diff --git a/codex-rs/Cargo.lock b/codex-rs/Cargo.lock
index d1b9cb39..7bf6c2a7 100644
--- a/codex-rs/Cargo.lock
+++ b/codex-rs/Cargo.lock
@@ -311,15 +311,6 @@ version = "0.5.2"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "3a8241f3ebb85c056b509d4327ad0358fbbba6ffb340bf388f26350aeda225b1"
 
-[[package]]
-name = "bincode"
-version = "1.3.3"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "b1f45e9417d87227c7a56d22e471c6206462cba514c7590c09aff4cf6d1ddcad"
-dependencies = [
- "serde",
-]
-
 [[package]]
 name = "bit-set"
 version = "0.5.3"
@@ -655,7 +646,7 @@ dependencies = [
  "tokio-test",
  "tokio-util",
  "toml",
- "toml_edit 0.23.4",
+ "toml_edit",
  "tracing",
  "tree-sitter",
  "tree-sitter-bash",
@@ -879,6 +870,7 @@ dependencies = [
  "path-clean",
  "pathdiff",
  "pretty_assertions",
+ "pulldown-cmark",
  "rand 0.9.2",
  "ratatui",
  "regex-lite",
@@ -895,7 +887,6 @@ dependencies = [
  "tracing",
  "tracing-appender",
  "tracing-subscriber",
- "tui-markdown",
  "unicode-segmentation",
  "unicode-width 0.1.14",
  "url",
@@ -1763,12 +1754,6 @@ version = "0.3.31"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "f90f7dce0722e95104fcb095585910c0977252f286e354b5e3bd38902cd99988"
 
-[[package]]
-name = "futures-timer"
-version = "3.0.3"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "f288b0a4f20f9a56b5d1da57e2227c661b7b16168e2f72365f57b63326e29b24"
-
 [[package]]
 name = "futures-util"
 version = "0.3.31"
@@ -1854,12 +1839,6 @@ version = "0.31.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "07e28edb80900c19c28f1072f2e8aeca7fa06b23cd4169cefe1af5aa3260783f"
 
-[[package]]
-name = "glob"
-version = "0.3.2"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "a8d1add55171497b4705a648c6b583acafb01d58050a51727785f0b2c8e0a2b2"
-
 [[package]]
 name = "globset"
 version = "0.4.16"
@@ -2567,12 +2546,6 @@ dependencies = [
  "libc",
 ]
 
-[[package]]
-name = "linked-hash-map"
-version = "0.5.6"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "0717cef1bc8b636c6e1c1bbdefc09e6322da8a9321966e8928ef80d20f7f770f"
-
 [[package]]
 name = "linux-raw-sys"
 version = "0.4.15"
@@ -3014,28 +2987,6 @@ version = "1.70.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "a4895175b425cb1f87721b59f0f286c2092bd4af812243672510e1ac53e2e0ad"
 
-[[package]]
-name = "onig"
-version = "6.5.1"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "336b9c63443aceef14bea841b899035ae3abe89b7c486aaf4c5bd8aafedac3f0"
-dependencies = [
- "bitflags 2.9.1",
- "libc",
- "once_cell",
- "onig_sys",
-]
-
-[[package]]
-name = "onig_sys"
-version = "69.9.1"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "c7f86c6eef3d6df15f23bcfb6af487cbd2fed4e5581d58d5bf1f5f8b7f6727dc"
-dependencies = [
- "cc",
- "pkg-config",
-]
-
 [[package]]
 name = "openssl"
 version = "0.10.73"
@@ -3361,15 +3312,6 @@ dependencies = [
  "yansi",
 ]
 
-[[package]]
-name = "proc-macro-crate"
-version = "3.3.0"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "edce586971a4dfaa28950c6f18ed55e0406c1ab88bbce2c6f6293a7aaba73d35"
-dependencies = [
- "toml_edit 0.22.27",
-]
-
 [[package]]
 name = "proc-macro2"
 version = "1.0.95"
@@ -3381,9 +3323,9 @@ dependencies = [
 
 [[package]]
 name = "pulldown-cmark"
-version = "0.13.0"
+version = "0.10.3"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "1e8bbe1a966bd2f362681a44f6edce3c2310ac21e4d5067a6e7ec396297a6ea0"
+checksum = "76979bea66e7875e7509c4ec5300112b316af87fa7a252ca91c448b32dfe3993"
 dependencies = [
  "bitflags 2.9.1",
  "getopts",
@@ -3394,9 +3336,9 @@ dependencies = [
 
 [[package]]
 name = "pulldown-cmark-escape"
-version = "0.11.0"
+version = "0.10.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "007d8adb5ddab6f8e3f491ac63566a7d5002cc7ed73901f72057943fa71ae1ae"
+checksum = "bd348ff538bc9caeda7ee8cad2d1d48236a1f443c1fa3913c6a02fe0043b1dd3"
 
 [[package]]
 name = "pxfm"
@@ -3627,12 +3569,6 @@ version = "0.8.5"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "2b15c43186be67a4fd63bee50d0303afffcef381492ebe2c5d87f324e1b8815c"
 
-[[package]]
-name = "relative-path"
-version = "1.9.3"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "ba39f3699c378cd8970968dcbff9c43159ea4cfbd88d43c00b22f2ef10a435d2"
-
 [[package]]
 name = "reqwest"
 version = "0.12.23"
@@ -3691,51 +3627,12 @@ dependencies = [
  "windows-sys 0.52.0",
 ]
 
-[[package]]
-name = "rstest"
-version = "0.25.0"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "6fc39292f8613e913f7df8fa892b8944ceb47c247b78e1b1ae2f09e019be789d"
-dependencies = [
- "futures-timer",
- "futures-util",
- "rstest_macros",
- "rustc_version",
-]
-
-[[package]]
-name = "rstest_macros"
-version = "0.25.0"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "1f168d99749d307be9de54d23fd226628d99768225ef08f6ffb52e0182a27746"
-dependencies = [
- "cfg-if",
- "glob",
- "proc-macro-crate",
- "proc-macro2",
- "quote",
- "regex",
- "relative-path",
- "rustc_version",
- "syn 2.0.104",
- "unicode-ident",
-]
-
 [[package]]
 name = "rustc-demangle"
 version = "0.1.25"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "989e6739f80c4ad5b13e0fd7fe89531180375b18520cc8c82080e4dc4035b84f"
 
-[[package]]
-name = "rustc_version"
-version = "0.4.1"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "cfcb3a22ef46e85b45de6ee7e79d063319ebb6594faafcf1c225ea92ab6e9b92"
-dependencies = [
- "semver",
-]
-
 [[package]]
 name = "rustix"
 version = "0.38.44"
@@ -3975,12 +3872,6 @@ dependencies = [
  "libc",
 ]
 
-[[package]]
-name = "semver"
-version = "1.0.26"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "56e6fa9c48d24d85fb3de5ad847117517440f6beceb7798af16b4a87d616b8d0"
-
 [[package]]
 name = "serde"
 version = "1.0.219"
@@ -4464,28 +4355,6 @@ dependencies = [
  "syn 2.0.104",
 ]
 
-[[package]]
-name = "syntect"
-version = "5.2.0"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "874dcfa363995604333cf947ae9f751ca3af4522c60886774c4963943b4746b1"
-dependencies = [
- "bincode",
- "bitflags 1.3.2",
- "flate2",
- "fnv",
- "once_cell",
- "onig",
- "plist",
- "regex-syntax 0.8.5",
- "serde",
- "serde_derive",
- "serde_json",
- "thiserror 1.0.69",
- "walkdir",
- "yaml-rust",
-]
-
 [[package]]
 name = "sys-locale"
 version = "0.3.2"
@@ -4809,18 +4678,12 @@ dependencies = [
  "indexmap 2.10.0",
  "serde",
  "serde_spanned",
- "toml_datetime 0.7.0",
+ "toml_datetime",
  "toml_parser",
  "toml_writer",
  "winnow",
 ]
 
-[[package]]
-name = "toml_datetime"
-version = "0.6.11"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "22cddaf88f4fbc13c51aebbf5f8eceb5c7c5a9da2ac40a13519eb5b0a0e8f11c"
-
 [[package]]
 name = "toml_datetime"
 version = "0.7.0"
@@ -4830,17 +4693,6 @@ dependencies = [
  "serde",
 ]
 
-[[package]]
-name = "toml_edit"
-version = "0.22.27"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "41fe8c660ae4257887cf66394862d21dbca4a6ddd26f04a3560410406a2f819a"
-dependencies = [
- "indexmap 2.10.0",
- "toml_datetime 0.6.11",
- "winnow",
-]
-
 [[package]]
 name = "toml_edit"
 version = "0.23.4"
@@ -4848,7 +4700,7 @@ source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "7211ff1b8f0d3adae1663b7da9ffe396eabe1ca25f0b0bee42b0da29a9ddce93"
 dependencies = [
  "indexmap 2.10.0",
- "toml_datetime 0.7.0",
+ "toml_datetime",
  "toml_parser",
  "toml_writer",
  "winnow",
@@ -5058,22 +4910,6 @@ dependencies = [
  "termcolor",
 ]
 
-[[package]]
-name = "tui-markdown"
-version = "0.3.5"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "d10648c25931bfaaf5334ff4e7dc5f3d830e0c50d7b0119b1d5cfe771f540536"
-dependencies = [
- "ansi-to-tui",
- "itertools 0.14.0",
- "pretty_assertions",
- "pulldown-cmark",
- "ratatui",
- "rstest",
- "syntect",
- "tracing",
-]
-
 [[package]]
 name = "typenum"
 version = "1.18.0"
@@ -5855,15 +5691,6 @@ version = "0.13.1"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "ec107c4503ea0b4a98ef47356329af139c0a4f7750e621cf2973cd3385ebcb3d"
 
-[[package]]
-name = "yaml-rust"
-version = "0.4.5"
-source = "registry+https://github.com/rust-lang/crates.io-index"
-checksum = "56c1936c4cc7a1c9ab21a1ebb602eb942ba868cbd44a99cb7cdc5892335e1c85"
-dependencies = [
- "linked-hash-map",
-]
-
 [[package]]
 name = "yansi"
 version = "1.0.1"
diff --git a/codex-rs/tui/Cargo.toml b/codex-rs/tui/Cargo.toml
index bedcf827..88e68875 100644
--- a/codex-rs/tui/Cargo.toml
+++ b/codex-rs/tui/Cargo.toml
@@ -79,7 +79,7 @@ tokio-stream = "0.1.17"
 tracing = { version = "0.1.41", features = ["log"] }
 tracing-appender = "0.2.3"
 tracing-subscriber = { version = "0.3.19", features = ["env-filter"] }
-tui-markdown = "0.3.3"
+pulldown-cmark = "0.10"
 unicode-segmentation = "1.12.0"
 unicode-width = "0.1"
 url = "2"
diff --git a/codex-rs/tui/src/bin/md-events.rs b/codex-rs/tui/src/bin/md-events.rs
new file mode 100644
index 00000000..f1117fad
--- /dev/null
+++ b/codex-rs/tui/src/bin/md-events.rs
@@ -0,0 +1,15 @@
+use std::io::Read;
+use std::io::{self};
+
+fn main() {
+    let mut input = String::new();
+    if let Err(err) = io::stdin().read_to_string(&mut input) {
+        eprintln!("failed to read stdin: {err}");
+        std::process::exit(1);
+    }
+
+    let parser = pulldown_cmark::Parser::new(&input);
+    for event in parser {
+        println!("{event:?}");
+    }
+}
diff --git a/codex-rs/tui/src/chatwidget/snapshots/codex_tui__chatwidget__tests__chatwidget_markdown_code_blocks_vt100_snapshot.snap b/codex-rs/tui/src/chatwidget/snapshots/codex_tui__chatwidget__tests__chatwidget_markdown_code_blocks_vt100_snapshot.snap
new file mode 100644
index 00000000..ca4e72a9
--- /dev/null
+++ b/codex-rs/tui/src/chatwidget/snapshots/codex_tui__chatwidget__tests__chatwidget_markdown_code_blocks_vt100_snapshot.snap
@@ -0,0 +1,18 @@
+---
+source: tui/src/chatwidget/tests.rs
+expression: visual
+---
+>     -- Indented code block (4 spaces)
+      SELECT *
+      FROM "users"
+      WHERE "email" LIKE '%@example.com';
+
+  ```sh
+  printf 'fenced within fenced\n'
+  ```
+
+  {
+    // comment allowed in jsonc
+    "path": "C:\\Program Files\\App",
+    "regex": "^foo.*(bar)?$"
+  }
diff --git a/codex-rs/tui/src/chatwidget/tests.rs b/codex-rs/tui/src/chatwidget/tests.rs
index e097c201..aad6e839 100644
--- a/codex-rs/tui/src/chatwidget/tests.rs
+++ b/codex-rs/tui/src/chatwidget/tests.rs
@@ -1756,3 +1756,123 @@ fn chatwidget_exec_and_status_layout_vt100_snapshot() {
     let visual = vt_lines.join("\n");
     assert_snapshot!(visual);
 }
+
+// E2E vt100 snapshot for complex markdown with indented and nested fenced code blocks
+#[test]
+fn chatwidget_markdown_code_blocks_vt100_snapshot() {
+    let (mut chat, mut rx, _op_rx) = make_chatwidget_manual();
+
+    // Simulate a final agent message via streaming deltas instead of a single message
+
+    chat.handle_codex_event(Event {
+        id: "t1".into(),
+        msg: EventMsg::TaskStarted(TaskStartedEvent {
+            model_context_window: None,
+        }),
+    });
+    // Build a vt100 visual from the history insertions only (no UI overlay)
+    let width: u16 = 80;
+    let height: u16 = 50;
+    let backend = ratatui::backend::TestBackend::new(width, height);
+    let mut term = crate::custom_terminal::Terminal::with_options(backend).expect("terminal");
+    // Place viewport at the last line so that history lines insert above it
+    term.set_viewport_area(Rect::new(0, height - 1, width, 1));
+
+    let mut ansi: Vec<u8> = Vec::new();
+
+    // Simulate streaming via AgentMessageDelta in 2-character chunks (no final AgentMessage).
+    let source: &str = r#"
+
+    -- Indented code block (4 spaces)
+    SELECT *
+    FROM "users"
+    WHERE "email" LIKE '%@example.com';
+
+````markdown
+```sh
+printf 'fenced within fenced\n'
+```
+````
+
+```jsonc
+{
+  // comment allowed in jsonc
+  "path": "C:\\Program Files\\App",
+  "regex": "^foo.*(bar)?$"
+}
+```
+"#;
+
+    let mut it = source.chars();
+    loop {
+        let mut delta = String::new();
+        match it.next() {
+            Some(c) => delta.push(c),
+            None => break,
+        }
+        if let Some(c2) = it.next() {
+            delta.push(c2);
+        }
+
+        chat.handle_codex_event(Event {
+            id: "t1".into(),
+            msg: EventMsg::AgentMessageDelta(AgentMessageDeltaEvent { delta }),
+        });
+        // Drive commit ticks and drain emitted history lines into the vt100 buffer.
+        loop {
+            chat.on_commit_tick();
+            let mut inserted_any = false;
+            while let Ok(app_ev) = rx.try_recv() {
+                if let AppEvent::InsertHistoryCell(cell) = app_ev {
+                    let lines = cell.display_lines(width);
+                    crate::insert_history::insert_history_lines_to_writer(
+                        &mut term, &mut ansi, lines,
+                    );
+                    inserted_any = true;
+                }
+            }
+            if !inserted_any {
+                break;
+            }
+        }
+    }
+
+    // Finalize the stream without sending a final AgentMessage, to flush any tail.
+    chat.handle_codex_event(Event {
+        id: "t1".into(),
+        msg: EventMsg::TaskComplete(TaskCompleteEvent {
+            last_agent_message: None,
+        }),
+    });
+    for lines in drain_insert_history(&mut rx) {
+        crate::insert_history::insert_history_lines_to_writer(&mut term, &mut ansi, lines);
+    }
+
+    let mut parser = vt100::Parser::new(height, width, 0);
+    parser.process(&ansi);
+
+    let mut vt_lines: Vec<String> = (0..height)
+        .map(|row| {
+            let mut s = String::with_capacity(width as usize);
+            for col in 0..width {
+                if let Some(cell) = parser.screen().cell(row, col) {
+                    if let Some(ch) = cell.contents().chars().next() {
+                        s.push(ch);
+                    } else {
+                        s.push(' ');
+                    }
+                } else {
+                    s.push(' ');
+                }
+            }
+            s.trim_end().to_string()
+        })
+        .collect();
+
+    // Compact trailing blank rows for a stable snapshot
+    while matches!(vt_lines.last(), Some(l) if l.trim().is_empty()) {
+        vt_lines.pop();
+    }
+    let visual = vt_lines.join("\n");
+    assert_snapshot!(visual);
+}
diff --git a/codex-rs/tui/src/insert_history.rs b/codex-rs/tui/src/insert_history.rs
index bffd3f2b..75731c7f 100644
--- a/codex-rs/tui/src/insert_history.rs
+++ b/codex-rs/tui/src/insert_history.rs
@@ -97,7 +97,17 @@ pub fn insert_history_lines_to_writer<B, W>(
 
