diff --git a/envd/internal/services/process/handler/multiplex.go b/envd/internal/services/process/handler/multiplex.go
index 4fe696e..0f477dd 100644
--- a/envd/internal/services/process/handler/multiplex.go
+++ b/envd/internal/services/process/handler/multiplex.go
@@ -25,7 +25,11 @@ func NewMultiplexedChannel[T any](buffer int) *MultiplexedChannel[T] {
 			c.mu.RLock()
 
 			for _, cons := range c.channels {
-				cons <- v
+				select {
+				case cons <- v:
+				default:
+					// Consumer not reading — skip to prevent deadlock
+				}
 			}
 
 			c.mu.RUnlock()
@@ -52,7 +56,7 @@ func (m *MultiplexedChannel[T]) Fork() (chan T, func()) {
 	m.mu.Lock()
 	defer m.mu.Unlock()
 
-	consumer := make(chan T)
+	consumer := make(chan T, 64)
 
 	m.channels = append(m.channels, consumer)
 
diff --git a/envd/internal/services/process/service.go b/envd/internal/services/process/service.go
index e00f345..9b89521 100644
--- a/envd/internal/services/process/service.go
+++ b/envd/internal/services/process/service.go
@@ -62,16 +62,15 @@ func (s *Service) getProcess(selector *rpc.ProcessSelector) (*handler.Handler, e
 
 		s.processes.Range(func(_ uint32, value *handler.Handler) bool {
 			if value.Tag == nil {
-				return true
+				return true // no tag, keep looking
 			}
 
 			if *value.Tag == tag {
 				proc = value
-
-				return true
+				return false // found, stop iterating
 			}
 
-			return false
+			return true // different tag, keep looking
 		})
 
 		if proc == nil {
diff --git a/frontend/package.json b/frontend/package.json
index 85030ec..0b8499d 100644
--- a/frontend/package.json
+++ b/frontend/package.json
@@ -28,6 +28,9 @@
 		"vite": "^7.3.1"
 	},
 	"dependencies": {
+		"@xterm/addon-fit": "^0.11.0",
+		"@xterm/addon-web-links": "^0.12.0",
+		"@xterm/xterm": "^6.0.0",
 		"chart.js": "^4.5.1"
 	}
 }
diff --git a/frontend/pnpm-lock.yaml b/frontend/pnpm-lock.yaml
index 5b60992..9c0ff92 100644
--- a/frontend/pnpm-lock.yaml
+++ b/frontend/pnpm-lock.yaml
@@ -8,6 +8,15 @@ importers:
 
   .:
     dependencies:
+      '@xterm/addon-fit':
+        specifier: ^0.11.0
+        version: 0.11.0
+      '@xterm/addon-web-links':
+        specifier: ^0.12.0
+        version: 0.12.0
+      '@xterm/xterm':
+        specifier: ^6.0.0
+        version: 6.0.0
       chart.js:
         specifier: ^4.5.1
         version: 4.5.1
@@ -534,6 +543,15 @@ packages:
     resolution: {integrity: sha512-S29BOBPJSFUiblEl6RzPPjJt6w25A6XsBqRVDt53tA/tlL8q7ceQNZHTjPeONt/3S7KRI4quk+yP9jK2WjBiPQ==}
     engines: {node: ^18.18.0 || ^20.9.0 || >=21.1.0}
 
+  '@xterm/addon-fit@0.11.0':
+    resolution: {integrity: sha512-jYcgT6xtVYhnhgxh3QgYDnnNMYTcf8ElbxxFzX0IZo+vabQqSPAjC3c1wJrKB5E19VwQei89QCiZZP86DCPF7g==}
+
+  '@xterm/addon-web-links@0.12.0':
+    resolution: {integrity: sha512-4Smom3RPyVp7ZMYOYDoC/9eGJJJqYhnPLGGqJ6wOBfB8VxPViJNSKdgRYb8NpaM6YSelEKbA2SStD7lGyqaobw==}
+
+  '@xterm/xterm@6.0.0':
+    resolution: {integrity: sha512-TQwDdQGtwwDt+2cgKDLn0IRaSxYu1tSUjgKarSDkUM0ZNiSRXFpjxEsvc/Zgc5kq5omJ+V0a8/kIM2WD3sMOYg==}
+
   acorn@8.16.0:
     resolution: {integrity: sha512-UVJyE9MttOsBQIDKw1skb9nAwQuR5wuGD3+82K6JgJlm/Y+KI92oNsMNGZCYdDsVtRHSak0pcV5Dno5+4jh9sw==}
     engines: {node: '>=0.4.0'}
@@ -1197,6 +1215,12 @@ snapshots:
 
