diff --git a/packages/app/src/screens/workspace/terminals/state.test.ts b/packages/app/src/screens/workspace/terminals/state.test.ts
new file mode 100644
index 000000000..af853bbce
--- /dev/null
+++ b/packages/app/src/screens/workspace/terminals/state.test.ts
@@ -0,0 +1,99 @@
+import { describe, expect, it } from "vitest";
+import {
+  collectKnownTerminalIds,
+  collectScriptTerminalIds,
+  collectStandaloneTerminalIds,
+  reconcilePendingScriptTerminals,
+  removeTerminalFromPayload,
+  upsertCreatedTerminalPayload,
+  type ListTerminalsPayload,
+} from "@/screens/workspace/terminals/state";
+import type { CreateTerminalResponse } from "@server/shared/messages";
+
+function listedTerminal(id: string): ListTerminalsPayload["terminals"][number] {
+  return { id, name: id, title: id };
+}
+
+function createdTerminal(id: string): NonNullable<CreateTerminalResponse["payload"]["terminal"]> {
+  return { id, name: id, cwd: "/repo", title: id };
+}
+
+describe("workspace terminal state", () => {
+  it("keeps pending script terminals until they appear or a fresher list arrives", () => {
+    const pending = new Map([
+      ["older-than-list", 10],
+      ["now-live", 20],
+      ["still-pending", 30],
+    ]);
+
+    const reconciled = reconcilePendingScriptTerminals(["now-live"], 20)(pending);
+
+    expect(reconciled).toEqual(new Map([["still-pending", 30]]));
+  });
+
+  it("returns the same pending map when reconciliation changes nothing", () => {
+    const pending = new Map([["still-pending", 30]]);
+
+    const reconciled = reconcilePendingScriptTerminals([], 20)(pending);
+
+    expect(reconciled).toBe(pending);
+  });
+
+  it("combines live and pending terminal ids without duplicating script terminals", () => {
+    const pendingScriptTerminalIds = new Map([
+      ["script-pending", 10],
+      ["terminal-1", 10],
+    ]);
+
+    expect(
+      collectKnownTerminalIds({
+        liveTerminalIds: ["terminal-1", "terminal-2"],
+        pendingScriptTerminalIds,
+      }),
+    ).toEqual(["terminal-1", "terminal-2", "script-pending"]);
+    expect(
+      collectScriptTerminalIds({
+        pendingScriptTerminalIds,
+        scripts: [{ terminalId: "script-live" }, { terminalId: null }],
+      }),
+    ).toEqual(new Set(["script-pending", "terminal-1", "script-live"]));
+    expect(
+      collectStandaloneTerminalIds({
+        terminals: [
+          listedTerminal("terminal-1"),
+          listedTerminal("terminal-2"),
+          listedTerminal("script-live"),
+        ],
+        scriptTerminalIds: new Set(["terminal-1", "script-live"]),
+      }),
+    ).toEqual(["terminal-2"]);
+  });
+
+  it("updates terminal cache entries for created and closed terminals", () => {
+    const current: ListTerminalsPayload = {
+      cwd: "/repo",
+      requestId: "existing",
+      terminals: [listedTerminal("terminal-1")],
+    };
+
+    expect(
+      upsertCreatedTerminalPayload({
+        current,
+        terminal: createdTerminal("terminal-2"),
+        workspaceDirectory: "/repo",
+      }),
+    ).toEqual({
+      cwd: "/repo",
+      requestId: "existing",
+      terminals: [
+        listedTerminal("terminal-1"),
+        { id: "terminal-2", name: "terminal-2", title: "terminal-2" },
+      ],
+    });
+    expect(removeTerminalFromPayload("terminal-1")(current)).toEqual({
+      cwd: "/repo",
+      requestId: "existing",
+      terminals: [],
+    });
+  });
+});
diff --git a/packages/app/src/screens/workspace/terminals/state.ts b/packages/app/src/screens/workspace/terminals/state.ts
new file mode 100644
index 000000000..1923f28fa
--- /dev/null
+++ b/packages/app/src/screens/workspace/terminals/state.ts
@@ -0,0 +1,106 @@
+import type { CreateTerminalResponse, ListTerminalsResponse } from "@server/shared/messages";
+import { upsertTerminalListEntry } from "@/utils/terminal-list";
+
+export const TERMINALS_QUERY_STALE_TIME = 5_000;
+
+export type ListTerminalsPayload = ListTerminalsResponse["payload"];
+type TerminalEntry = ListTerminalsPayload["terminals"][number];
+type CreatedTerminal = NonNullable<CreateTerminalResponse["payload"]["terminal"]>;
+
+export function buildTerminalsQueryKey(serverId: string, workspaceDirectory: string | null) {
+  return ["terminals", serverId, workspaceDirectory] as const;
+}
+
+export function canCreateWorkspaceTerminal(input: {
+  isRouteFocused: boolean;
+  client: unknown;
+  isConnected: boolean;
+  workspaceDirectory: string | null;
+}): boolean {
+  return Boolean(
+    input.isRouteFocused && input.client && input.isConnected && input.workspaceDirectory,