     for line in wrapped {
         queue!(writer, Print("\r\n")).ok();
-        write_spans(writer, &line).ok();
+        // Merge line-level style into each span so that ANSI colors reflect
+        // line styles (e.g., blockquotes with green fg).
+        let merged_spans: Vec<Span> = line
+            .spans
+            .iter()
+            .map(|s| Span {
+                style: s.style.patch(line.style),
+                content: s.content.clone(),
+            })
+            .collect();
+        write_spans(writer, merged_spans.iter()).ok();
     }
 
     queue!(writer, ResetScrollRegion).ok();
@@ -264,6 +274,10 @@ where
 #[cfg(test)]
 mod tests {
     use super::*;
+    use crate::markdown_render::render_markdown_text;
+    use ratatui::layout::Rect;
+    use ratatui::style::Color;
+    use vt100::Parser;
 
     #[test]
     fn writes_bold_then_regular_spans() {
@@ -292,4 +306,240 @@ mod tests {
             String::from_utf8(expected).unwrap()
         );
     }
+
+    #[test]
+    fn vt100_blockquote_line_emits_green_fg() {
+        // Set up a small off-screen terminal
+        let width: u16 = 40;
+        let height: u16 = 10;
+        let backend = ratatui::backend::TestBackend::new(width, height);
+        let mut term = crate::custom_terminal::Terminal::with_options(backend).expect("terminal");
+        // Place viewport on the last line so history inserts scroll upward
+        let viewport = Rect::new(0, height - 1, width, 1);
+        term.set_viewport_area(viewport);
+
+        // Build a blockquote-like line: apply line-level green style and prefix "> "
+        let mut line: Line<'static> = Line::from(vec!["> ".into(), "Hello world".into()]);
+        line = line.style(Color::Green);
+        let mut ansi: Vec<u8> = Vec::new();
+        insert_history_lines_to_writer(&mut term, &mut ansi, vec![line]);
+
+        // Parse ANSI using vt100 and assert at least one non-default fg color appears
+        let mut parser = Parser::new(height, width, 0);
+        parser.process(&ansi);
+
+        let mut saw_colored = false;
+        'outer: for row in 0..height {
+            for col in 0..width {
+                if let Some(cell) = parser.screen().cell(row, col)
+                    && cell.has_contents()
+                    && cell.fgcolor() != vt100::Color::Default
+                {
+                    saw_colored = true;
+                    break 'outer;
+                }
+            }
+        }
+        assert!(
+            saw_colored,
+            "expected at least one colored cell in vt100 output"
+        );
+    }
+
+    #[test]
+    fn vt100_blockquote_wrap_preserves_color_on_all_wrapped_lines() {
+        // Force wrapping by using a narrow viewport width and a long blockquote line.
+        let width: u16 = 20;
+        let height: u16 = 8;
+        let backend = ratatui::backend::TestBackend::new(width, height);
+        let mut term = crate::custom_terminal::Terminal::with_options(backend).expect("terminal");
+        // Viewport is the last line so history goes directly above it.
+        let viewport = Rect::new(0, height - 1, width, 1);
+        term.set_viewport_area(viewport);
+
+        // Create a long blockquote with a distinct prefix and enough text to wrap.
+        let mut line: Line<'static> = Line::from(vec![
+            "> ".into(),
+            "This is a long quoted line that should wrap".into(),
+        ]);
+        line = line.style(Color::Green);
+
+        let mut ansi: Vec<u8> = Vec::new();
+        insert_history_lines_to_writer(&mut term, &mut ansi, vec![line]);
+
+        // Parse and inspect the final screen buffer.
+        let mut parser = Parser::new(height, width, 0);
+        parser.process(&ansi);
+        let screen = parser.screen();
+
+        // Collect rows that are non-empty; these should correspond to our wrapped lines.
+        let mut non_empty_rows: Vec<u16> = Vec::new();
+        for row in 0..height {
+            let mut any = false;
+            for col in 0..width {
+                if let Some(cell) = screen.cell(row, col)
+                    && cell.has_contents()
+                    && cell.contents() != "\0"
+                    && cell.contents() != " "
+                {
+                    any = true;
+                    break;
+                }
+            }
+            if any {
+                non_empty_rows.push(row);
+            }
+        }
+
+        // Expect at least two rows due to wrapping.
+        assert!(
+            non_empty_rows.len() >= 2,
+            "expected wrapped output to span >=2 rows, got {non_empty_rows:?}",
+        );
+
+        // For each non-empty row, ensure all non-space cells are using a non-default fg color.
+        for row in non_empty_rows {
+            for col in 0..width {
+                if let Some(cell) = screen.cell(row, col) {
+                    let contents = cell.contents();
+                    if !contents.is_empty() && contents != " " {
+                        assert!(
+                            cell.fgcolor() != vt100::Color::Default,
+                            "expected non-default fg on row {row} col {col}, got {:?}",
+                            cell.fgcolor()
+                        );
+                    }
+                }
+            }
+        }
+    }
+
+    #[test]
+    fn vt100_colored_prefix_then_plain_text_resets_color() {
+        let width: u16 = 40;
+        let height: u16 = 6;
+        let backend = ratatui::backend::TestBackend::new(width, height);
+        let mut term = crate::custom_terminal::Terminal::with_options(backend).expect("terminal");
+        let viewport = Rect::new(0, height - 1, width, 1);
+        term.set_viewport_area(viewport);
+
+        // First span colored, rest plain.
+        let line: Line<'static> = Line::from(vec![
+            Span::styled("1. ", ratatui::style::Style::default().fg(Color::LightBlue)),
+            Span::raw("Hello world"),
+        ]);
+
+        let mut ansi: Vec<u8> = Vec::new();
+        insert_history_lines_to_writer(&mut term, &mut ansi, vec![line]);
+
+        let mut parser = Parser::new(height, width, 0);
+        parser.process(&ansi);
+        let screen = parser.screen();
+
+        // Find the first non-empty row; verify first three cells are colored, following cells default.
+        'rows: for row in 0..height {
+            let mut has_text = false;
+            for col in 0..width {
+                if let Some(cell) = screen.cell(row, col)
+                    && cell.has_contents()
+                    && cell.contents() != " "
+                {
+                    has_text = true;
+                    break;
+                }
+            }
+            if !has_text {
+                continue;
+            }
+
+            // Expect "1. Hello world" starting at col 0.
+            for col in 0..3 {
+                let cell = screen.cell(row, col).unwrap();
+                assert!(
+                    cell.fgcolor() != vt100::Color::Default,
+                    "expected colored prefix at col {col}, got {:?}",
+                    cell.fgcolor()
+                );
+            }
+            for col in 3..(3 + "Hello world".len() as u16) {
+                let cell = screen.cell(row, col).unwrap();
+                assert_eq!(
+                    cell.fgcolor(),
+                    vt100::Color::Default,
+                    "expected default color for plain text at col {col}, got {:?}",
+                    cell.fgcolor()
+                );
+            }
+            break 'rows;
+        }
+    }
+
+    #[test]
+    fn vt100_deep_nested_mixed_list_third_level_marker_is_colored() {
+        // Markdown with five levels (ordered → unordered → ordered → unordered → unordered).
+        let md = "1. First\n   - Second level\n     1. Third level (ordered)\n        - Fourth level (bullet)\n          - Fifth level to test indent consistency\n";
+        let text = render_markdown_text(md);
+        let lines: Vec<Line<'static>> = text.lines.clone();
+
+        let width: u16 = 60;
+        let height: u16 = 12;
+        let backend = ratatui::backend::TestBackend::new(width, height);
+        let mut term = crate::custom_terminal::Terminal::with_options(backend).expect("terminal");
+        let viewport = ratatui::layout::Rect::new(0, height - 1, width, 1);
+        term.set_viewport_area(viewport);
+
+        let mut ansi: Vec<u8> = Vec::new();
+        insert_history_lines_to_writer(&mut term, &mut ansi, lines);
+
+        let mut parser = Parser::new(height, width, 0);
+        parser.process(&ansi);
+        let screen = parser.screen();
+
+        // Reconstruct screen rows as strings to locate the 3rd level line.
+        let mut rows: Vec<String> = Vec::with_capacity(height as usize);
+        for row in 0..height {
+            let mut s = String::with_capacity(width as usize);
+            for col in 0..width {
+                if let Some(cell) = screen.cell(row, col) {
+                    if let Some(ch) = cell.contents().chars().next() {
+                        s.push(ch);
+                    } else {
+                        s.push(' ');
+                    }
+                } else {
+                    s.push(' ');
+                }
+            }
+            rows.push(s.trim_end().to_string());
+        }
+
+        let needle = "1. Third level (ordered)";
+        let row_idx = rows
+            .iter()
+            .position(|r| r.contains(needle))
+            .unwrap_or_else(|| {
+                panic!("expected to find row containing {needle:?}, have rows: {rows:?}")
+            });
+        let col_start = rows[row_idx].find(needle).unwrap() as u16; // column where '1' starts
+
+        // Verify that the numeric marker ("1.") at the third level is colored
+        // (non-default fg) and the content after the following space resets to default.
+        for c in [col_start, col_start + 1] {
+            let cell = screen.cell(row_idx as u16, c).unwrap();
+            assert!(
+                cell.fgcolor() != vt100::Color::Default,
+                "expected colored 3rd-level marker at row {row_idx} col {c}, got {:?}",
+                cell.fgcolor()
+            );
+        }
+        let content_col = col_start + 3; // skip '1', '.', and the space
+        if let Some(cell) = screen.cell(row_idx as u16, content_col) {
+            assert_eq!(
+                cell.fgcolor(),
+                vt100::Color::Default,
+                "expected default color for 3rd-level content at row {row_idx} col {content_col}, got {:?}",
+                cell.fgcolor()
+            );
+        }
+    }
 }
diff --git a/codex-rs/tui/src/lib.rs b/codex-rs/tui/src/lib.rs
index 5f002e53..710312ce 100644
--- a/codex-rs/tui/src/lib.rs
+++ b/codex-rs/tui/src/lib.rs
@@ -45,6 +45,7 @@ pub mod insert_history;
 mod key_hint;
 pub mod live_wrap;
 mod markdown;
+mod markdown_render;
 mod markdown_stream;
 pub mod onboarding;
 mod pager_overlay;
diff --git a/codex-rs/tui/src/markdown.rs b/codex-rs/tui/src/markdown.rs
index 6aff205a..010ff78a 100644
--- a/codex-rs/tui/src/markdown.rs
+++ b/codex-rs/tui/src/markdown.rs
@@ -1,8 +1,6 @@
-use crate::citation_regex::CITATION_REGEX;
 use codex_core::config::Config;
 use codex_core::config_types::UriBasedFileOpener;
 use ratatui::text::Line;
-use std::borrow::Cow;
 use std::path::Path;
 
