diff --git a/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.stories.tsx b/site/src/pages/AgentsPage/components/ChatConversation/AssistantOutput.stories.tsx
similarity index 88%
rename from site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.stories.tsx
rename to site/src/pages/AgentsPage/components/ChatConversation/AssistantOutput.stories.tsx
index 2bd9b9d52c58c..d524feada72e2 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.stories.tsx
+++ b/site/src/pages/AgentsPage/components/ChatConversation/AssistantOutput.stories.tsx
@@ -1,24 +1,38 @@
 import type { Meta, StoryObj } from "@storybook/react-vite";
 import { expect, screen, waitFor, within } from "storybook/test";
-import { StreamingOutput } from "./StreamingOutput";
+import { AssistantOutput } from "./AssistantOutput";
 import {
 	buildLiveStatus,
 	buildReconnectState,
 	buildRetryState,
 	buildStreamRenderState,
 	pinFixtureClock,
+	type StoryStreamRenderState,
 } from "./storyFixtures";
 
-// StreamingOutput renders inside a ConversationItem > Message > MessageContent
-// chain, but it's self-contained enough to render standalone.
+// Mirrors how ConversationTimeline normalizes a live row before handing it to
+// AssistantOutput.
+const LiveAssistantOutput = ({
+	streamState,
+	streamTools,
+	liveStatus,
+}: StoryStreamRenderState) => (
+	<AssistantOutput
+		keyPrefix="stream"
+		blocks={streamState?.blocks ?? []}
+		tools={streamTools}
+		isStreaming={liveStatus.phase === "streaming"}
+		liveStatus={liveStatus}
+	/>
+);
 
-const meta: Meta<typeof StreamingOutput> = {
-	title: "pages/AgentsPage/ChatConversation/StreamingOutput",
-	component: StreamingOutput,
+const meta: Meta<typeof LiveAssistantOutput> = {
+	title: "pages/AgentsPage/ChatConversation/AssistantOutput",
+	component: LiveAssistantOutput,
 	beforeEach: pinFixtureClock,
 };
 export default meta;
-type Story = StoryObj<typeof StreamingOutput>;
+type Story = StoryObj<typeof LiveAssistantOutput>;
 
 /** Transport reconnects render a non-terminal reconnecting callout. */
 export const ReconnectingAfterDisconnect: Story = {
@@ -245,11 +259,7 @@ export const StartingShowsThinkingActivity: Story = {
 };
 
 export const ResponseDoesNotRenderActivitySlot: Story = {
-	args: {
-		streamState: responseStreamState.streamState,
-		streamTools: responseStreamState.streamTools,
-		liveStatus: responseStreamState.liveStatus,
-	},
+	args: responseStreamState,
 	play: async ({ canvasElement }) => {
 		const canvas = within(canvasElement);
 		expect(canvas.queryByTestId("live-activity-slot")).not.toBeInTheDocument();
@@ -258,22 +268,20 @@ export const ResponseDoesNotRenderActivitySlot: Story = {
 
 /** Tool-only streams use running tool affordances instead of generic thinking. */
 export const RunningToolsSuppressThinkingActivity: Story = {
-	args: {
-		...buildStreamRenderState([
-			{
-				type: "tool-call",
-				tool_name: "execute",
-				tool_call_id: "tc-1",
-				args: { command: "ls -la" },
-			},
-			{
-				type: "tool-call",
-				tool_name: "read_file",
-				tool_call_id: "tc-2",
-				args: { path: "README.md" },
-			},
-		]),
-	},
+	args: buildStreamRenderState([
+		{
+			type: "tool-call",
+			tool_name: "execute",
+			tool_call_id: "tc-1",
+			args: { command: "ls -la" },
+		},
+		{
+			type: "tool-call",
+			tool_name: "read_file",
+			tool_call_id: "tc-2",
+			args: { path: "README.md" },
+		},
+	]),
 	play: async ({ canvasElement }) => {
 		const canvas = within(canvasElement);
 		expect(canvas.queryByTestId("live-activity-slot")).not.toBeInTheDocument();
@@ -334,18 +342,10 @@ export const EditFilesEmptyDeltaKeepsRunningHeight: Story = {
 		return (
 			<div className="flex flex-col gap-2">
 				<div data-testid="running-edit-files">
-					<StreamingOutput
-						streamState={editFilesRunningState.streamState}
-						streamTools={editFilesRunningState.streamTools}
-						liveStatus={editFilesRunningState.liveStatus}
-					/>
+					<LiveAssistantOutput {...editFilesRunningState} />
 				</div>
 				<div data-testid="empty-delta-edit-files">
-					<StreamingOutput
-						streamState={editFilesEmptyDeltaState.streamState}
-						streamTools={editFilesEmptyDeltaState.streamTools}
-						liveStatus={editFilesEmptyDeltaState.liveStatus}
-					/>
+					<LiveAssistantOutput {...editFilesEmptyDeltaState} />
 				</div>
 			</div>
 		);
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/AssistantOutput.tsx b/site/src/pages/AgentsPage/components/ChatConversation/AssistantOutput.tsx
new file mode 100644
index 0000000000000..c7eb2e8f51556
--- /dev/null
+++ b/site/src/pages/AgentsPage/components/ChatConversation/AssistantOutput.tsx
@@ -0,0 +1,51 @@
+import type { FC } from "react";
+import { Shimmer } from "../ChatElements";
+import { ToolIcon } from "../ChatElements/tools/ToolIcon";
+import { ChatStatusCallout } from "./ChatStatusCallout";
+import type { LiveStatusModel } from "./liveStatusModel";
+import { BlockList, type BlockListProps } from "./MessageBlocks";
+import { shouldShowGenericThinking } from "./streamingActivity";
+
+const LiveActivitySlot: FC = () => (
+	<div
+		data-testid="live-activity-slot"
+		className="flex h-6 items-center gap-2 text-content-secondary"
+	>
+		<ToolIcon name="thinking" />
+		<Shimmer as="span" className="text-[13px] leading-6">
+			Thinking
+		</Shimmer>
+	</div>
+);
+
+type AssistantOutputProps = BlockListProps & {
+	// Present only while the turn is still live. Drives the retry/reconnect
+	// callout and the generic thinking indicator.
+	liveStatus?: LiveStatusModel;
+};
+
+/**
+ * Renders assistant output from already-normalized blocks and tools, so a live
+ * turn and the durable message that replaces it render through the same path.
+ */
+export const AssistantOutput: FC<AssistantOutputProps> = ({
+	liveStatus,
+	...blockProps
+}) => {
+	const { blocks, tools } = blockProps;
+	const callout =
+		liveStatus?.phase === "retrying" || liveStatus?.phase === "reconnecting"
+			? liveStatus
+			: undefined;
+
+	return (
+		<div className="relative flex flex-col gap-2 overflow-visible">
+			<BlockList {...blockProps} />
+			{callout && <ChatStatusCallout status={callout} />}
+			{liveStatus &&
+				shouldShowGenericThinking({ liveStatus, blocks, tools }) && (
+					<LiveActivitySlot />
+				)}
+		</div>
+	);
+};
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/ConversationTimeline.tsx b/site/src/pages/AgentsPage/components/ChatConversation/ConversationTimeline.tsx
index 20bdf50b3555b..1fa291b840391 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/ConversationTimeline.tsx
+++ b/site/src/pages/AgentsPage/components/ChatConversation/ConversationTimeline.tsx
@@ -6,7 +6,6 @@ import {
 } from "lucide-react";
 import {
 	type FC,
-	Fragment,
 	memo,
 	type ReactNode,
 	useLayoutEffect,
@@ -14,11 +13,8 @@ import {
 	useState,
 } from "react";
 
-import { useQuery } from "react-query";
 import type { UrlTransform } from "streamdown";
-import { preferenceSettings } from "#/api/queries/users";
 import type * as TypesGen from "#/api/typesGenerated";
-import type { ThinkingDisplayMode } from "#/api/typesGenerated";
 
 import { AlertTitle } from "#/components/Alert/Alert";
 import { Button } from "#/components/Button/Button";
@@ -35,36 +31,29 @@ import {
 	Message,
 	MessageContent,
 	Response,
-	Tool,
 } from "../ChatElements";
-import { WebSearchSources } from "../ChatElements/tools";
-import { ReadFilesTool } from "../ChatElements/tools/ReadFilesTool";
-import {
-	getReadFileToolData,
-	ReadFileTool,
-} from "../ChatElements/tools/ReadFileTool";
 import type { SubagentVariant } from "../ChatElements/tools/subagentDescriptor";
-import { ToolCall } from "../ChatElements/tools/ToolCall";
 import { ImageLightbox } from "../ImageLightbox";
 import { TextPreviewDialog } from "../TextPreviewDialog";
-import {
-	AttachmentBlock,
-	type PreviewTextAttachment,
-} from "./AttachmentBlocks";
-import { groupSequentialReadFileBlocks } from "./blockUtils";
+import { AssistantOutput } from "./AssistantOutput";
+import type { PreviewTextAttachment } from "./AttachmentBlocks";
 import { FileProbeProvider } from "./FileProbeContext";
+import {
+	type LiveStatusModel,
+	shouldRenderLiveAssistant,
+} from "./liveStatusModel";
 import {
 	buildDisplayMessages,
 	deriveMessageDisplayState,
 } from "./messageHelpers";
 import { getEditableUserMessagePayload } from "./messageParsing";
-import { useSmoothStreamingText } from "./SmoothText";
-import { getThinkingDisclosureDisplay } from "./thinkingTitle";
+import { assignTimelineRows } from "./timelineRows";
 import type {
 	MergedTool,
 	ParsedMessageContent,
 	ParsedMessageEntry,
 	RenderBlock,
+	StreamState,
 } from "./types";
 import { UserMessageContent } from "./UserMessageContent";
 
@@ -85,441 +74,6 @@ const getChatMessageTextContent = (
 	return textContent.length > 0 ? textContent : undefined;
 };
 
