_full()
+            .gap_1()
+            .child(
+                Label::new("Beta Release")
+                    .size(LabelSize::Small)
+                    .color(Color::Muted),
+            )
+            .child(Headline::new("Claude Code: Natively in Zed").size(HeadlineSize::Large));
+
+        let copy = "Powered by the Agent Client Protocol, you can now run Claude Code as\na first-class citizen in Zed's agent panel.";
+
+        let open_panel_button = Button::new("open-panel", "Start with Claude Code")
+            .icon_size(IconSize::Indicator)
+            .style(ButtonStyle::Tinted(TintColor::Accent))
+            .full_width()
+            .on_click(cx.listener(Self::open_panel));
+
+        let docs_button = Button::new("add-other-agents", "Add Other Agents")
+            .icon(IconName::ArrowUpRight)
+            .icon_size(IconSize::Indicator)
+            .icon_color(Color::Muted)
+            .full_width()
+            .on_click(cx.listener(Self::view_docs));
+
+        let close_button = h_flex().absolute().top_2().right_2().child(
+            IconButton::new("cancel", IconName::Close).on_click(cx.listener(
+                |_, _: &ClickEvent, _window, cx| {
+                    claude_code_onboarding_event!("Canceled", trigger = "X click");
+                    cx.emit(DismissEvent);
+                },
+            )),
+        );
+
+        v_flex()
+            .id("acp-onboarding")
+            .key_context("AcpOnboardingModal")
+            .relative()
+            .w(rems(34.))
+            .h_full()
+            .elevation_3(cx)
+            .track_focus(&self.focus_handle(cx))
+            .overflow_hidden()
+            .on_action(cx.listener(Self::cancel))
+            .on_action(cx.listener(|_, _: &menu::Cancel, _window, cx| {
+                claude_code_onboarding_event!("Canceled", trigger = "Action");
+                cx.emit(DismissEvent);
+            }))
+            .on_any_mouse_down(cx.listener(|this, _: &MouseDownEvent, window, _cx| {
+                this.focus_handle.focus(window);
+            }))
+            .child(illustration)
+            .child(
+                v_flex()
+                    .p_4()
+                    .gap_2()
+                    .child(heading)
+                    .child(Label::new(copy).color(Color::Muted))
+                    .child(
+                        v_flex()
+                            .w_full()
+                            .mt_2()
+                            .gap_1()
+                            .child(open_panel_button)
+                            .child(docs_button),
+                    ),
+            )
+            .child(close_button)
+    }
+}
--- a/crates/agent_ui/src/ui/preview/usage_callouts.rs
+++ b/crates/agent_ui/src/ui/preview/usage_callouts.rs
@@ -86,23 +86,18 @@ impl RenderOnce for UsageCallout {
            (IconName::Warning, Severity::Warning)
        };

-        div()
-            .border_t_1()
-            .border_color(cx.theme().colors().border)
-            .child(
-                Callout::new()
-                    .icon(icon)
-                    .severity(severity)
-                    .icon(icon)
-                    .title(title)
-                    .description(message)
-                    .actions_slot(
-                        Button::new("upgrade", button_text)
-                            .label_size(LabelSize::Small)
-                            .on_click(move |_, _, cx| {
-                                cx.open_url(&url);
-                            }),
-                    ),
+        Callout::new()
+            .icon(icon)
+            .severity(severity)
+            .icon(icon)
+            .title(title)
+            .description(message)
+            .actions_slot(
+                Button::new("upgrade", button_text)
+                    .label_size(LabelSize::Small)
+                    .on_click(move |_, _, cx| {
+                        cx.open_url(&url);
+                    }),
            )
            .into_any_element()
    }
--- a/crates/agent_ui/src/ui/unavailable_editing_tooltip.rs
+++ b/crates/agent_ui/src/ui/unavailable_editing_tooltip.rs
@@ -0,0 +1,29 @@
+use gpui::{Context, IntoElement, Render, Window};
+use ui::{prelude::*, tooltip_container};
+
+pub struct UnavailableEditingTooltip {
+    agent_name: SharedString,
+}
+
+impl UnavailableEditingTooltip {
+    pub fn new(agent_name: SharedString) -> Self {
+        Self { agent_name }
+    }
+}
+
+impl Render for UnavailableEditingTooltip {
+    fn render(&mut self, window: &mut Window, cx: &mut Context<Self>) -> impl IntoElement {
+        tooltip_container(window, cx, |this, _, _| {
+            this.child(Label::new("Unavailable Editing")).child(
+                div().max_w_64().child(
+                    Label::new(format!(
+                        "Editing previous messages is not available for {} yet.",
+                        self.agent_name
+                    ))
+                    .size(LabelSize::Small)
+                    .color(Color::Muted),
+                ),
+            )
+        })
+    }
+}
--- a/crates/ai_onboarding/src/ai_onboarding.rs
+++ b/crates/ai_onboarding/src/ai_onboarding.rs
@@ -19,7 +19,7 @@ use std::sync::Arc;