 pub(crate) fn append_markdown(
@@ -19,238 +17,13 @@ fn append_markdown_with_opener_and_cwd(
     file_opener: UriBasedFileOpener,
     cwd: &Path,
 ) {
-    // Historically, we fed the entire `markdown_source` into the renderer in
-    // one pass. However, fenced code blocks sometimes lost leading whitespace
-    // when formatted by the markdown renderer/highlighter. To preserve code
-    // block content exactly, split the source into "text" and "code" segments:
-    // - Render non-code text through `tui_markdown` (with citation rewrite).
-    // - Render code block content verbatim as plain lines without additional
-    //   formatting, preserving leading spaces.
-    for seg in split_text_and_fences(markdown_source) {
-        match seg {
-            Segment::Text(s) => {
-                let processed = rewrite_file_citations(&s, file_opener, cwd);
-                let rendered = tui_markdown::from_str(&processed);
-                crate::render::line_utils::push_owned_lines(&rendered.lines, lines);
-            }
-            Segment::Code { content, .. } => {
-                // Emit the code content exactly as-is, line by line.
-                // We don't attempt syntax highlighting to avoid whitespace bugs.
-                for line in content.split_inclusive('\n') {
-                    // split_inclusive keeps the trailing \n; we want lines without it.
-                    let line = if let Some(stripped) = line.strip_suffix('\n') {
-                        stripped
-                    } else {
-                        line
-                    };
-                    let owned_line: Line<'static> = line.to_string().into();
-                    lines.push(owned_line);
-                }
-            }
-        }
-    }
-}
-
-/// Rewrites file citations in `src` into markdown hyperlinks using the
-/// provided `scheme` (`vscode`, `cursor`, etc.). The resulting URI follows the
-/// format expected by VS Code-compatible file openers:
-///
-/// ```text
-/// <scheme>://file<ABS_PATH>:<LINE>
-/// ```
-fn rewrite_file_citations<'a>(
-    src: &'a str,
-    file_opener: UriBasedFileOpener,
-    cwd: &Path,
-) -> Cow<'a, str> {
-    // Map enum values to the corresponding URI scheme strings.
-    let scheme: &str = match file_opener.get_scheme() {
-        Some(scheme) => scheme,
-        None => return Cow::Borrowed(src),
-    };
-
-    CITATION_REGEX.replace_all(src, |caps: &regex_lite::Captures<'_>| {
-        let file = &caps[1];
-        let start_line = &caps[2];
-
-        // Resolve the path against `cwd` when it is relative.
-        let absolute_path = {
-            let p = Path::new(file);
-            let absolute_path = if p.is_absolute() {
-                path_clean::clean(p)
-            } else {
-                path_clean::clean(cwd.join(p))
-            };
-            // VS Code expects forward slashes even on Windows because URIs use
-            // `/` as the path separator.
-            absolute_path.to_string_lossy().replace('\\', "/")
-        };
-
-        // Render as a normal markdown link so the downstream renderer emits
-        // the hyperlink escape sequence (when supported by the terminal).
-        //
-        // In practice, sometimes multiple citations for the same file, but with a
-        // different line number, are shown sequentially, so we:
-        // - include the line number in the label to disambiguate them
-        // - add a space after the link to make it easier to read
-        format!("[{file}:{start_line}]({scheme}://file{absolute_path}:{start_line}) ")
-    })
-}
-
-// use shared helper from `line_utils`
-
-// Minimal code block splitting.
-// - Recognizes fenced blocks opened by ``` or ~~~ (allowing leading whitespace).
-//   The opening fence may include a language string which we ignore.
-//   The closing fence must be on its own line (ignoring surrounding whitespace).
-// - Additionally recognizes indented code blocks that begin after a blank line
-//   with a line starting with at least 4 spaces or a tab, and continue for
-//   consecutive lines that are blank or also indented by >= 4 spaces or a tab.
-enum Segment {
-    Text(String),
-    Code {
-        _lang: Option<String>,
-        content: String,
-    },
-}
-
-fn split_text_and_fences(src: &str) -> Vec<Segment> {
-    let mut segments = Vec::new();
-    let mut curr_text = String::new();
-    #[derive(Copy, Clone, PartialEq)]
-    enum CodeMode {
-        None,
-        Fenced,
-        Indented,
-    }
-    let mut code_mode = CodeMode::None;
-    let mut fence_token = "";
-    let mut code_lang: Option<String> = None;
-    let mut code_content = String::new();
-    // We intentionally do not require a preceding blank line for indented code blocks,
-    // since streamed model output often omits it. This favors preserving indentation.
-
-    for line in src.split_inclusive('\n') {
-        let line_no_nl = line.strip_suffix('\n');
-        let trimmed_start = match line_no_nl {
-            Some(l) => l.trim_start(),
-            None => line.trim_start(),
-        };
-        if code_mode == CodeMode::None {
-            let open = if trimmed_start.starts_with("```") {
-                Some("```")
-            } else if trimmed_start.starts_with("~~~") {
-                Some("~~~")
-            } else {
-                None
-            };
-            if let Some(tok) = open {
-                // Flush pending text segment.
-                if !curr_text.is_empty() {
-                    segments.push(Segment::Text(curr_text.clone()));
-                    curr_text.clear();
-                }
-                fence_token = tok;
-                // Capture language after the token on this line (before newline).
-                let after = &trimmed_start[tok.len()..];
-                let lang = after.trim();
-                code_lang = if lang.is_empty() {
-                    None
-                } else {
-                    Some(lang.to_string())
-                };
-                code_mode = CodeMode::Fenced;
-                code_content.clear();
-                // Do not include the opening fence line in output.
-                continue;
-            }
-            // Check for start of an indented code block: only after a blank line
-            // (or at the beginning), and the line must start with >=4 spaces or a tab.
-            let raw_line = match line_no_nl {
-                Some(l) => l,
-                None => line,
-            };
-            let leading_spaces = raw_line.chars().take_while(|c| *c == ' ').count();
-            let starts_with_tab = raw_line.starts_with('\t');
-            // Consider any line that begins with >=4 spaces or a tab to start an
-            // indented code block. This favors preserving indentation even when a
-            // preceding blank line is omitted (common in streamed model output).
-            let starts_indented_code = (leading_spaces >= 4) || starts_with_tab;
-            if starts_indented_code {
-                // Flush pending text and begin an indented code block.
-                if !curr_text.is_empty() {
-                    segments.push(Segment::Text(curr_text.clone()));
-                    curr_text.clear();
-                }
-                code_mode = CodeMode::Indented;
-                code_content.clear();
-                code_content.push_str(line);
-                // Inside code now; do not treat this line as normal text.
-                continue;
-            }
-            // Normal text line.
-            curr_text.push_str(line);
-        } else {
-            match code_mode {
-                CodeMode::Fenced => {
-                    // inside fenced code: check for closing fence on its own line
-                    let trimmed = match line_no_nl {
-                        Some(l) => l.trim(),
-                        None => line.trim(),
-                    };
-                    if trimmed == fence_token {
-                        // End code block: emit segment without fences
-                        segments.push(Segment::Code {
-                            _lang: code_lang.take(),
-                            content: code_content.clone(),
-                        });
-                        code_content.clear();
-                        code_mode = CodeMode::None;
-                        fence_token = "";
-                        continue;
-                    }
-                    // Accumulate code content exactly as-is.
-                    code_content.push_str(line);
-                }
-                CodeMode::Indented => {
-                    // Continue while the line is blank, or starts with >=4 spaces, or a tab.
-                    let raw_line = match line_no_nl {
-                        Some(l) => l,
-                        None => line,
-                    };
-                    let is_blank = raw_line.trim().is_empty();
-                    let leading_spaces = raw_line.chars().take_while(|c| *c == ' ').count();
-                    let starts_with_tab = raw_line.starts_with('\t');
-                    if is_blank || leading_spaces >= 4 || starts_with_tab {
-                        code_content.push_str(line);
-                    } else {
-                        // Close the indented code block and reprocess this line as normal text.
-                        segments.push(Segment::Code {
-                            _lang: None,
-                            content: code_content.clone(),
-                        });
-                        code_content.clear();
-                        code_mode = CodeMode::None;
-                        // Now handle current line as text.
-                        curr_text.push_str(line);
-                    }
-                }
-                CodeMode::None => unreachable!(),
-            }
-        }
-    }
-
-    if code_mode != CodeMode::None {
-        // Unterminated code fence: treat accumulated content as a code segment.
-        segments.push(Segment::Code {
-            _lang: code_lang.take(),
-            content: code_content.clone(),
-        });
-    } else if !curr_text.is_empty() {
-        segments.push(Segment::Text(curr_text.clone()));
-    }
-
-    segments
+    // Render via pulldown-cmark and rewrite citations during traversal (outside code blocks).
+    let rendered = crate::markdown_render::render_markdown_text_with_citations(
+        markdown_source,
+        file_opener.get_scheme(),
+        cwd,
+    );
+    crate::render::line_utils::push_owned_lines(&rendered.lines, lines);
 }
 
 #[cfg(test)]
@@ -258,88 +31,6 @@ mod tests {
     use super::*;
     use pretty_assertions::assert_eq;
 
-    #[test]
-    fn citation_is_rewritten_with_absolute_path() {
-        let markdown = "See 【F:/src/main.rs†L42-L50】 for details.";
-        let cwd = Path::new("/workspace");
-        let result = rewrite_file_citations(markdown, UriBasedFileOpener::VsCode, cwd);
-
-        assert_eq!(
-            "See [/src/main.rs:42](vscode://file/src/main.rs:42)  for details.",
-            result
-        );
-    }
-
-    #[test]
-    fn citation_is_rewritten_with_relative_path() {
-        let markdown = "Refer to 【F:lib/mod.rs†L5】 here.";
-        let cwd = Path::new("/home/user/project");
-        let result = rewrite_file_citations(markdown, UriBasedFileOpener::Windsurf, cwd);
-
-        assert_eq!(
-            "Refer to [lib/mod.rs:5](windsurf://file/home/user/project/lib/mod.rs:5)  here.",
-            result
-        );
-    }
-
-    #[test]
-    fn citation_followed_by_space_so_they_do_not_run_together() {
-        let markdown = "References on lines 【F:src/foo.rs†L24】【F:src/foo.rs†L42】";
-        let cwd = Path::new("/home/user/project");
-        let result = rewrite_file_citations(markdown, UriBasedFileOpener::VsCode, cwd);
-
-        assert_eq!(
-            "References on lines [src/foo.rs:24](vscode://file/home/user/project/src/foo.rs:24) [src/foo.rs:42](vscode://file/home/user/project/src/foo.rs:42) ",
-            result
-        );
-    }
-
-    #[test]
-    fn citation_unchanged_without_file_opener() {
-        let markdown = "Look at 【F:file.rs†L1】.";
-        let cwd = Path::new("/");
-        let unchanged = rewrite_file_citations(markdown, UriBasedFileOpener::VsCode, cwd);
-        // The helper itself always rewrites – this test validates behaviour of
-        // append_markdown when `file_opener` is None.
-        let mut out = Vec::new();
-        append_markdown_with_opener_and_cwd(markdown, &mut out, UriBasedFileOpener::None, cwd);
-        // Convert lines back to string for comparison.
-        let rendered: String = out
-            .iter()
-            .flat_map(|l| l.spans.iter())
-            .map(|s| s.content.clone())
-            .collect::<Vec<_>>()
-            .join("");
-        assert_eq!(markdown, rendered);
-        // Ensure helper rewrites.
-        assert_ne!(markdown, unchanged);
-    }
-
-    #[test]
-    fn fenced_code_blocks_preserve_leading_whitespace() {
-        let src = "```\n  indented\n\t\twith tabs\n    four spaces\n```\n";
-        let cwd = Path::new("/");
-        let mut out = Vec::new();
-        append_markdown_with_opener_and_cwd(src, &mut out, UriBasedFileOpener::None, cwd);
-        let rendered: Vec<String> = out
-            .iter()
-            .map(|l| {
-                l.spans
-                    .iter()
-                    .map(|s| s.content.clone())
-                    .collect::<String>()
-            })
-            .collect();
-        assert_eq!(
-            rendered,
-            vec![
-                "  indented".to_string(),
-                "\t\twith tabs".to_string(),
-                "    four spaces".to_string()
-            ]
-        );
-    }
-
     #[test]
     fn citations_not_rewritten_inside_code_blocks() {
         let src = "Before 【F:/x.rs†L1】\n```\nInside 【F:/x.rs†L2】\n```\nAfter 【F:/x.rs†L3】\n";
@@ -355,19 +46,31 @@ mod tests {
                     .collect::<String>()
             })
             .collect();
-        // Expect first and last lines rewritten, middle line unchanged.
-        assert!(rendered[0].contains("vscode://file"));
-        assert_eq!(rendered[1], "Inside 【F:/x.rs†L2】");
-        assert!(matches!(rendered.last(), Some(s) if s.contains("vscode://file")));
+        // Expect a line containing the inside text unchanged.
+        assert!(rendered.iter().any(|s| s.contains("Inside 【F:/x.rs†L2】")));
+        // And first/last sections rewritten.
+        assert!(
+            rendered
+                .first()
+                .map(|s| s.contains("vscode://file"))
+                .unwrap_or(false)
+        );
+        assert!(
+            rendered
+                .last()
+                .map(|s| s.contains("vscode://file"))
+                .unwrap_or(false)
+        );
     }
 
     #[test]
     fn indented_code_blocks_preserve_leading_whitespace() {
-        let src = "Before\n    code 1\n\tcode with tab\n        code 2\nAfter\n";
+        // Basic sanity: indented code with surrounding blank lines should produce the indented line.
+        let src = "Before\n\n    code 1\n\nAfter\n";
         let cwd = Path::new("/");
         let mut out = Vec::new();
         append_markdown_with_opener_and_cwd(src, &mut out, UriBasedFileOpener::None, cwd);
-        let rendered: Vec<String> = out
+        let lines: Vec<String> = out
             .iter()
             .map(|l| {
                 l.spans
@@ -376,16 +79,7 @@ mod tests {
                     .collect::<String>()
             })
             .collect();
-        assert_eq!(
-            rendered,
-            vec![
-                "Before".to_string(),
-                "    code 1".to_string(),
-                "\tcode with tab".to_string(),
-                "        code 2".to_string(),
-                "After".to_string()
-            ]
-        );
+        assert_eq!(lines, vec!["Before", "", "    code 1", "", "After"]);
     }
 
     #[test]
@@ -403,11 +97,17 @@ mod tests {
                     .collect::<String>()
             })
             .collect();
-        // Expect first and last lines rewritten, and the indented code line present
-        // unchanged (citations inside not rewritten). We do not assert on blank
-        // separator lines since the markdown renderer may normalize them.
-        assert!(rendered.iter().any(|s| s.contains("vscode://file")));
-        assert!(rendered.iter().any(|s| s == "    Inside 【F:/x.rs†L2】"));
+        assert!(
+            rendered
+                .iter()
+                .any(|s| s.contains("Start") && s.contains("vscode://file"))
+        );
+        assert!(
+            rendered
+                .iter()
+                .any(|s| s.contains("End") && s.contains("vscode://file"))
+        );
+        assert!(rendered.iter().any(|s| s.contains("Inside 【F:/x.rs†L2】")));
     }
 
     #[test]
@@ -435,27 +135,6 @@ mod tests {
         );
     }
 
-    #[test]
-    fn tui_markdown_splits_ordered_marker_and_text() {
-        // With marker and content on the same line, tui_markdown keeps it as one line
-        // even in the surrounding section context.
-        let rendered = tui_markdown::from_str("Loose vs. tight list items:\n1. Tight item\n");
-        let lines: Vec<String> = rendered
-            .lines
-            .iter()
-            .map(|l| {
-                l.spans
-                    .iter()
-                    .map(|s| s.content.clone())
-                    .collect::<String>()
-            })
-            .collect();
-        assert!(
-            lines.iter().any(|w| w == "1. Tight item"),
-            "expected single line '1. Tight item' in context: {lines:?}"
-        );
-    }
-
     #[test]
     fn append_markdown_matches_tui_markdown_for_ordered_item() {
         use codex_core::config_types::UriBasedFileOpener;
@@ -480,72 +159,6 @@ mod tests {
         assert_eq!(lines, vec!["1. Tight item".to_string()]);
     }
 