-const ReasoningDisclosure = memo<{
-	id: string;
-	text: string;
-	isStreaming?: boolean;
-	urlTransform?: UrlTransform;
-	thinkingDisplayMode?: ThinkingDisplayMode;
-}>(
-	({
-		id,
-		text,
-		isStreaming = false,
-		urlTransform,
-		thinkingDisplayMode: mode = "auto",
-	}) => {
-		const [manualToggle, setManualToggle] = useState<boolean | null>(null);
-
-		// Reset manual override on streaming transitions so
-		// auto/preview modes collapse when streaming stops.
-		const [prevStreaming, setPrevStreaming] = useState(isStreaming);
-		if (prevStreaming !== isStreaming) {
-			setPrevStreaming(isStreaming);
-			if (mode === "auto" || mode === "preview") {
-				setManualToggle(null);
-			}
-		}
-
-		const autoExpanded = (() => {
-			switch (mode) {
-				case "always_expanded":
-					return true;
-				case "always_collapsed":
-					return false;
-				case "auto":
-				case "preview":
-					return isStreaming;
-				default: {
-					const _exhaustive: never = mode;
-					return _exhaustive;
-				}
-			}
-		})();
-
-		const expanded = manualToggle ?? autoExpanded;
-
-		const isPreviewConstrained =
-			mode === "preview" && isStreaming && manualToggle === null;
-
-		const previewScrollRef = useRef<HTMLDivElement>(null);
-
-		const { visibleText } = useSmoothStreamingText({
-			fullText: text,
-			isStreaming,
-			bypassSmoothing: !isStreaming,
-			streamKey: id,
-		});
-		const displayText = isStreaming ? visibleText : text;
-		const { title, body } = getThinkingDisclosureDisplay(displayText);
-		const hasText = body.trim().length > 0;
-
-		// Auto-scroll the preview container to the bottom as new
-		// thinking content streams in. useLayoutEffect avoids a
-		// visible frame where content has grown but not scrolled.
-		const displayTextLength = body.length;
-		useLayoutEffect(() => {
-			if (
-				displayTextLength &&
-				isPreviewConstrained &&
-				previewScrollRef.current
-			) {
-				previewScrollRef.current.scrollTop =
-					previewScrollRef.current.scrollHeight;
-			}
-		}, [displayTextLength, isPreviewConstrained]);
-
-		return (
-			<div data-transcript-row="">
-				<ToolCall.Root
-					className="w-full"
-					status={isStreaming ? "running" : "completed"}
-					hasContent={hasText}
-					expanded={expanded}
-					onExpandedChange={(open) => setManualToggle(open)}
-				>
-					<ToolCall.Header
-						iconName="thinking"
-						label={title}
-						showStatus={false}
-					/>
-					<ToolCall.Content>
-						<div
-							ref={previewScrollRef}
-							className={cn(
-								"mt-1.5",
-								isPreviewConstrained && "max-h-24 overflow-y-auto",
-							)}
-						>
-							<Response
-								className="text-[11px] text-content-secondary"
-								urlTransform={urlTransform}
-								streaming={isStreaming}
-							>
-								{body}
-							</Response>
-						</div>
-					</ToolCall.Content>
-				</ToolCall.Root>
-			</div>
-		);
-	},
-);
-
-// Wrapper that runs the smooth-streaming jitter buffer on a single
-// response block. Only used during live streaming — historical
-// messages render through <Response> directly.
-const SmoothedResponse = memo<{
-	text: string;
-	streamKey: string;
-	urlTransform?: UrlTransform;
-}>(({ text, streamKey, urlTransform }) => {
-	const { visibleText } = useSmoothStreamingText({
-		fullText: text,
-		isStreaming: true,
-		bypassSmoothing: false,
-		streamKey,
-	});
-	return (
-		<Response streaming urlTransform={urlTransform}>
-			{visibleText}
-		</Response>
-	);
-});
-
-const ReadFileTimelineBlock = memo<{
-	tools: readonly [MergedTool, ...MergedTool[]];
-}>(({ tools }) => {
-	const [expanded, setExpanded] = useState(false);
-	const [firstTool] = tools;
-	if (tools.length === 1) {
-		const readFile = getReadFileToolData(firstTool);
-		return (
-			<ToolCall.PolicyProvider hookRewritten={firstTool.hookRewritten ?? false}>
-				<div data-tool-call="">
-					<ReadFileTool
-						{...readFile}
-						status={firstTool.status}
-						expanded={expanded}
-						onExpandedChange={setExpanded}
-					/>
-				</div>
-			</ToolCall.PolicyProvider>
-		);
-	}
-
-	return (
-		<ReadFilesTool
-			tools={tools}
-			expanded={expanded}
-			onExpandedChange={setExpanded}
-		/>
-	);
-});
-
-// Shared block renderer used by both ChatMessageItem (historical
-// messages) and StreamingOutput (live stream). Encapsulates the
-// response / thinking / tool / file / sources switch so both
-// consumers stay in sync. PascalCase so the React Compiler
-// auto-memoizes every element inside.
-export const BlockList: FC<{
-	blocks: readonly RenderBlock[];
-	tools: readonly MergedTool[];
-	keyPrefix: string;
-	isStreaming?: boolean;
-	subagentTitles?: Map<string, string>;
-	subagentVariants?: Map<string, SubagentVariant>;
-	showDesktopPreviews?: boolean;
-	subagentStatusOverrides?: Map<string, TypesGen.ChatStatus>;
-	mcpServers?: readonly TypesGen.MCPServerConfig[];
-	onImageClick?: (src: string) => void;
-	onTextFileClick?: (attachment: PreviewTextAttachment) => void;
-	onImplementPlan?: () => Promise<void> | void;
-	onSendAskUserQuestionResponse?: (message: string) => Promise<void> | void;
-	isChatCompleted?: boolean;
-	latestAskUserQuestionToolId?: string;
-	askUserQuestionResponseTextByToolId?: ReadonlyMap<string, string>;
-	hasUserResponseAfterAskQuestion?: boolean;
-	urlTransform?: UrlTransform;
-}> = ({
-	blocks,
-	tools,
-	keyPrefix,
-	isStreaming = false,
-	subagentTitles,
-	subagentVariants,
-	showDesktopPreviews,
-	subagentStatusOverrides,
-	mcpServers,
-	onImageClick,
-	onTextFileClick,
-	onImplementPlan,
-	onSendAskUserQuestionResponse,
-	isChatCompleted,
-	latestAskUserQuestionToolId,
-	askUserQuestionResponseTextByToolId,
-	hasUserResponseAfterAskQuestion = false,
-	urlTransform,
-}) => {
-	const prefQuery = useQuery(preferenceSettings());
-	const thinkingDisplayMode: ThinkingDisplayMode =
-		prefQuery.data?.thinking_display_mode || "auto";
-	const shellToolDisplayMode: TypesGen.AgentDisplayMode =
-		prefQuery.data?.shell_tool_display_mode || "always_collapsed";
-	const codeDiffDisplayMode: TypesGen.AgentDisplayMode =
-		prefQuery.data?.code_diff_display_mode || "auto";
-
-	const toolByID = new Map(tools.map((tool) => [tool.id, tool]));
-	const displayBlocks = groupSequentialReadFileBlocks(blocks, tools);
-
-	// Pre-compute which tool IDs have a corresponding block so
-	// we can render "remaining" (block-less) tools afterwards.
-	const blockToolIDs = new Set(
-		displayBlocks.flatMap((block) => {
-			if (block.type === "tool") {
-				return toolByID.has(block.id) || isStreaming ? [block.id] : [];
-			}
-			if (block.type === "tool-group") {
-				return block.ids;
-			}
-			return [];
-		}),
-	);
-
-	const remainingTools = tools.filter((tool) => !blockToolIDs.has(tool.id));
-
-	// A thinking block is actively streaming only when it is the
-	// very last block in the list. Once newer content arrives
-	// (response, tool call, etc.) the thinking phase is over.
-	const lastDisplayBlockIsThinking =
-		displayBlocks.length > 0 &&
-		displayBlocks[displayBlocks.length - 1].type === "thinking";
-
-	return (
-		<>
-			{displayBlocks.map((block, index) => {
-				switch (block.type) {
-					case "response": {
-						const responseEl = isStreaming ? (
-							<SmoothedResponse
-								key={`${keyPrefix}-response-${index}`}
-								text={block.text}
-								streamKey={keyPrefix}
-								urlTransform={urlTransform}
-							/>
-						) : (
-							<Response
-								key={`${keyPrefix}-response-${index}`}
-								urlTransform={urlTransform}
-							>
-								{block.text}
-							</Response>
-						);
-						return (
-							<Fragment key={`${keyPrefix}-response-${index}`}>
-								{responseEl}
-							</Fragment>
-						);
-					}
-					case "thinking":
-						return (
-							<ReasoningDisclosure
-								key={`${keyPrefix}-thinking-${index}`}
-								id={`${keyPrefix}-thinking-${index}`}
-								text={block.text}
-								isStreaming={
-									isStreaming &&
-									lastDisplayBlockIsThinking &&
-									index === displayBlocks.length - 1
-								}
-								urlTransform={urlTransform}
-								thinkingDisplayMode={thinkingDisplayMode}
-							/>
-						);
-					case "file-reference":
-						return (
-							<div
-								key={`${keyPrefix}-file-reference-${index}`}
-								className="my-1 flex items-start gap-2 rounded-md border border-content-link/20 bg-content-link/5 px-2.5 py-1.5"
-							>
-								<span className="shrink-0 text-xs font-medium text-content-link">
-									{block.file_name}:
-									{block.start_line === block.end_line
-										? block.start_line
-										: `${block.start_line}\u2013${block.end_line}`}
-								</span>
-							</div>
-						);
-					case "tool-group": {
-						const [firstGroupTool, ...restGroupTools] = block.ids
-							.map((id) => toolByID.get(id))
-							.filter((tool) => tool !== undefined);
-						if (!firstGroupTool) {
-							return null;
-						}
-						return (
-							<ReadFileTimelineBlock
-								key={firstGroupTool.id}
-								tools={[firstGroupTool, ...restGroupTools]}
-							/>
-						);
-					}
-					case "tool": {
-						const tool = toolByID.get(block.id);
-						if (!tool) {
-							if (!isStreaming) {
-								return null;
-							}
-							// Streaming placeholder for not-yet-resolved tool.
-							return (
-								<Tool
-									key={block.id}
-									name="Tool"
-									status="running"
-									isError={false}
-									shellToolDisplayMode={shellToolDisplayMode}
-									codeDiffDisplayMode={codeDiffDisplayMode}
-									subagentTitles={subagentTitles}
-									subagentVariants={subagentVariants}
-									subagentStatusOverrides={subagentStatusOverrides}
-									mcpServers={mcpServers}
-								/>
-							);
-						}
-						if (tool.name === "read_file") {
-							return <ReadFileTimelineBlock key={tool.id} tools={[tool]} />;
-						}
-						return (
-							<Tool
-								key={tool.id}
-								name={tool.name}
-								args={tool.args}
-								result={tool.result}
-								status={tool.status}
-								isError={tool.isError}
-								killedBySignal={tool.killedBySignal}
-								shellToolDisplayMode={shellToolDisplayMode}
-								codeDiffDisplayMode={codeDiffDisplayMode}
-								subagentTitles={subagentTitles}
-								subagentVariants={subagentVariants}
-								showDesktopPreviews={showDesktopPreviews}
-								subagentStatusOverrides={
-									isStreaming ? subagentStatusOverrides : undefined
-								}
-								mcpServerConfigId={tool.mcpServerConfigId}
-								mcpServers={mcpServers}
-								onImplementPlan={onImplementPlan}
-								onSendAskUserQuestionResponse={onSendAskUserQuestionResponse}
-								isChatCompleted={isChatCompleted}
-								isLatestAskUserQuestion={
-									tool.id === latestAskUserQuestionToolId &&
-									!hasUserResponseAfterAskQuestion
-								}
-								previousResponseText={
-									tool.name === "ask_user_question"
-										? askUserQuestionResponseTextByToolId?.get(tool.id)
-										: undefined
-								}
-								modelIntent={tool.modelIntent}
-								parsedCommands={tool.parsedCommands}
-								hookRewritten={tool.hookRewritten}
-							/>
-						);
-					}
-					case "file":
-						return (
-							<AttachmentBlock
-								key={`${keyPrefix}-file-${block.file_id ?? index}`}
-								block={block}
-								onImageClick={onImageClick}
-								onTextFileClick={onTextFileClick}
-								framePreview
-								showTextStatus
-							/>
-						);
-					case "sources":
-						return (
-							<WebSearchSources
-								key={`${keyPrefix}-sources-${index}`}
-								sources={block.sources}
-							/>
-						);
-					default: {
-						const _exhaustive: never = block;
-						return _exhaustive;
-					}
-				}
-			})}
-			{remainingTools.map((tool) => (
-				<Tool
-					key={tool.id}
-					name={tool.name}
-					args={tool.args}
-					result={tool.result}
-					status={tool.status}
-					isError={tool.isError}
-					killedBySignal={tool.killedBySignal}
-					shellToolDisplayMode={shellToolDisplayMode}
-					codeDiffDisplayMode={codeDiffDisplayMode}
-					subagentTitles={subagentTitles}
-					subagentVariants={subagentVariants}
-					showDesktopPreviews={showDesktopPreviews}
-					subagentStatusOverrides={
-						isStreaming ? subagentStatusOverrides : undefined
-					}
-					mcpServerConfigId={tool.mcpServerConfigId}
-					mcpServers={mcpServers}
-					onImplementPlan={onImplementPlan}
-					onSendAskUserQuestionResponse={onSendAskUserQuestionResponse}
-					isChatCompleted={isChatCompleted}
-					isLatestAskUserQuestion={
-						tool.id === latestAskUserQuestionToolId &&
-						!hasUserResponseAfterAskQuestion
-					}
-					previousResponseText={
-						tool.name === "ask_user_question"
-							? askUserQuestionResponseTextByToolId?.get(tool.id)
-							: undefined
-					}
-					modelIntent={tool.modelIntent}
-					parsedCommands={tool.parsedCommands}
-					hookRewritten={tool.hookRewritten}
-				/>
-			))}
-		</>
-	);
-};
-
 // Avoid announcing historical hook notices as live alerts.
 const TimelineNotice: FC<{ children?: ReactNode }> = ({ children }) => (
 	<div
@@ -546,8 +100,17 @@ const LifecycleHookNotice: FC<{
 );
 