+  );
+}
+
+export function reconcilePendingScriptTerminals(liveTerminalIds: string[], dataUpdatedAt: number) {
+  return function update(pendingTerminalIds: Map<string, number>): Map<string, number> {
+    if (pendingTerminalIds.size === 0) {
+      return pendingTerminalIds;
+    }
+    const liveIds = new Set(liveTerminalIds);
+    let changed = false;
+    const nextTerminalIds = new Map<string, number>();
+    for (const [terminalId, listedAt] of pendingTerminalIds) {
+      if (liveIds.has(terminalId) || dataUpdatedAt > listedAt) {
+        changed = true;
+        continue;
+      }
+      nextTerminalIds.set(terminalId, listedAt);
+    }
+    return changed ? nextTerminalIds : pendingTerminalIds;
+  };
+}
+
+export function collectKnownTerminalIds(input: {
+  liveTerminalIds: string[];
+  pendingScriptTerminalIds: Map<string, number>;
+}): string[] {
+  const terminalIds = new Set(input.liveTerminalIds);
+  for (const terminalId of input.pendingScriptTerminalIds.keys()) {
+    terminalIds.add(terminalId);
+  }
+  return Array.from(terminalIds);
+}
+
+export function collectScriptTerminalIds(input: {
+  pendingScriptTerminalIds: Map<string, number>;
+  scripts: Array<{ terminalId?: string | null }>;
+}): Set<string> {
+  const terminalIds = new Set(input.pendingScriptTerminalIds.keys());
+  for (const script of input.scripts) {
+    if (script.terminalId) {
+      terminalIds.add(script.terminalId);
+    }
+  }
+  return terminalIds;
+}
+
+export function collectStandaloneTerminalIds(input: {
+  terminals: TerminalEntry[];
+  scriptTerminalIds: Set<string>;
+}): string[] {
+  return input.terminals
+    .filter((terminal) => !input.scriptTerminalIds.has(terminal.id))
+    .map((terminal) => terminal.id);
+}
+
+export function removeTerminalFromPayload(terminalId: string) {
+  return function updatePayload(
+    current: ListTerminalsPayload | undefined,
+  ): ListTerminalsPayload | undefined {
+    if (!current) {
+      return current;
+    }
+    return {
+      ...current,
+      terminals: current.terminals.filter((terminal) => terminal.id !== terminalId),
+    };
+  };
+}
+
+export function upsertCreatedTerminalPayload(input: {
+  current: ListTerminalsPayload | undefined;
+  terminal: CreatedTerminal;
+  workspaceDirectory: string | null;
+}): ListTerminalsPayload {
+  const nextTerminals = upsertTerminalListEntry({
+    terminals: input.current?.terminals ?? [],
+    terminal: input.terminal,
+  });
+  const cwd = input.current?.cwd ?? input.workspaceDirectory;
+  return {
+    ...(cwd ? { cwd } : {}),
+    terminals: nextTerminals,
+    requestId: input.current?.requestId ?? `terminal-create-${input.terminal.id}`,
+  };
+}
diff --git a/packages/app/src/screens/workspace/terminals/use-workspace-terminals.ts b/packages/app/src/screens/workspace/terminals/use-workspace-terminals.ts
new file mode 100644
index 000000000..e825ca6f0
--- /dev/null
+++ b/packages/app/src/screens/workspace/terminals/use-workspace-terminals.ts
@@ -0,0 +1,281 @@
+import { useCallback, useEffect, useMemo, useState } from "react";
+import { useMutation, useQuery, useQueryClient } from "@tanstack/react-query";
+import type { DaemonClient } from "@server/client/daemon-client";
+import type { WorkspaceDescriptor } from "@/stores/session-store";
+import {
+  buildTerminalsQueryKey,
+  canCreateWorkspaceTerminal,
+  collectKnownTerminalIds,
+  collectScriptTerminalIds,
+  collectStandaloneTerminalIds,
+  reconcilePendingScriptTerminals,
+  removeTerminalFromPayload,
+  TERMINALS_QUERY_STALE_TIME,
+  type ListTerminalsPayload,
+  upsertCreatedTerminalPayload,
+} from "@/screens/workspace/terminals/state";
+
+interface PendingTerminalCreateInput {
+  paneId?: string;
+}
+
+interface UseWorkspaceTerminalsInput {
+  client: DaemonClient | null;
+  isConnected: boolean;
+  isRouteFocused: boolean;
+  normalizedServerId: string;
+  normalizedWorkspaceId: string;
+  workspaceDirectory: string | null;
+  workspaceScripts: WorkspaceDescriptor["scripts"];
+  hasHydratedWorkspaces: boolean;
+  isMissingWorkspaceExecutionAuthority: boolean;
+  onTerminalCreated: (input: { terminalId: string; paneId?: string }) => void;
+  onScriptTerminalSelected: (terminalId: string) => void;
+  onWorkspacePathUnavailable: () => void;
+  onTerminalCreateQueued: () => void;
+}
+
+export function useWorkspaceTerminals(input: UseWorkspaceTerminalsInput) {
+  const {
+    client,
+    isConnected,
+    isRouteFocused,
+    normalizedServerId,
+    normalizedWorkspaceId,
+    workspaceDirectory,
+    workspaceScripts,
+    hasHydratedWorkspaces,