-    #[test]
-    fn tui_markdown_shape_for_loose_tight_section() {
-        // Use the exact source from the session deltas used in tests.
-        let source = r#"
-Loose vs. tight list items:
-1. Tight item
-2. Another tight item
-
-3.
-   Loose item
-"#;
-
-        let rendered = tui_markdown::from_str(source);
-        let lines: Vec<String> = rendered
-            .lines
-            .iter()
-            .map(|l| {
-                l.spans
-                    .iter()
-                    .map(|s| s.content.clone())
-                    .collect::<String>()
-            })
-            .collect();
-        // Join into a single string and assert the exact shape we observe
-        // from tui_markdown in this larger context (marker and content split).
-        let joined = {
-            let mut s = String::new();
-            for (i, l) in lines.iter().enumerate() {
-                s.push_str(l);
-                if i + 1 < lines.len() {
-                    s.push('\n');
-                }
-            }
-            s
-        };
-        let expected = r#"Loose vs. tight list items:
-
-1. 
-Tight item
-2. 
-Another tight item
-3. 
-Loose item"#;
-        assert_eq!(
-            joined, expected,
-            "unexpected tui_markdown shape: {joined:?}"
-        );
-    }
-
-    #[test]
-    fn split_text_and_fences_keeps_ordered_list_line_as_text() {
-        // No fences here; expect a single Text segment containing the full input.
-        let src = "Loose vs. tight list items:\n1. Tight item\n";
-        let segs = super::split_text_and_fences(src);
-        assert_eq!(
-            segs.len(),
-            1,
-            "expected single text segment, got {}",
-            segs.len()
-        );
-        match &segs[0] {
-            super::Segment::Text(s) => assert_eq!(s, src),
-            _ => panic!("expected Text segment for non-fence input"),
-        }
-    }
-
     #[test]
     fn append_markdown_keeps_ordered_list_line_unsplit_in_context() {
         use codex_core::config_types::UriBasedFileOpener;
diff --git a/codex-rs/tui/src/markdown_render.rs b/codex-rs/tui/src/markdown_render.rs
new file mode 100644
index 00000000..f20bfd75
--- /dev/null
+++ b/codex-rs/tui/src/markdown_render.rs
@@ -0,0 +1,566 @@
+use crate::citation_regex::CITATION_REGEX;
+use pulldown_cmark::CodeBlockKind;
+use pulldown_cmark::CowStr;
+use pulldown_cmark::Event;
+use pulldown_cmark::HeadingLevel;
+use pulldown_cmark::Options;
+use pulldown_cmark::Parser;
+use pulldown_cmark::Tag;
+use pulldown_cmark::TagEnd;
+use ratatui::style::Style;
+use ratatui::style::Stylize;
+use ratatui::text::Line;
+use ratatui::text::Span;
+use ratatui::text::Text;
+use std::borrow::Cow;
+use std::path::Path;
+
+#[derive(Clone, Debug)]
+struct IndentContext {
+    prefix: Vec<Span<'static>>,
+    marker: Option<Vec<Span<'static>>>,
+    is_list: bool,
+}
+
+impl IndentContext {
+    fn new(prefix: Vec<Span<'static>>, marker: Option<Vec<Span<'static>>>, is_list: bool) -> Self {
+        Self {
+            prefix,
+            marker,
+            is_list,
+        }
+    }
+}
+
+#[allow(dead_code)]
+pub(crate) fn render_markdown_text(input: &str) -> Text<'static> {
+    let mut options = Options::empty();
+    options.insert(Options::ENABLE_STRIKETHROUGH);
+    let parser = Parser::new_ext(input, options);
+    let mut w = Writer::new(parser, None, None);
+    w.run();
+    w.text
+}
+
+pub(crate) fn render_markdown_text_with_citations(
+    input: &str,
+    scheme: Option<&str>,
+    cwd: &Path,
+) -> Text<'static> {
+    let mut options = Options::empty();
+    options.insert(Options::ENABLE_STRIKETHROUGH);
+    let parser = Parser::new_ext(input, options);
+    let mut w = Writer::new(
+        parser,
+        scheme.map(|s| s.to_string()),
+        Some(cwd.to_path_buf()),
+    );
+    w.run();
+    w.text
+}
+
+struct Writer<'a, I>
+where
+    I: Iterator<Item = Event<'a>>,
+{
+    iter: I,
+    text: Text<'static>,
+    inline_styles: Vec<Style>,
+    indent_stack: Vec<IndentContext>,
+    list_indices: Vec<Option<u64>>,
+    link: Option<String>,
+    needs_newline: bool,
+    pending_marker_line: bool,
+    in_paragraph: bool,
+    scheme: Option<String>,
+    cwd: Option<std::path::PathBuf>,
+    in_code_block: bool,
+}
+
+impl<'a, I> Writer<'a, I>
+where
+    I: Iterator<Item = Event<'a>>,
+{
+    fn new(iter: I, scheme: Option<String>, cwd: Option<std::path::PathBuf>) -> Self {
+        Self {
+            iter,
+            text: Text::default(),
+            inline_styles: Vec::new(),
+            indent_stack: Vec::new(),
+            list_indices: Vec::new(),
+            link: None,
+            needs_newline: false,
+            pending_marker_line: false,
+            in_paragraph: false,
+            scheme,
+            cwd,
+            in_code_block: false,
+        }
+    }
+
+    fn run(&mut self) {
+        while let Some(ev) = self.iter.next() {
+            self.handle_event(ev);
+        }
+    }
+
+    fn handle_event(&mut self, event: Event<'a>) {
+        match event {
+            Event::Start(tag) => self.start_tag(tag),
+            Event::End(tag) => self.end_tag(tag),
+            Event::Text(text) => self.text(text),
+            Event::Code(code) => self.code(code),
+            Event::SoftBreak => self.soft_break(),
+            Event::HardBreak => self.hard_break(),
+            Event::Rule => {
+                if !self.text.lines.is_empty() {
+                    self.push_blank_line();
+                }
+                self.push_line(Line::from("———"));
+                self.needs_newline = true;
+            }
+            Event::Html(html) => self.html(html, false),
+            Event::InlineHtml(html) => self.html(html, true),
+            Event::FootnoteReference(_) => {}
+            Event::TaskListMarker(_) => {}
+        }
+    }
+
+    fn start_tag(&mut self, tag: Tag<'a>) {
+        match tag {
+            Tag::Paragraph => self.start_paragraph(),
+            Tag::Heading { level, .. } => self.start_heading(level),
+            Tag::BlockQuote => self.start_blockquote(),
+            Tag::CodeBlock(kind) => {
+                let indent = match kind {
+                    CodeBlockKind::Fenced(_) => None,
+                    CodeBlockKind::Indented => Some(Span::from(" ".repeat(4))),
+                };
+                let lang = match kind {
+                    CodeBlockKind::Fenced(lang) => Some(lang.to_string()),
+                    CodeBlockKind::Indented => None,
+                };
+                self.start_codeblock(lang, indent)
+            }
+            Tag::List(start) => self.start_list(start),
+            Tag::Item => self.start_item(),
+            Tag::Emphasis => self.push_inline_style(Style::new().italic()),
+            Tag::Strong => self.push_inline_style(Style::new().bold()),
+            Tag::Strikethrough => self.push_inline_style(Style::new().crossed_out()),
+            Tag::Link { dest_url, .. } => self.push_link(dest_url.to_string()),
+            Tag::HtmlBlock
+            | Tag::FootnoteDefinition(_)
+            | Tag::Table(_)
+            | Tag::TableHead
+            | Tag::TableRow
+            | Tag::TableCell
+            | Tag::Image { .. }
+            | Tag::MetadataBlock(_) => {}
+        }
+    }
+
+    fn end_tag(&mut self, tag: TagEnd) {
+        match tag {
+            TagEnd::Paragraph => self.end_paragraph(),
+            TagEnd::Heading(_) => self.end_heading(),
+            TagEnd::BlockQuote => self.end_blockquote(),
+            TagEnd::CodeBlock => self.end_codeblock(),
+            TagEnd::List(_) => self.end_list(),
+            TagEnd::Item => {
+                self.indent_stack.pop();
+                self.pending_marker_line = false;
+            }
+            TagEnd::Emphasis | TagEnd::Strong | TagEnd::Strikethrough => self.pop_inline_style(),
+            TagEnd::Link => self.pop_link(),
+            TagEnd::HtmlBlock
+            | TagEnd::FootnoteDefinition
+            | TagEnd::Table
+            | TagEnd::TableHead
+            | TagEnd::TableRow
+            | TagEnd::TableCell
+            | TagEnd::Image
+            | TagEnd::MetadataBlock(_) => {}
+        }
+    }
+
+    fn start_paragraph(&mut self) {
+        if self.needs_newline {
+            self.push_blank_line();
+        }
+        self.push_line(Line::default());
+        self.needs_newline = false;
+        self.in_paragraph = true;
+    }
+
+    fn end_paragraph(&mut self) {
+        self.needs_newline = true;
+        self.in_paragraph = false;
+        self.pending_marker_line = false;
+    }
+
+    fn start_heading(&mut self, level: HeadingLevel) {
+        if self.needs_newline {
+            self.push_line(Line::default());
+            self.needs_newline = false;
+        }
+        let heading_style = match level {
+            HeadingLevel::H1 => Style::new().bold().underlined(),
+            HeadingLevel::H2 => Style::new().bold(),
+            HeadingLevel::H3 => Style::new().bold().italic(),
+            HeadingLevel::H4 => Style::new().italic(),
+            HeadingLevel::H5 => Style::new().italic(),
+            HeadingLevel::H6 => Style::new().italic(),
+        };
+        let content = format!("{} ", "#".repeat(level as usize));
+        self.push_line(Line::from(vec![Span::styled(content, heading_style)]));
+        self.push_inline_style(heading_style);
+        self.needs_newline = false;
+    }
+
+    fn end_heading(&mut self) {
+        self.needs_newline = true;
+        self.pop_inline_style();
+    }
+
+    fn start_blockquote(&mut self) {
+        if self.needs_newline {
+            self.push_blank_line();
+            self.needs_newline = false;
+        }
+        self.indent_stack
+            .push(IndentContext::new(vec![Span::from("> ")], None, false));
+    }
+
+    fn end_blockquote(&mut self) {
+        self.indent_stack.pop();
+        self.needs_newline = true;
+    }
+
+    fn text(&mut self, text: CowStr<'a>) {
+        if self.pending_marker_line {
+            self.push_line(Line::default());
+        }
+        self.pending_marker_line = false;
+        if self.in_code_block
+            && !self.needs_newline
+            && self
+                .text
+                .lines
+                .last()
+                .map(|line| !line.spans.is_empty())
+                .unwrap_or(false)
+        {
+            self.push_line(Line::default());
+        }
+        for (i, line) in text.lines().enumerate() {
+            if self.needs_newline {
+                self.push_line(Line::default());
+                self.needs_newline = false;
+            }
+            if i > 0 {
+                self.push_line(Line::default());
+            }
+            let mut content = line.to_string();
+            if !self.in_code_block
+                && let (Some(scheme), Some(cwd)) = (&self.scheme, &self.cwd)
+            {
+                let cow = rewrite_file_citations_with_scheme(&content, Some(scheme.as_str()), cwd);
+                if let std::borrow::Cow::Owned(s) = cow {
+                    content = s;
+                }
+            }
+            let span = Span::styled(
+                content,
+                self.inline_styles.last().copied().unwrap_or_default(),
+            );
+            self.push_span(span);
+        }
+        self.needs_newline = false;
+    }
+
+    fn code(&mut self, code: CowStr<'a>) {
+        if self.pending_marker_line {
+            self.push_line(Line::default());
+            self.pending_marker_line = false;
+        }
+        let span = Span::from(code.into_string()).dim();
+        self.push_span(span);
+    }
+
+    fn html(&mut self, html: CowStr<'a>, inline: bool) {
+        self.pending_marker_line = false;
+        for (i, line) in html.lines().enumerate() {
+            if self.needs_newline {
+                self.push_line(Line::default());
+                self.needs_newline = false;
+            }
+            if i > 0 {
+                self.push_line(Line::default());
+            }
+            let style = self.inline_styles.last().copied().unwrap_or_default();
+            self.push_span(Span::styled(line.to_string(), style));
+        }
+        self.needs_newline = !inline;
+    }
+
+    fn hard_break(&mut self) {
+        self.push_line(Line::default());
+    }
+
+    fn soft_break(&mut self) {
+        self.push_line(Line::default());
+    }
+
+    fn start_list(&mut self, index: Option<u64>) {
+        if self.list_indices.is_empty() && self.needs_newline {
+            self.push_line(Line::default());
+        }
+        self.list_indices.push(index);
+    }
+
+    fn end_list(&mut self) {
+        self.list_indices.pop();
+        self.needs_newline = true;
+    }
+
+    fn start_item(&mut self) {
+        self.pending_marker_line = true;
+        let depth = self.list_indices.len();
+        let is_ordered = self
+            .list_indices
+            .last()
+            .map(|index| index.is_some())
+            .unwrap_or(false);
+        let width = depth * 4 - 3;
+        let marker = if let Some(last_index) = self.list_indices.last_mut() {
+            match last_index {
+                None => Some(vec![Span::from(" ".repeat(width - 1) + "- ")]),
+                Some(index) => {
+                    *index += 1;
+                    Some(vec![format!("{:width$}. ", *index - 1).light_blue()])
+                }
+            }
+        } else {
+            None
+        };
+        let indent_prefix = if depth == 0 {
+            Vec::new()
+        } else {
+            let indent_len = if is_ordered { width + 2 } else { width + 1 };
+            vec![Span::from(" ".repeat(indent_len))]
+        };
+        self.indent_stack
+            .push(IndentContext::new(indent_prefix, marker, true));
+        self.needs_newline = false;
+    }
+
+    fn start_codeblock(&mut self, _lang: Option<String>, indent: Option<Span<'static>>) {
+        if !self.text.lines.is_empty() {
+            self.push_blank_line();
+        }
+        self.in_code_block = true;
+        self.indent_stack.push(IndentContext::new(
+            vec![indent.unwrap_or_default()],
+            None,
+            false,
+        ));
+        // let opener = match lang {
+        //     Some(l) if !l.is_empty() => format!("```{l}"),
+        //     _ => "```".to_string(),
+        // };
+        // self.push_line(opener.into());
+        self.needs_newline = true;
+    }
+
+    fn end_codeblock(&mut self) {
+        // self.push_line("```".into());
+        self.needs_newline = true;
+        self.in_code_block = false;
+        self.indent_stack.pop();
+    }
+
+    fn push_inline_style(&mut self, style: Style) {
+        let current = self.inline_styles.last().copied().unwrap_or_default();
+        let merged = current.patch(style);
+        self.inline_styles.push(merged);
+    }
+
+    fn pop_inline_style(&mut self) {
+        self.inline_styles.pop();
+    }
+
+    fn push_link(&mut self, dest_url: String) {
+        self.link = Some(dest_url);
+    }
+
+    fn pop_link(&mut self) {
+        if let Some(link) = self.link.take() {
+            self.push_span(" (".into());
+            self.push_span(link.cyan().underlined());
+            self.push_span(")".into());
+        }
+    }
+
+    fn push_line(&mut self, line: Line<'static>) {
+        let mut line = line;
+        let was_pending = self.pending_marker_line;
+        let mut spans = self.current_prefix_spans();
+        spans.append(&mut line.spans);
+        let blockquote_active = self
+            .indent_stack
+            .iter()
+            .any(|ctx| ctx.prefix.iter().any(|s| s.content.contains('>')));
+        let style = if blockquote_active {
+            Style::new().green()
+        } else {
+            line.style
+        };
+        self.text.lines.push(Line::from_iter(spans).style(style));
+        if was_pending {
+            self.pending_marker_line = false;
+        }
+    }
+
+    fn push_span(&mut self, span: Span<'static>) {
+        if let Some(last) = self.text.lines.last_mut() {
+            last.push_span(span);
+        } else {
+            self.push_line(Line::from(vec![span]));
+        }
+    }
+
+    fn push_blank_line(&mut self) {
+        if self.indent_stack.iter().all(|ctx| ctx.is_list) {
+            self.text.lines.push(Line::default());
+        } else {
+            self.push_line(Line::default());
+        }
+    }
+
+    fn current_prefix_spans(&self) -> Vec<Span<'static>> {
+        let mut prefix: Vec<Span<'static>> = Vec::new();
+        let last_marker_index = if self.pending_marker_line {
+            self.indent_stack
+                .iter()
+                .enumerate()
+                .rev()
+                .find_map(|(i, ctx)| if ctx.marker.is_some() { Some(i) } else { None })
+        } else {
+            None
+        };
+        let last_list_index = self.indent_stack.iter().rposition(|ctx| ctx.is_list);
+
+        for (i, ctx) in self.indent_stack.iter().enumerate() {
+            if self.pending_marker_line {
+                if Some(i) == last_marker_index
+                    && let Some(marker) = &ctx.marker
+                {
+                    prefix.extend(marker.iter().cloned());
+                    continue;
+                }
+                if ctx.is_list && last_marker_index.is_some_and(|idx| idx > i) {
+                    continue;
+                }
+            } else if ctx.is_list && Some(i) != last_list_index {
+                continue;
+            }
+            prefix.extend(ctx.prefix.iter().cloned());
+        }
+
+        prefix
+    }
+}
+
+pub(crate) fn rewrite_file_citations_with_scheme<'a>(
+    src: &'a str,
+    scheme_opt: Option<&str>,
+    cwd: &Path,
+) -> Cow<'a, str> {
+    let scheme: &str = match scheme_opt {
+        Some(s) => s,
+        None => return Cow::Borrowed(src),
+    };
+
+    CITATION_REGEX.replace_all(src, |caps: &regex_lite::Captures<'_>| {
+        let file = &caps[1];
+        let start_line = &caps[2];
+
+        // Resolve the path against `cwd` when it is relative.
+        let absolute_path = {
+            let p = Path::new(file);
+            let absolute_path = if p.is_absolute() {
+                path_clean::clean(p)
+            } else {
+                path_clean::clean(cwd.join(p))
+            };
+            // VS Code expects forward slashes even on Windows because URIs use
+            // `/` as the path separator.
+            absolute_path.to_string_lossy().replace('\\', "/")
+        };
+
+        // Render as a normal markdown link so the downstream renderer emits
+        // the hyperlink escape sequence (when supported by the terminal).
+        //
+        // In practice, sometimes multiple citations for the same file, but with a
+        // different line number, are shown sequentially, so we:
+        // - include the line number in the label to disambiguate them
+        // - add a space after the link to make it easier to read
+        format!("[{file}:{start_line}]({scheme}://file{absolute_path}:{start_line}) ")
+    })
+}
+
+#[cfg(test)]
+mod markdown_render_tests {
+    include!("markdown_render_tests.rs");
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+    use pretty_assertions::assert_eq;
+
+    #[test]
+    fn citation_is_rewritten_with_absolute_path() {
+        let markdown = "See 【F:/src/main.rs†L42-L50】 for details.";
+        let cwd = Path::new("/workspace");
+        let result = rewrite_file_citations_with_scheme(markdown, Some("vscode"), cwd);
+
+        assert_eq!(
+            "See [/src/main.rs:42](vscode://file/src/main.rs:42)  for details.",
+            result
+        );
+    }
+
+    #[test]
+    fn citation_followed_by_space_so_they_do_not_run_together() {
+        let markdown = "References on lines 【F:src/foo.rs†L24】【F:src/foo.rs†L42】";
+        let cwd = Path::new("/home/user/project");
+        let result = rewrite_file_citations_with_scheme(markdown, Some("vscode"), cwd);
+
+        assert_eq!(
+            "References on lines [src/foo.rs:24](vscode://file/home/user/project/src/foo.rs:24) [src/foo.rs:42](vscode://file/home/user/project/src/foo.rs:42) ",
+            result
+        );
+    }
+
+    #[test]
+    fn citation_unchanged_without_file_opener() {
+        let markdown = "Look at 【F:file.rs†L1】.";
+        let cwd = Path::new("/");
+        let unchanged = rewrite_file_citations_with_scheme(markdown, Some("vscode"), cwd);
+        // The helper itself always rewrites – this test validates behaviour of
+        // append_markdown when `file_opener` is None.
+        let rendered = render_markdown_text_with_citations(markdown, None, cwd);
+        // Convert lines back to string for comparison.
+        let rendered: String = rendered
+            .lines
+            .iter()
+            .flat_map(|l| l.spans.iter())
+            .map(|s| s.content.clone())
+            .collect::<Vec<_>>()
+            .join("");
+        assert_eq!(markdown, rendered);
+        // Ensure helper rewrites.
+        assert_ne!(markdown, unchanged);
+    }
+}
diff --git a/codex-rs/tui/src/markdown_render_tests.rs b/codex-rs/tui/src/markdown_render_tests.rs
new file mode 100644
index 00000000..203a4515
--- /dev/null
+++ b/codex-rs/tui/src/markdown_render_tests.rs
@@ -0,0 +1,995 @@
+use pretty_assertions::assert_eq;
+use ratatui::style::Stylize;
+use ratatui::text::Line;
+use ratatui::text::Span;
+use ratatui::text::Text;
+
+use crate::markdown_render::render_markdown_text;
+use insta::assert_snapshot;
+
+#[test]
+fn empty() {
+    assert_eq!(render_markdown_text(""), Text::default());
+}
+
+#[test]
+fn paragraph_single() {
+    assert_eq!(
+        render_markdown_text("Hello, world!"),
+        Text::from("Hello, world!")
+    );
+}
+
+#[test]
+fn paragraph_soft_break() {
+    assert_eq!(
+        render_markdown_text("Hello\nWorld"),
+        Text::from_iter(["Hello", "World"])
+    );
+}
+
+#[test]
+fn paragraph_multiple() {
+    assert_eq!(
+        render_markdown_text("Paragraph 1\n\nParagraph 2"),
+        Text::from_iter(["Paragraph 1", "", "Paragraph 2"])
+    );
+}
+
+#[test]
+fn headings() {
+    let md = "# Heading 1\n## Heading 2\n### Heading 3\n#### Heading 4\n##### Heading 5\n###### Heading 6\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["# ".bold().underlined(), "Heading 1".bold().underlined()]),
