diff --git a/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/executeStrategy/strategyHelpers.ts b/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/executeStrategy/strategyHelpers.ts
index 5d5682c2e43..c372a8c78af 100644
--- a/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/executeStrategy/strategyHelpers.ts
+++ b/src/vs/workbench/contrib/terminalContrib/chatAgentTools/browser/executeStrategy/strategyHelpers.ts
@@ -134,44 +134,59 @@ function _stripCommandEchoAndPromptOnce(output: string, commandLine: string, log
 	const maxTrailingPromptLines = 2;
 	while (endIndex > startIndex) {
 		const line = lines[endIndex - 1].trimEnd();
-		if (
-			line.length === 0 ||
-			(trailingStrippedCount < maxTrailingPromptLines && (
-				// Bash/zsh prompt: user@host:path ending with $ or #
-				// e.g., "user@host:~/src $ " or "root@server:/var/log# "
-				(!knownPrompt || isUnixAt) && /^\s*\w+@[\w.-]+:.*[#$]\s*$/.test(line) ||
-				// Prompt without @: hostname:path user$ or hostname:path user#
-				// e.g., "dsm12-be220-abc:testWorkspace runner$"
-				(!knownPrompt || isUnixHost) && /^\s*[\w.-]+:\S.*\s\w+[#$]\s*$/.test(line) ||
-				// Wrapped prompt fragment ending with $ or # (e.g. "er$", "ts/testWorkspace$")
-				// These appear when a prompt wraps across terminal columns.
-				(!knownPrompt || isUnix) && /^\s*[\w/.-]+[#$]\s*$/.test(line) ||
-				// Bracketed prompt start: [ hostname:/path or [ user@host:/path (wrapped prompt first line)
-				// e.g., "[ alex@MacBook-Pro:/Users/alex/src/vscode4/extensions/vscode-api-test"
-				// e.g., "[W007DV9PF9-1:~/vss/_work/1/s/extensions/vscode-api-tests/testWorkspace] cloudte"
-				(!knownPrompt || isUnix) && /^\[\s*[\w.-]+(@[\w.-]+)?:[~\/]/.test(line) ||
-				// Wrapped prompt continuation: user@host:path or hostname:path (no trailing $)
-				// Only matched after we've already stripped a prompt fragment below.
-				// e.g., "cloudtest@host:/mnt/vss/.../vscode-api-tes" or "dsm12-abc:testWorkspace runn"
-				(!knownPrompt || isUnix) && trailingStrippedCount > 0 && /^\s*[\w][-\w.]*(@[\w.-]+)?:\S/.test(line) ||
-				// Bracketed prompt end: ...] $ or ...] #
-				// e.g., "s/testWorkspace (main**) ] $ "
-				(!knownPrompt || isUnix) && /\]\s*[#$]\s*$/.test(line) ||
-				// PowerShell prompt: PS C:\path>
-				(!knownPrompt || isPowerShell) && /^PS\s+[A-Z]:\\.*>\s*$/.test(line) ||
-				// Windows cmd prompt: C:\path>
-				(!knownPrompt || isCmd) && /^[A-Z]:\\.*>\s*$/.test(line) ||
-				// Starship prompt character
-				// allow-any-unicode-next-line
-				(!knownPrompt || isStarship) && /\u276f\s*$/.test(line) ||
-				// Python REPL prompt
-				(!knownPrompt || isPython) && /^>>>\s*$/.test(line)
-			))
-		) {
+		if (line.length === 0) {
 			endIndex--;
-			if (line.length > 0) {
-				trailingStrippedCount++;
-			}
+			continue;
+		}
+		if (trailingStrippedCount >= maxTrailingPromptLines) {
+			break;
+		}
+
+		// Complete (self-contained) prompt patterns: these have a recognizable
+		// prefix and a trailing marker ($, #, >). After stripping one complete
+		// prompt line, stop — lines above it are command output, not wrapped
+		// prompt continuation lines.
+		const isCompletePrompt =
+			// Bash/zsh: user@host:path ending with $ or #
+			// e.g., "user@host:~/src $ " or "root@server:/var/log# "
+			((!knownPrompt || isUnixAt) && /^\s*\w+@[\w.-]+:.*[#$]\s*$/.test(line)) ||
+			// hostname:path user$ or hostname:path user#
+			// e.g., "dsm12-be220-abc:testWorkspace runner$"
+			((!knownPrompt || isUnixHost) && /^\s*[\w.-]+:\S.*\s\w+[#$]\s*$/.test(line)) ||
+			// PowerShell: PS C:\path>
+			((!knownPrompt || isPowerShell) && /^PS\s+[A-Z]:\\.*>\s*$/.test(line)) ||
+			// Windows cmd: C:\path>
+			((!knownPrompt || isCmd) && /^[A-Z]:\\.*>\s*$/.test(line)) ||
+			// Starship prompt character
+			// allow-any-unicode-next-line
+			((!knownPrompt || isStarship) && /\u276f\s*$/.test(line)) ||
+			// Python REPL
+			((!knownPrompt || isPython) && /^>>>\s*$/.test(line));
+
+		// Fragment/partial prompt patterns: these represent pieces of a prompt
+		// that wraps across multiple terminal lines due to column width.