+    isMissingWorkspaceExecutionAuthority,
+    onTerminalCreated,
+    onScriptTerminalSelected,
+    onWorkspacePathUnavailable,
+    onTerminalCreateQueued,
+  } = input;
+  const queryClient = useQueryClient();
+  const [pendingCreateInput, setPendingCreateInput] = useState<PendingTerminalCreateInput | null>(
+    null,
+  );
+  const canCreateNow = useMemo(
+    () => canCreateWorkspaceTerminal({ isRouteFocused, client, isConnected, workspaceDirectory }),
+    [isRouteFocused, client, isConnected, workspaceDirectory],
+  );
+  const queryKey = useMemo(
+    () => buildTerminalsQueryKey(normalizedServerId, workspaceDirectory),
+    [normalizedServerId, workspaceDirectory],
+  );
+
+  const query = useQuery({
+    queryKey,
+    enabled: canCreateNow,
+    queryFn: async () => {
+      if (!client || !workspaceDirectory) {
+        throw new Error("Host is not connected");
+      }
+      return await client.listTerminals(workspaceDirectory);
+    },
+    staleTime: TERMINALS_QUERY_STALE_TIME,
+  });
+  const terminals = useMemo(() => query.data?.terminals ?? [], [query.data]);
+  const liveTerminalIds = useMemo(() => terminals.map((terminal) => terminal.id), [terminals]);
+  const [pendingScriptTerminalIds, setPendingScriptTerminalIds] = useState<Map<string, number>>(
+    () => new Map(),
+  );
+
+  useEffect(() => {
+    setPendingScriptTerminalIds(new Map());
+  }, [normalizedServerId, normalizedWorkspaceId]);
+
+  const dataUpdatedAt = query.dataUpdatedAt;
+  useEffect(() => {
+    setPendingScriptTerminalIds(reconcilePendingScriptTerminals(liveTerminalIds, dataUpdatedAt));
+  }, [liveTerminalIds, dataUpdatedAt]);
+
+  const knownTerminalIds = useMemo(
+    () => collectKnownTerminalIds({ liveTerminalIds, pendingScriptTerminalIds }),
+    [liveTerminalIds, pendingScriptTerminalIds],
+  );
+  const scriptTerminalIds = useMemo(
+    () => collectScriptTerminalIds({ pendingScriptTerminalIds, scripts: workspaceScripts }),
+    [pendingScriptTerminalIds, workspaceScripts],
+  );
+  const standaloneTerminalIds = useMemo(
+    () => collectStandaloneTerminalIds({ terminals, scriptTerminalIds }),
+    [scriptTerminalIds, terminals],
+  );
+
+  const createMutation = useMutation({
+    mutationFn: async (_input?: PendingTerminalCreateInput) => {
+      if (!client || !workspaceDirectory) {
+        throw new Error("Host is not connected");
+      }
+      return await client.createTerminal(workspaceDirectory);
+    },
+    onSuccess: (payload, createInput) => {
+      const createdTerminal = payload.terminal;
+      if (createdTerminal) {
+        queryClient.setQueryData<ListTerminalsPayload>(queryKey, (current) =>
+          upsertCreatedTerminalPayload({
+            current,
+            terminal: createdTerminal,
+            workspaceDirectory,
+          }),
+        );
+      }
+
+      void queryClient.invalidateQueries({ queryKey });
+      if (createdTerminal) {
+        onTerminalCreated({
+          terminalId: createdTerminal.id,
+          paneId: createInput?.paneId,
+        });
+      }
+    },
+  });
+  const killMutation = useMutation({
+    mutationFn: async (terminalId: string) => {
+      if (!client) {
+        throw new Error("Host is not connected");
+      }
+      const payload = await client.killTerminal(terminalId);
+      if (!payload.success) {
+        throw new Error("Unable to close terminal");
+      }
+      return payload;
+    },
+  });
+
+  useEffect(() => {
+    if (!isRouteFocused || !client || !isConnected || !workspaceDirectory) {
+      return;
+    }
+
+    const unsubscribeChanged = client.on("terminals_changed", (message) => {
+      if (message.payload.cwd !== workspaceDirectory) {
+        return;
+      }
+
+      queryClient.setQueryData<ListTerminalsPayload>(queryKey, (current) => ({
+        cwd: message.payload.cwd,
+        terminals: message.payload.terminals,
+        requestId: current?.requestId ?? `terminals-changed-${Date.now()}`,
+      }));
+    });
+
+    client.subscribeTerminals({ cwd: workspaceDirectory });
+
+    return () => {
+      unsubscribeChanged();
+      client.unsubscribeTerminals({ cwd: workspaceDirectory });
+    };
+  }, [client, isConnected, isRouteFocused, queryClient, queryKey, workspaceDirectory]);
+
+  useEffect(() => {
+    if (!pendingCreateInput) {
+      return;
+    }
+
+    if (canCreateNow && !createMutation.isPending) {
+      const pendingInput = pendingCreateInput;
+      setPendingCreateInput(null);
+      createMutation.mutate(pendingInput);
+      return;
+    }
+