+        Line::default(),
+        Line::from_iter(["## ".bold(), "Heading 2".bold()]),
+        Line::default(),
+        Line::from_iter(["### ".bold().italic(), "Heading 3".bold().italic()]),
+        Line::default(),
+        Line::from_iter(["#### ".italic(), "Heading 4".italic()]),
+        Line::default(),
+        Line::from_iter(["##### ".italic(), "Heading 5".italic()]),
+        Line::default(),
+        Line::from_iter(["###### ".italic(), "Heading 6".italic()]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn blockquote_single() {
+    let text = render_markdown_text("> Blockquote");
+    let expected = Text::from(Line::from_iter(["> ", "Blockquote"]).green());
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn blockquote_soft_break() {
+    // Soft break via lazy continuation should render as a new line in blockquotes.
+    let text = render_markdown_text("> This is a blockquote\nwith a soft break\n");
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(
+        lines,
+        vec![
+            "> This is a blockquote".to_string(),
+            "> with a soft break".to_string()
+        ]
+    );
+}
+
+#[test]
+fn blockquote_multiple_with_break() {
+    let text = render_markdown_text("> Blockquote 1\n\n> Blockquote 2\n");
+    let expected = Text::from_iter([
+        Line::from_iter(["> ", "Blockquote 1"]).green(),
+        Line::default(),
+        Line::from_iter(["> ", "Blockquote 2"]).green(),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn blockquote_three_paragraphs_short_lines() {
+    let md = "> one\n>\n> two\n>\n> three\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["> ", "one"]).green(),
+        Line::from_iter(["> "]).green(),
+        Line::from_iter(["> ", "two"]).green(),
+        Line::from_iter(["> "]).green(),
+        Line::from_iter(["> ", "three"]).green(),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn blockquote_nested_two_levels() {
+    let md = "> Level 1\n>> Level 2\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["> ", "Level 1"]).green(),
+        Line::from_iter(["> "]).green(),
+        Line::from_iter(["> ", "> ", "Level 2"]).green(),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn blockquote_with_list_items() {
+    let md = "> - item 1\n> - item 2\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["> ", "- ", "item 1"]).green(),
+        Line::from_iter(["> ", "- ", "item 2"]).green(),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn blockquote_with_ordered_list() {
+    let md = "> 1. first\n> 2. second\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(vec![
+            Span::from("> "),
+            "1. ".light_blue(),
+            Span::from("first"),
+        ])
+        .green(),
+        Line::from_iter(vec![
+            Span::from("> "),
+            "2. ".light_blue(),
+            Span::from("second"),
+        ])
+        .green(),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn blockquote_list_then_nested_blockquote() {
+    let md = "> - parent\n>   > child\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["> ", "- ", "parent"]).green(),
+        Line::from_iter(["> ", "  ", "> ", "child"]).green(),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn list_item_with_inline_blockquote_on_same_line() {
+    let md = "1. > quoted\n";
+    let text = render_markdown_text(md);
+    let mut lines = text.lines.iter();
+    let first = lines.next().expect("one line");
+    // Expect content to include the ordered marker, a space, "> ", and the text
+    let s: String = first.spans.iter().map(|sp| sp.content.clone()).collect();
+    assert_eq!(s, "1. > quoted");
+}
+
+#[test]
+fn blockquote_surrounded_by_blank_lines() {
+    let md = "foo\n\n> bar\n\nbaz\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(
+        lines,
+        vec![
+            "foo".to_string(),
+            "".to_string(),
+            "> bar".to_string(),
+            "".to_string(),
+            "baz".to_string(),
+        ]
+    );
+}
+
+#[test]
+fn blockquote_in_ordered_list_on_next_line() {
+    // Blockquote begins on a new line within an ordered list item; it should
+    // render inline on the same marker line.
+    let md = "1.\n   > quoted\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["1. > quoted".to_string()]);
+}
+
+#[test]
+fn blockquote_in_unordered_list_on_next_line() {
+    // Blockquote begins on a new line within an unordered list item; it should
+    // render inline on the same marker line.
+    let md = "-\n  > quoted\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["- > quoted".to_string()]);
+}
+
+#[test]
+fn blockquote_two_paragraphs_inside_ordered_list_has_blank_line() {
+    // Two blockquote paragraphs inside a list item should be separated by a blank line.
+    let md = "1.\n   > para 1\n   >\n   > para 2\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(
+        lines,
+        vec![
+            "1. > para 1".to_string(),
+            "   > ".to_string(),
+            "   > para 2".to_string(),
+        ],
+        "expected blockquote content to stay aligned after list marker"
+    );
+}
+
+#[test]
+fn blockquote_inside_nested_list() {
+    let md = "1. A\n    - B\n      > inner\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["1. A", "    - B", "      > inner"]);
+}
+
+#[test]
+fn list_item_text_then_blockquote() {
+    let md = "1. before\n   > quoted\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["1. before", "   > quoted"]);
+}
+
+#[test]
+fn list_item_blockquote_then_text() {
+    let md = "1.\n   > quoted\n   after\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["1. > quoted", "   > after"]);
+}
+
+#[test]
+fn list_item_text_blockquote_text() {
+    let md = "1. before\n   > quoted\n   after\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["1. before", "   > quoted", "   > after"]);
+}
+
+#[test]
+fn blockquote_with_heading_and_paragraph() {
+    let md = "> # Heading\n> paragraph text\n";
+    let text = render_markdown_text(md);
+    // Validate on content shape; styling is handled elsewhere
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(
+        lines,
+        vec![
+            "> # Heading".to_string(),
+            "> ".to_string(),
+            "> paragraph text".to_string(),
+        ]
+    );
+}
+
+#[test]
+fn blockquote_heading_inherits_heading_style() {
+    let text = render_markdown_text("> # test header\n> in blockquote\n");
+    assert_eq!(
+        text.lines,
+        [
+            Line::from_iter([
+                "> ".into(),
+                "# ".bold().underlined(),
+                "test header".bold().underlined(),
+            ])
+            .green(),
+            Line::from_iter(["> "]).green(),
+            Line::from_iter(["> ", "in blockquote"]).green(),
+        ]
+    );
+}
+
+#[test]
+fn blockquote_with_code_block() {
+    let md = "> ```\n> code\n> ```\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["> code".to_string()]);
+}
+
+#[test]
+fn blockquote_with_multiline_code_block() {
+    let md = "> ```\n> first\n> second\n> ```\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["> first", "> second"]);
+}
+
+#[test]
+fn nested_blockquote_with_inline_and_fenced_code() {
+    /*
+    let md = \"> Nested quote with code:\n\
+    > > Inner quote and `inline code`\n\
+    > >\n\
+    > > ```\n\
+    > > # fenced code inside a quote\n\
+    > > echo \"hello from a quote\"\n\
+    > > ```\n";
+    */
+    let md = r#"> Nested quote with code:
+> > Inner quote and `inline code`
+> >
+> > ```
+> > # fenced code inside a quote
+> > echo "hello from a quote"
+> > ```
+"#;
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(
+        lines,
+        vec![
+            "> Nested quote with code:".to_string(),
+            "> ".to_string(),
+            "> > Inner quote and inline code".to_string(),
+            "> > ".to_string(),
+            "> > # fenced code inside a quote".to_string(),
+            "> > echo \"hello from a quote\"".to_string(),
+        ]
+    );
+}
+
+#[test]
+fn list_unordered_single() {
+    let text = render_markdown_text("- List item 1\n");
+    let expected = Text::from_iter([Line::from_iter(["- ", "List item 1"])]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn list_unordered_multiple() {
+    let text = render_markdown_text("- List item 1\n- List item 2\n");
+    let expected = Text::from_iter([
+        Line::from_iter(["- ", "List item 1"]),
+        Line::from_iter(["- ", "List item 2"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn list_ordered() {
+    let text = render_markdown_text("1. List item 1\n2. List item 2\n");
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "List item 1".into()]),
+        Line::from_iter(["2. ".light_blue(), "List item 2".into()]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn list_nested() {
+    let text = render_markdown_text("- List item 1\n  - Nested list item 1\n");
+    let expected = Text::from_iter([
+        Line::from_iter(["- ", "List item 1"]),
+        Line::from_iter(["    - ", "Nested list item 1"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn list_ordered_custom_start() {
+    let text = render_markdown_text("3. First\n4. Second\n");
+    let expected = Text::from_iter([
+        Line::from_iter(["3. ".light_blue(), "First".into()]),
+        Line::from_iter(["4. ".light_blue(), "Second".into()]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn nested_unordered_in_ordered() {
+    let md = "1. Outer\n    - Inner A\n    - Inner B\n2. Next\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "Outer".into()]),
+        Line::from_iter(["    - ", "Inner A"]),
+        Line::from_iter(["    - ", "Inner B"]),
+        Line::from_iter(["2. ".light_blue(), "Next".into()]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn nested_ordered_in_unordered() {
+    let md = "- Outer\n    1. One\n    2. Two\n- Last\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["- ", "Outer"]),
+        Line::from_iter(["    1. ".light_blue(), "One".into()]),
+        Line::from_iter(["    2. ".light_blue(), "Two".into()]),
+        Line::from_iter(["- ", "Last"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn loose_list_item_multiple_paragraphs() {
+    let md = "1. First paragraph\n\n   Second paragraph of same item\n\n2. Next item\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "First paragraph".into()]),
+        Line::default(),
+        Line::from_iter(["   ", "Second paragraph of same item"]),
+        Line::from_iter(["2. ".light_blue(), "Next item".into()]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn tight_item_with_soft_break() {
+    let md = "- item line1\n  item line2\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["- ", "item line1"]),
+        Line::from_iter(["  ", "item line2"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn deeply_nested_mixed_three_levels() {
+    let md = "1. A\n    - B\n        1. C\n2. D\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "A".into()]),
+        Line::from_iter(["    - ", "B"]),
+        Line::from_iter(["        1. ".light_blue(), "C".into()]),
+        Line::from_iter(["2. ".light_blue(), "D".into()]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn loose_items_due_to_blank_line_between_items() {
+    let md = "1. First\n\n2. Second\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "First".into()]),
+        Line::from_iter(["2. ".light_blue(), "Second".into()]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn mixed_tight_then_loose_in_one_list() {
+    let md = "1. Tight\n\n2.\n   Loose\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "Tight".into()]),
+        Line::from_iter(["2. ".light_blue(), "Loose".into()]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn ordered_item_with_indented_continuation_is_tight() {
+    let md = "1. Foo\n   Bar\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "Foo".into()]),
+        Line::from_iter(["   ", "Bar"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn inline_code() {
+    let text = render_markdown_text("Example of `Inline code`");
+    let expected = Line::from_iter(["Example of ".into(), "Inline code".dim()]).into();
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn strong() {
+    assert_eq!(
+        render_markdown_text("**Strong**"),
+        Text::from(Line::from("Strong".bold()))
+    );
+}
+
+#[test]
+fn emphasis() {
+    assert_eq!(
+        render_markdown_text("*Emphasis*"),
+        Text::from(Line::from("Emphasis".italic()))
+    );
+}
+
+#[test]
+fn strikethrough() {
+    assert_eq!(
+        render_markdown_text("~~Strikethrough~~"),
+        Text::from(Line::from("Strikethrough".crossed_out()))
+    );
+}
+
+#[test]
+fn strong_emphasis() {
+    let text = render_markdown_text("**Strong *emphasis***");
+    let expected = Text::from(Line::from_iter([
+        "Strong ".bold(),
+        "emphasis".bold().italic(),
+    ]));
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn link() {
+    let text = render_markdown_text("[Link](https://example.com)");
+    let expected = Text::from(Line::from_iter([
+        "Link".into(),
+        " (".into(),
+        "https://example.com".cyan().underlined(),
+        ")".into(),
+    ]));
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn code_block_unhighlighted() {
+    let text = render_markdown_text("```rust\nfn main() {}\n```\n");
+    let expected = Text::from_iter([Line::from_iter(["", "fn main() {}"])]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn code_block_multiple_lines_root() {
+    let md = "```\nfirst\nsecond\n```\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["", "first"]),
+        Line::from_iter(["", "second"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn code_block_indented() {
+    let md = "    function greet() {\n      console.log(\"Hi\");\n    }\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["    ", "function greet() {"]),
+        Line::from_iter(["    ", "  console.log(\"Hi\");"]),
+        Line::from_iter(["    ", "}"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn horizontal_rule_renders_em_dashes() {
+    let md = "Before\n\n---\n\nAfter\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["Before", "", "———", "", "After"]);
+}
+
+#[test]
+fn code_block_with_inner_triple_backticks_outer_four() {
+    let md = r#"````text
+Here is a code block that shows another fenced block:
+
+```md
+# Inside fence
+- bullet
+- `inline code`
+```
+````
+"#;
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(
+        lines,
+        vec![
+            "Here is a code block that shows another fenced block:".to_string(),
+            String::new(),
+            "```md".to_string(),
+            "# Inside fence".to_string(),
+            "- bullet".to_string(),
+            "- `inline code`".to_string(),
+            "```".to_string(),
+        ]
+    );
+}
+
+#[test]
+fn code_block_inside_unordered_list_item_is_indented() {
+    let md = "- Item\n\n  ```\n  code line\n  ```\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["- Item", "", "  code line"]);
+}
+
+#[test]
+fn code_block_multiple_lines_inside_unordered_list() {
+    let md = "- Item\n\n  ```\n  first\n  second\n  ```\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["- Item", "", "  first", "  second"]);
+}
+
+#[test]
+fn code_block_inside_unordered_list_item_multiple_lines() {
+    let md = "- Item\n\n  ```\n  first\n  second\n  ```\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(lines, vec!["- Item", "", "  first", "  second"]);
+}
+
+#[test]
+fn markdown_render_complex_snapshot() {
+    let md = r#"# H1: Markdown Streaming Test
+Intro paragraph with bold **text**, italic *text*, and inline code `x=1`.
+Combined bold-italic ***both*** and escaped asterisks \*literal\*.
+Auto-link: <https://example.com> and reference link [ref][r1].
+Link with title: [hover me](https://example.com "Example") and mailto <mailto:test@example.com>.
+Image: ![alt text](https://example.com/img.png "Title")
+> Blockquote level 1
+>> Blockquote level 2 with `inline code`
+- Unordered list item 1
+  - Nested bullet with italics _inner_
+- Unordered list item 2 with ~~strikethrough~~
+1. Ordered item one
+2. Ordered item two with sublist:
+   1) Alt-numbered subitem
+- [ ] Task: unchecked
+- [x] Task: checked with link [home](https://example.org)
+---
+Table below (alignment test):
+| Left | Center | Right |
+|:-----|:------:|------:|
+| a    |   b    |     c |
+Inline HTML: <sup>sup</sup> and <sub>sub</sub>.
+HTML block:
+<div style="border:1px solid #ccc;padding:2px">inline block</div>
+Escapes: \_underscores\_, backslash \\, ticks ``code with `backtick` inside``.
+Emoji shortcodes: :sparkles: :tada: (if supported).
+Hard break test (line ends with two spaces)  
+Next line should be close to previous.
+Footnote reference here[^1] and another[^longnote].
+Horizontal rule with asterisks:
+***
+Fenced code block (JSON):
+```json
+{ "a": 1, "b": [true, false] }
+```
+Fenced code with tildes and triple backticks inside:
+~~~markdown
+To close ``` you need tildes.
+~~~
+Indented code block:
+    for i in range(3): print(i)
+Definition-like list:
+Term
+: Definition with `code`.
+Character entities: &amp; &lt; &gt; &quot; &#39;
+[^1]: This is the first footnote.
+[^longnote]: A longer footnote with a link to [Rust](https://www.rust-lang.org/).
+Escaped pipe in text: a \| b \| c.
+URL with parentheses: [link](https://example.com/path_(with)_parens).
+[r1]: https://example.com/ref "Reference link title"
+"#;
+
+    let text = render_markdown_text(md);
+    // Convert to plain text lines for snapshot (ignore styles)
+    let rendered = text
+        .lines
+        .iter()
+        .map(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+        })
+        .collect::<Vec<_>>()
+        .join("\n");
+
+    assert_snapshot!(rendered);
+}
+
+#[test]
+fn ordered_item_with_code_block_and_nested_bullet() {
+    let md = "1. **item 1**\n\n2. **item 2**\n   ```\n   code\n   ```\n   - `PROCESS_START` (a `OnceLock<Instant>`) keeps the start time for the entire process.\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|line| {
+            line.spans
+                .iter()
+                .map(|span| span.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(
+        lines,
+        vec![
+            "1. item 1".to_string(),
+            "2. item 2".to_string(),
+            String::new(),
+            "   code".to_string(),
+            "    - PROCESS_START (a OnceLock<Instant>) keeps the start time for the entire process.".to_string(),
+        ]
+    );
+}
+
+#[test]
+fn nested_five_levels_mixed_lists() {
+    let md = "1. First\n   - Second level\n     1. Third level (ordered)\n        - Fourth level (bullet)\n          - Fifth level to test indent consistency\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "First".into()]),
+        Line::from_iter(["    - ", "Second level"]),
+        Line::from_iter(["        1. ".light_blue(), "Third level (ordered)".into()]),
+        Line::from_iter(["            - ", "Fourth level (bullet)"]),
+        Line::from_iter([
+            "                - ",
+            "Fifth level to test indent consistency",
+        ]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn html_inline_is_verbatim() {
+    let md = "Hello <span>world</span>!";
+    let text = render_markdown_text(md);
+    let expected: Text = Line::from_iter(["Hello ", "<span>", "world", "</span>", "!"]).into();
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn html_block_is_verbatim_multiline() {
+    let md = "<div>\n  <span>hi</span>\n</div>\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["<div>"]),
+        Line::from_iter(["  <span>hi</span>"]),
+        Line::from_iter(["</div>"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn html_in_tight_ordered_item_soft_breaks_with_space() {
+    let md = "1. Foo\n   <i>Bar</i>\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "Foo".into()]),
+        Line::from_iter(["   ", "<i>", "Bar", "</i>"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn html_continuation_paragraph_in_unordered_item_indented() {
+    let md = "- Item\n\n  <em>continued</em>\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["- ", "Item"]),
+        Line::default(),
+        Line::from_iter(["  ", "<em>", "continued", "</em>"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn unordered_item_continuation_paragraph_is_indented() {
+    let md = "- Intro\n\n  Continuation paragraph line 1\n  Continuation paragraph line 2\n";
+    let text = render_markdown_text(md);
+    let lines: Vec<String> = text
+        .lines
+        .iter()
+        .map(|line| {
+            line.spans
+                .iter()
+                .map(|span| span.content.clone())
+                .collect::<String>()
+        })
+        .collect();
+    assert_eq!(
+        lines,
+        vec![
+            "- Intro".to_string(),
+            String::new(),
+            "  Continuation paragraph line 1".to_string(),
+            "  Continuation paragraph line 2".to_string(),
+        ]
+    );
+}
+
+#[test]
+fn ordered_item_continuation_paragraph_is_indented() {
+    let md = "1. Intro\n\n   More details about intro\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "Intro".into()]),
+        Line::default(),
+        Line::from_iter(["   ", "More details about intro"]),
+    ]);
+    assert_eq!(text, expected);
+}
+
+#[test]
+fn nested_item_continuation_paragraph_is_indented() {
+    let md = "1. A\n    - B\n\n      Continuation for B\n2. C\n";
+    let text = render_markdown_text(md);
+    let expected = Text::from_iter([
+        Line::from_iter(["1. ".light_blue(), "A".into()]),
+        Line::from_iter(["    - ", "B"]),
+        Line::default(),
+        Line::from_iter(["      ", "Continuation for B"]),
+        Line::from_iter(["2. ".light_blue(), "C".into()]),
+    ]);
+    assert_eq!(text, expected);
+}
diff --git a/codex-rs/tui/src/markdown_stream.rs b/codex-rs/tui/src/markdown_stream.rs
index 5dc84cb1..7245afb1 100644
--- a/codex-rs/tui/src/markdown_stream.rs
+++ b/codex-rs/tui/src/markdown_stream.rs
@@ -4,8 +4,6 @@ use codex_core::config::Config;
 use ratatui::text::Line;
 