 const ChatMessageItem = memo<{
-	message: TypesGen.ChatMessage;
-	parsed: ParsedMessageContent;
+	renderKey: string;
+	// Durable rows render from a message. The live assistant row renders from
+	// liveStatus and the stream buffers instead.
+	message?: TypesGen.ChatMessage;
+	parsed?: ParsedMessageContent;
+	liveStatus?: LiveStatusModel;
+	// Live blocks and tools are normalized at the live row callsite, so this
+	// component never has to decide when stream output is visible.
+	liveBlocks?: readonly RenderBlock[];
+	liveTools?: readonly MergedTool[];
+	subagentStatusOverrides?: Map<string, TypesGen.ChatStatus>;
 	onEditUserMessage?: (
 		messageId: number,
 		text: string,
@@ -584,8 +147,13 @@ const ChatMessageItem = memo<{
 	onJumpToUserMessage?: (messageId: number) => void;
 }>(
 	({
+		renderKey,
 		message,
 		parsed,
+		liveStatus,
+		liveBlocks = [],
+		liveTools = [],
+		subagentStatusOverrides,
 		onEditUserMessage,
 		editingMessageId,
 		isAfterEditingMessage = false,
@@ -610,21 +178,25 @@ const ChatMessageItem = memo<{
 		subagentVariants,
 		showDesktopPreviews,
 	}) => {
-		const isUser = message.role === "user";
+		const isUser = message?.role === "user";
+		const messageId = message?.id;
 		const [previewImage, setPreviewImage] = useState<string | null>(null);
 		const [previewText, setPreviewText] =
 			useState<PreviewTextAttachment | null>(null);
-		const displayState = deriveMessageDisplayState({
-			message,
-			parsed,
-			hideActions,
-			hasActiveStream,
-			isAwaitingFirstStreamChunk,
-		});
-		if (displayState.shouldHide) {
+		const displayState =
+			message && parsed
+				? deriveMessageDisplayState({
+						message,
+						parsed,
+						hideActions,
+						hasActiveStream,
+						isAwaitingFirstStreamChunk,
+					})
+				: undefined;
+		if (displayState?.shouldHide) {
 			return null;
 		}
-		if (message.role === "system") {
+		if (message?.role === "system" && parsed) {
 			return (
 				<div
 					className={cn(
@@ -637,7 +209,7 @@ const ChatMessageItem = memo<{
 					{parsed.hookNotices.length > 0 ? (
 						parsed.hookNotices.map((notice, index) => (
 							<LifecycleHookNotice
-								key={`${message.id}-hook-notice-${index}`}
+								key={`${renderKey}-hook-notice-${index}`}
 								urlTransform={urlTransform}
 							>
 								{notice}
@@ -658,6 +230,9 @@ const ChatMessageItem = memo<{
 
 		return (
 			<div
+				// User rows render inside StickyUserMessage, which owns the row
+				// identity attributes for both the flow copy and the sticky copy.
+				data-testid={isUser ? undefined : `chat-message-${renderKey}`}
 				className={cn(
 					isAfterEditingMessage && "opacity-40 pointer-events-none",
 					"group/msg relative transition-opacity duration-200",
@@ -665,11 +240,13 @@ const ChatMessageItem = memo<{
 				inert={isAfterEditingMessage ? true : undefined}
 			>
 				<ConversationItem {...conversationItemProps}>
-					{isUser ? (
+					{isUser && displayState && parsed ? (
 						<UserMessageContent
 							displayState={displayState}
 							markdown={parsed.markdown}
-							isEditing={editingMessageId === message.id}
+							isEditing={
+								messageId !== undefined && editingMessageId === messageId
+							}
 							fadeFromBottom={fadeFromBottom}
 							onImageClick={setPreviewImage}
 							onTextFileClick={setPreviewText}
@@ -677,46 +254,45 @@ const ChatMessageItem = memo<{
 					) : (
 						<Message className="w-full">
 							<MessageContent className="whitespace-normal">
-								{/* Keep assistant content spacing consistent by letting the parent stack own every top-level gap. */}
-								<div className="relative flex flex-col gap-2 overflow-visible">
-									<BlockList
-										blocks={parsed.blocks}
-										tools={parsed.tools}
-										keyPrefix={String(message.id)}
-										subagentTitles={subagentTitles}
-										subagentVariants={subagentVariants}
-										showDesktopPreviews={showDesktopPreviews}
-										onImplementPlan={onImplementPlan}
-										onSendAskUserQuestionResponse={
-											onSendAskUserQuestionResponse
-										}
-										isChatCompleted={isChatCompleted}
-										latestAskUserQuestionToolId={latestAskUserQuestionToolId}
-										askUserQuestionResponseTextByToolId={
-											askUserQuestionResponseTextByToolId
-										}
-										hasUserResponseAfterAskQuestion={
-											hasUserResponseAfterAskQuestion
-										}
-										onImageClick={setPreviewImage}
-										onTextFileClick={setPreviewText}
-										urlTransform={urlTransform}
-										mcpServers={mcpServers}
-									/>
-								</div>
+								<AssistantOutput
+									keyPrefix={renderKey}
+									blocks={parsed?.blocks ?? liveBlocks}
+									tools={parsed?.tools ?? liveTools}
+									isStreaming={liveStatus?.phase === "streaming"}
+									liveStatus={liveStatus}
+									subagentStatusOverrides={subagentStatusOverrides}
+									subagentTitles={subagentTitles}
+									subagentVariants={subagentVariants}
+									showDesktopPreviews={showDesktopPreviews}
+									onImplementPlan={onImplementPlan}
+									onSendAskUserQuestionResponse={onSendAskUserQuestionResponse}
+									isChatCompleted={isChatCompleted}
+									latestAskUserQuestionToolId={latestAskUserQuestionToolId}
+									askUserQuestionResponseTextByToolId={
+										askUserQuestionResponseTextByToolId
+									}
+									hasUserResponseAfterAskQuestion={
+										hasUserResponseAfterAskQuestion
+									}
+									onImageClick={setPreviewImage}
+									onTextFileClick={setPreviewText}
+									urlTransform={urlTransform}
+									mcpServers={mcpServers}
+								/>
 							</MessageContent>
 						</Message>
 					)}
 				</ConversationItem>
-				{parsed.hookNotices.map((notice, index) => (
+				{parsed?.hookNotices.map((notice, index) => (
 					<LifecycleHookNotice
-						key={`${message.id}-hook-notice-${index}`}
+						key={`${renderKey}-hook-notice-${index}`}
 						urlTransform={urlTransform}
 					>
 						{notice}
 					</LifecycleHookNotice>
 				))}
-				{!hideActions &&
+				{displayState &&
+					!hideActions &&
 					(displayState.hasCopyableContent ||
 						(isUser && onEditUserMessage)) && (
 						<div
@@ -726,7 +302,7 @@ const ChatMessageItem = memo<{
 							)}
 							data-testid="message-actions"
 						>
-							{displayState.hasCopyableContent && (
+							{displayState.hasCopyableContent && parsed && (
 								<CopyButton
 									text={parsed.markdown}
 									label="Copy message"
@@ -734,7 +310,7 @@ const ChatMessageItem = memo<{
 									tooltipSide="bottom"
 								/>
 							)}
-							{isUser && onEditUserMessage && (
+							{isUser && messageId !== undefined && onEditUserMessage && (
 								<Tooltip>
 									<TooltipTrigger asChild>
 										<Button
@@ -745,7 +321,7 @@ const ChatMessageItem = memo<{
 											onClick={() => {
 												const { text, fileBlocks } =
 													getEditableUserMessagePayload(message);
-												onEditUserMessage(message.id, text, fileBlocks);
+												onEditUserMessage(messageId, text, fileBlocks);
 											}}
 										>
 											<PencilIcon />
@@ -812,7 +388,7 @@ const ChatMessageItem = memo<{
 								)}
 						</div>
 					)}
-				{displayState.needsAssistantBottomSpacer && !isLastMessage && (
+				{displayState?.needsAssistantBottomSpacer && !isLastMessage && (
 					<div className="min-h-6" data-testid="assistant-bottom-spacer" />
 				)}
 				{previewImage && (
@@ -866,6 +442,7 @@ const StickyUserMessage = memo<{
 		const [isReady, setIsReady] = useState(false);
 		const [isTooTall, setIsTooTall] = useState(false);
 		const sentinelRef = useRef<HTMLDivElement>(null);
+		const messageKey = `message:${message.id}`;
 		const messageId = message.id;
 		const setSentinelRef = (el: HTMLDivElement | null) => {
 			sentinelRef.current = el;
@@ -1070,6 +647,7 @@ const StickyUserMessage = memo<{
 				<div ref={setSentinelRef} className="h-0" data-user-sentinel />
 				<div
 					ref={containerRef}
+					data-testid={`chat-message-${messageKey}`}
 					className={cn(
 						"relative px-3 -mx-3 -mt-2",
 						!isTooTall && "sticky z-10",
@@ -1096,6 +674,7 @@ const StickyUserMessage = memo<{
 						inert={isStuck && !isTooTall ? true : undefined}
 					>
 						<ChatMessageItem
+							renderKey={messageKey}
 							message={message}
 							parsed={parsed}
 							onEditUserMessage={handleEditUserMessage}
@@ -1142,6 +721,7 @@ const StickyUserMessage = memo<{
 							    to GPU layer. */}
 							<div className="relative px-3 pointer-events-auto will-change-[max-height]">
 								<ChatMessageItem
+									renderKey={messageKey}
 									message={message}
 									parsed={parsed}
 									onEditUserMessage={handleEditUserMessage}
@@ -1162,27 +742,12 @@ const StickyUserMessage = memo<{
 	},
 );
 