 use client::{Client, UserStore, zed_urls};
 use gpui::{AnyElement, Entity, IntoElement, ParentElement};
-use ui::{Divider, RegisterComponent, TintColor, Tooltip, prelude::*};
+use ui::{Divider, RegisterComponent, Tooltip, prelude::*};

 #[derive(PartialEq)]
 pub enum SignInStatus {
@@ -43,12 +43,10 @@ impl From<client::Status> for SignInStatus {
 #[derive(RegisterComponent, IntoElement)]
 pub struct ZedAiOnboarding {
    pub sign_in_status: SignInStatus,
-    pub has_accepted_terms_of_service: bool,
    pub plan: Option<Plan>,
    pub account_too_young: bool,
    pub continue_with_zed_ai: Arc<dyn Fn(&mut Window, &mut App)>,
    pub sign_in: Arc<dyn Fn(&mut Window, &mut App)>,
-    pub accept_terms_of_service: Arc<dyn Fn(&mut Window, &mut App)>,
    pub dismiss_onboarding: Option<Arc<dyn Fn(&mut Window, &mut App)>>,
 }

@@ -64,17 +62,9 @@ impl ZedAiOnboarding {

        Self {
            sign_in_status: status.into(),
-            has_accepted_terms_of_service: store.has_accepted_terms_of_service(),
            plan: store.plan(),
            account_too_young: store.account_too_young(),
            continue_with_zed_ai,
-            accept_terms_of_service: Arc::new({
-                let store = user_store.clone();
-                move |_window, cx| {
-                    let task = store.update(cx, |store, cx| store.accept_terms_of_service(cx));
-                    task.detach_and_log_err(cx);
-                }
-            }),
            sign_in: Arc::new(move |_window, cx| {
                cx.spawn({
                    let client = client.clone();
@@ -94,42 +84,6 @@ impl ZedAiOnboarding {
        self
    }