+    if (hasHydratedWorkspaces && isMissingWorkspaceExecutionAuthority) {
+      setPendingCreateInput(null);
+      onWorkspacePathUnavailable();
+    }
+  }, [
+    canCreateNow,
+    createMutation,
+    hasHydratedWorkspaces,
+    isMissingWorkspaceExecutionAuthority,
+    onWorkspacePathUnavailable,
+    pendingCreateInput,
+  ]);
+
+  const createTerminal = useCallback(
+    (createInput?: PendingTerminalCreateInput) => {
+      if (createMutation.isPending || pendingCreateInput) {
+        return;
+      }
+
+      if (canCreateNow) {
+        createMutation.mutate(createInput);
+        return;
+      }
+
+      if (hasHydratedWorkspaces && isMissingWorkspaceExecutionAuthority) {
+        onWorkspacePathUnavailable();
+        return;
+      }
+
+      setPendingCreateInput(createInput ?? {});
+      onTerminalCreateQueued();
+    },
+    [
+      canCreateNow,
+      createMutation,
+      hasHydratedWorkspaces,
+      isMissingWorkspaceExecutionAuthority,
+      onTerminalCreateQueued,
+      onWorkspacePathUnavailable,
+      pendingCreateInput,
+    ],
+  );
+
+  const handleScriptTerminalStarted = useCallback(
+    (terminalId: string) => {
+      setPendingScriptTerminalIds((pendingTerminalIds) => {
+        if (pendingTerminalIds.get(terminalId) === query.dataUpdatedAt) {
+          return pendingTerminalIds;
+        }
+        const nextTerminalIds = new Map(pendingTerminalIds);
+        nextTerminalIds.set(terminalId, query.dataUpdatedAt);
+        return nextTerminalIds;
+      });
+      onScriptTerminalSelected(terminalId);
+      void queryClient.invalidateQueries({ queryKey });
+    },
+    [onScriptTerminalSelected, query.dataUpdatedAt, queryClient, queryKey],
+  );
+
+  const handleViewScriptTerminal = useCallback(
+    (terminalId: string) => {
+      onScriptTerminalSelected(terminalId);
+    },
+    [onScriptTerminalSelected],
+  );
+
+  const removeTerminalFromCache = useCallback(
+    (terminalId: string) => {
+      queryClient.setQueryData<ListTerminalsPayload>(
+        queryKey,
+        removeTerminalFromPayload(terminalId),
+      );
+    },
+    [queryClient, queryKey],
+  );
+
+  const invalidateTerminals = useCallback(() => {
+    void queryClient.invalidateQueries({ queryKey });
+  }, [queryClient, queryKey]);
+
+  return {
+    canCreateNow,
+    createMutation,
+    createTerminal,
+    handleScriptTerminalStarted,
+    handleViewScriptTerminal,
+    invalidateTerminals,
+    killMutation,
+    knownTerminalIds,
+    liveTerminalIds,
+    pendingCreateInput,
+    query,
+    queryKey,
+    removeTerminalFromCache,
+    standaloneTerminalIds,
+    terminals,
+  };
+}
diff --git a/packages/app/src/screens/workspace/workspace-screen.tsx b/packages/app/src/screens/workspace/workspace-screen.tsx
index 60356a289..80acadc0a 100644
--- a/packages/app/src/screens/workspace/workspace-screen.tsx
+++ b/packages/app/src/screens/workspace/workspace-screen.tsx
@@ -11,7 +11,7 @@ import {
 import { useStoreWithEqualityFn } from "zustand/traditional";
 import { useIsFocused } from "@react-navigation/native";
 import { ActivityIndicator, BackHandler, Keyboard, Pressable, Text, View } from "react-native";
-import { useMutation, useQuery, useQueryClient } from "@tanstack/react-query";
+import { useQuery } from "@tanstack/react-query";
 import { useRouter, type Href } from "expo-router";
 import * as Clipboard from "expo-clipboard";
 import { DiffStat } from "@/components/diff-stat";
@@ -94,8 +94,6 @@ import { useWorkspace } from "@/stores/session-store-hooks";
 import { useWorkspaceTerminalSessionRetention } from "@/terminal/hooks/use-workspace-terminal-session-retention";
 import type { CheckoutStatusPayload } from "@/git/use-status-query";
 import { checkoutStatusQueryKey } from "@/git/query-keys";
-import type { ListTerminalsResponse } from "@server/shared/messages";
-import { upsertTerminalListEntry } from "@/utils/terminal-list";
 import { confirmDialog } from "@/utils/confirm-dialog";
 import { useArchiveAgent } from "@/hooks/use-archive-agent";
 import { useStableEvent } from "@/hooks/use-stable-event";
@@ -158,10 +156,12 @@ import { useIsCompactFormFactor, supportsDesktopPaneSplits } from "@/constants/l
 import { getIsElectron, isNative, isWeb } from "@/constants/platform";
 import { useContainerWidthBelow } from "@/hooks/use-container-width";
 import { buildHostRootRoute, buildSettingsHostRoute } from "@/utils/host-routes";
+import { canCreateWorkspaceTerminal } from "@/screens/workspace/terminals/state";
+import { useWorkspaceTerminals } from "@/screens/workspace/terminals/use-workspace-terminals";
 