-function computeLastInChainFlags(
-	displayMessages: readonly ParsedMessageEntry[],
-): boolean[] {
-	const flags = new Array<boolean>(displayMessages.length).fill(false);
-	let nextVisibleIsUser = true;
-	for (let i = displayMessages.length - 1; i >= 0; i--) {
-		const entry = displayMessages[i];
-		if (entry.message.role === "system") {
-			nextVisibleIsUser = true;
-			continue;
-		}
-		if (entry.message.role !== "user") {
-			flags[i] = nextVisibleIsUser;
-		}
-		nextVisibleIsUser = entry.message.role === "user";
-	}
-	return flags;
-}
-
 interface ConversationTimelineProps {
 	parsedMessages: readonly ParsedMessageEntry[];
+	streamState?: StreamState | null;
+	streamTools?: readonly MergedTool[];
+	liveStatus?: LiveStatusModel;
+	subagentStatusOverrides?: Map<string, TypesGen.ChatStatus>;
 	subagentTitles: Map<string, string>;
 	subagentVariants?: Map<string, SubagentVariant>;
 	onEditUserMessage?: (
@@ -1204,6 +769,10 @@ interface ConversationTimelineProps {
 export const ConversationTimeline = memo<ConversationTimelineProps>(
 	({
 		parsedMessages,
+		streamState,
+		streamTools = [],
+		liveStatus,
+		subagentStatusOverrides,
 		subagentTitles,
 		subagentVariants,
 		onEditUserMessage,
@@ -1233,9 +802,20 @@ export const ConversationTimeline = memo<ConversationTimelineProps>(
 		};
 
 		const displayMessages = buildDisplayMessages(parsedMessages);
-		const lastInChainFlags = computeLastInChainFlags(displayMessages);
+		const renderRows = assignTimelineRows(
+			displayMessages,
+			Boolean(liveStatus && shouldRenderLiveAssistant(liveStatus)),
+		);
+
+		// A live turn only reveals its stream blocks once output has accumulated.
+		// Before that the callout and thinking indicator stand in for the turn.
+		const showsStreamOutput =
+			liveStatus !== undefined &&
+			(liveStatus.phase === "streaming" || liveStatus.hasAccumulatedOutput);
+		const liveBlocks = showsStreamOutput ? (streamState?.blocks ?? []) : [];
+		const liveTools = showsStreamOutput ? streamTools : [];
 
-		if (parsedMessages.length === 0) {
+		if (renderRows.length === 0) {
 			return null;
 		}
 
@@ -1259,16 +839,10 @@ export const ConversationTimeline = memo<ConversationTimelineProps>(
 		// per-bubble prev/next arrow buttons that jump the transcript
 		// to the neighbouring user prompt.
 		const visibleUserMessageIds: number[] = [];
-		for (const { message, parsed } of parsedMessages) {
-			if (message.role !== "user") continue;
-			const { shouldHide } = deriveMessageDisplayState({
-				message,
-				parsed,
-				hideActions: false,
-				hasActiveStream: false,
-				isAwaitingFirstStreamChunk: false,
-			});
-			if (!shouldHide) visibleUserMessageIds.push(message.id);
+		for (const { message } of displayMessages) {
+			if (message.role === "user") {
+				visibleUserMessageIds.push(message.id);
+			}
 		}
 		const userNeighborsById = new Map<
 			number,
@@ -1325,41 +899,52 @@ export const ConversationTimeline = memo<ConversationTimelineProps>(
 					data-testid="conversation-timeline"
 					className="flex flex-col gap-2"
 				>
-					{displayMessages.map(({ message, parsed }, msgIdx) => {
+					{renderRows.map((row) => {
+						if (row.type === "live") {
+							// This row only exists when liveStatus is set.
+							return (
+								<ChatMessageItem
+									key={row.key}
+									renderKey={row.key}
+									liveStatus={liveStatus}
+									liveBlocks={liveBlocks}
+									liveTools={liveTools}
+									subagentStatusOverrides={
+										showsStreamOutput ? subagentStatusOverrides : undefined
+									}
+									subagentTitles={subagentTitles}
+									subagentVariants={subagentVariants}
+									urlTransform={urlTransform}
+									mcpServers={mcpServers}
+								/>
+							);
+						}
+						const { message, parsed } = row.entry;
+						const neighbors = userNeighborsById.get(message.id);
+						const isAfterEditingMessage = afterEditingMessageIds.has(
+							message.id,
+						);
 						if (message.role === "user") {
-							const { shouldHide } = deriveMessageDisplayState({
-								message,
-								parsed,
-								hideActions: false,
-								hasActiveStream: false,
-								isAwaitingFirstStreamChunk: false,
-							});
-							if (shouldHide) {
-								return null;
-							}
 							return (
 								<StickyUserMessage
-									key={message.id}
+									key={row.key}
 									message={message}
 									parsed={parsed}
 									onEditUserMessage={onEditUserMessage}
 									editingMessageId={editingMessageId}
-									isAfterEditingMessage={afterEditingMessageIds.has(message.id)}
-									prevUserMessageId={userNeighborsById.get(message.id)?.prevId}
-									nextUserMessageId={userNeighborsById.get(message.id)?.nextId}
+									isAfterEditingMessage={isAfterEditingMessage}
+									prevUserMessageId={neighbors?.prevId}
+									nextUserMessageId={neighbors?.nextId}
 									onJumpToUserMessage={jumpToUserMessage}
 									registerSentinel={registerSentinel}
 									urlTransform={urlTransform}
 								/>
 							);
 						}
-						// Hide actions on assistant messages that are not the
-						// last in a consecutive assistant chain. Flags are
-						// precomputed in a single reverse pass above.
-						const isLastInChain = lastInChainFlags[msgIdx];
 						return (
 							<ChatMessageItem
-								key={message.id}
+								key={row.key}
+								renderKey={row.key}
 								message={message}
 								parsed={parsed}
 								onImplementPlan={onImplementPlan}
@@ -1373,11 +958,11 @@ export const ConversationTimeline = memo<ConversationTimelineProps>(
 									hasUserResponseAfterAskQuestion
 								}
 								urlTransform={urlTransform}
-								isAfterEditingMessage={afterEditingMessageIds.has(message.id)}
-								hideActions={!isLastInChain}
+								isAfterEditingMessage={isAfterEditingMessage}
+								hideActions={!row.isLastInAssistantChain}
 								hasActiveStream={Boolean(hasActiveStream)}
 								isAwaitingFirstStreamChunk={Boolean(isAwaitingFirstStreamChunk)}
-								isLastMessage={msgIdx === displayMessages.length - 1}
+								isLastMessage={row.isLastMessage}
 								mcpServers={mcpServers}
 								subagentTitles={subagentTitles}
 								subagentVariants={subagentVariants}
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/LiveStreamTail.stories.tsx b/site/src/pages/AgentsPage/components/ChatConversation/LiveStreamTail.stories.tsx
index 269b5d0e5e095..20e1adf1f9180 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/LiveStreamTail.stories.tsx
+++ b/site/src/pages/AgentsPage/components/ChatConversation/LiveStreamTail.stories.tsx
@@ -1,24 +1,11 @@
 import type { Meta, StoryObj } from "@storybook/react-vite";
-import { expect, waitFor, within } from "storybook/test";
+import { expect, within } from "storybook/test";
 import { LiveStreamTailContent } from "./LiveStreamTail";
-import {
-	buildLiveStatus,
-	buildReconnectState,
-	buildRetryState,
-	buildStreamRenderState,
-	pinFixtureClock,
-	textResponseStreamParts,
-} from "./storyFixtures";
-
-const retryThenResumedStream = buildStreamRenderState(textResponseStreamParts);
+import { buildLiveStatus, pinFixtureClock } from "./storyFixtures";
 
 const defaultArgs: React.ComponentProps<typeof LiveStreamTailContent> = {
 	isTranscriptEmpty: true,
-	streamState: null,
-	streamTools: [],
 	liveStatus: buildLiveStatus(),
-	subagentTitles: new Map(),
-	subagentStatusOverrides: new Map(),
 };
 
 const meta: Meta<typeof LiveStreamTailContent> = {
@@ -245,36 +232,6 @@ export const TerminalMissingKeyError: Story = {
 	},
 };
 
