diff --git a/src-tauri/src/wsl_bridge.rs b/src-tauri/src/wsl_bridge.rs
index e8e4725..120de9f 100644
--- a/src-tauri/src/wsl_bridge.rs
+++ b/src-tauri/src/wsl_bridge.rs
@@ -1082,17 +1082,37 @@ fn process_json_line(
                             stats.write().increment_code_blocks();
                         }
 
+                        let is_prompt_too_long = text.starts_with("Prompt is too long");
+
                         let _ = app.emit(
                             "claude:output",
                             OutputEvent {
-                                line_type: "assistant".to_string(),
+                                line_type: if is_prompt_too_long {
+                                    "error".to_string()
+                                } else {
+                                    "assistant".to_string()
+                                },
                                 content: text.clone(),
                                 tool_name: None,
                                 conversation_id: conversation_id.clone(),
-                                cost: message_cost.clone(), // Include cost with assistant text
+                                cost: message_cost.clone(),
                                 parent_tool_use_id: parent_tool_use_id.clone(),
                             },
                         );
+
+                        if is_prompt_too_long {
+                            let _ = app.emit(
+                                "claude:output",
+                                OutputEvent {
+                                    line_type: "compact-prompt".to_string(),
+                                    content: String::new(),
+                                    tool_name: None,
+                                    conversation_id: conversation_id.clone(),
+                                    cost: None,
+                                    parent_tool_use_id: None,
+                                },
+                            );
+                        }
                     }
                     ContentBlock::Thinking { thinking } => {
                         state = CharacterState::Thinking;
diff --git a/src/lib/components/Terminal.svelte b/src/lib/components/Terminal.svelte
index ebd682b..9933d3c 100644
--- a/src/lib/components/Terminal.svelte
+++ b/src/lib/components/Terminal.svelte
@@ -1,6 +1,7 @@
 <script lang="ts">
   import { claudeStore, type TerminalLine } from "$lib/stores/claude";
   import { afterUpdate, tick, onMount, onDestroy } from "svelte";
+  import { invoke } from "@tauri-apps/api/core";
 
   import ConversationTabs from "./ConversationTabs.svelte";
   import Markdown from "./Markdown.svelte";
@@ -95,6 +96,8 @@
         return "terminal-thinking";
       case "rate-limit":
         return "terminal-rate-limit";
+      case "compact-prompt":
+        return "terminal-compact-prompt";
       default:
         return "terminal-default";
     }
@@ -193,6 +196,11 @@
     }, 2000);
   }
 
+  async function handleCompact() {
+    if (!currentConversationId) return;
+    await invoke("send_prompt", { conversationId: currentConversationId, message: "/compact" });
+  }
+
   // Collapsible tool lines
   const TOOL_COLLAPSE_THRESHOLD = 60;
   let expandedToolLines: Record<string, boolean> = {};
@@ -283,7 +291,11 @@
             {#if line.toolName}
               <span class="terminal-tool-name mr-2">[{line.toolName}]</span>
             {/if}
-            {#if line.type === "assistant" || line.type === "user"}
+            {#if line.type === "compact-prompt"}
+              <button class="compact-action-btn" onclick={handleCompact}>
+                ⚡ Compact Conversation
+              </button>
+            {:else if line.type === "assistant" || line.type === "user"}
               <div class="message-content-wrapper">
                 <Markdown
                   content={maskPaths(line.content, hidePaths)}
@@ -370,6 +382,30 @@
     color: var(--terminal-rate-limit, #fb923c);
   }
 
+  .terminal-compact-prompt {
+    color: var(--text-secondary);
+  }
+
+  .compact-action-btn {
+    display: inline-flex;
+    align-items: center;
+    gap: 0.4em;
+    background: var(--bg-secondary);
+    border: 1px solid var(--terminal-error, #f87171);
+    color: var(--terminal-error, #f87171);
+    padding: 0.3em 0.8em;
+    cursor: pointer;
+    border-radius: 4px;
+    font-size: 0.9em;
+    font-family: inherit;
+    transition: all 0.15s ease;
+  }
+
+  .compact-action-btn:hover {
+    background: color-mix(in srgb, var(--terminal-error, #f87171) 15%, transparent);
+    color: var(--terminal-error, #f87171);
+  }
+
   .terminal-default {
     color: var(--text-primary);
   }
diff --git a/src/lib/components/Terminal.test.ts b/src/lib/components/Terminal.test.ts
index 53dce78..332c255 100644
--- a/src/lib/components/Terminal.test.ts
+++ b/src/lib/components/Terminal.test.ts
@@ -38,6 +38,8 @@ function getLineClass(type: string): string {
       return "terminal-thinking";
     case "rate-limit":
       return "terminal-rate-limit";
+    case "compact-prompt":
+      return "terminal-compact-prompt";
     default:
       return "terminal-default";
   }
@@ -110,6 +112,10 @@ describe("getLineClass", () => {
     expect(getLineClass("rate-limit")).toBe("terminal-rate-limit");
   });
 
+  it("returns terminal-compact-prompt for compact-prompt lines", () => {
+    expect(getLineClass("compact-prompt")).toBe("terminal-compact-prompt");
+  });
+
   it("returns terminal-default for unknown line types", () => {
     expect(getLineClass("unknown")).toBe("terminal-default");
     expect(getLineClass("")).toBe("terminal-default");
@@ -142,6 +148,10 @@ describe("getLinePrefix", () => {
     expect(getLinePrefix("rate-limit")).toBe("[rate-limit]");
   });
 
+  it("returns empty string for compact-prompt lines (button renders instead)", () => {
+    expect(getLinePrefix("compact-prompt")).toBe("");
+  });
+
   it("returns empty string for thinking lines (no prefix)", () => {
     expect(getLinePrefix("thinking")).toBe("");
   });
diff --git a/src/lib/tauri.ts b/src/lib/tauri.ts
index 3727d4f..8773a9a 100644
--- a/src/lib/tauri.ts
+++ b/src/lib/tauri.ts
@@ -323,7 +323,15 @@ export async function initializeTauriListeners() {
     if (conversation_id) {
       claudeStore.addLineToConversation(
         conversation_id,
-        line_type as "user" | "assistant" | "system" | "tool" | "error" | "thinking" | "rate-limit",
+        line_type as
+          | "user"
+          | "assistant"
+          | "system"
+          | "tool"
+          | "error"
+          | "thinking"
+          | "rate-limit"
+          | "compact-prompt",
         content,
         tool_name || undefined,
         costData,
@@ -332,7 +340,15 @@ export async function initializeTauriListeners() {
     } else {
       // Fallback to active conversation if no conversation_id provided
       claudeStore.addLine(
-        line_type as "user" | "assistant" | "system" | "tool" | "error" | "thinking" | "rate-limit",
+        line_type as
+          | "user"
+          | "assistant"
+          | "system"
+          | "tool"
+          | "error"
+          | "thinking"
+          | "rate-limit"
+          | "compact-prompt",
         content,
         tool_name || undefined,
         costData,
diff --git a/src/lib/types/messages.ts b/src/lib/types/messages.ts
index 358bef7..e9b3537 100644
--- a/src/lib/types/messages.ts
+++ b/src/lib/types/messages.ts
@@ -1,6 +1,14 @@
 export interface TerminalLine {
   id: string;
-  type: "user" | "assistant" | "system" | "tool" | "error" | "thinking" | "rate-limit";
+  type:
+    | "user"
+    | "assistant"
+    | "system"
+    | "tool"
+    | "error"
+    | "thinking"
+    | "rate-limit"
+    | "compact-prompt";
   content: string;
   timestamp: Date;
   toolName?: string;