 use crate::markdown;
-use crate::render::markdown_utils::is_inside_unclosed_fence;
-use crate::render::markdown_utils::strip_empty_fenced_code_blocks;
 
 /// Newline-gated accumulator that renders markdown and commits only fully
 /// completed logical lines.
@@ -42,6 +40,7 @@ impl MarkdownStreamCollector {
     }
 
     pub fn push_delta(&mut self, delta: &str) {
+        tracing::trace!("push_delta: {delta:?}");
         self.buffer.push_str(delta);
     }
 
@@ -49,14 +48,15 @@ impl MarkdownStreamCollector {
     /// since the last commit. When the buffer does not end with a newline, the
     /// final rendered line is considered incomplete and is not emitted.
     pub fn commit_complete_lines(&mut self, config: &Config) -> Vec<Line<'static>> {
-        // In non-test builds, unwrap an outer ```markdown fence during commit as well,
-        // so fence markers never appear in streamed history.
-        let source = unwrap_markdown_language_fence_if_enabled(self.buffer.clone());
-        let source = strip_empty_fenced_code_blocks(&source);
-
+        let source = self.buffer.clone();
+        let last_newline_idx = source.rfind('\n');
+        let source = if let Some(last_newline_idx) = last_newline_idx {
+            source[..=last_newline_idx].to_string()
+        } else {
+            return Vec::new();
+        };
         let mut rendered: Vec<Line<'static>> = Vec::new();
         markdown::append_markdown(&source, &mut rendered, config);
-
         let mut complete_line_count = rendered.len();
         if complete_line_count > 0
             && crate::render::line_utils::is_blank_line_spaces_only(
@@ -65,87 +65,12 @@ impl MarkdownStreamCollector {
         {
             complete_line_count -= 1;
         }
-        // Heuristic: if the buffer ends with a double newline and the last non-blank
-        // rendered line looks like a list bullet with inline content (e.g., "- item"),
-        // defer committing that line. Subsequent context (e.g., another list item)
-        // can cause the renderer to split the bullet marker and text into separate
-        // logical lines ("- " then "item"), which would otherwise duplicate content.
-        if self.buffer.ends_with("\n\n") && complete_line_count > 0 {
-            let last = &rendered[complete_line_count - 1];
-            let mut text = String::new();
-            for s in &last.spans {
-                text.push_str(&s.content);
-            }
-            if text.starts_with("- ") && text.trim() != "-" {
-                complete_line_count = complete_line_count.saturating_sub(1);
-            }
-        }
-        if !self.buffer.ends_with('\n') {
-            complete_line_count = complete_line_count.saturating_sub(1);
-            // If we're inside an unclosed fenced code block, also drop the
-            // last rendered line to avoid committing a partial code line.
-            if is_inside_unclosed_fence(&source) {
-                complete_line_count = complete_line_count.saturating_sub(1);
-            }
-            // If the next (incomplete) line appears to begin a list item,
-            // also defer the previous completed line because the renderer may
-            // retroactively treat it as part of the list (e.g., ordered list item 1).
-            if let Some(last_nl) = source.rfind('\n') {
-                let tail = &source[last_nl + 1..];
-                if starts_with_list_marker(tail) {
-                    complete_line_count = complete_line_count.saturating_sub(1);
-                }
-            }
-        }
-
-        // Conservatively withhold trailing list-like lines (unordered or ordered)
-        // because streaming mid-item can cause the renderer to later split or
-        // restructure them (e.g., duplicating content or separating the marker).
-        // Only defers lines at the end of the out slice so previously committed
-        // lines remain stable.
-        if complete_line_count > self.committed_line_count {
-            let mut safe_count = complete_line_count;
-            while safe_count > self.committed_line_count {
-                let l = &rendered[safe_count - 1];
-                let mut text = String::new();
-                for s in &l.spans {
-                    text.push_str(&s.content);
-                }
-                let listish = is_potentially_volatile_list_line(&text);
-                if listish {
-                    safe_count -= 1;
-                    continue;
-                }
-                break;
-            }
-            complete_line_count = safe_count;
-        }
 
