diff --git a/codex-rs/tui/src/app.rs b/codex-rs/tui/src/app.rs
index a97948f3ea..92384dfb94 100644
--- a/codex-rs/tui/src/app.rs
+++ b/codex-rs/tui/src/app.rs
@@ -64,6 +64,11 @@ pub(crate) struct App<'a> {
     pending_history_lines: Vec<Line<'static>>,
 
     enhanced_keys_supported: bool,
+
+    // UI options passed from CLI
+    live_rows: u16,
+    overlay_wrap: bool,
+    preview_max_cols: Option<u16>,
 }
 
 /// Aggregate parameters needed to create a `ChatWidget`, as creation may be
@@ -74,6 +79,9 @@ pub(crate) struct ChatWidgetArgs {
     initial_prompt: Option<String>,
     initial_images: Vec<PathBuf>,
     enhanced_keys_supported: bool,
+    live_rows: u16,
+    overlay_wrap: bool,
+    preview_max_cols: Option<u16>,
 }
 
 impl App<'_> {
@@ -82,6 +90,9 @@ impl App<'_> {
         initial_prompt: Option<String>,
         initial_images: Vec<std::path::PathBuf>,
         show_trust_screen: bool,
+        live_rows: u16,
+        overlay_wrap: bool,
+        preview_max_cols: Option<u16>,
     ) -> Self {
         let (app_event_tx, app_event_rx) = channel();
         let app_event_tx = AppEventSender::new(app_event_tx);
@@ -139,6 +150,9 @@ impl App<'_> {
                 initial_prompt,
                 initial_images,
                 enhanced_keys_supported,
+                live_rows,
+                overlay_wrap,
+                preview_max_cols,
             };
             AppState::Onboarding {
                 screen: OnboardingScreen::new(OnboardingScreenArgs {
@@ -157,6 +171,9 @@ impl App<'_> {
                 initial_prompt,
                 initial_images,
                 enhanced_keys_supported,
+                live_rows,
+                overlay_wrap,
+                preview_max_cols,
             );
             AppState::Chat {
                 widget: Box::new(chat_widget),
@@ -173,6 +190,9 @@ impl App<'_> {
             file_search,
             pending_redraw,
             enhanced_keys_supported,
+            live_rows,
+            overlay_wrap,
+            preview_max_cols,
         }
     }
 
@@ -319,6 +339,9 @@ impl App<'_> {
                             None,
                             Vec::new(),
                             self.enhanced_keys_supported,
+                            self.live_rows,
+                            self.overlay_wrap,
+                            self.preview_max_cols,
                         ));
                         self.app_state = AppState::Chat { widget: new_widget };
                         self.app_event_tx.send(AppEvent::RequestRedraw);
@@ -426,6 +449,9 @@ impl App<'_> {
                     enhanced_keys_supported,
                     initial_images,
                     initial_prompt,
+                    live_rows,
+                    overlay_wrap,
+                    preview_max_cols,
                 }) => {
                     self.app_state = AppState::Chat {
                         widget: Box::new(ChatWidget::new(
@@ -434,6 +460,9 @@ impl App<'_> {
                             initial_prompt,
                             initial_images,
                             enhanced_keys_supported,
+                            live_rows,
+                            overlay_wrap,
+                            preview_max_cols,
                         )),
                     }
                 }
diff --git a/codex-rs/tui/src/bottom_pane/approval_modal_view.rs b/codex-rs/tui/src/bottom_pane/approval_modal_view.rs
index 8e9ff6d936..5deac931cb 100644
--- a/codex-rs/tui/src/bottom_pane/approval_modal_view.rs
+++ b/codex-rs/tui/src/bottom_pane/approval_modal_view.rs
@@ -100,6 +100,7 @@ mod tests {
             app_event_tx: AppEventSender::new(tx_raw2),
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
         assert_eq!(CancellationEvent::Handled, view.on_ctrl_c(&mut pane));
         assert!(view.queue.is_empty());
diff --git a/codex-rs/tui/src/bottom_pane/live_ring_widget.rs b/codex-rs/tui/src/bottom_pane/live_ring_widget.rs
index 13f91acc5d..fb4d4a46d0 100644
--- a/codex-rs/tui/src/bottom_pane/live_ring_widget.rs
+++ b/codex-rs/tui/src/bottom_pane/live_ring_widget.rs
@@ -8,6 +8,7 @@ use ratatui::widgets::WidgetRef;
 pub(crate) struct LiveRingWidget {
     max_rows: u16,
     rows: Vec<Line<'static>>, // newest at the end
+    wrap: bool,
 }
 