   '@typescript-eslint/types@8.57.1': {}
 
+  '@xterm/addon-fit@0.11.0': {}
+
+  '@xterm/addon-web-links@0.12.0': {}
+
+  '@xterm/xterm@6.0.0': {}
+
   acorn@8.16.0: {}
 
   aria-query@5.3.1: {}
diff --git a/frontend/src/lib/components/TerminalTab.svelte b/frontend/src/lib/components/TerminalTab.svelte
new file mode 100644
index 0000000..5c516c2
--- /dev/null
+++ b/frontend/src/lib/components/TerminalTab.svelte
@@ -0,0 +1,548 @@
+<script lang="ts">
+	import { onDestroy, tick } from 'svelte';
+	import { auth } from '$lib/auth.svelte';
+
+	type Props = {
+		sandboxId: string;
+		isRunning: boolean;
+		visible?: boolean;
+	};
+
+	let { sandboxId, isRunning, visible = true }: Props = $props();
+
+	type ConnectionState = 'idle' | 'connecting' | 'connected' | 'disconnected' | 'error';
+
+	type SessionDisplay = {
+		id: number;
+		state: ConnectionState;
+		errorMessage: string | null;
+		ptyTag: string | null;
+		ptyPid: number | null;
+	};
+
+	type SessionInternal = {
+		// eslint-disable-next-line @typescript-eslint/no-explicit-any
+		term: any;
+		// eslint-disable-next-line @typescript-eslint/no-explicit-any
+		fitAddon: any;
+		ws: WebSocket | null;
+		resizeObserver: ResizeObserver | null;
+		fitDebounce: ReturnType<typeof setTimeout> | null;
+	};
+
+	let sessions = $state<SessionDisplay[]>([]);
+	const internals = new Map<number, SessionInternal>();
+	let activeSessionId = $state<number | null>(null);
+	let nextId = 0;
+	let cssLoaded = false;
+	let containerRef = $state<HTMLDivElement | undefined>(undefined);
+	let hasAutoCreated = false;
+
+	// eslint-disable-next-line @typescript-eslint/no-explicit-any
+	let TerminalClass: any = null;
+	// eslint-disable-next-line @typescript-eslint/no-explicit-any
+	let FitAddonClass: any = null;
+	// eslint-disable-next-line @typescript-eslint/no-explicit-any
+	let WebLinksAddonClass: any = null;
+
+	const activeSession = $derived(sessions.find(s => s.id === activeSessionId) ?? null);
+
+	const TERM_THEME = {
+		background: '#0a0c0b',
+		foreground: '#d0cdc6',
+		cursor: '#5e8c58',
+		cursorAccent: '#0a0c0b',
+		selectionBackground: 'rgba(94, 140, 88, 0.25)',
+		selectionForeground: '#eae7e2',
+		selectionInactiveBackground: 'rgba(94, 140, 88, 0.12)',
+		black: '#1a1e1c',
+		red: '#cf8172',
+		green: '#5e8c58',
+		yellow: '#d4a73c',
+		blue: '#5a9fd4',
+		magenta: '#b07ab8',
+		cyan: '#5aafb0',
+		white: '#d0cdc6',
+		brightBlack: '#454340',
+		brightRed: '#e09585',
+		brightGreen: '#89a785',
+		brightYellow: '#e0c070',
+		brightBlue: '#7ab8e0',
+		brightMagenta: '#c898cf',
+		brightCyan: '#7ac5c6',
+		brightWhite: '#eae7e2',
+	};
+
+	function getWsUrl(): string {
+		const proto = window.location.protocol === 'https:' ? 'wss:' : 'ws:';
+		const token = auth.token ? `?token=${encodeURIComponent(auth.token)}` : '';
+		return `${proto}//${window.location.host}/api/v1/sandboxes/${sandboxId}/pty${token}`;
+	}
+
+	function updateSession(id: number, updates: Partial<SessionDisplay>) {
+		const idx = sessions.findIndex(s => s.id === id);
+		if (idx === -1) return;
+		Object.assign(sessions[idx], updates);
+	}
+
+	async function loadModules() {
+		if (TerminalClass) return;
+		const [{ Terminal }, { FitAddon }, { WebLinksAddon }] = await Promise.all([
+			import('@xterm/xterm'),
+			import('@xterm/addon-fit'),
+			import('@xterm/addon-web-links')
+		]);
+		TerminalClass = Terminal;
+		FitAddonClass = FitAddon;
+		WebLinksAddonClass = WebLinksAddon;
+		if (!cssLoaded) {
+			await import('@xterm/xterm/css/xterm.css');
+			cssLoaded = true;
+		}
+	}
+
+	// Create first session when the tab becomes visible for the first time
+	$effect(() => {
+		if (visible && isRunning && !hasAutoCreated && containerRef) {
+			hasAutoCreated = true;
+			createSession();
+		}
+	});
+
+	// Re-fit active terminal when tab becomes visible (after being hidden)
+	$effect(() => {
+		if (visible && activeSessionId !== null) {
+			const int = internals.get(activeSessionId);
+			if (int?.fitAddon && int.term) {
+				requestAnimationFrame(() => {
+					int.fitAddon.fit();
+					int.term.focus();
+				});
+			}
+		}
+	});
+