-const TERMINALS_QUERY_STALE_TIME = 5_000;
 const WORKSPACE_SETUP_AUTO_OPEN_WINDOW_MS = 30_000;
 const EMPTY_UI_TABS: WorkspaceTab[] = [];
+const EMPTY_WORKSPACE_SCRIPTS: WorkspaceDescriptor["scripts"] = [];
 const EMPTY_PINNED_AGENT_IDS = new Set<string>();
 const EMPTY_SET = new Set<string>();
 
@@ -1028,8 +1028,6 @@ function WorkspaceHeaderTitleBar({
   );
 }
 
-type ListTerminalsPayload = ListTerminalsResponse["payload"];
-
 type PaneDirection = "left" | "right" | "up" | "down";
 
 function parsePaneDirection(actionId: string): PaneDirection | null {
@@ -1180,39 +1178,6 @@ function resolveWorkspaceAuthorityState(
   };
 }
 
-function reconcilePendingScriptTerminals(liveTerminalIds: string[], dataUpdatedAt: number) {
-  return function update(pendingTerminalIds: Map<string, number>): Map<string, number> {
-    if (pendingTerminalIds.size === 0) {
-      return pendingTerminalIds;
-    }
-    const liveIds = new Set(liveTerminalIds);
-    let changed = false;
-    const nextTerminalIds = new Map<string, number>();
-    for (const [terminalId, listedAt] of pendingTerminalIds) {
-      if (liveIds.has(terminalId) || dataUpdatedAt > listedAt) {
-        changed = true;
-        continue;
-      }
-      nextTerminalIds.set(terminalId, listedAt);
-    }
-    return changed ? nextTerminalIds : pendingTerminalIds;
-  };
-}
-
-function removeTerminalFromPayload(terminalId: string) {
-  return function updatePayload(
-    current: ListTerminalsPayload | undefined,
-  ): ListTerminalsPayload | undefined {
-    if (!current) {
-      return current;
-    }
-    return {
-      ...current,
-      terminals: current.terminals.filter((terminal) => terminal.id !== terminalId),
-    };
-  };
-}
-
 function getHostDisplayName(host: { label?: string | null } | null, fallback: string): string {
   const trimmed = host?.label?.trim();
   return trimmed ? trimmed : fallback;
@@ -1359,17 +1324,6 @@ function shouldShowWorkspaceExplorerSidebar(input: {
   return input.isRouteFocused && shouldShowWorkspaceScreenHeader(input);
 }
 
-function canCreateWorkspaceTerminal(input: {
-  isRouteFocused: boolean;
-  client: unknown;
-  isConnected: boolean;
-  workspaceDirectory: string | null;
-}): boolean {
-  return Boolean(
-    input.isRouteFocused && input.client && input.isConnected && input.workspaceDirectory,
-  );
-}
-
 function buildWorkspaceTerminalScopeKey(serverId: string, workspaceId: string): string | null {
   if (!serverId || !workspaceId) {
     return null;
@@ -1377,6 +1331,108 @@ function buildWorkspaceTerminalScopeKey(serverId: string, workspaceId: string):
   return `${serverId}:${workspaceId}`;
 }
 
+interface WorkspaceTerminalTabActionsInput {
+  persistenceKey: string | null;
+  focusWorkspacePane: (workspaceKey: string, paneId: string) => void;
+  openWorkspaceTabFocused: (workspaceKey: string, target: WorkspaceTabTarget) => string | null;
+  toast: {
+    error: (message: string) => void;
+    show: (message: string) => void;
+  };
+}
+
+interface WorkspaceTerminalTabActions {
+  handleTerminalCreated: (input: { terminalId: string; paneId?: string }) => void;
+  handleScriptTerminalSelected: (terminalId: string) => void;
+  handleWorkspacePathUnavailable: () => void;
+  handleTerminalCreateQueued: () => void;
+}
+
+function useWorkspaceTerminalTabActions({
+  persistenceKey,
+  focusWorkspacePane,
+  openWorkspaceTabFocused,
+  toast,
+}: WorkspaceTerminalTabActionsInput): WorkspaceTerminalTabActions {
+  const handleTerminalCreated = useCallback(
+    ({ terminalId, paneId }: { terminalId: string; paneId?: string }) => {
+      if (!persistenceKey) {
+        return;
+      }
+      if (paneId) {
+        focusWorkspacePane(persistenceKey, paneId);
+      }
+      openWorkspaceTabFocused(persistenceKey, { kind: "terminal", terminalId });
+    },
+    [focusWorkspacePane, openWorkspaceTabFocused, persistenceKey],
+  );
+  const handleScriptTerminalSelected = useCallback(
+    (terminalId: string) => {
+      if (!persistenceKey) {
+        return;
+      }
+      openWorkspaceTabFocused(persistenceKey, { kind: "terminal", terminalId });
+    },
+    [openWorkspaceTabFocused, persistenceKey],
+  );
+  const handleWorkspacePathUnavailable = useCallback(() => {
+    toast.error("Workspace path is not available yet");
+  }, [toast]);
+  const handleTerminalCreateQueued = useCallback(() => {
+    toast.show("Preparing workspace, opening terminal when ready...");
+  }, [toast]);
+
+  return {
+    handleTerminalCreated,
+    handleScriptTerminalSelected,
+    handleWorkspacePathUnavailable,
+    handleTerminalCreateQueued,
+  };
+}
+
+function useWorkspaceCheckoutStatus(input: {
+  client: ReturnType<typeof useHostRuntimeClient>;
+  isConnected: boolean;
+  isRouteFocused: boolean;
+  normalizedServerId: string;
+  normalizedWorkspaceId: string;
+  workspaceDirectory: string | null;
+}) {
+  const isCheckoutQueryEnabled = useMemo(
+    () =>
+      canCreateWorkspaceTerminal({
+        isRouteFocused: input.isRouteFocused,
+        client: input.client,
+        isConnected: input.isConnected,
+        workspaceDirectory: input.workspaceDirectory,
+      }),
+    [input.isRouteFocused, input.client, input.isConnected, input.workspaceDirectory],
+  );
+  const checkoutQuery = useQuery({
+    queryKey: checkoutStatusQueryKey(
+      input.normalizedServerId,
+      input.workspaceDirectory ?? `missing-workspace-directory:${input.normalizedWorkspaceId}`,
+    ),
+    enabled: isCheckoutQueryEnabled,
+    queryFn: async () => {
+      if (!input.client || !input.workspaceDirectory) {
+        throw new Error("Host is not connected");
+      }
+      return await input.client.getCheckoutStatus(input.workspaceDirectory);
+    },
+    staleTime: Infinity,
+    refetchOnMount: false,
+    refetchOnReconnect: false,
+    refetchOnWindowFocus: false,
+  });
+  const isCheckoutStatusLoading = useMemo(
+    () => isCheckoutQueryEnabled && checkoutQuery.data === undefined && !checkoutQuery.isError,
+    [isCheckoutQueryEnabled, checkoutQuery.data, checkoutQuery.isError],
+  );
+
+  return { checkoutQuery, isCheckoutStatusLoading };
+}
+
 function WorkspaceScreenContent({
   serverId,
   workspaceId,
@@ -1405,7 +1461,6 @@ function WorkspaceScreenContent({
     scopeKey: workspaceTerminalScopeKey,
   });
 