 impl LiveRingWidget {
@@ -15,6 +16,7 @@ impl LiveRingWidget {
         Self {
             max_rows: 3,
             rows: Vec::new(),
+            wrap: false,
         }
     }
 
@@ -26,6 +28,10 @@ impl LiveRingWidget {
         self.rows = rows;
     }
 
+    pub fn set_wrap(&mut self, wrap: bool) {
+        self.wrap = wrap;
+    }
+
     pub fn desired_height(&self, _width: u16) -> u16 {
         let len = self.rows.len() as u16;
         len.min(self.max_rows)
@@ -39,7 +45,10 @@ impl WidgetRef for LiveRingWidget {
         }
         let visible = self.rows.len().saturating_sub(self.max_rows as usize);
         let slice = &self.rows[visible..];
-        let para = Paragraph::new(slice.to_vec());
+        let mut para = Paragraph::new(slice.to_vec());
+        if self.wrap {
+            para = para.wrap(ratatui::widgets::Wrap { trim: false });
+        }
         para.render_ref(area, buf);
     }
 }
diff --git a/codex-rs/tui/src/bottom_pane/mod.rs b/codex-rs/tui/src/bottom_pane/mod.rs
index 0c8610470c..4e946aa906 100644
--- a/codex-rs/tui/src/bottom_pane/mod.rs
+++ b/codex-rs/tui/src/bottom_pane/mod.rs
@@ -61,6 +61,9 @@ pub(crate) struct BottomPane<'a> {
     /// container used during development before we wire it to ChatWidget events.
     live_ring: Option<live_ring_widget::LiveRingWidget>,
 
+    /// Whether the live ring should soft-wrap to the terminal width.
+    live_ring_wrap: bool,
+
     /// True if the active view is the StatusIndicatorView that replaces the
     /// composer during a running task.
     status_view_active: bool,
@@ -70,6 +73,7 @@ pub(crate) struct BottomPaneParams {
     pub(crate) app_event_tx: AppEventSender,
     pub(crate) has_input_focus: bool,
     pub(crate) enhanced_keys_supported: bool,
+    pub(crate) live_ring_wrap: bool,
 }
 
 impl BottomPane<'_> {
@@ -89,6 +93,7 @@ impl BottomPane<'_> {
             ctrl_c_quit_hint: false,
             live_status: None,
             live_ring: None,
+            live_ring_wrap: params.live_ring_wrap,
             status_view_active: false,
         }
     }
@@ -357,6 +362,7 @@ impl BottomPane<'_> {
     pub(crate) fn set_live_ring_rows(&mut self, max_rows: u16, rows: Vec<Line<'static>>) {
         let mut w = live_ring_widget::LiveRingWidget::new();
         w.set_max_rows(max_rows);
+        w.set_wrap(self.live_ring_wrap);
         w.set_rows(rows);
         self.live_ring = Some(w);
     }
@@ -459,6 +465,7 @@ mod tests {
             app_event_tx: tx,
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
         pane.push_approval_request(exec_request());
         assert_eq!(CancellationEvent::Handled, pane.on_ctrl_c());
@@ -474,6 +481,7 @@ mod tests {
             app_event_tx: tx,
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
 
         // Provide 4 rows with max_rows=3; only the last 3 should be visible.
@@ -511,6 +519,7 @@ mod tests {
             app_event_tx: tx,
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
 