         if self.committed_line_count >= complete_line_count {
             return Vec::new();
         }
 
         let out_slice = &rendered[self.committed_line_count..complete_line_count];
-        // Strong correctness: while a fenced code block is open (no closing fence yet),
-        // do not emit any new lines from inside it. Wait until the fence closes to emit
-        // the entire block together. This avoids stray backticks and misformatted content.
-        if is_inside_unclosed_fence(&source) {
-            return Vec::new();
-        }
-
-        // Additional conservative hold-back: if exactly one short, plain word
-        // line would be emitted, defer it. This avoids committing a lone word
-        // that might become the first ordered-list item once the next delta
-        // arrives (e.g., next line starts with "2 " or "2. ").
-        if out_slice.len() == 1 {
-            let mut s = String::new();
-            for sp in &out_slice[0].spans {
-                s.push_str(&sp.content);
-            }
-            if is_short_plain_word(&s) {
-                return Vec::new();
-            }
-        }
 
         let out = out_slice.to_vec();
         self.committed_line_count = complete_line_count;
@@ -157,12 +82,19 @@ impl MarkdownStreamCollector {
     /// for rendering. Optionally unwraps ```markdown language fences in
     /// non-test builds.
     pub fn finalize_and_drain(&mut self, config: &Config) -> Vec<Line<'static>> {
-        let mut source: String = self.buffer.clone();
+        let raw_buffer = self.buffer.clone();
+        let mut source: String = raw_buffer.clone();
         if !source.ends_with('\n') {
             source.push('\n');
         }
-        let source = unwrap_markdown_language_fence_if_enabled(source);
-        let source = strip_empty_fenced_code_blocks(&source);
+        tracing::debug!(
+            raw_len = raw_buffer.len(),
+            source_len = source.len(),
+            "markdown finalize (raw length: {}, rendered length: {})",
+            raw_buffer.len(),
+            source.len()
+        );
+        tracing::trace!("markdown finalize (raw source):\n---\n{source}\n---");
 
         let mut rendered: Vec<Line<'static>> = Vec::new();
         markdown::append_markdown(&source, &mut rendered, config);
@@ -179,122 +111,6 @@ impl MarkdownStreamCollector {
     }
 }
 
-#[inline]
-fn is_potentially_volatile_list_line(text: &str) -> bool {
-    let t = text.trim_end();
-    if t == "-" || t == "*" || t == "- " || t == "* " {
-        return true;
-    }
-    if t.starts_with("- ") || t.starts_with("* ") {
-        return true;
-    }
-    // ordered list like "1. " or "23. "
-    let mut it = t.chars().peekable();
-    let mut saw_digit = false;
-    while let Some(&ch) = it.peek() {
-        if ch.is_ascii_digit() {
-            saw_digit = true;
-            it.next();
-            continue;
-        }
-        break;
-    }
-    if saw_digit && it.peek() == Some(&'.') {
-        // consume '.'
-        it.next();
-        if it.peek() == Some(&' ') {
-            return true;
-        }
-    }
-    false
-}
-
-#[inline]
-fn starts_with_list_marker(text: &str) -> bool {
-    let t = text.trim_start();
-    if t.starts_with("- ") || t.starts_with("* ") || t.starts_with("-\t") || t.starts_with("*\t") {
-        return true;
-    }
-    // ordered list marker like "1 ", "1. ", "23 ", "23. "
-    let mut it = t.chars().peekable();
-    let mut saw_digit = false;
-    while let Some(&ch) = it.peek() {
-        if ch.is_ascii_digit() {
-            saw_digit = true;
-            it.next();
-        } else {
-            break;
-        }
-    }
-    if !saw_digit {
-        return false;
-    }
-    match it.peek() {
-        Some('.') => {
-            it.next();
-            matches!(it.peek(), Some(' '))
-        }
-        Some(' ') => true,
-        _ => false,
-    }
-}
-
-#[inline]
-fn is_short_plain_word(s: &str) -> bool {
-    let t = s.trim();
-    if t.is_empty() || t.len() > 5 {
-        return false;
-    }
-    t.chars().all(|c| c.is_alphanumeric())
-}
-
-/// fence helpers are provided by `crate::render::markdown_utils`
-#[cfg(test)]
-fn unwrap_markdown_language_fence_if_enabled(s: String) -> String {
-    // In tests, keep content exactly as provided to simplify assertions.
-    s
-}
-
-#[cfg(not(test))]
-fn unwrap_markdown_language_fence_if_enabled(s: String) -> String {
-    // Best-effort unwrap of a single outer fenced markdown block.
-    // Recognizes common forms like ```markdown, ```md (any case), optional
-    // surrounding whitespace, and flexible trailing newlines/CRLF.
-    // If the block is not recognized, return the input unchanged.
-    let lines = s.lines().collect::<Vec<_>>();
-    if lines.len() < 2 {
-        return s;
-    }
-
-    // Identify opening fence and language.
-    let open = lines.first().map(|l| l.trim_start()).unwrap_or("");
-    if !open.starts_with("```") {
-        return s;
-    }
-    let lang = open.trim_start_matches("```").trim();
-    let is_markdown_lang = lang.eq_ignore_ascii_case("markdown") || lang.eq_ignore_ascii_case("md");
-    if !is_markdown_lang {
-        return s;
-    }
-
-    // Find the last non-empty line and ensure it is a closing fence.
-    let mut last_idx = lines.len() - 1;
-    while last_idx > 0 && lines[last_idx].trim().is_empty() {
-        last_idx -= 1;
-    }
-    if lines[last_idx].trim() != "```" {
-        return s;
-    }
-
-    // Reconstruct the inner content between the fences.
-    let mut out = String::new();
-    for l in lines.iter().take(last_idx).skip(1) {
-        out.push_str(l);
-        out.push('\n');
-    }
-    out
-}
-
 pub(crate) struct StepResult {
     pub history: Vec<Line<'static>>, // lines to insert into history this step
 }
@@ -373,6 +189,7 @@ mod tests {
     use super::*;
     use codex_core::config::Config;
     use codex_core::config::ConfigOverrides;
+    use ratatui::style::Color;
 
     fn test_config() -> Config {
         let overrides = ConfigOverrides {
@@ -406,6 +223,125 @@ mod tests {
         assert_eq!(out.len(), 1);
     }
 
+    #[test]
+    fn e2e_stream_blockquote_simple_is_green() {
+        let cfg = test_config();
+        let out = super::simulate_stream_markdown_for_tests(&["> Hello\n"], true, &cfg);
+        assert_eq!(out.len(), 1);
+        let l = &out[0];
+        assert_eq!(
+            l.style.fg,
+            Some(Color::Green),
+            "expected blockquote line fg green, got {:?}",
+            l.style.fg
+        );
+    }
+
+    #[test]
+    fn e2e_stream_blockquote_nested_is_green() {
+        let cfg = test_config();
+        let out =
+            super::simulate_stream_markdown_for_tests(&["> Level 1\n>> Level 2\n"], true, &cfg);
+        // Filter out any blank lines that may be inserted at paragraph starts.
+        let non_blank: Vec<_> = out
+            .into_iter()
+            .filter(|l| {
+                let s = l
+                    .spans
+                    .iter()
+                    .map(|sp| sp.content.clone())
+                    .collect::<Vec<_>>()
+                    .join("");
+                let t = s.trim();
+                // Ignore quote-only blank lines like ">" inserted at paragraph boundaries.
+                !(t.is_empty() || t == ">")
+            })
+            .collect();
+        assert_eq!(non_blank.len(), 2);
+        assert_eq!(non_blank[0].style.fg, Some(Color::Green));
+        assert_eq!(non_blank[1].style.fg, Some(Color::Green));
+    }
+
+    #[test]
+    fn e2e_stream_blockquote_with_list_items_is_green() {
+        let cfg = test_config();
+        let out =
+            super::simulate_stream_markdown_for_tests(&["> - item 1\n> - item 2\n"], true, &cfg);
+        assert_eq!(out.len(), 2);
+        assert_eq!(out[0].style.fg, Some(Color::Green));
+        assert_eq!(out[1].style.fg, Some(Color::Green));
+    }
+
+    #[test]
+    fn e2e_stream_nested_mixed_lists_ordered_marker_is_light_blue() {
+        let cfg = test_config();
+        let md = [
+            "1. First\n",
+            "   - Second level\n",
+            "     1. Third level (ordered)\n",
+            "        - Fourth level (bullet)\n",
+            "          - Fifth level to test indent consistency\n",
+        ];
+        let out = super::simulate_stream_markdown_for_tests(&md, true, &cfg);
+        // Find the line that contains the third-level ordered text
+        let find_idx = out.iter().position(|l| {
+            l.spans
+                .iter()
+                .map(|s| s.content.clone())
+                .collect::<String>()
+                .contains("Third level (ordered)")
+        });
+        let idx = find_idx.expect("expected third-level ordered line");
+        let line = &out[idx];
+        // Expect at least one span on this line to be styled light blue
+        let has_light_blue = line
+            .spans
+            .iter()
+            .any(|s| s.style.fg == Some(ratatui::style::Color::LightBlue));
+        assert!(
+            has_light_blue,
+            "expected an ordered-list marker span with light blue fg on: {line:?}"
+        );
+    }
+
+    #[test]
+    fn e2e_stream_blockquote_wrap_preserves_green_style() {
+        let cfg = test_config();
+        let long = "> This is a very long quoted line that should wrap across multiple columns to verify style preservation.";
+        let out = super::simulate_stream_markdown_for_tests(&[long, "\n"], true, &cfg);
+        // Wrap to a narrow width to force multiple output lines.
+        let wrapped = crate::wrapping::word_wrap_lines(
+            out.iter().collect::<Vec<_>>(),
+            crate::wrapping::RtOptions::new(24),
+        );
+        // Filter out purely blank lines
+        let non_blank: Vec<_> = wrapped
+            .into_iter()
+            .filter(|l| {
+                let s = l
+                    .spans
+                    .iter()
+                    .map(|sp| sp.content.clone())
+                    .collect::<Vec<_>>()
+                    .join("");
+                !s.trim().is_empty()
+            })
+            .collect();
+        assert!(
+            non_blank.len() >= 2,
+            "expected wrapped blockquote to span multiple lines"
+        );
+        for (i, l) in non_blank.iter().enumerate() {
+            assert_eq!(
+                l.style.fg,
+                Some(Color::Green),
+                "wrapped line {} should preserve green style, got {:?}",
+                i,
+                l.style.fg
+            );
+        }
+    }
+
     #[test]
     fn heading_starts_on_new_line_when_following_paragraph() {
         let cfg = test_config();
@@ -490,7 +426,7 @@ mod tests {
             .collect();
         assert_eq!(
             s1,
-            vec!["Sounds good!", ""],
+            vec!["Sounds good!"],
             "expected paragraph followed by blank separator before heading chunk"
         );
 
@@ -509,7 +445,7 @@ mod tests {
             .collect();
         assert_eq!(
             s2,
-            vec!["## Adding Bird subcommand"],
+            vec!["", "## Adding Bird subcommand"],
             "expected the heading line only on the final commit"
         );
 
@@ -531,18 +467,6 @@ mod tests {
             vec!["Hello."],
             "unexpected markdown lines: {rendered_strings:?}"
         );
-
-        let line_to_string = |l: &ratatui::text::Line<'_>| -> String {
-            l.spans
-                .iter()
-                .map(|s| s.content.clone())
-                .collect::<Vec<_>>()
-                .join("")
-        };
-
-        assert_eq!(line_to_string(&out1[0]), "Sounds good!");
-        assert_eq!(line_to_string(&out1[1]), "");
-        assert_eq!(line_to_string(&out2[0]), "## Adding Bird subcommand");
     }
 
     fn lines_to_plain_strings(lines: &[ratatui::text::Line<'_>]) -> Vec<String> {
@@ -560,35 +484,11 @@ mod tests {
 
     #[test]
     fn lists_and_fences_commit_without_duplication() {
-        let cfg = test_config();
-
         // List case
-        let deltas = vec!["- a\n- ", "b\n- c\n"];
-        let streamed = simulate_stream_markdown_for_tests(&deltas, true, &cfg);
-        let streamed_str = lines_to_plain_strings(&streamed);
-
-        let mut rendered_all: Vec<ratatui::text::Line<'static>> = Vec::new();
-        crate::markdown::append_markdown("- a\n- b\n- c\n", &mut rendered_all, &cfg);
-        let rendered_all_str = lines_to_plain_strings(&rendered_all);
-
-        assert_eq!(
-            streamed_str, rendered_all_str,
-            "list streaming should equal full render without duplication"
-        );
+        assert_streamed_equals_full(&["- a\n- ", "b\n- c\n"]);
 
         // Fenced code case: stream in small chunks
-        let deltas2 = vec!["```", "\nco", "de 1\ncode 2\n", "```\n"];
-        let streamed2 = simulate_stream_markdown_for_tests(&deltas2, true, &cfg);
-        let streamed2_str = lines_to_plain_strings(&streamed2);
-
-        let mut rendered_all2: Vec<ratatui::text::Line<'static>> = Vec::new();
-        crate::markdown::append_markdown("```\ncode 1\ncode 2\n```\n", &mut rendered_all2, &cfg);
-        let rendered_all2_str = lines_to_plain_strings(&rendered_all2);
-
-        assert_eq!(
-            streamed2_str, rendered_all2_str,
-            "fence streaming should equal full render without duplication"
-        );
+        assert_streamed_equals_full(&["```", "\nco", "de 1\ncode 2\n", "```\n"]);
     }
 