+	async function createSession() {
+		if (!isRunning || !containerRef) return;
+		await loadModules();
+
+		const id = nextId++;
+
+		sessions = [...sessions, {
+			id,
+			state: 'connecting',
+			errorMessage: null,
+			ptyTag: null,
+			ptyPid: null,
+		}];
+		activeSessionId = id;
+
+		await tick();
+
+		const el = containerRef?.querySelector(`[data-session-id="${id}"]`) as HTMLDivElement | null;
+		if (!el) return;
+
+		const fitAddon = new FitAddonClass();
+		const term = new TerminalClass({
+			cursorBlink: true,
+			cursorStyle: 'bar',
+			cursorInactiveStyle: 'outline',
+			fontFamily: "'JetBrains Mono Variable', 'JetBrains Mono', monospace",
+			fontSize: 13,
+			lineHeight: 1.4,
+			letterSpacing: 0,
+			theme: TERM_THEME,
+			allowProposedApi: true,
+			scrollback: 5000,
+			convertEol: true,
+		});
+
+		term.loadAddon(fitAddon);
+		term.loadAddon(new WebLinksAddonClass());
+		term.open(el);
+
+		const internal: SessionInternal = {
+			term,
+			fitAddon,
+			ws: null,
+			resizeObserver: null,
+			fitDebounce: null,
+		};
+		internals.set(id, internal);
+
+		requestAnimationFrame(() => fitAddon.fit());
+
+		internal.resizeObserver = new ResizeObserver(() => {
+			if (internal.fitDebounce) clearTimeout(internal.fitDebounce);
+			internal.fitDebounce = setTimeout(() => {
+				if (internal.fitAddon && internal.term && activeSessionId === id) {
+					internal.fitAddon.fit();
+				}
+			}, 50);
+		});
+		internal.resizeObserver.observe(el);
+
+		// Register input/resize handlers ONCE per terminal (not per connection).
+		// Buffer keystrokes and flush every 100ms to reduce request volume.
+		// 100ms is imperceptible but coalesces paste
+		// operations and fast typing into single messages.
+		let inputBuffer = '';
+		let inputFlushTimer: ReturnType<typeof setTimeout> | null = null;
+
+		function flushInput() {
+			inputFlushTimer = null;
+			if (!inputBuffer) return;
+			const i = internals.get(id);
+			if (i?.ws?.readyState === WebSocket.OPEN) {
+				i.ws.send(JSON.stringify({ type: 'input', data: btoa(inputBuffer) }));
+			}
+			inputBuffer = '';
+		}
+
+		term.onData((data: string) => {
+			inputBuffer += data;
+			if (!inputFlushTimer) {
+				inputFlushTimer = setTimeout(flushInput, 100);
+			}
+		});
+
+		term.onResize(({ cols, rows }: { cols: number; rows: number }) => {
+			const i = internals.get(id);
+			if (i?.ws?.readyState === WebSocket.OPEN) {
+				i.ws.send(JSON.stringify({ type: 'resize', cols, rows }));
+			}
+		});
+
+		connectSession(id);
+	}
+
+	function connectSession(id: number, reconnectTag?: string) {
+		const int = internals.get(id);
+		if (!int) return;
+
+		const display = sessions.find(s => s.id === id);
+		const tag = reconnectTag ?? display?.ptyTag;
+
+		const ws = new WebSocket(getWsUrl());
+		int.ws = ws;
+		updateSession(id, { state: 'connecting', errorMessage: null });
+
+		ws.onopen = () => {
+			const { cols, rows } = int.term;
+			const msg: Record<string, unknown> = {
+				type: tag ? 'connect' : 'start',
+				cols,
+				rows,
+			};
+			if (tag) {
+				msg.tag = tag;
+			} else {
+				msg.cmd = '/bin/bash';
+				msg.envs = { TERM: 'xterm-256color' };
+			}
+			ws.send(JSON.stringify(msg));
+		};
+
+		ws.onmessage = (event) => {
+			try {
+				const msg = JSON.parse(event.data);
+				switch (msg.type) {
+					case 'started':
+						updateSession(id, {
+							state: 'connected',
+							ptyTag: msg.tag,
+							ptyPid: msg.pid ?? null,
+						});
+						if (activeSessionId === id) int.term.focus();
+						break;
+					case 'output':
+						if (msg.data) int.term.write(atob(msg.data));
+						break;
+					case 'exit':
+						closeSession(id);
+						break;
+					case 'error':
+						if (msg.fatal) {
+							updateSession(id, { state: 'error', errorMessage: msg.data || 'Connection error' });
+							int.term.write(`\r\n\x1b[38;2;207;129;114m${msg.data}\x1b[0m\r\n`);
+						}
+						break;
+					case 'ping':
+						ws.send(JSON.stringify({ type: 'pong' }));
+						break;
+				}
+			} catch {
+				// Ignore malformed messages
+			}
+		};
+
+		ws.onclose = () => {
+			const s = sessions.find(s => s.id === id);
