diff --git a/app/lib/hooks/useMessageParser.ts b/app/lib/hooks/useMessageParser.ts
index e08e77e91e..92e3a9673a 100644
--- a/app/lib/hooks/useMessageParser.ts
+++ b/app/lib/hooks/useMessageParser.ts
@@ -1,12 +1,12 @@
 import type { Message } from 'ai';
 import { useCallback, useState } from 'react';
-import { StreamingMessageParser } from '~/lib/runtime/message-parser';
+import { EnhancedStreamingMessageParser } from '~/lib/runtime/enhanced-message-parser';
 import { workbenchStore } from '~/lib/stores/workbench';
 import { createScopedLogger } from '~/utils/logger';
 
 const logger = createScopedLogger('useMessageParser');
 
-const messageParser = new StreamingMessageParser({
+const messageParser = new EnhancedStreamingMessageParser({
   callbacks: {
     onArtifactOpen: (data) => {
       logger.trace('onArtifactOpen', data);
diff --git a/app/lib/runtime/enhanced-message-parser.ts b/app/lib/runtime/enhanced-message-parser.ts
new file mode 100644
index 0000000000..9820302df0
--- /dev/null
+++ b/app/lib/runtime/enhanced-message-parser.ts
@@ -0,0 +1,300 @@
+import { createScopedLogger } from '~/utils/logger';
+import { StreamingMessageParser, type StreamingMessageParserOptions } from './message-parser';
+
+const logger = createScopedLogger('EnhancedMessageParser');
+
+/**
+ * Enhanced message parser that detects code blocks and file patterns
+ * even when AI models don't wrap them in proper artifact tags.
+ * Fixes issue #1797 where code outputs to chat instead of files.
+ */
+export class EnhancedStreamingMessageParser extends StreamingMessageParser {
+  private _processedCodeBlocks = new Map<string, Set<string>>();
+  private _artifactCounter = 0;
+
+  constructor(options: StreamingMessageParserOptions = {}) {
+    super(options);
+  }
+
+  parse(messageId: string, input: string): string {
+    // First try the normal parsing
+    let output = super.parse(messageId, input);
+
+    // If no artifacts were detected, check for code blocks that should be files
+    if (!this._hasDetectedArtifacts(input)) {
+      const enhancedInput = this._detectAndWrapCodeBlocks(messageId, input);
+
+      if (enhancedInput !== input) {
+        // Reset and reparse with enhanced input
+        this.reset();
+        output = super.parse(messageId, enhancedInput);
+      }
+    }
+
+    return output;
+  }
+
+  private _hasDetectedArtifacts(input: string): boolean {
+    return input.includes('<boltArtifact') || input.includes('</boltArtifact>');
+  }
+
+  private _detectAndWrapCodeBlocks(messageId: string, input: string): string {
+    // Initialize processed blocks for this message if not exists
+    if (!this._processedCodeBlocks.has(messageId)) {
+      this._processedCodeBlocks.set(messageId, new Set());
+    }
+
+    const processed = this._processedCodeBlocks.get(messageId)!;
+
+    // Regex patterns for detecting code blocks with file indicators
+    const patterns = [
+      // Pattern 1: Explicit file creation/modification mentions
+      /(?:create|update|modify|edit|write|add|generate|here'?s?|file:?)\s+(?:a\s+)?(?:new\s+)?(?:file\s+)?(?:called\s+)?[`'"]*([\/\w\-\.]+\.\w+)[`'"]*:?\s*\n+```(\w*)\n([\s\S]*?)```/gi,
+
+      // Pattern 2: Code blocks with filename comments
+      /```(\w*)\n(?:\/\/|#|<!--)\s*(?:file:?|filename:?)\s*([\/\w\-\.]+\.\w+).*?\n([\s\S]*?)```/gi,
+
+      // Pattern 3: File path followed by code block
+      /(?:^|\n)([\/\w\-\.]+\.\w+):?\s*\n+```(\w*)\n([\s\S]*?)```/gim,
+
+      // Pattern 4: Code block with "in <filename>" context