-  const queryClient = useQueryClient();
   const client = useHostRuntimeClient(normalizedServerId);
   const isConnected = useHostRuntimeIsConnected(normalizedServerId);
   const workspaceAuthority = useMemo(
@@ -1430,12 +1485,19 @@ function WorkspaceScreenContent({
   useProvidersSnapshot(normalizedServerId, {
     enabled: isRouteFocused,
   });
-  const [pendingTerminalCreateInput, setPendingTerminalCreateInput] = useState<{
-    paneId?: string;
-  } | null>(null);
-  const canCreateTerminalNow = useMemo(
-    () => canCreateWorkspaceTerminal({ isRouteFocused, client, isConnected, workspaceDirectory }),
-    [isRouteFocused, client, isConnected, workspaceDirectory],
+
+  const persistenceKey = useMemo(
+    () =>
+      buildWorkspaceTabPersistenceKey({
+        serverId: normalizedServerId,
+        workspaceId: normalizedWorkspaceId,
+      }),
+    [normalizedServerId, normalizedWorkspaceId],
+  );
+  const openWorkspaceTabFocused = useWorkspaceLayoutStore((state) => state.openTabFocused);
+  const focusWorkspacePane = useWorkspaceLayoutStore((state) => state.focusPane);
+  const hasHydratedWorkspaces = useSessionStore(
+    (state) => state.sessions[normalizedServerId]?.hasHydratedWorkspaces ?? false,
   );
 
   const workspaceAgentVisibility = useStoreWithEqualityFn(
@@ -1449,167 +1511,56 @@ function WorkspaceScreenContent({
     workspaceAgentVisibilityEqual,
   );
 
-  const terminalsQueryKey = useMemo(
-    () => ["terminals", normalizedServerId, workspaceDirectory] as const,
-    [normalizedServerId, workspaceDirectory],
-  );
-  const terminalsQuery = useQuery({
-    queryKey: terminalsQueryKey,
-    enabled: canCreateTerminalNow,
-    queryFn: async () => {
-      if (!client || !workspaceDirectory) {
-        throw new Error("Host is not connected");
-      }
-      return await client.listTerminals(workspaceDirectory);
-    },
-    staleTime: TERMINALS_QUERY_STALE_TIME,
+  const {
+    handleTerminalCreated,
+    handleScriptTerminalSelected,
+    handleWorkspacePathUnavailable,
+    handleTerminalCreateQueued,
+  } = useWorkspaceTerminalTabActions({
+    persistenceKey,
+    focusWorkspacePane,
+    openWorkspaceTabFocused,
+    toast,
   });
-  const terminals = useMemo(() => terminalsQuery.data?.terminals ?? [], [terminalsQuery.data]);
-  const liveTerminalIds = useMemo(() => terminals.map((terminal) => terminal.id), [terminals]);
-  const [pendingScriptTerminalIds, setPendingScriptTerminalIds] = useState<Map<string, number>>(
-    () => new Map(),
-  );
-  useEffect(() => {
-    setPendingScriptTerminalIds(new Map());
-  }, [normalizedServerId, normalizedWorkspaceId]);
-  const terminalsDataUpdatedAt = terminalsQuery.dataUpdatedAt;
-  useEffect(() => {
-    setPendingScriptTerminalIds(
-      reconcilePendingScriptTerminals(liveTerminalIds, terminalsDataUpdatedAt),
-    );
-  }, [liveTerminalIds, terminalsDataUpdatedAt]);
-  const knownTerminalIds = useMemo(() => {
-    const terminalIds = new Set(liveTerminalIds);
-    for (const terminalId of pendingScriptTerminalIds.keys()) {
-      terminalIds.add(terminalId);
-    }
-    return Array.from(terminalIds);
-  }, [liveTerminalIds, pendingScriptTerminalIds]);
-  const scriptTerminalIds = useMemo(() => {
-    const terminalIds = new Set(pendingScriptTerminalIds.keys());
-    for (const script of workspaceDescriptor?.scripts ?? []) {
-      if (script.terminalId) {
-        terminalIds.add(script.terminalId);
-      }
-    }
-    return terminalIds;
-  }, [pendingScriptTerminalIds, workspaceDescriptor?.scripts]);
-  const standaloneTerminalIds = useMemo(
-    () =>
-      terminals
-        .filter((terminal) => !scriptTerminalIds.has(terminal.id))
-        .map((terminal) => terminal.id),
-    [scriptTerminalIds, terminals],
-  );
-  const createTerminalMutation = useMutation({
-    mutationFn: async (_input?: { paneId?: string }) => {
-      if (!client || !workspaceDirectory) {
-        throw new Error("Host is not connected");
-      }
-      return await client.createTerminal(workspaceDirectory);
-    },
-    onSuccess: (payload, input) => {
-      const createdTerminal = payload.terminal;
-      if (createdTerminal) {
-        queryClient.setQueryData<ListTerminalsPayload>(terminalsQueryKey, (current) => {
-          const nextTerminals = upsertTerminalListEntry({
-            terminals: current?.terminals ?? [],
-            terminal: createdTerminal,
-          });
-          const cwd = current?.cwd ?? workspaceDirectory;
-          return {
-            ...(cwd ? { cwd } : {}),
-            terminals: nextTerminals,
-            requestId: current?.requestId ?? `terminal-create-${createdTerminal.id}`,
-          };
-        });
-      }
-
-      void queryClient.invalidateQueries({ queryKey: terminalsQueryKey });
-      if (createdTerminal) {
-        const workspaceKey = buildWorkspaceTabPersistenceKey({
-          serverId: normalizedServerId,
-          workspaceId: normalizedWorkspaceId,
-        });
-        if (!workspaceKey) {
-          return;
-        }
-        if (input?.paneId) {
-          focusWorkspacePane(workspaceKey, input.paneId);
-        }
-        useWorkspaceLayoutStore
-          .getState()
-          .openTabFocused(workspaceKey, { kind: "terminal", terminalId: createdTerminal.id });
-      }
-    },
-  });
-  const killTerminalMutation = useMutation({
-    mutationFn: async (terminalId: string) => {
-      if (!client) {
-        throw new Error("Host is not connected");
-      }
-      const payload = await client.killTerminal(terminalId);
-      if (!payload.success) {
-        throw new Error("Unable to close terminal");
-      }
-      return payload;
-    },
+  const {
+    createMutation: createTerminalMutation,
+    createTerminal,
+    handleScriptTerminalStarted,
+    handleViewScriptTerminal,
+    invalidateTerminals,
+    killMutation: killTerminalMutation,
+    knownTerminalIds,
+    liveTerminalIds,
+    pendingCreateInput: pendingTerminalCreateInput,
+    query: terminalsQuery,
+    removeTerminalFromCache,
+    standaloneTerminalIds,
+    terminals,
+  } = useWorkspaceTerminals({
+    client,
+    isConnected,
+    isRouteFocused,
+    normalizedServerId,
+    normalizedWorkspaceId,
+    workspaceDirectory,
+    workspaceScripts: workspaceDescriptor?.scripts ?? EMPTY_WORKSPACE_SCRIPTS,
+    hasHydratedWorkspaces,
+    isMissingWorkspaceExecutionAuthority,
+    onTerminalCreated: handleTerminalCreated,
+    onScriptTerminalSelected: handleScriptTerminalSelected,
+    onWorkspacePathUnavailable: handleWorkspacePathUnavailable,
+    onTerminalCreateQueued: handleTerminalCreateQueued,
   });
   const { archiveAgent } = useArchiveAgent();
 