+			if (s?.state === 'connected') {
+				updateSession(id, { state: 'disconnected' });
+			}
+		};
+
+		ws.onerror = () => {
+			updateSession(id, { state: 'error', errorMessage: 'Connection lost — check that the capsule is running' });
+		};
+	}
+
+	function switchTo(id: number) {
+		activeSessionId = id;
+		requestAnimationFrame(() => {
+			const int = internals.get(id);
+			if (int?.fitAddon && int.term) {
+				int.fitAddon.fit();
+				int.term.focus();
+			}
+		});
+	}
+
+	function closeSession(id: number) {
+		const idx = sessions.findIndex(s => s.id === id);
+		if (idx === -1) return;
+
+		const int = internals.get(id);
+		if (int) {
+			if (int.fitDebounce) clearTimeout(int.fitDebounce);
+			int.resizeObserver?.disconnect();
+			if (int.ws?.readyState === WebSocket.OPEN) {
+				int.ws.send(JSON.stringify({ type: 'kill' }));
+			}
+			int.ws?.close();
+			int.term?.dispose();
+			internals.delete(id);
+		}
+
+		sessions = sessions.filter(s => s.id !== id);
+
+		if (activeSessionId === id) {
+			if (sessions.length === 0) {
+				activeSessionId = null;
+			} else {
+				const newIdx = Math.min(idx, sessions.length - 1);
+				switchTo(sessions[newIdx].id);
+			}
+		}
+	}
+
+	function reconnectSession(id: number) {
+		const int = internals.get(id);
+		const display = sessions.find(s => s.id === id);
+		if (!int || !display) return;
+		int.ws?.close();
+		connectSession(id, display.ptyTag ?? undefined);
+	}
+
+	function statusDot(state: ConnectionState): string {
+		switch (state) {
+			case 'connected': return 'bg-[var(--color-accent)]';
+			case 'connecting': return 'bg-[var(--color-text-tertiary)] animate-pulse';
+			case 'error': return 'bg-[var(--color-red)]';
+			default: return 'bg-[var(--color-text-muted)]';
+		}
+	}
+
+	onDestroy(() => {
+		for (const [, int] of internals) {
+			if (int.fitDebounce) clearTimeout(int.fitDebounce);
+			int.resizeObserver?.disconnect();
+			int.ws?.close();
+			int.term?.dispose();
+		}
+		internals.clear();
+	});
+</script>
+
+<style>
+	.terminal-container :global(.xterm) {
+		padding: 12px 4px 12px 16px;
+		height: 100%;
+	}
+	.terminal-container :global(.xterm-viewport) {
+		scrollbar-width: thin;
+		scrollbar-color: rgba(94, 140, 88, 0.18) transparent;
+	}
+	.terminal-container :global(.xterm-viewport::-webkit-scrollbar) {
+		width: 6px;
+	}
+	.terminal-container :global(.xterm-viewport::-webkit-scrollbar-track) {
+		background: transparent;
+	}
+	.terminal-container :global(.xterm-viewport::-webkit-scrollbar-thumb) {
+		background: rgba(94, 140, 88, 0.18);
+		border-radius: 3px;
+	}
+	.terminal-container :global(.xterm-viewport::-webkit-scrollbar-thumb:hover) {
+		background: rgba(94, 140, 88, 0.32);
+	}
+	.tab-scroll {
+		scrollbar-width: none;
+	}
+	.tab-scroll::-webkit-scrollbar {
+		display: none;
+	}
+</style>
+
+<div class="flex flex-1 flex-col min-h-0">
+	{#if !isRunning}
+		<div class="flex flex-1 items-center justify-center">
+			<div class="flex flex-col items-center gap-4 text-center">
+				<div class="flex h-14 w-14 items-center justify-center rounded-[var(--radius-card)] border border-[var(--color-border-mid)] bg-[var(--color-bg-2)]" style="animation: iconFloat 3s ease-in-out infinite">
+					<svg class="text-[var(--color-text-muted)]" width="24" height="24" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="1.5" stroke-linecap="round" stroke-linejoin="round" aria-hidden="true">
+						<polyline points="4 17 10 11 4 5" /><line x1="12" y1="19" x2="20" y2="19" />
+					</svg>
+				</div>
+				<div class="flex flex-col gap-1">
+					<span class="text-ui font-medium text-[var(--color-text-secondary)]">Terminal unavailable</span>
+					<span class="text-meta text-[var(--color-text-muted)]">Start the capsule to connect</span>
+				</div>
+			</div>
+		</div>
+	{:else}
+		<!-- Session tab bar -->
+		<div class="flex items-center border-b border-[var(--color-border)] bg-[var(--color-bg-1)]">
+			<div class="tab-scroll flex flex-1 items-center overflow-x-auto">
+				{#each sessions as session (session.id)}
+					<!-- svelte-ignore a11y_no_static_element_interactions -->