-/** Retrying a transport timeout shows attempt + countdown. */
-export const RetryingTimeoutAnthropic: Story = {
-	args: {
-		...defaultArgs,
-		liveStatus: buildLiveStatus({
-			retryState: buildRetryState({
-				attempt: 2,
-				kind: "timeout",
-				error: "Anthropic is temporarily unavailable.",
-				provider: "anthropic",
-			}),
-		}),
-	},
-	play: async ({ canvasElement }) => {
-		const canvas = within(canvasElement);
-		expect(
-			canvas.getByRole("heading", { name: /request timed out/i }),
-		).toBeVisible();
-		expect(
-			canvas.getByText(/anthropic is temporarily unavailable/i),
-		).toBeVisible();
-		expect(canvas.getByText(/attempt 2/i)).toBeVisible();
-		// StatusCountdown renders label and seconds as separate text
-		// nodes, so match against the element's combined textContent.
-		await waitFor(() => {
-			expect(canvasElement).toHaveTextContent(/retrying in \d+s/i);
-		});
-	},
-};
-
 /** Terminal stream-silence timeouts get a specific heading without provider metadata. */
 export const TerminalStreamSilenceTimeoutError: Story = {
 	args: {
@@ -396,82 +353,3 @@ export const GenericErrorShowsProviderDetail: Story = {
 		expect(canvas.getByText(/image exceeds 5 mb maximum/i)).toBeVisible();
 	},
 };
-
-/** Reconnecting keeps already-streamed content visible without a terminal footer. */
-export const ReconnectingKeepsPartialOutputVisible: Story = {
-	args: {
-		...defaultArgs,
-		isTranscriptEmpty: false,
-		streamState: retryThenResumedStream.streamState,
-		streamTools: retryThenResumedStream.streamTools,
-		liveStatus: buildLiveStatus({
-			streamState: retryThenResumedStream.streamState,
-			reconnectState: buildReconnectState({
-				attempt: 2,
-				delayMs: 2000,
-			}),
-		}),
-	},
-	play: async ({ canvasElement }) => {
-		const canvas = within(canvasElement);
-		expect(canvas.getByText(/storybook streamed answer/i)).toBeVisible();
-		expect(
-			canvas.getByRole("heading", { name: /reconnecting/i }),
-		).toBeVisible();
-		expect(canvas.getByText(/chat stream disconnected/i)).toBeVisible();
-		expect(
-			canvas.queryByRole("heading", { name: /request failed/i }),
-		).not.toBeInTheDocument();
-	},
-};
-
-/** Persisted errors yield to live streaming while the live tail is active. */
-export const PersistedGenericErrorDoesNotOverrideStreaming: Story = {
-	args: {
-		...defaultArgs,
-		isTranscriptEmpty: false,
-		streamState: retryThenResumedStream.streamState,
-		streamTools: retryThenResumedStream.streamTools,
-		liveStatus: buildLiveStatus({
-			streamState: retryThenResumedStream.streamState,
-			persistedError: {
-				kind: "generic",
-				message: "Stale persisted error.",
-			},
-		}),
-	},
-	play: async ({ canvasElement }) => {
-		const canvas = within(canvasElement);
-		await waitFor(() => {
-			expect(canvas.getByText(/storybook streamed answer/i)).toBeVisible();
-		});
-		expect(
-			canvas.queryByRole("heading", { name: /request failed/i }),
-		).not.toBeInTheDocument();
-	},
-};
-
-/** Terminal failures keep partial output visible above the footer callout. */
-export const FailedStreamKeepsPartialOutputVisible: Story = {
-	args: {
-		...defaultArgs,
-		isTranscriptEmpty: false,
-		streamState: retryThenResumedStream.streamState,
-		streamTools: retryThenResumedStream.streamTools,
-		liveStatus: buildLiveStatus({
-			streamState: retryThenResumedStream.streamState,
-			streamError: {
-				kind: "generic",
-				message: "Provider request failed.",
-			},
-		}),
-	},
-	play: async ({ canvasElement }) => {
-		const canvas = within(canvasElement);
-		expect(canvas.getByText(/storybook streamed answer/i)).toBeVisible();
-		expect(
-			canvas.getByRole("heading", { name: /request failed/i }),
-		).toBeVisible();
-		expect(canvas.getByText(/provider request failed/i)).toBeVisible();
-	},
-};
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/LiveStreamTail.tsx b/site/src/pages/AgentsPage/components/ChatConversation/LiveStreamTail.tsx
index ac396eefdaa48..1bcc0ab732597 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/LiveStreamTail.tsx
+++ b/site/src/pages/AgentsPage/components/ChatConversation/LiveStreamTail.tsx
@@ -1,65 +1,22 @@
-import type { UrlTransform } from "streamdown";
-import type * as TypesGen from "#/api/typesGenerated";
-import type { SubagentVariant } from "../ChatElements/tools/subagentDescriptor";
 import { ChatStatusCallout } from "./ChatStatusCallout";
-import type { ChatDetailError } from "./chatError";
-import {
-	selectIsAwaitingFirstStreamChunk,
-	selectReconnectState,
-	selectRetryState,
-	selectStreamError,
-	selectStreamState,
-	selectSubagentStatusOverrides,
-	useChatSelector,
-	type useChatStore,
-} from "./chatStore";
-import { deriveLiveStatus, type LiveStatusModel } from "./liveStatusModel";
-import { StreamingOutput } from "./StreamingOutput";
-import { buildStreamTools } from "./streamState";
-import type { MergedTool, StreamState } from "./types";
-
-const shouldRenderStreamingSection = (liveStatus: LiveStatusModel): boolean =>
-	liveStatus.phase === "streaming" ||
-	liveStatus.phase === "starting" ||
-	liveStatus.phase === "retrying" ||
-	liveStatus.phase === "reconnecting" ||
-	liveStatus.hasAccumulatedOutput;
-
-type ChatStoreHandle = ReturnType<typeof useChatStore>["store"];
+import type { LiveStatusModel } from "./liveStatusModel";
 
 interface LiveStreamTailContentProps {
 	isTranscriptEmpty: boolean;
-	streamState: StreamState | null;
-	streamTools: readonly MergedTool[];
 	liveStatus: LiveStatusModel;
-	subagentTitles: Map<string, string>;
-	subagentVariants?: Map<string, SubagentVariant>;
-	subagentStatusOverrides: Map<string, TypesGen.ChatStatus>;
-	urlTransform?: UrlTransform;
-	mcpServers?: readonly TypesGen.MCPServerConfig[];
 }
 
+// The live assistant turn renders as a timeline row, so the tail below the
+// transcript only carries the empty state and the terminal failure callout.
 export const LiveStreamTailContent = ({
 	isTranscriptEmpty,
-	streamState,
-	streamTools,
 	liveStatus,
-	subagentTitles,
-	subagentVariants,
-	subagentStatusOverrides,
-	urlTransform,
-	mcpServers,
 }: LiveStreamTailContentProps) => {
-	const shouldRenderStreamSection = shouldRenderStreamingSection(liveStatus);
 	const terminalStatus = liveStatus.phase === "failed" ? liveStatus : null;
 	const shouldRenderEmptyState =
 		isTranscriptEmpty && liveStatus.phase === "idle";
 
-	if (
-		!shouldRenderEmptyState &&
-		!shouldRenderStreamSection &&
-		!terminalStatus
-	) {
+	if (!shouldRenderEmptyState && !terminalStatus) {
 		return null;
 	}
 