-  useEffect(() => {
-    if (!isRouteFocused || !client || !isConnected || !workspaceDirectory) {
-      return;
-    }
-
-    const unsubscribeChanged = client.on("terminals_changed", (message) => {
-      if (message.payload.cwd !== workspaceDirectory) {
-        return;
-      }
-
-      queryClient.setQueryData<ListTerminalsPayload>(terminalsQueryKey, (current) => ({
-        cwd: message.payload.cwd,
-        terminals: message.payload.terminals,
-        requestId: current?.requestId ?? `terminals-changed-${Date.now()}`,
-      }));
-    });
-
-    client.subscribeTerminals({ cwd: workspaceDirectory });
-
-    return () => {
-      unsubscribeChanged();
-      client.unsubscribeTerminals({ cwd: workspaceDirectory });
-    };
-  }, [client, isConnected, isRouteFocused, queryClient, terminalsQueryKey, workspaceDirectory]);
-
-  const isCheckoutQueryEnabled = useMemo(
-    () => canCreateWorkspaceTerminal({ isRouteFocused, client, isConnected, workspaceDirectory }),
-    [isRouteFocused, client, isConnected, workspaceDirectory],
-  );
-  const checkoutQuery = useQuery({
-    queryKey: checkoutStatusQueryKey(
-      normalizedServerId,
-      workspaceDirectory ?? `missing-workspace-directory:${normalizedWorkspaceId}`,
-    ),
-    enabled: isCheckoutQueryEnabled,
-    queryFn: async () => {
-      if (!client || !workspaceDirectory) {
-        throw new Error("Host is not connected");
-      }
-      return await client.getCheckoutStatus(workspaceDirectory);
-    },
-    staleTime: Infinity,
-    refetchOnMount: false,
-    refetchOnReconnect: false,
-    refetchOnWindowFocus: false,
+  const { checkoutQuery, isCheckoutStatusLoading } = useWorkspaceCheckoutStatus({
+    client,
+    isConnected,
+    isRouteFocused,
+    normalizedServerId,
+    normalizedWorkspaceId,
+    workspaceDirectory,
   });
-  const isCheckoutStatusLoading = useMemo(
-    () => isCheckoutQueryEnabled && checkoutQuery.data === undefined && !checkoutQuery.isError,
-    [isCheckoutQueryEnabled, checkoutQuery.data, checkoutQuery.isError],
-  );
-  const hasHydratedWorkspaces = useSessionStore(
-    (state) => state.sessions[normalizedServerId]?.hasHydratedWorkspaces ?? false,
-  );
   const hasHydratedAgents = useSessionStore(
     (state) => state.sessions[normalizedServerId]?.hasHydratedAgents ?? false,
   );
@@ -1618,30 +1569,6 @@ function WorkspaceScreenContent({
     workspace: workspaceDescriptor,
     hasHydratedWorkspaces,
   });
-  useEffect(() => {
-    if (!pendingTerminalCreateInput) {
-      return;
-    }
-
-    if (canCreateTerminalNow && !createTerminalMutation.isPending) {
-      const pendingInput = pendingTerminalCreateInput;
-      setPendingTerminalCreateInput(null);
-      createTerminalMutation.mutate(pendingInput);
-      return;
-    }
-
-    if (hasHydratedWorkspaces && isMissingWorkspaceExecutionAuthority) {
-      setPendingTerminalCreateInput(null);
-      toast.error("Workspace path is not available yet");
-    }
-  }, [
-    canCreateTerminalNow,
-    createTerminalMutation,
-    hasHydratedWorkspaces,
-    isMissingWorkspaceExecutionAuthority,
-    pendingTerminalCreateInput,
-    toast,
-  ]);
   const workspaceHeaderCheckoutState = buildWorkspaceHeaderCheckoutState({
     isCheckoutStatusLoading,
     isError: checkoutQuery.isError,
@@ -1738,15 +1665,6 @@ function WorkspaceScreenContent({
     return () => handler.remove();
   }, [isExplorerOpen, isRouteFocused, showMobileAgent]);
 