         // Simulate task running which replaces composer with the status indicator.
@@ -572,6 +581,7 @@ mod tests {
             app_event_tx: tx,
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
 
         // Create an approval modal (active view).
@@ -602,6 +612,7 @@ mod tests {
             app_event_tx: tx.clone(),
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
 
         // Start a running task so the status indicator replaces the composer.
@@ -652,6 +663,7 @@ mod tests {
             app_event_tx: tx,
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
 
         // Begin a task: show initial status.
@@ -688,6 +700,7 @@ mod tests {
             app_event_tx: tx,
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
 
         // Activate spinner (status view replaces composer) with no live ring.
@@ -740,6 +753,7 @@ mod tests {
             app_event_tx: tx,
             has_input_focus: true,
             enhanced_keys_supported: false,
+            live_ring_wrap: false,
         });
 
         pane.set_task_running(true);
diff --git a/codex-rs/tui/src/chatwidget.rs b/codex-rs/tui/src/chatwidget.rs
index 344f025842..31cf10d335 100644
--- a/codex-rs/tui/src/chatwidget.rs
+++ b/codex-rs/tui/src/chatwidget.rs
@@ -49,6 +49,7 @@ use crate::history_cell::CommandOutput;
 use crate::history_cell::HistoryCell;
 use crate::history_cell::PatchEventType;
 use crate::live_wrap::RowBuilder;
+use crate::markdown;
 use crate::user_approval_widget::ApprovalRequest;
 use codex_file_search::FileMatch;
 use ratatui::style::Stylize;
@@ -69,7 +70,6 @@ pub(crate) struct ChatWidget<'a> {
     total_token_usage: TokenUsage,
     last_token_usage: TokenUsage,
     reasoning_buffer: String,
-    content_buffer: String,
     // Buffer for streaming assistant answer text; we do not surface partial
     // We wait for the final AgentMessage event and then emit the full text
     // at once into scrollback so the history contains a single message.
@@ -77,8 +77,11 @@ pub(crate) struct ChatWidget<'a> {
     running_commands: HashMap<String, RunningCommand>,
     live_builder: RowBuilder,
     current_stream: Option<StreamKind>,
+    // maximum rows for live overlay; configured via CLI
+    // maximum preview columns for tool output; None disables fixed width
     stream_header_emitted: bool,
     live_max_rows: u16,
+    preview_max_cols: Option<u16>,
 }
 
 struct UserMessage {
@@ -117,12 +120,11 @@ impl ChatWidget<'_> {
             self.submit_op(Op::Interrupt);
             self.bottom_pane.set_task_running(false);
             self.bottom_pane.clear_live_ring();
-            self.live_builder = RowBuilder::new(self.live_builder.width());
+            // Avoid premature hard-wrapping by using a very large target width.
+            self.live_builder = RowBuilder::new(usize::MAX);
             self.current_stream = None;
-            self.stream_header_emitted = false;
             self.answer_buffer.clear();
             self.reasoning_buffer.clear();
-            self.content_buffer.clear();
             self.request_redraw();
         }
     }
@@ -137,30 +139,21 @@ impl ChatWidget<'_> {
         ])
         .areas(area)
     }
-    fn emit_stream_header(&mut self, kind: StreamKind) {
-        use ratatui::text::Line as RLine;
-        if self.stream_header_emitted {
-            return;
-        }
-        let header = match kind {
-            StreamKind::Reasoning => RLine::from("thinking".magenta().italic()),
-            StreamKind::Answer => RLine::from("codex".magenta().bold()),
-        };
-        self.app_event_tx
-            .send(AppEvent::InsertHistory(vec![header]));
-        self.stream_header_emitted = true;
-    }
     fn finalize_active_stream(&mut self) {
         if let Some(kind) = self.current_stream {
             self.finalize_stream(kind);
         }
     }
+    #[allow(clippy::too_many_arguments)]
     pub(crate) fn new(
         config: Config,
         app_event_tx: AppEventSender,
         initial_prompt: Option<String>,
         initial_images: Vec<PathBuf>,
         enhanced_keys_supported: bool,
+        live_rows: u16,
+        overlay_wrap: bool,
+        preview_max_cols: Option<u16>,
     ) -> Self {
         let (codex_op_tx, mut codex_op_rx) = unbounded_channel::<Op>();
 