-    fn render_accept_terms_of_service(&self) -> AnyElement {
-        v_flex()
-            .gap_1()
-            .w_full()
-            .child(Headline::new("Accept Terms of Service"))
-            .child(
-                Label::new("We don’t sell your data, track you across the web, or compromise your privacy.")
-                    .color(Color::Muted)
-                    .mb_2(),
-            )
-            .child(
-                Button::new("terms_of_service", "Review Terms of Service")
-                    .full_width()
-                    .style(ButtonStyle::Outlined)
-                    .icon(IconName::ArrowUpRight)
-                    .icon_color(Color::Muted)
-                    .icon_size(IconSize::Small)
-                    .on_click(move |_, _window, cx| {
-                        telemetry::event!("Review Terms of Service Clicked");
-                        cx.open_url(&zed_urls::terms_of_service(cx))
-                    }),
-            )
-            .child(
-                Button::new("accept_terms", "Accept")
-                    .full_width()
-                    .style(ButtonStyle::Tinted(TintColor::Accent))
-                    .on_click({
-                        let callback = self.accept_terms_of_service.clone();
-                        move |_, window, cx| {
-                            telemetry::event!("Terms of Service Accepted");
-                            (callback)(window, cx)}
-                    }),
-            )
-            .into_any_element()
-    }
-
    fn render_sign_in_disclaimer(&self, _cx: &mut App) -> AnyElement {
        let signing_in = matches!(self.sign_in_status, SignInStatus::SigningIn);
        let plan_definitions = PlanDefinitions;
@@ -359,14 +313,10 @@ impl ZedAiOnboarding {
 impl RenderOnce for ZedAiOnboarding {
    fn render(self, _window: &mut ui::Window, cx: &mut App) -> impl IntoElement {
        if matches!(self.sign_in_status, SignInStatus::SignedIn) {
-            if self.has_accepted_terms_of_service {
-                match self.plan {
-                    None | Some(Plan::ZedFree) => self.render_free_plan_state(cx),
-                    Some(Plan::ZedProTrial) => self.render_trial_state(cx),
-                    Some(Plan::ZedPro) => self.render_pro_plan_state(cx),
-                }
-            } else {
-                self.render_accept_terms_of_service()
+            match self.plan {
+                None | Some(Plan::ZedFree) => self.render_free_plan_state(cx),
+                Some(Plan::ZedProTrial) => self.render_trial_state(cx),
+                Some(Plan::ZedPro) => self.render_pro_plan_state(cx),
            }
        } else {
            self.render_sign_in_disclaimer(cx)
@@ -390,18 +340,15 @@ impl Component for ZedAiOnboarding {
    fn preview(_window: &mut Window, _cx: &mut App) -> Option<AnyElement> {
        fn onboarding(
            sign_in_status: SignInStatus,
-            has_accepted_terms_of_service: bool,
            plan: Option<Plan>,
            account_too_young: bool,
        ) -> AnyElement {
            ZedAiOnboarding {
                sign_in_status,
-                has_accepted_terms_of_service,
                plan,
                account_too_young,
                continue_with_zed_ai: Arc::new(|_, _| {}),
                sign_in: Arc::new(|_, _| {}),
-                accept_terms_of_service: Arc::new(|_, _| {}),
                dismiss_onboarding: None,
            }
            .into_any_element()
@@ -415,27 +362,23 @@ impl Component for ZedAiOnboarding {
                .children(vec![
                    single_example(
                        "Not Signed-in",
-                        onboarding(SignInStatus::SignedOut, false, None, false),
-                    ),
-                    single_example(
-                        "Not Accepted ToS",
-                        onboarding(SignInStatus::SignedIn, false, None, false),
+                        onboarding(SignInStatus::SignedOut, None, false),
                    ),
                    single_example(
                        "Young Account",
-                        onboarding(SignInStatus::SignedIn, true, None, true),
+                        onboarding(SignInStatus::SignedIn, None, true),
                    ),
                    single_example(
                        "Free Plan",
-                        onboarding(SignInStatus::SignedIn, true, Some(Plan::ZedFree), false),
+                        onboarding(SignInStatus::SignedIn, Some(Plan::ZedFree), false),
                    ),
                    single_example(
                        "Pro Trial",
-                        onboarding(SignInStatus::SignedIn, true, Some(Plan::ZedProTrial), false),
+                        onboarding(SignInStatus::SignedIn, Some(Plan::ZedProTrial), false),
                    ),
                    single_example(
                        "Pro Plan",
-                        onboarding(SignInStatus::SignedIn, true, Some(Plan::ZedPro), false),
+                        onboarding(SignInStatus::SignedIn, Some(Plan::ZedPro), false),
                    ),
                ])
                .into_any_element(),
--- a/crates/ai_onboarding/src/ai_upsell_card.rs
+++ b/crates/ai_onboarding/src/ai_upsell_card.rs
@@ -12,11 +12,11 @@ use crate::{SignInStatus, YoungAccountBanner, plan_definitions::PlanDefinitions}

 #[derive(IntoElement, RegisterComponent)]
 pub struct AiUpsellCard {
-    pub sign_in_status: SignInStatus,
-    pub sign_in: Arc<dyn Fn(&mut Window, &mut App)>,
-    pub account_too_young: bool,
-    pub user_plan: Option<Plan>,
-    pub tab_index: Option<isize>,
+    sign_in_status: SignInStatus,
+    sign_in: Arc<dyn Fn(&mut Window, &mut App)>,
+    account_too_young: bool,
+    user_plan: Option<Plan>,
+    tab_index: Option<isize>,
 }