+		const isPromptFragment =
+			// Wrapped fragment ending with $ or # (e.g. "er$", "ts/testWorkspace$")
+			((!knownPrompt || isUnix) && /^\s*[\w/.-]+[#$]\s*$/.test(line)) ||
+			// Bracketed prompt start: [ hostname:/path or [ user@host:/path
+			// e.g., "[ alex@MacBook-Pro:/Users/alex/src/vscode4/extensions/vscode-api-test"
+			// e.g., "[W007DV9PF9-1:~/vss/_work/1/s/extensions/vscode-api-tests/testWorkspace] cloudte"
+			((!knownPrompt || isUnix) && /^\[\s*[\w.-]+(@[\w.-]+)?:[~\/]/.test(line)) ||
+			// Wrapped continuation: user@host:path or hostname:path (no trailing $)
+			// Only matched after we've already stripped a prompt fragment below.
+			// e.g., "cloudtest@host:/mnt/vss/.../vscode-api-tes" or "dsm12-abc:testWorkspace runn"
+			((!knownPrompt || isUnix) && trailingStrippedCount > 0 && /^\s*[\w][-\w.]*(@[\w.-]+)?:\S/.test(line)) ||
+			// Bracketed prompt end: ...] $ or ...] #
+			// e.g., "s/testWorkspace (main**) ] $ "
+			((!knownPrompt || isUnix) && /\]\s*[#$]\s*$/.test(line));
+
+		if (isCompletePrompt) {
+			endIndex--;
+			trailingStrippedCount++;
+			break; // Complete prompt = nothing above can be prompt wrap
+		} else if (isPromptFragment) {
+			endIndex--;
+			trailingStrippedCount++;
 		} else {
 			break;
 		}
diff --git a/src/vs/workbench/contrib/terminalContrib/chatAgentTools/test/browser/strategyHelpers.test.ts b/src/vs/workbench/contrib/terminalContrib/chatAgentTools/test/browser/strategyHelpers.test.ts
index 71c0d7d9bab..8e22ff4a36e 100644
--- a/src/vs/workbench/contrib/terminalContrib/chatAgentTools/test/browser/strategyHelpers.test.ts
+++ b/src/vs/workbench/contrib/terminalContrib/chatAgentTools/test/browser/strategyHelpers.test.ts
@@ -457,4 +457,108 @@ suite('stripCommandEchoAndPrompt', () => {
 			''
 		);
 	});
+
+	// --- Adversarial tests: output that looks like prompts ---
+	// These verify that realistic output is NOT falsely stripped.
+
+	suite('adversarial: output resembling prompts', () => {
+
+		test('output ending with $ is preserved (not confused with wrapped prompt)', () => {
+			const output = [
+				'user@host:~ $ echo \'test$\'',
+				'test$',
+				'user@host:~ $',
+			].join('\n');
+
+			// 'user@host:~ $' is a complete prompt → stripped and loop stops.
+			// 'test$' is preserved because nothing above a complete prompt is stripped.
+			assert.strictEqual(
+				stripCommandEchoAndPrompt(output, 'echo \'test$\''),
+				'test$'
+			);
+		});
+
+		test('output ending with # is preserved (not confused with wrapped prompt)', () => {
+			const output = [
+				'user@host:~ $ echo \'div#\'',
+				'div#',
+				'user@host:~ $',
+			].join('\n');
+
+			assert.strictEqual(
+				stripCommandEchoAndPrompt(output, 'echo \'div#\''),
+				'div#'
+			);
+		});
+
+		test('bracketed log output [tag:~/path] is preserved', () => {
+			const output = [
+				'user@host:~ $ node build.js',
+				'[build:~/dist] compiled successfully',
+				'user@host:~ $',
+			].join('\n');
+
+			assert.strictEqual(
+				stripCommandEchoAndPrompt(output, 'node build.js'),
+				'[build:~/dist] compiled successfully'
+			);
+		});
+
+		test('output containing user@host:path ending with # is preserved', () => {
+			const output = [
+				'user@host:~ $ cat /etc/motd',
+				'admin@server:~/docs #',
+				'user@host:~ $',
+			].join('\n');
+
+			assert.strictEqual(
+				stripCommandEchoAndPrompt(output, 'cat /etc/motd'),
+				'admin@server:~/docs #'
+			);
+		});
+
+		test('output ending with ] $ is preserved', () => {
+			const output = [
+				'user@host:~ $ echo \'values: [a, b] $\'',
+				'values: [a, b] $',
+				'user@host:~ $',
+			].join('\n');
+
+			assert.strictEqual(
+				stripCommandEchoAndPrompt(output, 'echo \'values: [a, b] $\''),
+				'values: [a, b] $'
+			);
+		});
+
+		test('multiple prompt-like output lines are all preserved', () => {
+			// Complete prompt at the bottom stops stripping immediately,
+			// so all prompt-like output lines above are preserved.
+			const output = [
+				'user@host:~ $ cat prompts.txt',
+				'admin@server:~/docs $',
+				'root@box:/var/log #',
+				'test@dev:~ $',
+				'user@host:~ $',
+			].join('\n');
+
+			assert.strictEqual(
+				stripCommandEchoAndPrompt(output, 'cat prompts.txt'),
+				'admin@server:~/docs $\nroot@box:/var/log #\ntest@dev:~ $'
+			);
+		});
+
+		test('multi-line output where last line has $ after non-word chars is preserved', () => {
+			const output = [
+				'user@host:~ $ ./report.sh',
+				'Revenue: 1000',
+				'Currency: USD$',
+				'user@host:~ $',
+			].join('\n');
+
+			assert.strictEqual(
+				stripCommandEchoAndPrompt(output, './report.sh'),
+				'Revenue: 1000\nCurrency: USD$'
+			);
+		});
+	});
 });