@@ -207,6 +200,7 @@ impl ChatWidget<'_> {
                 app_event_tx,
                 has_input_focus: true,
                 enhanced_keys_supported,
+                live_ring_wrap: overlay_wrap,
             }),
             active_history_cell: None,
             config,
@@ -217,13 +211,15 @@ impl ChatWidget<'_> {
             total_token_usage: TokenUsage::default(),
             last_token_usage: TokenUsage::default(),
             reasoning_buffer: String::new(),
-            content_buffer: String::new(),
             answer_buffer: String::new(),
             running_commands: HashMap::new(),
-            live_builder: RowBuilder::new(80),
+            // Avoid pinning to 80 columns. Let the Paragraph in the bottom pane
+            // handle visual wrapping based on the actual terminal width.
+            live_builder: RowBuilder::new(usize::MAX),
             current_stream: None,
             stream_header_emitted: false,
-            live_max_rows: 3,
+            live_max_rows: live_rows,
+            preview_max_cols,
         }
     }
 
@@ -381,10 +377,8 @@ impl ChatWidget<'_> {
                 self.bottom_pane.clear_live_ring();
                 self.live_builder = RowBuilder::new(self.live_builder.width());
                 self.current_stream = None;
-                self.stream_header_emitted = false;
                 self.answer_buffer.clear();
                 self.reasoning_buffer.clear();
-                self.content_buffer.clear();
                 self.request_redraw();
             }
             EventMsg::PlanUpdate(update) => {
@@ -507,7 +501,7 @@ impl ChatWidget<'_> {
                 result,
             }) => {
                 self.add_to_history(HistoryCell::new_completed_mcp_tool_call(
-                    80,
+                    self.preview_max_cols.unwrap_or(u16::MAX),
                     invocation,
                     duration,
                     result
@@ -654,12 +648,12 @@ impl ChatWidget<'_> {
         if self.current_stream != Some(kind) {
             self.current_stream = Some(kind);
             self.stream_header_emitted = false;
-            // Clear any previous live content; we're starting a new stream.
-            self.live_builder = RowBuilder::new(self.live_builder.width());
+            // Clear any previous live content; we're starting a new stream. Use a very
+            // large width so wrapping happens in the renderer, not here.
+            self.live_builder = RowBuilder::new(usize::MAX);
             // Ensure the waiting status is visible (composer replaced).
             self.bottom_pane
                 .update_status_text("waiting for model".to_string());
-            self.emit_stream_header(kind);
         }
     }
 