 impl AiUpsellCard {
@@ -43,6 +43,11 @@ impl AiUpsellCard {
            tab_index: None,
        }
    }
+
+    pub fn tab_index(mut self, tab_index: Option<isize>) -> Self {
+        self.tab_index = tab_index;
+        self
+    }
 }

 impl RenderOnce for AiUpsellCard {
--- a/crates/assistant_tools/src/fetch_tool.rs
+++ b/crates/assistant_tools/src/fetch_tool.rs
@@ -118,7 +118,7 @@ impl Tool for FetchTool {
    }

    fn needs_confirmation(&self, _: &serde_json::Value, _: &Entity<Project>, _: &App) -> bool {
-        false
+        true
    }

    fn may_perform_edits(&self) -> bool {
--- a/crates/assistant_tools/src/find_path_tool.rs
+++ b/crates/assistant_tools/src/find_path_tool.rs
@@ -435,8 +435,8 @@ mod test {
        assert_eq!(
            matches,
            &[
-                PathBuf::from("root/apple/banana/carrot"),
-                PathBuf::from("root/apple/bandana/carbonara")
+                PathBuf::from(path!("root/apple/banana/carrot")),
+                PathBuf::from(path!("root/apple/bandana/carbonara"))
            ]
        );

@@ -447,8 +447,8 @@ mod test {
        assert_eq!(
            matches,
            &[
-                PathBuf::from("root/apple/banana/carrot"),
-                PathBuf::from("root/apple/bandana/carbonara")
+                PathBuf::from(path!("root/apple/banana/carrot")),
+                PathBuf::from(path!("root/apple/bandana/carbonara"))
            ]
        );
    }
--- a/crates/assistant_tools/src/read_file_tool.rs
+++ b/crates/assistant_tools/src/read_file_tool.rs
@@ -68,7 +68,7 @@ impl Tool for ReadFileTool {
    }

    fn icon(&self) -> IconName {
-        IconName::ToolRead
+        IconName::ToolSearch
    }

    fn input_schema(&self, format: LanguageModelToolSchemaFormat) -> Result<serde_json::Value> {
--- a/crates/assistant_tools/src/terminal_tool.rs
+++ b/crates/assistant_tools/src/terminal_tool.rs
@@ -15,7 +15,7 @@ use language::LineEnding;
 use language_model::{LanguageModel, LanguageModelRequest, LanguageModelToolSchemaFormat};
 use markdown::{Markdown, MarkdownElement, MarkdownStyle};
 use portable_pty::{CommandBuilder, PtySize, native_pty_system};
-use project::{Project, terminals::TerminalKind};
+use project::Project;
 use schemars::JsonSchema;
 use serde::{Deserialize, Serialize};
 use settings::Settings;
@@ -213,17 +213,16 @@ impl Tool for TerminalTool {
            async move |cx| {
                let program = program.await;
                let env = env.await;
-
                project
                    .update(cx, |project, cx| {
-                        project.create_terminal(
-                            TerminalKind::Task(task::SpawnInTerminal {
+                        project.create_terminal_task(
+                            task::SpawnInTerminal {
                                command: Some(program),
                                args,
                                cwd,
                                env,
                                ..Default::default()
-                            }),
+                            },
                            cx,
                        )
                    })?
--- a/crates/bedrock/src/bedrock.rs
+++ b/crates/bedrock/src/bedrock.rs
@@ -3,6 +3,7 @@ mod models;
 use anyhow::{Context, Error, Result, anyhow};
 use aws_sdk_bedrockruntime as bedrock;
 pub use aws_sdk_bedrockruntime as bedrock_client;
+use aws_sdk_bedrockruntime::types::InferenceConfiguration;
 pub use aws_sdk_bedrockruntime::types::{
    AnyToolChoice as BedrockAnyToolChoice, AutoToolChoice as BedrockAutoToolChoice,
    ContentBlock as BedrockInnerContent, Tool as BedrockTool, ToolChoice as BedrockToolChoice,
@@ -17,7 +18,8 @@ pub use bedrock::types::{
    ConverseOutput as BedrockResponse, ConverseStreamOutput as BedrockStreamingResponse,
    ImageBlock as BedrockImageBlock, Message as BedrockMessage,
    ReasoningContentBlock as BedrockThinkingBlock, ReasoningTextBlock as BedrockThinkingTextBlock,
-    ResponseStream as BedrockResponseStream, ToolResultBlock as BedrockToolResultBlock,
+    ResponseStream as BedrockResponseStream, SystemContentBlock as BedrockSystemContentBlock,
+    ToolResultBlock as BedrockToolResultBlock,
    ToolResultContentBlock as BedrockToolResultContentBlock,
    ToolResultStatus as BedrockToolResultStatus, ToolUseBlock as BedrockToolUseBlock,
 };
@@ -58,6 +60,20 @@ pub async fn stream_completion(
        response = response.set_tool_config(request.tools);
    }