@@ -76,78 +33,7 @@ export const LiveStreamTailContent = ({
 					<p className="text-sm">Start a conversation with your agent.</p>
 				</div>
 			)}
-			{shouldRenderStreamSection && (
-				<StreamingOutput
-					streamState={streamState}
-					streamTools={streamTools}
-					liveStatus={liveStatus}
-					subagentTitles={subagentTitles}
-					subagentVariants={subagentVariants}
-					subagentStatusOverrides={subagentStatusOverrides}
-					urlTransform={urlTransform}
-					mcpServers={mcpServers}
-				/>
-			)}
 			{terminalStatus && <ChatStatusCallout status={terminalStatus} />}
 		</div>
 	);
 };
-
-interface LiveStreamTailProps {
-	store: ChatStoreHandle;
-	persistedError: ChatDetailError | undefined;
-	isTranscriptEmpty: boolean;
-	subagentTitles: Map<string, string>;
-	subagentVariants?: Map<string, SubagentVariant>;
-	urlTransform?: UrlTransform;
-	mcpServers?: readonly TypesGen.MCPServerConfig[];
-}
-
-export const LiveStreamTail = ({
-	store,
-	persistedError,
-	isTranscriptEmpty,
-	subagentTitles,
-	subagentVariants,
-	urlTransform,
-	mcpServers,
-}: LiveStreamTailProps) => {
-	const streamState = useChatSelector(store, selectStreamState);
-	const streamError = useChatSelector(store, selectStreamError);
-	const retryState = useChatSelector(store, selectRetryState);
-	const reconnectState = useChatSelector(store, selectReconnectState);
-	const isAwaitingFirstStreamChunk = useChatSelector(
-		store,
-		selectIsAwaitingFirstStreamChunk,
-	);
-	const subagentStatusOverrides = useChatSelector(
-		store,
-		selectSubagentStatusOverrides,
-	);
-	const streamTools = buildStreamTools(
-		streamState?.toolCalls,
-		streamState?.toolResults,
-	);
-	const liveStatus = deriveLiveStatus({
-		streamState,
-		retryState,
-		reconnectState,
-		streamError,
-		persistedError: persistedError ?? null,
-		isAwaitingFirstStreamChunk,
-	});
-
-	return (
-		<LiveStreamTailContent
-			isTranscriptEmpty={isTranscriptEmpty}
-			streamState={streamState}
-			streamTools={streamTools}
-			liveStatus={liveStatus}
-			subagentTitles={subagentTitles}
-			subagentVariants={subagentVariants}
-			subagentStatusOverrides={subagentStatusOverrides}
-			urlTransform={urlTransform}
-			mcpServers={mcpServers}
-		/>
-	);
-};
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/MessageBlocks.tsx b/site/src/pages/AgentsPage/components/ChatConversation/MessageBlocks.tsx
new file mode 100644
index 0000000000000..85ef00f2a967c
--- /dev/null
+++ b/site/src/pages/AgentsPage/components/ChatConversation/MessageBlocks.tsx
@@ -0,0 +1,449 @@
+import { type FC, memo, useLayoutEffect, useRef, useState } from "react";
+import { useQuery } from "react-query";
+import type { UrlTransform } from "streamdown";
+import { preferenceSettings } from "#/api/queries/users";
+import type * as TypesGen from "#/api/typesGenerated";
+import type { ThinkingDisplayMode } from "#/api/typesGenerated";
+import { cn } from "#/utils/cn";
+import { Response, Tool } from "../ChatElements";
+import { WebSearchSources } from "../ChatElements/tools";
+import { ReadFilesTool } from "../ChatElements/tools/ReadFilesTool";
+import {
+	getReadFileToolData,
+	ReadFileTool,
+} from "../ChatElements/tools/ReadFileTool";
+import type { SubagentVariant } from "../ChatElements/tools/subagentDescriptor";
+import { ToolCall } from "../ChatElements/tools/ToolCall";
+import {
+	AttachmentBlock,
+	type PreviewTextAttachment,
+} from "./AttachmentBlocks";
+import { groupSequentialReadFileBlocks } from "./blockUtils";
+import { useSmoothStreamingText } from "./SmoothText";
+import { getThinkingDisclosureDisplay } from "./thinkingTitle";
+import type { MergedTool, RenderBlock } from "./types";
+
+const ReasoningDisclosure = memo<{
+	id: string;
+	text: string;
+	isStreaming?: boolean;
+	urlTransform?: UrlTransform;
+	thinkingDisplayMode?: ThinkingDisplayMode;
+}>(
+	({
+		id,
+		text,
+		isStreaming = false,
+		urlTransform,
+		thinkingDisplayMode: mode = "auto",
+	}) => {
+		const [manualToggle, setManualToggle] = useState<boolean | null>(null);
+
+		// Reset manual override on streaming transitions so
+		// auto/preview modes collapse when streaming stops.
+		const [prevStreaming, setPrevStreaming] = useState(isStreaming);
+		if (prevStreaming !== isStreaming) {
+			setPrevStreaming(isStreaming);
+			if (mode === "auto" || mode === "preview") {
+				setManualToggle(null);
+			}
+		}
+
+		const autoExpanded = (() => {
+			switch (mode) {
+				case "always_expanded":
+					return true;
+				case "always_collapsed":
+					return false;
+				case "auto":
+				case "preview":
+					return isStreaming;
+				default: {
+					const _exhaustive: never = mode;
+					return _exhaustive;
+				}
+			}
+		})();
+
+		const expanded = manualToggle ?? autoExpanded;
+
+		const isPreviewConstrained =
+			mode === "preview" && isStreaming && manualToggle === null;
+
+		const previewScrollRef = useRef<HTMLDivElement>(null);
+
+		const { visibleText } = useSmoothStreamingText({
+			fullText: text,
+			isStreaming,
+			bypassSmoothing: !isStreaming,
+			streamKey: id,
+		});
+		const displayText = isStreaming ? visibleText : text;
+		const { title, body } = getThinkingDisclosureDisplay(displayText);
+		const hasText = body.trim().length > 0;
+
+		// Auto-scroll the preview container to the bottom as new
+		// thinking content streams in. useLayoutEffect avoids a
+		// visible frame where content has grown but not scrolled.
+		const displayTextLength = body.length;
+		useLayoutEffect(() => {
+			if (
+				displayTextLength &&
+				isPreviewConstrained &&
+				previewScrollRef.current
+			) {
+				previewScrollRef.current.scrollTop =
+					previewScrollRef.current.scrollHeight;
+			}
+		}, [displayTextLength, isPreviewConstrained]);
+
+		return (
+			<div data-transcript-row="">
+				<ToolCall.Root
+					className="w-full"
+					status={isStreaming ? "running" : "completed"}
+					hasContent={hasText}
+					expanded={expanded}
+					onExpandedChange={(open) => setManualToggle(open)}
+				>
+					<ToolCall.Header
+						iconName="thinking"
+						label={title}
+						showStatus={false}
+					/>
+					<ToolCall.Content>
+						<div
+							ref={previewScrollRef}
+							className={cn(
+								"mt-1.5",
+								isPreviewConstrained && "max-h-24 overflow-y-auto",
+							)}
+						>
+							<Response
+								className="text-[11px] text-content-secondary"
+								urlTransform={urlTransform}
+								streaming={isStreaming}
+							>
+								{body}
+							</Response>
+						</div>
+					</ToolCall.Content>
+				</ToolCall.Root>
+			</div>
+		);
+	},
+);
+
+// Runs the smooth-streaming jitter buffer while the turn is live and renders
+// the raw text once it is durable, so both shapes render through the same
+// code path.
+const ResponseBlock = memo<{
+	text: string;
+	isStreaming: boolean;
+	streamKey: string;
+	urlTransform?: UrlTransform;
+}>(({ text, isStreaming, streamKey, urlTransform }) => {
+	const { visibleText } = useSmoothStreamingText({
+		fullText: text,
+		isStreaming,
+		bypassSmoothing: !isStreaming,
+		streamKey,
+	});
+	return (
+		<Response streaming={isStreaming} urlTransform={urlTransform}>
+			{isStreaming ? visibleText : text}
+		</Response>
+	);
+});
+
+const ReadFileTimelineBlock = memo<{
+	tools: readonly [MergedTool, ...MergedTool[]];
+}>(({ tools }) => {
+	const [expanded, setExpanded] = useState(false);
+	const [firstTool] = tools;
+	if (tools.length === 1) {
+		const readFile = getReadFileToolData(firstTool);
+		return (
+			<ToolCall.PolicyProvider hookRewritten={firstTool.hookRewritten ?? false}>
+				<div data-tool-call="">
+					<ReadFileTool
+						{...readFile}
+						status={firstTool.status}
+						expanded={expanded}
+						onExpandedChange={setExpanded}
+					/>
+				</div>
+			</ToolCall.PolicyProvider>
+		);
+	}
+
+	return (
+		<ReadFilesTool
+			tools={tools}
+			expanded={expanded}
+			onExpandedChange={setExpanded}
+		/>
+	);
+});
+
+export type BlockListProps = {
+	blocks: readonly RenderBlock[];
+	tools: readonly MergedTool[];
+	keyPrefix: string;
+	isStreaming?: boolean;
+	subagentTitles?: Map<string, string>;
+	subagentVariants?: Map<string, SubagentVariant>;
+	showDesktopPreviews?: boolean;
+	subagentStatusOverrides?: Map<string, TypesGen.ChatStatus>;
+	mcpServers?: readonly TypesGen.MCPServerConfig[];
+	onImageClick?: (src: string) => void;
+	onTextFileClick?: (attachment: PreviewTextAttachment) => void;
+	onImplementPlan?: () => Promise<void> | void;
+	onSendAskUserQuestionResponse?: (message: string) => Promise<void> | void;
+	isChatCompleted?: boolean;
+	latestAskUserQuestionToolId?: string;
+	askUserQuestionResponseTextByToolId?: ReadonlyMap<string, string>;
+	hasUserResponseAfterAskQuestion?: boolean;
+	urlTransform?: UrlTransform;
+};
+
+// Shared block renderer for durable messages and the live assistant turn.
+// Encapsulates the response / thinking / tool / file / sources switch so both
+// consumers stay in sync. PascalCase so the React Compiler auto-memoizes every
+// element inside.
+export const BlockList: FC<BlockListProps> = ({
+	blocks,
+	tools,
+	keyPrefix,
+	isStreaming = false,
+	subagentTitles,
+	subagentVariants,
+	showDesktopPreviews,
+	subagentStatusOverrides,
+	mcpServers,
+	onImageClick,
+	onTextFileClick,
+	onImplementPlan,
+	onSendAskUserQuestionResponse,
+	isChatCompleted,
+	latestAskUserQuestionToolId,
+	askUserQuestionResponseTextByToolId,
+	hasUserResponseAfterAskQuestion = false,
+	urlTransform,
+}) => {
+	const prefQuery = useQuery(preferenceSettings());
+	const thinkingDisplayMode: ThinkingDisplayMode =
+		prefQuery.data?.thinking_display_mode || "auto";
+	const shellToolDisplayMode: TypesGen.AgentDisplayMode =
+		prefQuery.data?.shell_tool_display_mode || "always_collapsed";
+	const codeDiffDisplayMode: TypesGen.AgentDisplayMode =
+		prefQuery.data?.code_diff_display_mode || "auto";
+
+	const toolByID = new Map(tools.map((tool) => [tool.id, tool]));
+	const displayBlocks = groupSequentialReadFileBlocks(blocks, tools);
+
+	// Pre-compute which tool IDs have a corresponding block so
+	// we can render "remaining" (block-less) tools afterwards.
+	const blockToolIDs = new Set(
+		displayBlocks.flatMap((block) => {
+			if (block.type === "tool") {
+				return toolByID.has(block.id) || isStreaming ? [block.id] : [];
+			}
+			if (block.type === "tool-group") {
+				return block.ids;
+			}
+			return [];
+		}),
+	);
+
+	const remainingTools = tools.filter((tool) => !blockToolIDs.has(tool.id));
+
+	// A thinking block is actively streaming only when it is the
+	// very last block in the list. Once newer content arrives
+	// (response, tool call, etc.) the thinking phase is over.
+	const lastDisplayBlockIsThinking =
+		displayBlocks.length > 0 &&
+		displayBlocks[displayBlocks.length - 1].type === "thinking";
+
+	return (
+		<>
+			{displayBlocks.map((block, index) => {
+				switch (block.type) {
+					case "response":
+						return (
+							<ResponseBlock
+								key={`${keyPrefix}-response-${index}`}
+								text={block.text}
+								isStreaming={isStreaming}
+								streamKey={keyPrefix}
+								urlTransform={urlTransform}
+							/>
+						);
+					case "thinking":
+						return (
+							<ReasoningDisclosure
+								key={`${keyPrefix}-thinking-${index}`}
+								id={`${keyPrefix}-thinking-${index}`}
+								text={block.text}
+								isStreaming={
+									isStreaming &&
+									lastDisplayBlockIsThinking &&
+									index === displayBlocks.length - 1
+								}
+								urlTransform={urlTransform}
+								thinkingDisplayMode={thinkingDisplayMode}
+							/>
+						);
+					case "file-reference":
+						return (
+							<div
+								key={`${keyPrefix}-file-reference-${index}`}
+								className="my-1 flex items-start gap-2 rounded-md border border-content-link/20 bg-content-link/5 px-2.5 py-1.5"
+							>
+								<span className="shrink-0 text-xs font-medium text-content-link">
+									{block.file_name}:
+									{block.start_line === block.end_line
+										? block.start_line
+										: `${block.start_line}\u2013${block.end_line}`}
+								</span>
+							</div>
+						);
+					case "tool-group": {
+						const [firstGroupTool, ...restGroupTools] = block.ids
+							.map((id) => toolByID.get(id))
+							.filter((tool) => tool !== undefined);
+						if (!firstGroupTool) {
+							return null;
+						}
+						return (
+							<ReadFileTimelineBlock
+								key={firstGroupTool.id}
+								tools={[firstGroupTool, ...restGroupTools]}
+							/>
+						);
+					}
+					case "tool": {
+						const tool = toolByID.get(block.id);
+						if (!tool) {
+							if (!isStreaming) {
+								return null;
+							}
+							// Streaming placeholder for not-yet-resolved tool.
+							return (
+								<Tool
+									key={block.id}
+									name="Tool"
+									status="running"
+									isError={false}
+									shellToolDisplayMode={shellToolDisplayMode}
+									codeDiffDisplayMode={codeDiffDisplayMode}
+									subagentTitles={subagentTitles}
+									subagentVariants={subagentVariants}
+									subagentStatusOverrides={subagentStatusOverrides}
+									mcpServers={mcpServers}
+								/>
+							);
+						}
+						if (tool.name === "read_file") {
+							return <ReadFileTimelineBlock key={tool.id} tools={[tool]} />;
+						}
+						return (
+							<Tool
+								key={tool.id}
+								name={tool.name}
+								args={tool.args}
+								result={tool.result}
+								status={tool.status}
+								isError={tool.isError}
+								killedBySignal={tool.killedBySignal}
+								shellToolDisplayMode={shellToolDisplayMode}
+								codeDiffDisplayMode={codeDiffDisplayMode}
+								subagentTitles={subagentTitles}
+								subagentVariants={subagentVariants}
+								showDesktopPreviews={showDesktopPreviews}
+								subagentStatusOverrides={
+									isStreaming ? subagentStatusOverrides : undefined
+								}
+								mcpServerConfigId={tool.mcpServerConfigId}
+								mcpServers={mcpServers}
+								onImplementPlan={onImplementPlan}
+								onSendAskUserQuestionResponse={onSendAskUserQuestionResponse}
+								isChatCompleted={isChatCompleted}
+								isLatestAskUserQuestion={
+									tool.id === latestAskUserQuestionToolId &&
+									!hasUserResponseAfterAskQuestion
+								}
+								previousResponseText={
+									tool.name === "ask_user_question"
+										? askUserQuestionResponseTextByToolId?.get(tool.id)
+										: undefined
+								}
+								modelIntent={tool.modelIntent}
+								parsedCommands={tool.parsedCommands}
+								hookRewritten={tool.hookRewritten}
+							/>
+						);
+					}
+					case "file":
+						return (
+							<AttachmentBlock
+								key={`${keyPrefix}-file-${block.file_id ?? index}`}
+								block={block}
+								onImageClick={onImageClick}
+								onTextFileClick={onTextFileClick}
+								framePreview
+								showTextStatus
+							/>
+						);
+					case "sources":
+						return (
+							<WebSearchSources
+								key={`${keyPrefix}-sources-${index}`}
+								sources={block.sources}
+							/>
+						);
+					default: {
+						const _exhaustive: never = block;
+						return _exhaustive;
+					}
+				}
+			})}
+			{remainingTools.map((tool) => (
+				<Tool
+					key={tool.id}
+					name={tool.name}
+					args={tool.args}
+					result={tool.result}
+					status={tool.status}
+					isError={tool.isError}
+					killedBySignal={tool.killedBySignal}
+					shellToolDisplayMode={shellToolDisplayMode}
+					codeDiffDisplayMode={codeDiffDisplayMode}
+					subagentTitles={subagentTitles}
+					subagentVariants={subagentVariants}
+					showDesktopPreviews={showDesktopPreviews}
+					subagentStatusOverrides={
+						isStreaming ? subagentStatusOverrides : undefined
+					}
+					mcpServerConfigId={tool.mcpServerConfigId}
+					mcpServers={mcpServers}
+					onImplementPlan={onImplementPlan}
+					onSendAskUserQuestionResponse={onSendAskUserQuestionResponse}
+					isChatCompleted={isChatCompleted}
+					isLatestAskUserQuestion={
+						tool.id === latestAskUserQuestionToolId &&
+						!hasUserResponseAfterAskQuestion
+					}
+					previousResponseText={
+						tool.name === "ask_user_question"
+							? askUserQuestionResponseTextByToolId?.get(tool.id)
+							: undefined
+					}
+					modelIntent={tool.modelIntent}
+					parsedCommands={tool.parsedCommands}
+					hookRewritten={tool.hookRewritten}
+				/>
+			))}
+		</>
+	);
+};
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.tsx b/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.tsx
deleted file mode 100644
index ba894a3eb0d70..0000000000000
--- a/site/src/pages/AgentsPage/components/ChatConversation/StreamingOutput.tsx
+++ /dev/null
@@ -1,96 +0,0 @@
-import type { FC } from "react";
-import type { UrlTransform } from "streamdown";
-import type * as TypesGen from "#/api/typesGenerated";
-import {
-	ConversationItem,
-	Message,
-	MessageContent,
-	Shimmer,
-} from "../ChatElements";
-import type { SubagentVariant } from "../ChatElements/tools/subagentDescriptor";
-import { ToolIcon } from "../ChatElements/tools/ToolIcon";
-import { ChatStatusCallout } from "./ChatStatusCallout";
-import { BlockList } from "./ConversationTimeline";
-import type { LiveStatusModel } from "./liveStatusModel";
-import { shouldShowGenericThinking } from "./streamingActivity";
-import type { MergedTool, StreamState } from "./types";
-
-const hasCalloutLiveStatus = (liveStatus: LiveStatusModel): boolean =>
-	liveStatus.phase === "retrying" || liveStatus.phase === "reconnecting";
-
-const LiveActivitySlot: FC = () => (
-	<div
-		data-testid="live-activity-slot"
-		className="flex h-6 items-center gap-2 text-content-secondary"
-	>
-		<ToolIcon name="thinking" />
-		<Shimmer as="span" className="text-[13px] leading-6">
-			Thinking
-		</Shimmer>
-	</div>
-);
-
-export const StreamingOutput: FC<{
-	streamState: StreamState | null;
-	streamTools: readonly MergedTool[];
-	subagentTitles?: Map<string, string>;
-	subagentVariants?: Map<string, SubagentVariant>;
-	subagentStatusOverrides?: Map<string, TypesGen.ChatStatus>;
-	liveStatus: LiveStatusModel;
-	urlTransform?: UrlTransform;
-	mcpServers?: readonly TypesGen.MCPServerConfig[];
-}> = ({
-	streamState,
-	streamTools,
-	subagentTitles,
-	subagentVariants,
-	subagentStatusOverrides,
-	liveStatus,
-	urlTransform,
-	mcpServers,
-}) => {
-	if (liveStatus.phase === "idle") {
-		return null;
-	}
-
-	const isStreaming = liveStatus.phase === "streaming";
-	const shouldShowBlocks =
-		liveStatus.phase === "streaming" || liveStatus.hasAccumulatedOutput;
-	const blocks = shouldShowBlocks ? (streamState?.blocks ?? []) : [];
-
-	const showActivity = shouldShowGenericThinking({
-		liveStatus,
-		streamState,
-		streamTools,
-	});
-
-	const conversationItemProps = { role: "assistant" as const };
-
-	return (
-		<ConversationItem {...conversationItemProps}>
-			<Message className="w-full">
-				<MessageContent className="whitespace-normal">
-					<div className="relative flex flex-col gap-2 overflow-visible">
-						{shouldShowBlocks && (
-							<BlockList
-								blocks={blocks}
-								tools={streamTools}
-								keyPrefix="stream"
-								isStreaming={isStreaming}
-								subagentTitles={subagentTitles}
-								subagentVariants={subagentVariants}
-								subagentStatusOverrides={subagentStatusOverrides}
-								urlTransform={urlTransform}
-								mcpServers={mcpServers}
-							/>
-						)}
-						{hasCalloutLiveStatus(liveStatus) && (
-							<ChatStatusCallout status={liveStatus} />
-						)}
-						{showActivity && <LiveActivitySlot />}
-					</div>
-				</MessageContent>
-			</Message>
-		</ConversationItem>
-	);
-};
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/liveStatusModel.ts b/site/src/pages/AgentsPage/components/ChatConversation/liveStatusModel.ts
index 77f3ed6cab64d..6ba37b294c890 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/liveStatusModel.ts
+++ b/site/src/pages/AgentsPage/components/ChatConversation/liveStatusModel.ts
@@ -41,6 +41,15 @@ export type LiveStatusModel =
 			statusCode?: number;
 	  } & LiveStatusBase);
 