@@ -670,7 +664,11 @@ impl ChatWidget<'_> {
         let drained = self
             .live_builder
             .drain_commit_ready(self.live_max_rows as usize);
-        if !drained.is_empty() {
+        // Avoid committing partial content to history for both answers and reasoning so that
+        // the final message can be rendered as a single markdown block. We still update
+        // the live overlay below so the user sees progress.
+        let should_commit_now = false;
+        if should_commit_now && !drained.is_empty() {
             let mut lines: Vec<ratatui::text::Line<'static>> = Vec::new();
             if !self.stream_header_emitted {
                 match self.current_stream {
@@ -709,9 +707,8 @@ impl ChatWidget<'_> {
         // Flush any partial line as a full row, then drain all remaining rows.
         self.live_builder.end_line();
         let remaining = self.live_builder.drain_rows();
-        // TODO: Re-add markdown rendering for assistant answers and reasoning.
-        // When finalizing, pass the accumulated text through `markdown::append_markdown`
-        // to build styled `Line<'static>` entries instead of raw plain text lines.
+        // Re-add markdown rendering for assistant answers and, for reasoning,
+        // the final remaining chunk.
         if !remaining.is_empty() || !self.stream_header_emitted {
             let mut lines: Vec<ratatui::text::Line<'static>> = Vec::new();
             if !self.stream_header_emitted {
@@ -725,19 +722,43 @@ impl ChatWidget<'_> {
                 }
                 self.stream_header_emitted = true;
             }
-            for r in remaining {
-                lines.push(ratatui::text::Line::from(r.text));
+
+            match kind {
+                StreamKind::Answer => {
+                    // Render the full assistant answer as a single markdown block.
+                    markdown::append_markdown(
+                        self.answer_buffer.as_str(),
+                        &mut lines,
+                        &self.config,
+                    );
+                }
+                StreamKind::Reasoning => {
+                    // Render the full reasoning as a single markdown block.
+                    markdown::append_markdown(
+                        self.reasoning_buffer.as_str(),
+                        &mut lines,
+                        &self.config,
+                    );
+                }
             }
+
             // Close the block with a blank line for readability.
             lines.push(ratatui::text::Line::from(""));
             self.app_event_tx.send(AppEvent::InsertHistory(lines));
         }
 
         // Clear the live overlay and reset state for the next stream.
-        self.live_builder = RowBuilder::new(self.live_builder.width());
+        // Reset the builder with a very large width to delegate wrapping to the renderer.
+        self.live_builder = RowBuilder::new(usize::MAX);
         self.bottom_pane.clear_live_ring();
         self.current_stream = None;
         self.stream_header_emitted = false;
+
+        // Clear buffers for the completed stream.
+        match kind {
+            StreamKind::Answer => self.answer_buffer.clear(),
+            StreamKind::Reasoning => self.reasoning_buffer.clear(),
+        }
     }
 }
 
diff --git a/codex-rs/tui/src/cli.rs b/codex-rs/tui/src/cli.rs
index 91ee9cfdc7..85e7f6cdbb 100644
--- a/codex-rs/tui/src/cli.rs
+++ b/codex-rs/tui/src/cli.rs
@@ -56,4 +56,13 @@ pub struct Cli {
 
     #[clap(skip)]
     pub config_overrides: CliConfigOverrides,
+
+    /// Maximum columns used for preview/truncation in history cells (e.g., tool output).
+    /// If set, caps preview width; otherwise previews are uncapped (soft‑wrap, default).
+    #[arg(long = "max-cols", value_name = "N")]
+    pub max_cols: Option<u16>,
+
+    /// Number of rows to show in the transient live overlay ring above the composer.
+    #[arg(long = "live-rows", value_name = "N", default_value_t = 3)]
+    pub live_rows: u16,
 }
diff --git a/codex-rs/tui/src/lib.rs b/codex-rs/tui/src/lib.rs
index e15a235a71..05e84800ee 100644
--- a/codex-rs/tui/src/lib.rs
+++ b/codex-rs/tui/src/lib.rs
@@ -265,8 +265,26 @@ fn run_ratatui_app(
     let mut terminal = tui::init(&config)?;
     terminal.clear()?;
 
+    // UI options from CLI
+    // Default behavior: soft-wrap (no max cols). If --max-cols is set, it overrides.
+    let overlay_wrap = !cli.max_cols.is_some();
+    let preview_max_cols = if let Some(n) = cli.max_cols {
+        Some(n)
+    } else {
+        None
+    };
+    let live_rows = cli.live_rows;
+
     let Cli { prompt, images, .. } = cli;
-    let mut app = App::new(config.clone(), prompt, images, should_show_trust_screen);
+    let mut app = App::new(
+        config.clone(),
+        prompt,
+        images,
+        should_show_trust_screen,
+        live_rows,
+        overlay_wrap,
+        preview_max_cols,
+    );
 
     // Bridge log receiver into the AppEvent channel so latest log lines update the UI.
     {