diff --git a/src/vs/workbench/contrib/chat/browser/widget/chatContentParts/chatThinkingContentPart.ts b/src/vs/workbench/contrib/chat/browser/widget/chatContentParts/chatThinkingContentPart.ts
index c4d66671c21..8b780c2a924 100644
--- a/src/vs/workbench/contrib/chat/browser/widget/chatContentParts/chatThinkingContentPart.ts
+++ b/src/vs/workbench/contrib/chat/browser/widget/chatContentParts/chatThinkingContentPart.ts
@@ -7,7 +7,7 @@ import { $, clearNode, getWindow, hide, scheduleAtNextAnimationFrame } from '../
 import { alert } from '../../../../../../base/browser/ui/aria/aria.js';
 import { DomScrollableElement } from '../../../../../../base/browser/ui/scrollbar/scrollableElement.js';
 import { ScrollbarVisibility } from '../../../../../../base/common/scrollable.js';
-import { IChatMarkdownContent, IChatThinkingPart, IChatToolInvocation, IChatToolInvocationSerialized } from '../../../common/chatService/chatService.js';
+import { IChatMarkdownContent, IChatTerminalToolInvocationData, IChatThinkingPart, IChatToolInvocation, IChatToolInvocationSerialized } from '../../../common/chatService/chatService.js';
 import { IChatContentPartRenderContext, IChatContentPart } from './chatContentParts.js';
 import { IChatRendererContent } from '../../../common/model/chatViewModel.js';
 import { ChatConfiguration, ThinkingDisplayMode } from '../../../common/constants.js';
@@ -228,6 +228,7 @@ export class ChatThinkingContentPart extends ChatCollapsibleContentPart implemen
 	private workingSpinnerLabel: HTMLElement | undefined;
 	private availableMessagesByCategory = new Map<WorkingMessageCategory, string[]>();
 	private readonly toolWrappersByCallId = new Map<string, HTMLElement>();
+	private readonly toolIconsByCallId = new Map<string, HTMLElement>();
 	private readonly toolLabelsByCallId = new Map<string, string>();
 	private readonly toolDisposables = this._register(new DisposableMap<string, DisposableStore>());
 	private readonly ownedToolParts = new Map<string, IDisposable>();
@@ -1224,6 +1225,7 @@ ${this.hookCount > 0 ? `EXAMPLES WITH BLOCKED CONTENT (from hooks):
 		const wrapper = this.toolWrappersByCallId.get(toolCallId);
 		if (wrapper) {
 			this.toolWrappersByCallId.delete(toolCallId);
+			this.toolIconsByCallId.delete(toolCallId);
 		}
 
 		this.appendedItemCount = Math.max(0, this.appendedItemCount - 1);
@@ -1342,6 +1344,7 @@ ${this.hookCount > 0 ? `EXAMPLES WITH BLOCKED CONTENT (from hooks):
 		if (wrapper) {
 			wrapper.remove();
 			this.toolWrappersByCallId.delete(toolCallId);
+			this.toolIconsByCallId.delete(toolCallId);
 		}
 
 		// make sure to remove any lazy item as well
@@ -1470,6 +1473,18 @@ ${this.hookCount > 0 ? `EXAMPLES WITH BLOCKED CONTENT (from hooks):
 					// queue item to be removed if it was streaming and presentation is hidden
 					if (isStreaming && currentState.type !== IChatToolInvocation.StateKind.Streaming) {
 						isStreaming = false;
+
+						// Update terminal tool icon based on sandbox wrapping state
+						const termData = toolInvocationOrMarkdown.toolSpecificData as IChatTerminalToolInvocationData | undefined;
+						if (termData?.kind === 'terminal') {
+							const iconEl = this.toolIconsByCallId.get(toolCallId);
+							if (iconEl) {
+								const newIcon = termData.commandLine?.isSandboxWrapped ? Codicon.terminalSecure : Codicon.terminal;
+								iconEl.className = 'chat-thinking-icon';
+								iconEl.classList.add(...ThemeIcon.asClassNameArray(newIcon));
+							}
+						}
+
 						if (toolInvocationOrMarkdown.presentation === 'hidden') {
 							this.pendingRemovals.push({ toolCallId: toolInvocationOrMarkdown.toolCallId, toolLabel: currentToolLabel });
 							this.schedulePendingRemovalsFlush();
@@ -1628,6 +1643,7 @@ ${this.hookCount > 0 ? `EXAMPLES WITH BLOCKED CONTENT (from hooks):
 		const isToolInvocation = toolInvocationOrMarkdown && (toolInvocationOrMarkdown.kind === 'toolInvocation' || toolInvocationOrMarkdown.kind === 'toolInvocationSerialized');
 		if (isToolInvocation && toolInvocationOrMarkdown.toolCallId) {
 			this.toolWrappersByCallId.set(toolInvocationOrMarkdown.toolCallId, itemWrapper);
+			this.toolIconsByCallId.set(toolInvocationOrMarkdown.toolCallId, iconElement);
 		}
 
 		this.appendToWrapper(itemWrapper);
diff --git a/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/tools/runInTerminalTool.ts b/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/tools/runInTerminalTool.ts
index 4739f7e27c9..3d7614d54e6 100644
--- a/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/tools/runInTerminalTool.ts
+++ b/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/tools/runInTerminalTool.ts
@@ -274,7 +274,7 @@ export async function createRunInTerminalToolData(
 		modelDescription,
 		userDescription: localize('runInTerminalTool.userDescription', 'Run commands in the terminal'),
 		source: ToolDataSource.Internal,
-		icon: isSandboxEnabled ? Codicon.terminalSecure : Codicon.terminal,
+		icon: Codicon.terminal,
 		inputSchema: {
 			type: 'object',
 			properties: {