+export const shouldRenderLiveAssistant = (
+	liveStatus: LiveStatusModel,
+): boolean =>
+	liveStatus.phase === "streaming" ||
+	liveStatus.phase === "starting" ||
+	liveStatus.phase === "retrying" ||
+	liveStatus.phase === "reconnecting" ||
+	liveStatus.hasAccumulatedOutput;
+
 export type DeriveLiveStatusParams = {
 	streamState: StreamState | null;
 	retryState: RetryState | null;
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/storyFixtures.ts b/site/src/pages/AgentsPage/components/ChatConversation/storyFixtures.ts
index e0695c8ffe07b..dd95be0bf55d0 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/storyFixtures.ts
+++ b/site/src/pages/AgentsPage/components/ChatConversation/storyFixtures.ts
@@ -12,7 +12,7 @@ import type {
 	StreamState,
 } from "./types";
 
-type StoryStreamRenderState = {
+export type StoryStreamRenderState = {
 	streamState: StreamState | null;
 	streamTools: readonly MergedTool[];
 	liveStatus: LiveStatusModel;
@@ -83,13 +83,6 @@ export const buildRetryState = (
 	...overrides,
 });
 
-export const textResponseStreamParts = [
-	{
-		type: "text",
-		text: "Storybook streamed answer.",
-	},
-] satisfies readonly TypesGen.ChatMessagePart[];
-
 export const pinFixtureClock = () => {
 	const real = Date.now;
 	Date.now = () => FIXTURE_NOW;
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/streamingActivity.test.ts b/site/src/pages/AgentsPage/components/ChatConversation/streamingActivity.test.ts
index 8d5a04bcca2ff..5367e63d4da79 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/streamingActivity.test.ts
+++ b/site/src/pages/AgentsPage/components/ChatConversation/streamingActivity.test.ts
@@ -1,7 +1,7 @@
 import { describe, expect, it } from "vitest";
 import type { LiveStatusModel } from "./liveStatusModel";
 import { shouldShowGenericThinking } from "./streamingActivity";
-import type { MergedTool, StreamState } from "./types";
+import type { MergedTool } from "./types";
 
 const liveStatus = (phase: LiveStatusModel["phase"]): LiveStatusModel => {
 	switch (phase) {
@@ -41,13 +41,6 @@ const liveStatus = (phase: LiveStatusModel["phase"]): LiveStatusModel => {
 	}
 };
 
-const streamState = (blocks: StreamState["blocks"]): StreamState => ({
-	blocks,
-	toolCalls: {},
-	toolResults: {},
-	sources: [],
-});
-
 const tool = (status: MergedTool["status"]): MergedTool => ({
 	id: status,
 	name: "read_file",
@@ -60,8 +53,8 @@ describe("shouldShowGenericThinking", () => {
 		expect(
 			shouldShowGenericThinking({
 				liveStatus: liveStatus("starting"),
-				streamState: null,
-				streamTools: [],
+				blocks: [],
+				tools: [],
 			}),
 		).toBe(true);
 	});
@@ -70,8 +63,8 @@ describe("shouldShowGenericThinking", () => {
 		expect(
 			shouldShowGenericThinking({
 				liveStatus: liveStatus("streaming"),
-				streamState: null,
-				streamTools: [],
+				blocks: [],
+				tools: [],
 			}),
 		).toBe(true);
 	});
@@ -80,8 +73,8 @@ describe("shouldShowGenericThinking", () => {
 		expect(
 			shouldShowGenericThinking({
 				liveStatus: liveStatus("streaming"),
-				streamState: streamState([{ type: "tool", id: "read-1" }]),
-				streamTools: [tool("running")],
+				blocks: [{ type: "tool", id: "read-1" }],
+				tools: [tool("running")],
 			}),
 		).toBe(false);
 	});
@@ -90,8 +83,8 @@ describe("shouldShowGenericThinking", () => {
 		expect(
 			shouldShowGenericThinking({
 				liveStatus: liveStatus("streaming"),
-				streamState: streamState([{ type: "tool", id: "read-1" }]),
-				streamTools: [tool("completed")],
+				blocks: [{ type: "tool", id: "read-1" }],
+				tools: [tool("completed")],
 			}),
 		).toBe(true);
 	});
@@ -100,8 +93,8 @@ describe("shouldShowGenericThinking", () => {
 		expect(
 			shouldShowGenericThinking({
 				liveStatus: liveStatus("streaming"),
-				streamState: streamState([{ type: "response", text: "hello" }]),
-				streamTools: [],
+				blocks: [{ type: "response", text: "hello" }],
+				tools: [],
 			}),
 		).toBe(false);
 	});
@@ -110,8 +103,8 @@ describe("shouldShowGenericThinking", () => {
 		expect(
 			shouldShowGenericThinking({
 				liveStatus: liveStatus("streaming"),
-				streamState: streamState([{ type: "thinking", text: "thinking" }]),
-				streamTools: [],
+				blocks: [{ type: "thinking", text: "thinking" }],
+				tools: [],
 			}),
 		).toBe(false);
 	});
@@ -125,8 +118,8 @@ describe("shouldShowGenericThinking", () => {
 		expect(
 			shouldShowGenericThinking({
 				liveStatus: liveStatus(phase),
-				streamState: null,
-				streamTools: [],
+				blocks: [],
+				tools: [],
 			}),
 		).toBe(false);
 	});
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/streamingActivity.ts b/site/src/pages/AgentsPage/components/ChatConversation/streamingActivity.ts
index 7175bccdb1831..06751690a6a1c 100644
--- a/site/src/pages/AgentsPage/components/ChatConversation/streamingActivity.ts
+++ b/site/src/pages/AgentsPage/components/ChatConversation/streamingActivity.ts
@@ -1,24 +1,24 @@
 import type { LiveStatusModel } from "./liveStatusModel";
-import type { MergedTool, StreamState } from "./types";
+import type { MergedTool, RenderBlock } from "./types";
 