-  const persistenceKey = useMemo(
-    () =>
-      buildWorkspaceTabPersistenceKey({
-        serverId: normalizedServerId,
-        workspaceId: normalizedWorkspaceId,
-      }),
-    [normalizedServerId, normalizedWorkspaceId],
-  );
-
   const workspaceLayout = useWorkspaceLayoutStore((state) =>
     persistenceKey ? (state.layoutByWorkspace[persistenceKey] ?? null) : null,
   );
@@ -1761,7 +1679,6 @@ function WorkspaceScreenContent({
     [workspaceLayout],
   );
   useSyncWorkspaceActiveBrowser({ workspaceLayout, isRouteFocused });
-  const openWorkspaceTabFocused = useWorkspaceLayoutStore((state) => state.openTabFocused);
   const openWorkspaceTabInBackground = useWorkspaceLayoutStore(
     (state) => state.openTabInBackground,
   );
@@ -1777,39 +1694,6 @@ function WorkspaceScreenContent({
   const splitWorkspacePane = useWorkspaceLayoutStore((state) => state.splitPane);
   const splitWorkspacePaneEmpty = useWorkspaceLayoutStore((state) => state.splitPaneEmpty);
   const moveWorkspaceTabToPane = useWorkspaceLayoutStore((state) => state.moveTabToPane);
-  const focusWorkspacePane = useWorkspaceLayoutStore((state) => state.focusPane);
-  const handleScriptTerminalStarted = useCallback(
-    (terminalId: string) => {
-      setPendingScriptTerminalIds((pendingTerminalIds) => {
-        if (pendingTerminalIds.get(terminalId) === terminalsQuery.dataUpdatedAt) {
-          return pendingTerminalIds;
-        }
-        const nextTerminalIds = new Map(pendingTerminalIds);
-        nextTerminalIds.set(terminalId, terminalsQuery.dataUpdatedAt);
-        return nextTerminalIds;
-      });
-      if (persistenceKey) {
-        openWorkspaceTabFocused(persistenceKey, { kind: "terminal", terminalId });
-      }
-      void queryClient.invalidateQueries({ queryKey: terminalsQueryKey });
-    },
-    [
-      openWorkspaceTabFocused,
-      persistenceKey,
-      queryClient,
-      terminalsQuery.dataUpdatedAt,
-      terminalsQueryKey,
-    ],
-  );
-  const handleViewScriptTerminal = useCallback(
-    (terminalId: string) => {
-      if (!persistenceKey) {
-        return;
-      }
-      openWorkspaceTabFocused(persistenceKey, { kind: "terminal", terminalId });
-    },
-    [openWorkspaceTabFocused, persistenceKey],
-  );
   const paneFocusSuppressedRef = useRef(false);
   const resizeWorkspaceSplit = useWorkspaceLayoutStore((state) => state.resizeSplit);
   const reorderWorkspaceTabsInPane = useWorkspaceLayoutStore((state) => state.reorderTabsInPane);
@@ -2200,24 +2084,7 @@ function WorkspaceScreenContent({
     [focusWorkspacePane, openWorkspaceDraftTab, persistenceKey],
   );
 
-  const handleCreateTerminal = useStableEvent((input?: { paneId?: string }) => {
-    if (createTerminalMutation.isPending || pendingTerminalCreateInput) {
-      return;
-    }
-
-    if (canCreateTerminalNow) {
-      createTerminalMutation.mutate(input);
-      return;
-    }
-
-    if (hasHydratedWorkspaces && isMissingWorkspaceExecutionAuthority) {
-      toast.error("Workspace path is not available yet");
-      return;
-    }
-
-    setPendingTerminalCreateInput(input ?? {});
-    toast.show("Preparing workspace, opening terminal when ready...");
-  });
+  const handleCreateTerminal = useStableEvent(createTerminal);
 
   const handleCreateBrowserTab = useCallback(
     (input?: { paneId?: string }) => {
@@ -2284,10 +2151,7 @@ function WorkspaceScreenContent({
           return;
         }
 
-        queryClient.setQueryData<ListTerminalsPayload>(
-          terminalsQueryKey,
-          removeTerminalFromPayload(terminalId),
-        );
+        removeTerminalFromCache(terminalId);
         setHoveredTabKey((current) => (current === tabId ? null : current));
         setHoveredCloseTabKey((current) => (current === tabId ? null : current));
         if (persistenceKey) {
@@ -2297,18 +2161,16 @@ function WorkspaceScreenContent({
           });
         }
 
-        void killTerminalAsync(terminalId).catch(() => {
-          void queryClient.invalidateQueries({ queryKey: terminalsQueryKey });
-        });
+        void killTerminalAsync(terminalId).catch(invalidateTerminals);
       });
     },
     [
       closeTab,
       closeWorkspaceTabWithCleanup,
+      invalidateTerminals,
       killTerminalAsync,
       persistenceKey,
-      queryClient,
-      terminalsQueryKey,
+      removeTerminalFromCache,
     ],
   );