+      /(?:in|for|update)\s+[`'"]*([\/\w\-\.]+\.\w+)[`'"]*:?\s*\n+```(\w*)\n([\s\S]*?)```/gi,
+
+      // Pattern 5: HTML/Component files with clear structure
+      /```(?:jsx?|tsx?|html?|vue|svelte)\n(<[\w\-]+[^>]*>[\s\S]*?<\/[\w\-]+>[\s\S]*?)```/gi,
+
+      // Pattern 6: Package.json or config files
+      /```(?:json)?\n(\{[\s\S]*?"(?:name|version|scripts|dependencies|devDependencies)"[\s\S]*?\})```/gi,
+    ];
+
+    let enhanced = input;
+
+    // Process each pattern
+    for (const pattern of patterns) {
+      enhanced = enhanced.replace(pattern, (match, ...args) => {
+        // Skip if already processed
+        const blockHash = this._hashBlock(match);
+
+        if (processed.has(blockHash)) {
+          return match;
+        }
+
+        let filePath: string;
+        let language: string;
+        let content: string;
+
+        // Extract based on pattern
+        if (pattern.source.includes('file:?|filename:?')) {
+          // Pattern 2: filename in comment
+          [language, filePath, content] = args;
+        } else if (pattern.source.includes('<[\w\-]+[^>]*>')) {
+          // Pattern 5: HTML/Component detection
+          content = args[0];
+          language = 'jsx';
+          filePath = this._inferFileNameFromContent(content, language);
+        } else if (pattern.source.includes('"name"|"version"')) {
+          // Pattern 6: package.json detection
+          content = args[0];
+          language = 'json';
+          filePath = 'package.json';
+        } else {
+          // Other patterns
+          [filePath, language, content] = args;
+        }
+
+        // Clean up the file path
+        filePath = this._normalizeFilePath(filePath);
+
+        // Validate file path
+        if (!this._isValidFilePath(filePath)) {
+          return match; // Return original if invalid
+        }
+
+        // Mark as processed
+        processed.add(blockHash);
+
+        // Generate artifact wrapper
+        const artifactId = `artifact-${messageId}-${this._artifactCounter++}`;
+        const wrapped = this._wrapInArtifact(artifactId, filePath, content);
+
+        logger.debug(`Auto-wrapped code block as file: ${filePath}`);
+
+        return wrapped;
+      });
+    }
+
+    // Also detect standalone file operations without code blocks
+    const fileOperationPattern =
+      /(?:create|write|save|generate)\s+(?:a\s+)?(?:new\s+)?file\s+(?:at\s+)?[`'"]*([\/\w\-\.]+\.\w+)[`'"]*\s+with\s+(?:the\s+)?(?:following\s+)?content:?\s*\n([\s\S]+?)(?=\n\n|\n(?:create|write|save|generate|now|next|then|finally)|$)/gi;
+
+    enhanced = enhanced.replace(fileOperationPattern, (match, filePath, content) => {
+      const blockHash = this._hashBlock(match);
+
+      if (processed.has(blockHash)) {
+        return match;
+      }
+
+      filePath = this._normalizeFilePath(filePath);
+
+      if (!this._isValidFilePath(filePath)) {
+        return match;
+      }
+
+      processed.add(blockHash);
+
+      const artifactId = `artifact-${messageId}-${this._artifactCounter++}`;
+
+      // Clean content - remove leading/trailing whitespace but preserve indentation
+      content = content.trim();
+
+      const wrapped = this._wrapInArtifact(artifactId, filePath, content);
+      logger.debug(`Auto-wrapped file operation: ${filePath}`);
+
+      return wrapped;
+    });
+
+    return enhanced;
+  }
+
+  private _wrapInArtifact(artifactId: string, filePath: string, content: string): string {
+    const title = filePath.split('/').pop() || 'File';
+