+					<div
+						onclick={() => switchTo(session.id)}
+						onkeydown={(e) => { if (e.key === 'Enter' || e.key === ' ') switchTo(session.id); }}
+						role="tab"
+						tabindex="0"
+						aria-selected={session.id === activeSessionId}
+						class="group relative flex shrink-0 cursor-pointer items-center gap-2 border-r border-[var(--color-border)] px-3.5 py-2 text-label transition-colors
+							{session.id === activeSessionId
+								? 'bg-[var(--color-bg-0)] text-[var(--color-text-primary)]'
+								: 'bg-[var(--color-bg-1)] text-[var(--color-text-tertiary)] hover:bg-[var(--color-bg-2)] hover:text-[var(--color-text-secondary)]'}"
+					>
+						{#if session.id === activeSessionId}
+							<span class="absolute inset-x-0 bottom-0 h-px bg-[var(--color-accent)]"></span>
+						{/if}
+
+						<span class="h-[6px] w-[6px] shrink-0 rounded-full {statusDot(session.state)}"></span>
+
+						<span class="font-mono">
+							bash
+							{#if session.ptyPid}
+								<span class="text-[var(--color-text-muted)]">:{session.ptyPid}</span>
+							{/if}
+						</span>
+
+						<button
+							onclick={(e) => { e.stopPropagation(); closeSession(session.id); }}
+							class="ml-0.5 flex h-4 w-4 items-center justify-center rounded-[2px] text-[var(--color-text-muted)] opacity-0 transition-all group-hover:opacity-100 hover:bg-[var(--color-bg-4)] hover:text-[var(--color-text-secondary)]"
+							title="Close session"
+						>
+							<svg width="10" height="10" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2.5" stroke-linecap="round" stroke-linejoin="round">
+								<line x1="18" y1="6" x2="6" y2="18" /><line x1="6" y1="6" x2="18" y2="18" />
+							</svg>
+						</button>
+					</div>
+				{/each}
+			</div>
+
+			<button
+				onclick={createSession}
+				class="flex shrink-0 items-center gap-1.5 px-3 py-2 text-label font-medium text-[var(--color-text-muted)] transition-colors hover:bg-[var(--color-bg-2)] hover:text-[var(--color-text-secondary)]"
+				title="New terminal session"
+			>
+				<svg width="13" height="13" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round">
+					<line x1="12" y1="5" x2="12" y2="19" /><line x1="5" y1="12" x2="19" y2="12" />
+				</svg>
+			</button>
+		</div>
+
+		<!-- Status bar for active session -->
+		{#if activeSession}
+			<div class="flex items-center justify-between border-b border-[var(--color-border)] bg-[var(--color-bg-1)] px-4 py-1.5">
+				<div class="flex items-center gap-2.5">
+					{#if activeSession.state === 'connected'}
+						<span class="flex items-center gap-1.5 rounded-[3px] border border-[var(--color-accent)]/25 bg-[var(--color-accent-glow-mid)] px-2 py-0.5 text-badge font-semibold uppercase tracking-[0.05em] text-[var(--color-accent-mid)]">
+							<span class="relative flex h-[5px] w-[5px] shrink-0">
+								<span class="animate-status-ping absolute inline-flex h-full w-full rounded-full bg-[var(--color-accent)]"></span>
+								<span class="relative inline-flex h-[5px] w-[5px] rounded-full bg-[var(--color-accent)]"></span>
+							</span>
+							Live
+						</span>
+					{:else if activeSession.state === 'connecting'}
+						<span class="flex items-center gap-1.5 rounded-[3px] border border-[var(--color-border)] bg-[var(--color-bg-2)] px-2 py-0.5 text-badge font-semibold uppercase tracking-[0.05em] text-[var(--color-text-tertiary)]">
+							<svg class="animate-spin" width="10" height="10" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2.5"><path d="M21 12a9 9 0 1 1-6.219-8.56" /></svg>
+							Connecting
+						</span>
+					{:else if activeSession.state === 'error'}
+						<span class="flex items-center gap-1.5 rounded-[3px] border border-[var(--color-red)]/25 bg-[var(--color-red)]/8 px-2 py-0.5 text-badge font-semibold uppercase tracking-[0.05em] text-[var(--color-red)]">
+							Error
+						</span>
+						{#if activeSession.errorMessage}
+							<span class="text-meta text-[var(--color-red)]/80">{activeSession.errorMessage}</span>
+						{/if}
+					{:else if activeSession.state === 'disconnected'}
