diff --git a/internal/ui/message_items.go b/internal/ui/message_items.go
index b2bfade2..20757761 100644
--- a/internal/ui/message_items.go
+++ b/internal/ui/message_items.go
@@ -270,14 +270,18 @@ func (m *StreamingBashOutputItem) Render(width int) string {
 		parts = append(parts, headerStyle.Render(fmt.Sprintf("▸ %s", m.command)))
 	}
 
+	const lineIndent = "  "
+	lineWidth := width - len(lineIndent)
+
 	// Stdout lines
 	if len(m.stdoutLines) > 0 {
 		outputStyle := lipgloss.NewStyle().
 			Foreground(theme.Text).
 			Background(theme.CodeBg).
-			PaddingLeft(2)
+			PaddingLeft(1).
+			Width(lineWidth)
 		for _, line := range m.stdoutLines {
-			parts = append(parts, outputStyle.Render(line))
+			parts = append(parts, lineIndent+outputStyle.Render(line))
 		}
 	}
 
@@ -286,9 +290,10 @@ func (m *StreamingBashOutputItem) Render(width int) string {
 		stderrStyle := lipgloss.NewStyle().
 			Foreground(theme.Error).
 			Background(theme.CodeBg).
-			PaddingLeft(2)
+			PaddingLeft(1).
+			Width(lineWidth)
 		for _, line := range m.stderrLines {
-			parts = append(parts, stderrStyle.Render(line))
+			parts = append(parts, lineIndent+stderrStyle.Render(line))
 		}
 	}
 
diff --git a/internal/ui/model.go b/internal/ui/model.go
index 56facd51..aa01f61e 100644
--- a/internal/ui/model.go
+++ b/internal/ui/model.go
@@ -1492,16 +1492,18 @@ func (m *AppModel) Update(msg tea.Msg) (tea.Model, tea.Cmd) {
 		}
 
 	case app.ToolResultEvent:
-		// Buffer tool result for scrollback.
-		m.printToolResult(msg)
-
-		// Mark streaming bash output as complete.
+		// Remove streaming bash output item (if present) before adding the final tool result.
+		// The tool result will contain the truncated output.
 		if len(m.messages) > 0 {
-			if bashItem, ok := m.messages[len(m.messages)-1].(*StreamingBashOutputItem); ok {
-				bashItem.MarkComplete()
+			if _, ok := m.messages[len(m.messages)-1].(*StreamingBashOutputItem); ok {
+				// Remove the streaming bash item
+				m.messages = m.messages[:len(m.messages)-1]
 			}
 		}
 
+		// Add the final tool result with truncated output.
+		m.printToolResult(msg)
+
 		// Clear legacy bash output state
 		m.streamingBashOutput = nil
 		m.streamingBashStderr = nil
@@ -1538,6 +1540,14 @@ func (m *AppModel) Update(msg tea.Msg) (tea.Model, tea.Cmd) {
 			bashItem.AppendStdout(msg.Chunk)
 		}
 
+		// Check height and cap if needed - we don't want streaming output to grow forever
+		const maxStreamingBashHeight = 20 // Max lines to show during streaming
+		if bashItem.Height() > maxStreamingBashHeight {
+			// Stop showing new output once we hit the limit
+			// The final tool result will show truncated output
+			return m, nil
+		}
+
 		// Refresh ScrollList
 		m.refreshContent()