+    let inference_config = InferenceConfiguration::builder()
+        .max_tokens(request.max_tokens as i32)
+        .set_temperature(request.temperature)
+        .set_top_p(request.top_p)
+        .build();
+
+    response = response.inference_config(inference_config);
+
+    if let Some(system) = request.system {
+        if !system.is_empty() {
+            response = response.system(BedrockSystemContentBlock::Text(system));
+        }
+    }
+
    let output = response
        .send()
        .await
--- a/crates/bedrock/src/models.rs
+++ b/crates/bedrock/src/models.rs
@@ -151,12 +151,12 @@ impl Model {

    pub fn id(&self) -> &str {
        match self {
-            Model::ClaudeSonnet4 => "claude-4-sonnet",
-            Model::ClaudeSonnet4Thinking => "claude-4-sonnet-thinking",
-            Model::ClaudeOpus4 => "claude-4-opus",
-            Model::ClaudeOpus4_1 => "claude-4-opus-1",
-            Model::ClaudeOpus4Thinking => "claude-4-opus-thinking",
-            Model::ClaudeOpus4_1Thinking => "claude-4-opus-1-thinking",
+            Model::ClaudeSonnet4 => "claude-sonnet-4",
+            Model::ClaudeSonnet4Thinking => "claude-sonnet-4-thinking",
+            Model::ClaudeOpus4 => "claude-opus-4",
+            Model::ClaudeOpus4_1 => "claude-opus-4-1",
+            Model::ClaudeOpus4Thinking => "claude-opus-4-thinking",
+            Model::ClaudeOpus4_1Thinking => "claude-opus-4-1-thinking",
            Model::Claude3_5SonnetV2 => "claude-3-5-sonnet-v2",
            Model::Claude3_5Sonnet => "claude-3-5-sonnet",
            Model::Claude3Opus => "claude-3-opus",
@@ -359,14 +359,12 @@ impl Model {
    pub fn max_output_tokens(&self) -> u64 {
        match self {
            Self::Claude3Opus | Self::Claude3Sonnet | Self::Claude3_5Haiku => 4_096,
-            Self::Claude3_7Sonnet
-            | Self::Claude3_7SonnetThinking
-            | Self::ClaudeSonnet4
-            | Self::ClaudeSonnet4Thinking
-            | Self::ClaudeOpus4
-            | Model::ClaudeOpus4Thinking
+            Self::Claude3_7Sonnet | Self::Claude3_7SonnetThinking => 128_000,
+            Self::ClaudeSonnet4 | Self::ClaudeSonnet4Thinking => 64_000,
+            Self::ClaudeOpus4
+            | Self::ClaudeOpus4Thinking
            | Self::ClaudeOpus4_1
-            | Model::ClaudeOpus4_1Thinking => 128_000,
+            | Self::ClaudeOpus4_1Thinking => 32_000,
            Self::Claude3_5SonnetV2 | Self::PalmyraWriterX4 | Self::PalmyraWriterX5 => 8_192,
            Self::Custom {
                max_output_tokens, ..
@@ -784,10 +782,10 @@ mod tests {
        );

        // Test thinking models have different friendly IDs but same request IDs
-        assert_eq!(Model::ClaudeSonnet4.id(), "claude-4-sonnet");
+        assert_eq!(Model::ClaudeSonnet4.id(), "claude-sonnet-4");
        assert_eq!(
            Model::ClaudeSonnet4Thinking.id(),
-            "claude-4-sonnet-thinking"
+            "claude-sonnet-4-thinking"
        );
        assert_eq!(
            Model::ClaudeSonnet4.request_id(),
--- a/crates/buffer_diff/src/buffer_diff.rs
+++ b/crates/buffer_diff/src/buffer_diff.rs
@@ -162,6 +162,22 @@ impl BufferDiffSnapshot {
        }
    }