     #[test]
@@ -622,6 +522,56 @@ mod tests {
         );
     }
 
+    #[test]
+    fn e2e_stream_deep_nested_third_level_marker_is_light_blue() {
+        let cfg = test_config();
+        let md = "1. First\n   - Second level\n     1. Third level (ordered)\n        - Fourth level (bullet)\n          - Fifth level to test indent consistency\n";
+        let streamed = super::simulate_stream_markdown_for_tests(&[md], true, &cfg);
+        let streamed_strs = lines_to_plain_strings(&streamed);
+
+        // Locate the third-level line in the streamed output; avoid relying on exact indent.
+        let target_suffix = "1. Third level (ordered)";
+        let mut found = None;
+        for line in &streamed {
+            let s: String = line.spans.iter().map(|sp| sp.content.clone()).collect();
+            if s.contains(target_suffix) {
+                found = Some(line.clone());
+                break;
+            }
+        }
+        let line = found.unwrap_or_else(|| {
+            panic!("expected to find the third-level ordered list line; got: {streamed_strs:?}")
+        });
+
+        // The marker (including indent and "1.") is expected to be in the first span
+        // and colored LightBlue; following content should be default color.
+        assert!(
+            !line.spans.is_empty(),
+            "expected non-empty spans for the third-level line"
+        );
+        let marker_span = &line.spans[0];
+        assert_eq!(
+            marker_span.style.fg,
+            Some(Color::LightBlue),
+            "expected LightBlue 3rd-level ordered marker, got {:?}",
+            marker_span.style.fg
+        );
+        // Find the first non-empty non-space content span and verify it is default color.
+        let mut content_fg = None;
+        for sp in &line.spans[1..] {
+            let t = sp.content.trim();
+            if !t.is_empty() {
+                content_fg = Some(sp.style.fg);
+                break;
+            }
+        }
+        assert_eq!(
+            content_fg.flatten(),
+            None,
+            "expected default color for 3rd-level content, got {content_fg:?}"
+        );
+    }
+
     #[test]
     fn empty_fenced_block_is_dropped_and_separator_preserved_before_heading() {
         let cfg = test_config();
@@ -768,16 +718,12 @@ mod tests {
         let expected = vec![
             "Loose vs. tight list items:".to_string(),
             "".to_string(),
-            "1. ".to_string(),
-            "Tight item".to_string(),
-            "2. ".to_string(),
-            "Another tight item".to_string(),
-            "3. ".to_string(),
-            "Loose item with its own paragraph.".to_string(),
+            "1. Tight item".to_string(),
+            "2. Another tight item".to_string(),
+            "3. Loose item with its own paragraph.".to_string(),
             "".to_string(),
-            "This paragraph belongs to the same list item.".to_string(),
-            "4. ".to_string(),
-            "Second loose item with a nested list after a blank line.".to_string(),
+            "   This paragraph belongs to the same list item.".to_string(),
+            "4. Second loose item with a nested list after a blank line.".to_string(),
             "    - Nested bullet under a loose item".to_string(),
             "    - Another nested bullet".to_string(),
         ];
@@ -788,63 +734,39 @@ mod tests {
     }
 
     // Targeted tests derived from fuzz findings. Each asserts streamed == full render.
-
-    #[test]
-    fn fuzz_class_bare_dash_then_task_item() {
+    fn assert_streamed_equals_full(deltas: &[&str]) {
         let cfg = test_config();
-        // Case similar to: ["two\n", "- \n* [x] done "]
-        let deltas = vec!["two\n", "- \n* [x] done \n"];
-        let streamed = simulate_stream_markdown_for_tests(&deltas, true, &cfg);
+        let streamed = simulate_stream_markdown_for_tests(deltas, true, &cfg);
         let streamed_strs = lines_to_plain_strings(&streamed);
         let full: String = deltas.iter().copied().collect();
         let mut rendered: Vec<ratatui::text::Line<'static>> = Vec::new();
         crate::markdown::append_markdown(&full, &mut rendered, &cfg);
         let rendered_strs = lines_to_plain_strings(&rendered);
-        assert_eq!(streamed_strs, rendered_strs);
+        assert_eq!(streamed_strs, rendered_strs, "full:\n---\n{full}\n---");
     }
 
     #[test]
     fn fuzz_class_bullet_duplication_variant_1() {
-        let cfg = test_config();
-        // Case similar to: ["aph.\n- let one\n- bull", "et two\n\n  second paragraph "]
-        let deltas = vec!["aph.\n- let one\n- bull", "et two\n\n  second paragraph \n"];
-        let streamed = simulate_stream_markdown_for_tests(&deltas, true, &cfg);
-        let streamed_strs = lines_to_plain_strings(&streamed);
-        let full: String = deltas.iter().copied().collect();
-        let mut rendered: Vec<ratatui::text::Line<'static>> = Vec::new();
-        crate::markdown::append_markdown(&full, &mut rendered, &cfg);
-        let rendered_strs = lines_to_plain_strings(&rendered);
-        assert_eq!(streamed_strs, rendered_strs);
+        assert_streamed_equals_full(&[
+            "aph.\n- let one\n- bull",
+            "et two\n\n  second paragraph \n",
+        ]);
     }
 
     #[test]
     fn fuzz_class_bullet_duplication_variant_2() {
-        let cfg = test_config();
-        // Case similar to: ["- e\n  c", "e\n- bullet two\n\n  second paragraph in bullet two\n"]
-        let deltas = vec![
+        assert_streamed_equals_full(&[
             "- e\n  c",
             "e\n- bullet two\n\n  second paragraph in bullet two\n",
-        ];
-        let streamed = simulate_stream_markdown_for_tests(&deltas, true, &cfg);
-        let streamed_strs = lines_to_plain_strings(&streamed);
-        let full: String = deltas.iter().copied().collect();
-        let mut rendered: Vec<ratatui::text::Line<'static>> = Vec::new();
-        crate::markdown::append_markdown(&full, &mut rendered, &cfg);
-        let rendered_strs = lines_to_plain_strings(&rendered);
-        assert_eq!(streamed_strs, rendered_strs);
+        ]);
     }
 
     #[test]
-    fn fuzz_class_ordered_list_split_weirdness() {
-        let cfg = test_config();
-        // Case similar to: ["one\n2", " two\n- \n* [x] d"]
-        let deltas = vec!["one\n2", " two\n- \n* [x] d\n"];
-        let streamed = simulate_stream_markdown_for_tests(&deltas, true, &cfg);
-        let streamed_strs = lines_to_plain_strings(&streamed);
-        let full: String = deltas.iter().copied().collect();
-        let mut rendered: Vec<ratatui::text::Line<'static>> = Vec::new();
-        crate::markdown::append_markdown(&full, &mut rendered, &cfg);
-        let rendered_strs = lines_to_plain_strings(&rendered);
-        assert_eq!(streamed_strs, rendered_strs);
+    fn streaming_html_block_then_text_matches_full() {
+        assert_streamed_equals_full(&[
+            "HTML block:\n",
+            "<div>inline block</div>\n",
+            "more stuff\n",
+        ]);
     }
 }
diff --git a/codex-rs/tui/src/render/markdown_utils.rs b/codex-rs/tui/src/render/markdown_utils.rs
deleted file mode 100644
index 6fd2ad67..00000000
--- a/codex-rs/tui/src/render/markdown_utils.rs
+++ /dev/null
@@ -1,72 +0,0 @@
-/// Returns true if the provided text contains an unclosed fenced code block
-/// (opened by ``` or ~~~, closed by a matching fence on its own line).
-pub fn is_inside_unclosed_fence(s: &str) -> bool {
-    let mut open = false;
-    for line in s.lines() {
-        let t = line.trim_start();
-        if t.starts_with("```") || t.starts_with("~~~") {
-            if !open {
-                open = true;
-            } else {
-                // closing fence on same pattern toggles off
-                open = false;
-            }
-        }
-    }
-    open
-}
-
-/// Remove fenced code blocks that contain no content (whitespace-only) to avoid
-/// streaming empty code blocks like ```lang\n``` or ```\n```.
-pub fn strip_empty_fenced_code_blocks(s: &str) -> String {
-    // Only remove complete fenced blocks that contain no non-whitespace content.
-    // Leave all other content unchanged to avoid affecting partial streams.
-    let lines: Vec<&str> = s.lines().collect();
-    let mut out = String::with_capacity(s.len());
-    let mut i = 0usize;
-    while i < lines.len() {
-        let line = lines[i];
-        let trimmed_start = line.trim_start();
-        let fence_token = if trimmed_start.starts_with("```") {
-            "```"
-        } else if trimmed_start.starts_with("~~~") {
-            "~~~"
-        } else {
-            ""
-        };
-        if !fence_token.is_empty() {
-            // Find a matching closing fence on its own line.
-            let mut j = i + 1;
-            let mut has_content = false;
-            let mut found_close = false;
-            while j < lines.len() {
-                let l = lines[j];
-                if l.trim() == fence_token {
-                    found_close = true;
-                    break;
-                }
-                if !l.trim().is_empty() {
-                    has_content = true;
-                }
-                j += 1;
-            }
-            if found_close && !has_content {
-                // Drop i..=j and insert at most a single blank separator line.
-                if !out.ends_with('\n') {
-                    out.push('\n');
-                }
-                i = j + 1;
-                continue;
-            }
-            // Not an empty fenced block; emit as-is.
-            out.push_str(line);
-            out.push('\n');
-            i += 1;
-        } else {
-            out.push_str(line);
-            out.push('\n');
-            i += 1;
-        }
-    }
-    out
-}
diff --git a/codex-rs/tui/src/render/mod.rs b/codex-rs/tui/src/render/mod.rs
index ed1e215e..e457423f 100644
--- a/codex-rs/tui/src/render/mod.rs
+++ b/codex-rs/tui/src/render/mod.rs
@@ -1,3 +1,2 @@
 pub mod highlight;
 pub mod line_utils;
-pub mod markdown_utils;
diff --git a/codex-rs/tui/src/snapshots/codex_tui__markdown_render__markdown_render_tests__markdown_render_complex_snapshot.snap b/codex-rs/tui/src/snapshots/codex_tui__markdown_render__markdown_render_tests__markdown_render_complex_snapshot.snap
new file mode 100644
index 00000000..cc752dd6
--- /dev/null
+++ b/codex-rs/tui/src/snapshots/codex_tui__markdown_render__markdown_render_tests__markdown_render_complex_snapshot.snap
@@ -0,0 +1,62 @@
+---
+source: tui/src/markdown_render_tests.rs
+expression: rendered
+---
+# H1: Markdown Streaming Test
+
+Intro paragraph with bold text, italic text, and inline code x=1.
+Combined bold-italic both and escaped asterisks *literal*.
+Auto-link: https://example.com (https://example.com) and reference link [ref][r1].
+Link with title: hover me (https://example.com) and mailto mailto:test@example.com (mailto:test@example.com).
+Image: alt text
+
+> Blockquote level 1
+> 
+> > Blockquote level 2 with inline code
+
+- Unordered list item 1
+    - Nested bullet with italics inner
+- Unordered list item 2 with strikethrough
+
+1. Ordered item one
+2. Ordered item two with sublist:
+    1. Alt-numbered subitem
+
+- [ ] Task: unchecked
+- [x] Task: checked with link home (https://example.org)
+
+———
+
+Table below (alignment test):
+| Left | Center | Right |
+|:-----|:------:|------:|
+| a    |   b    |     c |
+Inline HTML: <sup>sup</sup> and <sub>sub</sub>.
+HTML block:
+<div style="border:1px solid #ccc;padding:2px">inline block</div>
+Escapes: \_underscores\_, backslash \\, ticks ``code with `backtick` inside``.
+Emoji shortcodes: :sparkles: :tada: (if supported).
+Hard break test (line ends with two spaces)  
+Next line should be close to previous.
+Footnote reference here[^1] and another[^longnote].
+Horizontal rule with asterisks:
+***
+Fenced code block (JSON):
+```json
+{ "a": 1, "b": [true, false] }
+```
+Fenced code with tildes and triple backticks inside:
+~~~markdown
+To close ``` you need tildes.
+~~~
+Indented code block:
+    for i in range(3): print(i)
+Definition-like list:
+Term
+: Definition with `code`.
+Character entities: &amp; &lt; &gt; &quot; &#39;
+[^1]: This is the first footnote.
+[^longnote]: A longer footnote with a link to [Rust](https://www.rust-lang.org/).
+Escaped pipe in text: a \| b \| c.
+URL with parentheses: [link](https://example.com/path_(with)_parens).
+[r1]: https://example.com/ref "Reference link title"
diff --git a/codex-rs/tui/src/streaming/controller.rs b/codex-rs/tui/src/streaming/controller.rs
index 4edea186..490d1f6d 100644
--- a/codex-rs/tui/src/streaming/controller.rs
+++ b/codex-rs/tui/src/streaming/controller.rs
@@ -380,16 +380,12 @@ mod tests {
         let expected = vec![
             "Loose vs. tight list items:".to_string(),
             "".to_string(),
-            "1. ".to_string(),
-            "Tight item".to_string(),
-            "2. ".to_string(),
-            "Another tight item".to_string(),
-            "3. ".to_string(),
-            "Loose item with its own paragraph.".to_string(),
+            "1. Tight item".to_string(),
+            "2. Another tight item".to_string(),
+            "3. Loose item with its own paragraph.".to_string(),
             "".to_string(),
-            "This paragraph belongs to the same list item.".to_string(),
-            "4. ".to_string(),
-            "Second loose item with a nested list after a blank line.".to_string(),
+            "   This paragraph belongs to the same list item.".to_string(),
+            "4. Second loose item with a nested list after a blank line.".to_string(),
             "    - Nested bullet under a loose item".to_string(),
             "    - Another nested bullet".to_string(),
         ];
diff --git a/codex-rs/tui/src/wrapping.rs b/codex-rs/tui/src/wrapping.rs
index 508c6a45..bb309784 100644
--- a/codex-rs/tui/src/wrapping.rs
+++ b/codex-rs/tui/src/wrapping.rs
@@ -187,10 +187,17 @@ where
 
     // Build first wrapped line with initial indent.
     let mut first_line = rt_opts.initial_indent.clone();
+    first_line.style = first_line.style.patch(line.style);
     {
-        let mut sliced = slice_line_spans(line, &span_bounds, first_line_range);
+        let sliced = slice_line_spans(line, &span_bounds, first_line_range);
         let mut spans = first_line.spans;
-        spans.append(&mut sliced.spans);
+        spans.append(
+            &mut sliced
+                .spans
+                .into_iter()
+                .map(|s| s.patch_style(line.style))
+                .collect(),
+        );
         first_line.spans = spans;
         out.push(first_line);
     }
@@ -209,10 +216,17 @@ where
             continue;
         }
         let mut subsequent_line = rt_opts.subsequent_indent.clone();
+        subsequent_line.style = subsequent_line.style.patch(line.style);
         let offset_range = (r.start + base)..(r.end + base);
-        let mut sliced = slice_line_spans(line, &span_bounds, &offset_range);
+        let sliced = slice_line_spans(line, &span_bounds, &offset_range);
         let mut spans = subsequent_line.spans;
-        spans.append(&mut sliced.spans);
+        spans.append(
+            &mut sliced
+                .spans
+                .into_iter()
+                .map(|s| s.patch_style(line.style))
+                .collect(),
+        );
         subsequent_line.spans = spans;
         out.push(subsequent_line);
     }