diff --git a/src/vs/workbench/contrib/chat/browser/chatViewPane.ts b/src/vs/workbench/contrib/chat/browser/chatViewPane.ts
index f47724e681e..2832d39b805 100644
--- a/src/vs/workbench/contrib/chat/browser/chatViewPane.ts
+++ b/src/vs/workbench/contrib/chat/browser/chatViewPane.ts
@@ -473,6 +473,8 @@ export class ChatViewPane extends ViewPane implements IViewWelcomeDelegate {
 
 	//#region Chat Control
 
+	private static readonly MIN_CHAT_WIDGET_HEIGHT = 120;
+
 	private _widget!: ChatWidget;
 	get widget(): ChatWidget { return this._widget; }
 
@@ -779,9 +781,15 @@ export class ChatViewPane extends ViewPane implements IViewWelcomeDelegate {
 		}
 
 		// Ensure visibility is in sync before we layout
-		this.updateSessionsControlVisibility();
+		const { visible: sessionsContainerVisible } = this.updateSessionsControlVisibility();
+		if (!sessionsContainerVisible) {
+			return { heightReduction: 0, widthReduction: 0 };
+		}
 
-		const availableSessionsHeight = height - this.sessionsTitleContainer.offsetHeight - this.sessionsLinkContainer.offsetHeight;
+		let availableSessionsHeight = height - this.sessionsTitleContainer.offsetHeight - this.sessionsLinkContainer.offsetHeight;
+		if (this.sessionsViewerOrientation === AgentSessionsViewerOrientation.Stacked) {
+			availableSessionsHeight -= ChatViewPane.MIN_CHAT_WIDGET_HEIGHT; // always reserve some space for chat input
+		}
 
 		// Show as sidebar
 		if (this.sessionsViewerOrientation === AgentSessionsViewerOrientation.SideBySide) {