+    fn unchanged(
+        buffer: &text::BufferSnapshot,
+        base_text: language::BufferSnapshot,
+    ) -> BufferDiffSnapshot {
+        debug_assert_eq!(buffer.text(), base_text.text());
+        BufferDiffSnapshot {
+            inner: BufferDiffInner {
+                base_text,
+                hunks: SumTree::new(buffer),
+                pending_hunks: SumTree::new(buffer),
+                base_text_exists: false,
+            },
+            secondary_diff: None,
+        }
+    }
+
    fn new_with_base_text(
        buffer: text::BufferSnapshot,
        base_text: Option<Arc<String>>,
@@ -213,7 +229,10 @@ impl BufferDiffSnapshot {
        cx: &App,
    ) -> impl Future<Output = Self> + use<> {
        let base_text_exists = base_text.is_some();
-        let base_text_pair = base_text.map(|text| (text, base_text_snapshot.as_rope().clone()));
+        let base_text_pair = base_text.map(|text| {
+            debug_assert_eq!(&*text, &base_text_snapshot.text());
+            (text, base_text_snapshot.as_rope().clone())
+        });
        cx.background_executor()
            .spawn_labeled(*CALCULATE_DIFF_TASK, async move {
                Self {
@@ -873,6 +892,18 @@ impl BufferDiff {
        }
    }

+    pub fn new_unchanged(
+        buffer: &text::BufferSnapshot,
+        base_text: language::BufferSnapshot,
+    ) -> Self {
+        debug_assert_eq!(buffer.text(), base_text.text());
+        BufferDiff {
+            buffer_id: buffer.remote_id(),
+            inner: BufferDiffSnapshot::unchanged(buffer, base_text).inner,
+            secondary_diff: None,
+        }
+    }
+
    #[cfg(any(test, feature = "test-support"))]
    pub fn new_with_base_text(
        base_text: &str,
--- a/crates/call/src/call_impl/room.rs
+++ b/crates/call/src/call_impl/room.rs
@@ -1161,7 +1161,7 @@ impl Room {
        let request = self.client.request(proto::ShareProject {
            room_id: self.id(),
            worktrees: project.read(cx).worktree_metadata_protos(cx),
-            is_ssh_project: project.read(cx).is_via_ssh(),
+            is_ssh_project: project.read(cx).is_via_remote_server(),
        });

        cx.spawn(async move |this, cx| {
--- a/crates/client/src/client.rs
+++ b/crates/client/src/client.rs
@@ -66,6 +66,8 @@ pub static IMPERSONATE_LOGIN: LazyLock<Option<String>> = LazyLock::new(|| {
        .and_then(|s| if s.is_empty() { None } else { Some(s) })
 });

+pub static USE_WEB_LOGIN: LazyLock<bool> = LazyLock::new(|| std::env::var("ZED_WEB_LOGIN").is_ok());
+
 pub static ADMIN_API_TOKEN: LazyLock<Option<String>> = LazyLock::new(|| {
    std::env::var("ZED_ADMIN_API_TOKEN")
        .ok()
@@ -1392,11 +1394,13 @@ impl Client {
                    if let Some((login, token)) =
                        IMPERSONATE_LOGIN.as_ref().zip(ADMIN_API_TOKEN.as_ref())
                    {
-                        eprintln!("authenticate as admin {login}, {token}");
+                        if !*USE_WEB_LOGIN {
+                            eprintln!("authenticate as admin {login}, {token}");

-                        return this
-                            .authenticate_as_admin(http, login.clone(), token.clone())
-                            .await;
+                            return this
+                                .authenticate_as_admin(http, login.clone(), token.clone())
+                                .await;
+                        }
                    }

                    // Start an HTTP server to receive the redirect from Zed's sign-in page.
--- a/Show More
+++ b/Show More
				`@@ -0,0 +1 @@`
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