+						<span class="flex items-center gap-1.5 rounded-[3px] border border-[var(--color-border)] bg-[var(--color-bg-2)] px-2 py-0.5 text-badge font-semibold uppercase tracking-[0.05em] text-[var(--color-text-muted)]">
+							Disconnected
+						</span>
+					{/if}
+
+					{#if activeSession.ptyTag}
+						<span class="h-3 w-px bg-[var(--color-border)]"></span>
+						<span class="font-mono text-badge text-[var(--color-text-muted)]">{activeSession.ptyTag}</span>
+					{/if}
+				</div>
+
+				<div class="flex items-center gap-2">
+					{#if activeSession.state === 'disconnected' || activeSession.state === 'error'}
+						{#if activeSession.ptyTag}
+							<button
+								onclick={() => activeSession && reconnectSession(activeSession.id)}
+								class="flex items-center gap-1.5 rounded-[var(--radius-button)] border border-[var(--color-border)] bg-[var(--color-bg-3)] px-2.5 py-1 text-badge font-semibold uppercase tracking-[0.05em] text-[var(--color-text-secondary)] transition-colors hover:bg-[var(--color-bg-4)] hover:text-[var(--color-text-primary)]"
+							>
+								<svg width="11" height="11" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round">
+									<polyline points="1 4 1 10 7 10" /><polyline points="23 20 23 14 17 14" />
+									<path d="M20.49 9A9 9 0 0 0 5.64 5.64L1 10m22 4l-4.64 4.36A9 9 0 0 1 3.51 15" />
+								</svg>
+								Reconnect
+							</button>
+						{/if}
+					{/if}
+				</div>
+			</div>
+		{/if}
+
+		<!-- Terminal surfaces -->
+		<div class="relative flex-1 min-h-0" bind:this={containerRef}>
+			{#each sessions as session (session.id)}
+				<div
+					data-session-id={session.id}
+					class="terminal-container absolute inset-0 bg-[var(--color-bg-0)]"
+					style:display={session.id === activeSessionId ? 'block' : 'none'}
+				></div>
+			{/each}
+
+			{#if sessions.length === 0}
+				<div class="flex h-full items-center justify-center">
+					<div class="flex flex-col items-center gap-4 text-center">
+						<div class="flex h-14 w-14 items-center justify-center rounded-[var(--radius-card)] border border-[var(--color-border-mid)] bg-[var(--color-bg-2)]" style="animation: iconFloat 3s ease-in-out infinite">
+							<svg class="text-[var(--color-text-muted)]" width="24" height="24" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="1.5" stroke-linecap="round" stroke-linejoin="round" aria-hidden="true">
+								<polyline points="4 17 10 11 4 5" /><line x1="12" y1="19" x2="20" y2="19" />
+							</svg>
+						</div>
+						<div class="flex flex-col gap-1">
+							<span class="text-ui font-medium text-[var(--color-text-secondary)]">No active sessions</span>
+							<span class="text-meta text-[var(--color-text-muted)]">All terminal sessions have been closed</span>
+						</div>
+						<button
+							onclick={createSession}
+							class="mt-1 flex items-center gap-2 rounded-[var(--radius-button)] border border-[var(--color-accent)]/30 bg-[var(--color-accent-glow-mid)] px-4 py-2 text-meta font-semibold text-[var(--color-accent-bright)] transition-all duration-150 hover:border-[var(--color-accent)]/50 hover:bg-[var(--color-accent)]/15 hover:-translate-y-px active:translate-y-0"
+						>
+							<svg width="13" height="13" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round">
+								<line x1="12" y1="5" x2="12" y2="19" /><line x1="5" y1="12" x2="19" y2="12" />
+							</svg>
+							New session
+						</button>
+					</div>
+				</div>
+			{/if}
+		</div>
+	{/if}
+</div>
diff --git a/frontend/src/routes/dashboard/capsules/[id]/+page.svelte b/frontend/src/routes/dashboard/capsules/[id]/+page.svelte
index 5f2e192..3e65c74 100644
--- a/frontend/src/routes/dashboard/capsules/[id]/+page.svelte
+++ b/frontend/src/routes/dashboard/capsules/[id]/+page.svelte
@@ -4,6 +4,7 @@
 	import { goto } from '$app/navigation';
 	import { getCapsule, type Capsule } from '$lib/api/capsules';
 	import FilesTab from '$lib/components/FilesTab.svelte';
+	import TerminalTab from '$lib/components/TerminalTab.svelte';
 	import {
 		fetchSandboxMetrics,
 		METRIC_RANGES,
@@ -18,9 +19,21 @@
 	let capsuleLoading = $state(true);
 	let capsuleError = $state<string | null>(null);
 