-const hasTextOrThinkingBlock = (streamState: StreamState | null): boolean =>
-	streamState?.blocks.some(
+const hasTextOrThinkingBlock = (blocks: readonly RenderBlock[]): boolean =>
+	blocks.some(
 		(block) => block.type === "response" || block.type === "thinking",
-	) ?? false;
+	);
 
-const hasRunningTool = (streamTools: readonly MergedTool[]): boolean =>
-	streamTools.some((tool) => tool.status === "running");
+const hasRunningTool = (tools: readonly MergedTool[]): boolean =>
+	tools.some((tool) => tool.status === "running");
 
 export const shouldShowGenericThinking = ({
 	liveStatus,
-	streamState,
-	streamTools,
+	blocks,
+	tools,
 }: {
 	liveStatus: LiveStatusModel;
-	streamState: StreamState | null;
-	streamTools: readonly MergedTool[];
+	blocks: readonly RenderBlock[];
+	tools: readonly MergedTool[];
 }): boolean =>
 	liveStatus.phase === "starting" ||
 	(liveStatus.phase === "streaming" &&
-		!hasTextOrThinkingBlock(streamState) &&
-		!hasRunningTool(streamTools));
+		!hasTextOrThinkingBlock(blocks) &&
+		!hasRunningTool(tools));
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/timelineRows.test.ts b/site/src/pages/AgentsPage/components/ChatConversation/timelineRows.test.ts
new file mode 100644
index 0000000000000..7ccfc6135e005
--- /dev/null
+++ b/site/src/pages/AgentsPage/components/ChatConversation/timelineRows.test.ts
@@ -0,0 +1,72 @@
+import { describe, expect, it } from "vitest";
+import type * as TypesGen from "#/api/typesGenerated";
+import { assignTimelineRows } from "./timelineRows";
+import type { ParsedMessageContent, ParsedMessageEntry } from "./types";
+
+const emptyParsed: ParsedMessageContent = {
+	markdown: "",
+	reasoning: "",
+	toolCalls: [],
+	toolResults: [],
+	tools: [],
+	blocks: [],
+	sources: [],
+	hookNotices: [],
+};
+
+const entry = (
+	message: TypesGen.ChatMessage,
+	text: string,
+): ParsedMessageEntry => ({
+	message,
+	parsed: { ...emptyParsed, markdown: text },
+});
+
+const durable = (
+	id: number,
+	role: TypesGen.ChatMessage["role"],
+	text: string,
+): ParsedMessageEntry =>
+	entry(
+		{
+			id,
+			chat_id: "chat-1",
+			role,
+			created_at: "2026-08-12T00:00:00Z",
+			content: [{ type: "text", text }],
+		},
+		text,
+	);
+
+const keys = (rows: ReturnType<typeof assignTimelineRows>): string[] =>
+	rows.map((row) => row.key);
+
+describe("assignTimelineRows", () => {
+	it("keys durable rows by message ID and the live row separately", () => {
+		const rows = assignTimelineRows(
+			[durable(1, "user", "prompt"), durable(2, "assistant", "answer")],
+			true,
+		);
+
+		expect(keys(rows)).toEqual(["message:1", "message:2", "live-assistant"]);
+	});
+
+	it("marks only the last message of an assistant chain", () => {
+		const rows = assignTimelineRows(
+			[
+				durable(1, "user", "prompt"),
+				durable(2, "assistant", "first"),
+				durable(3, "assistant", "second"),
+				durable(4, "user", "follow up"),
+			],
+			false,
+		);
+
+		expect(
+			rows.map((row) => row.type === "message" && row.isLastInAssistantChain),
+		).toEqual([false, false, true, false]);
+		expect(
+			rows.map((row) => row.type === "message" && row.isLastMessage),
+		).toEqual([false, false, false, true]);
+	});
+});
diff --git a/site/src/pages/AgentsPage/components/ChatConversation/timelineRows.ts b/site/src/pages/AgentsPage/components/ChatConversation/timelineRows.ts
new file mode 100644
index 0000000000000..0888e08a3c7eb
--- /dev/null
+++ b/site/src/pages/AgentsPage/components/ChatConversation/timelineRows.ts
@@ -0,0 +1,49 @@
+import type { ParsedMessageEntry } from "./types";
+
+type TimelineMessageRow = {
+	type: "message";
+	entry: ParsedMessageEntry;
+	key: string;
+	isLastInAssistantChain: boolean;
+	isLastMessage: boolean;
+};
+
+type TimelineRow = TimelineMessageRow | { type: "live"; key: string };
+
+export const assignTimelineRows = (
+	displayMessages: readonly ParsedMessageEntry[],
+	hasLiveAssistant: boolean,
+): readonly TimelineRow[] => {
+	const rows: TimelineMessageRow[] = [];
+
+	for (const [index, entry] of displayMessages.entries()) {
+		rows.push({
+			type: "message",
+			entry,
+			key: `message:${entry.message.id}`,
+			isLastInAssistantChain: false,
+			isLastMessage: index === displayMessages.length - 1,
+		});
+	}
+
+	// Message actions only belong on the final message of a consecutive
+	// assistant chain, so walk backwards and mark the ones a user message
+	// (or the end of the transcript) follows.
+	let nextVisibleIsUser = true;
+	for (let i = rows.length - 1; i >= 0; i--) {
+		const { message } = rows[i].entry;
+		if (message.role === "system") {
+			nextVisibleIsUser = true;
+			continue;
+		}
+		if (message.role !== "user") {
+			rows[i].isLastInAssistantChain = nextVisibleIsUser;
+		}
+		nextVisibleIsUser = message.role === "user";
+	}
+
+	if (!hasLiveAssistant) {
+		return rows;
+	}
+	return [...rows, { type: "live", key: "live-assistant" }];
+};
diff --git a/site/src/pages/AgentsPage/components/ChatElements/tools/Tool.stories.tsx b/site/src/pages/AgentsPage/components/ChatElements/tools/Tool.stories.tsx
index 89f51604dc3c3..3edecea02caff 100644
--- a/site/src/pages/AgentsPage/components/ChatElements/tools/Tool.stories.tsx
+++ b/site/src/pages/AgentsPage/components/ChatElements/tools/Tool.stories.tsx
@@ -8,7 +8,7 @@ import type * as TypesGen from "#/api/typesGenerated";
 import { MockChatModelConfig } from "#/testHelpers/chatModels";
 import { MockWorkspace, MockWorkspaceBuild } from "#/testHelpers/entities";
 import { ChatWorkspaceContext } from "../../../context/ChatWorkspaceContext";
-import { BlockList } from "../../ChatConversation/ConversationTimeline";
+import { BlockList } from "../../ChatConversation/MessageBlocks";
 import { DesktopPanelContext } from "./DesktopPanelContext";
 import { Tool, toolRendererNames } from "./Tool";
 
diff --git a/site/src/pages/AgentsPage/components/ChatPageContent.tsx b/site/src/pages/AgentsPage/components/ChatPageContent.tsx
index fb08c2e30323e..a87deb9e18820 100644
--- a/site/src/pages/AgentsPage/components/ChatPageContent.tsx
+++ b/site/src/pages/AgentsPage/components/ChatPageContent.tsx
@@ -29,15 +29,22 @@ import {
 	selectMessagesByID,
 	selectOrderedMessageIDs,
 	selectQueuedMessages,
+	selectReconnectState,
+	selectRetryState,
+	selectStreamError,
+	selectStreamState,
+	selectSubagentStatusOverrides,
 	useChatSelector,
 	type useChatStore,
 } from "./ChatConversation/chatStore";
-import { LiveStreamTail } from "./ChatConversation/LiveStreamTail";
+import { LiveStreamTailContent } from "./ChatConversation/LiveStreamTail";
+import { deriveLiveStatus } from "./ChatConversation/liveStatusModel";
 import {
 	buildSubagentMaps,
 	getPendingToolCallIDs,
 	parseMessagesWithMergedTools,
 } from "./ChatConversation/messageParsing";
+import { buildStreamTools } from "./ChatConversation/streamState";
 import { useOnRenderProfiler } from "./ChatConversation/useOnRenderProfiler";
 import type { ModelSelectorOption } from "./ChatElements";
 import type { SkillMetadata } from "./ChatMessageInput/SkillsTriggerMenu";
@@ -109,8 +116,29 @@ export const ChatPageTimeline: FC<ChatPageTimelineProps> = ({
 		store,
 		selectIsAwaitingFirstStreamChunk,
 	);
+	const streamState = useChatSelector(store, selectStreamState);
+	const streamError = useChatSelector(store, selectStreamError);
+	const retryState = useChatSelector(store, selectRetryState);
+	const reconnectState = useChatSelector(store, selectReconnectState);
+	const subagentStatusOverrides = useChatSelector(
+		store,
+		selectSubagentStatusOverrides,
+	);
 	const isChatCompleted = !hasStream;
 
+	const liveStatus = deriveLiveStatus({
+		streamState,
+		retryState,
+		reconnectState,
+		streamError,
+		persistedError: persistedError ?? null,
+		isAwaitingFirstStreamChunk,
+	});
+	const streamTools = buildStreamTools(
+		streamState?.toolCalls,
+		streamState?.toolResults,
+	);
+
 	const messages = orderedMessageIDs
 		.map((messageID) => {
 			const message = messagesByID.get(messageID);
@@ -148,6 +176,10 @@ export const ChatPageTimeline: FC<ChatPageTimelineProps> = ({
 					   renders correctly. */}
 				<ConversationTimeline
 					parsedMessages={parsedMessages}
+					streamState={streamState}
+					streamTools={streamTools}
+					liveStatus={liveStatus}
+					subagentStatusOverrides={subagentStatusOverrides}
 					subagentTitles={subagentTitles}
 					subagentVariants={subagentVariants}
 					onEditUserMessage={onEditUserMessage}
@@ -161,14 +193,9 @@ export const ChatPageTimeline: FC<ChatPageTimelineProps> = ({
 					mcpServers={mcpServers}
 					showDesktopPreviews={false}
 				/>
-				<LiveStreamTail
-					store={store}
-					persistedError={persistedError}
+				<LiveStreamTailContent
 					isTranscriptEmpty={parsedMessages.length === 0}
-					subagentTitles={subagentTitles}
-					subagentVariants={subagentVariants}
-					urlTransform={urlTransform}
-					mcpServers={mcpServers}
+					liveStatus={liveStatus}
 				/>
 			</div>
 		</Profiler>