+    return `<boltArtifact id="${artifactId}" title="${title}" type="bundled">
+<boltAction type="file" filePath="${filePath}">
+${content}
+</boltAction>
+</boltArtifact>`;
+  }
+
+  private _normalizeFilePath(filePath: string): string {
+    // Remove quotes, backticks, and clean up
+    filePath = filePath.replace(/[`'"]/g, '').trim();
+
+    // Ensure forward slashes
+    filePath = filePath.replace(/\\/g, '/');
+
+    // Remove leading ./ if present
+    if (filePath.startsWith('./')) {
+      filePath = filePath.substring(2);
+    }
+
+    // Add leading slash if missing and not a relative path
+    if (!filePath.startsWith('/') && !filePath.startsWith('.')) {
+      filePath = '/' + filePath;
+    }
+
+    return filePath;
+  }
+
+  private _isValidFilePath(filePath: string): boolean {
+    // Check for valid file extension
+    const hasExtension = /\.\w+$/.test(filePath);
+
+    if (!hasExtension) {
+      return false;
+    }
+
+    // Check for valid characters
+    const isValid = /^[\/\w\-\.]+$/.test(filePath);
+
+    if (!isValid) {
+      return false;
+    }
+
+    // Exclude certain patterns that are likely not real files
+    const excludePatterns = [/^\/?(tmp|temp|test|example)\//i, /\.(tmp|temp|bak|backup|old|orig)$/i];
+
+    for (const pattern of excludePatterns) {
+      if (pattern.test(filePath)) {
+        return false;
+      }
+    }
+
+    return true;
+  }
+
+  private _detectLanguageFromPath(filePath: string): string {
+    const ext = filePath.split('.').pop()?.toLowerCase();
+
+    const languageMap: Record<string, string> = {
+      js: 'javascript',
+      jsx: 'jsx',
+      ts: 'typescript',
+      tsx: 'tsx',
+      py: 'python',
+      rb: 'ruby',
+      go: 'go',
+      rs: 'rust',
+      java: 'java',
+      cpp: 'cpp',
+      c: 'c',
+      cs: 'csharp',
+      php: 'php',
+      swift: 'swift',
+      kt: 'kotlin',
+      html: 'html',
+      css: 'css',
+      scss: 'scss',
+      sass: 'sass',
+      less: 'less',
+      json: 'json',
+      xml: 'xml',
+      yaml: 'yaml',
+      yml: 'yaml',
+      md: 'markdown',
+      sh: 'bash',
+      bash: 'bash',
+      zsh: 'bash',
+      fish: 'bash',
+      ps1: 'powershell',
+      sql: 'sql',
+      graphql: 'graphql',
+      gql: 'graphql',
+      vue: 'vue',
+      svelte: 'svelte',
+    };
+
+    return languageMap[ext || ''] || 'text';
+  }
+
+  private _inferFileNameFromContent(content: string, language: string): string {
+    // Try to infer component name from content
+    const componentMatch = content.match(
+      /(?:function|class|const|export\s+default\s+function|export\s+function)\s+(\w+)/,
+    );
+
+    if (componentMatch) {
+      const name = componentMatch[1];
+      const ext = language === 'jsx' ? '.jsx' : language === 'tsx' ? '.tsx' : '.js';
+
+      return `/components/${name}${ext}`;
+    }
+
+    // Check for App component
+    if (content.includes('function App') || content.includes('const App')) {
+      return '/App.jsx';
+    }
+
+    // Default to a generic name
+    return `/component-${Date.now()}.jsx`;
+  }
+
+  private _hashBlock(content: string): string {
+    // Simple hash for identifying processed blocks
+    let hash = 0;
+
+    for (let i = 0; i < content.length; i++) {
+      const char = content.charCodeAt(i);
+      hash = (hash << 5) - hash + char;
+      hash = hash & hash; // Convert to 32-bit integer
+    }
+
+    return hash.toString(36);
+  }
+
+  reset() {
+    super.reset();
+    this._processedCodeBlocks.clear();
+    this._artifactCounter = 0;
+  }
+}