-	type Tab = 'metrics' | 'files';
+	type Tab = 'metrics' | 'files' | 'terminal';
+	const VALID_TABS: Tab[] = ['metrics', 'files', 'terminal'];
 	let activeTab = $state<Tab>('metrics');
 
+	function setTab(tab: Tab) {
+		activeTab = tab;
+		const url = new URL(window.location.href);
+		if (tab === 'metrics') {
+			url.searchParams.delete('tab');
+		} else {
+			url.searchParams.set('tab', tab);
+		}
+		history.replaceState(null, '', url.toString());
+	}
+
 	let range = $state<MetricRange>('10m');
 	let points = $state<MetricPoint[]>([]);
 	let metricsLoading = $state(true);
@@ -304,7 +317,14 @@
 	});
 
 	onMount(async () => {
-		const urlRange = new URLSearchParams(window.location.search).get('range');
+		const params = new URLSearchParams(window.location.search);
+
+		const urlTab = params.get('tab') as Tab | null;
+		if (urlTab && VALID_TABS.includes(urlTab)) {
+			activeTab = urlTab;
+		}
+
+		const urlRange = params.get('range');
 		if (urlRange && METRIC_RANGES.includes(urlRange as MetricRange)) {
 			range = urlRange as MetricRange;
 		}
@@ -407,7 +427,7 @@
 	<!-- Tabs (matches Templates page pattern) -->
 	<div class="mt-5 flex gap-0 border-b border-[var(--color-border)] px-7">
 			<button
-				onclick={() => (activeTab = 'metrics')}
+				onclick={() => setTab('metrics')}
 				class="flex items-center gap-2 border-b-2 px-4 py-2.5 text-ui font-medium transition-colors duration-150
 					{activeTab === 'metrics'
 						? 'border-[var(--color-accent)] text-[var(--color-accent-bright)]'
@@ -420,7 +440,7 @@
 			</button>
 
 			<button
-				onclick={() => (activeTab = 'files')}
+				onclick={() => setTab('files')}
 				class="flex items-center gap-2 border-b-2 px-4 py-2.5 text-ui font-medium transition-colors duration-150
 					{activeTab === 'files'
 						? 'border-[var(--color-accent)] text-[var(--color-accent-bright)]'
@@ -431,9 +451,26 @@
 				</svg>
 				Files
 			</button>
+
+			<button
+				onclick={() => setTab('terminal')}
+				class="flex items-center gap-2 border-b-2 px-4 py-2.5 text-ui font-medium transition-colors duration-150
+					{activeTab === 'terminal'
+						? 'border-[var(--color-accent)] text-[var(--color-accent-bright)]'
+						: 'border-transparent text-[var(--color-text-secondary)] hover:text-[var(--color-text-primary)]'}"
+			>
+				<svg width="14" height="14" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" aria-hidden="true">
+					<polyline points="4 17 10 11 4 5" /><line x1="12" y1="19" x2="20" y2="19" />
+				</svg>
+				Terminal
+			</button>
 	</div>
 
-	<!-- Stats tab content -->
+	<!-- Tab content -->
+	<!-- Terminal stays mounted so sessions survive tab switches -->
+	<div class="flex flex-1 min-h-0" style:display={activeTab === 'terminal' ? 'flex' : 'none'}>
+		<TerminalTab sandboxId={sandboxId} isRunning={capsule.status === 'running'} visible={activeTab === 'terminal'} />
+	</div>
 	{#if activeTab === 'files'}
 		<div class="anim-in flex flex-1 min-h-0" style="animation-delay: 0.05s">
 			<FilesTab sandboxId={sandboxId} isRunning={capsule.status === 'running'} />
diff --git a/frontend/vite.config.ts b/frontend/vite.config.ts
index 350070b..76405cc 100644
--- a/frontend/vite.config.ts
+++ b/frontend/vite.config.ts
@@ -8,7 +8,8 @@ export default defineConfig({
 		proxy: {
 			'/api': {
 				target: 'http://localhost:8080',
-				rewrite: (path) => path.replace(/^\/api/, '')
+				rewrite: (path) => path.replace(/^\/api/, ''),
+				ws: true
 			}
 		}
 	}
diff --git a/internal/api/middleware_auth.go b/internal/api/middleware_auth.go
index c8e2056..5c00c25 100644
--- a/internal/api/middleware_auth.go
+++ b/internal/api/middleware_auth.go
@@ -38,9 +38,14 @@ func requireAPIKeyOrJWT(queries *db.Queries, jwtSecret []byte) func(http.Handler
 				return
 			}
 
-			// Try JWT bearer token.
+			// Try JWT bearer token (header or query param for WebSocket).
+			tokenStr := ""
 			if header := r.Header.Get("Authorization"); strings.HasPrefix(header, "Bearer ") {
-				tokenStr := strings.TrimPrefix(header, "Bearer ")
+				tokenStr = strings.TrimPrefix(header, "Bearer ")
+			} else if t := r.URL.Query().Get("token"); t != "" {
+				tokenStr = t
+			}
+			if tokenStr != "" {
 				claims, err := auth.VerifyJWT(jwtSecret, tokenStr)
 				if err != nil {
 					slog.Warn("jwt auth failed", "error", err, "ip", r.RemoteAddr)