diff --git a/src/commands/ai.test.ts b/src/commands/ai.test.ts
index 9cfe02b..fd18a83 100644
--- a/src/commands/ai.test.ts
+++ b/src/commands/ai.test.ts
@@ -21,20 +21,35 @@ afterEach(async () => {
 });
 
 function streamFrom(chunks: string[]) {
+  return fullStreamFrom(
+    chunks.map((chunk) => ({ type: 'text-delta' as const, text: chunk })),
+  );
+}
+
+function fullStreamFrom(
+  parts: Array<
+    | { type: 'text-delta'; text: string }
+    | { type: 'reasoning-start' }
+    | { type: 'reasoning-delta'; text: string }
+    | { type: 'reasoning-end' }
+    | { type: 'error'; error: unknown }
+  >,
+) {
   return {
     async *[Symbol.asyncIterator]() {
-      for (const chunk of chunks) {
-        yield chunk;
+      for (const part of parts) {
+        yield part;
       }
     },
   };
 }
 
-function createOutputCapture() {
+function createOutputCapture(options: { isTTY?: boolean } = {}) {
   const writes: string[] = [];
   return {
     writes,
     stream: {
+      isTTY: options.isTTY ?? false,
       write(value: string | Uint8Array) {
         writes.push(typeof value === 'string' ? value : value.toString());
         return true;
@@ -80,7 +95,7 @@ describe('askAi', () => {
     process.env.DUBSTACK_AI_GATEWAY_API_KEY = 'gateway-key';
 
     const streamText = vi.fn().mockReturnValue({
-      textStream: streamFrom(['hello']),
+      fullStream: streamFrom(['hello']),
     });
     const googleModel = vi.fn().mockReturnValue('google-model');
     const createGoogleGenerativeAI = vi.fn().mockReturnValue(googleModel);
@@ -126,6 +141,7 @@ describe('askAi', () => {
           google: {
             thinkingConfig: {
               thinkingLevel: 'high',
+              includeThoughts: true,
             },
           },
         },
@@ -139,7 +155,7 @@ describe('askAi', () => {
     process.env.DUBSTACK_AI_GATEWAY_API_KEY = 'gateway-key';
 
     const streamText = vi.fn().mockReturnValue({
-      textStream: streamFrom(['gateway']),
+      fullStream: streamFrom(['gateway']),
     });
     const createGoogleGenerativeAI = vi.fn();
     const gatewayModel = vi.fn().mockReturnValue('gateway-model');
@@ -168,6 +184,72 @@ describe('askAi', () => {
     expect(output.writes.join('')).toBe('gateway\n');
   });
 
+  it('streams a TTY thinking preview with spinner frames', async () => {
+    await writeConfig({ aiAssistantEnabled: true }, dir);
+    process.env.DUBSTACK_GEMINI_API_KEY = 'gem-key';
+    delete process.env.DUBSTACK_AI_GATEWAY_API_KEY;
+
+    const streamText = vi.fn().mockReturnValue({
+      fullStream: fullStreamFrom([
+        { type: 'reasoning-start' },
+        { type: 'reasoning-delta', text: 'Planning edits' },
+        { type: 'reasoning-delta', text: ' and checks' },
+        { type: 'reasoning-end' },
+        { type: 'text-delta', text: 'Done.' },
+      ]),
+    });
+    const googleModel = vi.fn().mockReturnValue('google-model');
+    const createGoogleGenerativeAI = vi.fn().mockReturnValue(googleModel);
+    const createGateway = vi.fn();
+    const collectAiContext = vi.fn().mockResolvedValue(fakeContext);
+    const { createBashTool } = createBashToolMock();
+    const output = createOutputCapture({ isTTY: true });
+
+    await askAi('Explain this stack', dir, {
+      output: output.stream,
+      deps: {
+        streamText,
+        createGoogleGenerativeAI,
+        createGateway,
+        collectAiContext,
+        createBashTool,
+      },
+    });
+
+    const rendered = output.writes.join('');
+    expect(rendered).toContain('thinking:');
+    expect(rendered).toContain('\r');
+    expect(rendered.endsWith('Done.\n')).toBe(true);
+  });
+
+  it('throws when the stream emits an error part', async () => {
+    await writeConfig({ aiAssistantEnabled: true }, dir);
+    process.env.DUBSTACK_GEMINI_API_KEY = 'gem-key';
+    delete process.env.DUBSTACK_AI_GATEWAY_API_KEY;
+
+    const streamText = vi.fn().mockReturnValue({
+      fullStream: fullStreamFrom([{ type: 'error', error: new Error('boom') }]),
+    });
+    const googleModel = vi.fn().mockReturnValue('google-model');
+    const createGoogleGenerativeAI = vi.fn().mockReturnValue(googleModel);
+    const createGateway = vi.fn();
+    const collectAiContext = vi.fn().mockResolvedValue(fakeContext);
+    const { createBashTool } = createBashToolMock();
+
+    await expect(
+      askAi('Explain this stack', dir, {
+        output: createOutputCapture().stream,
+        deps: {
+          streamText,
+          createGoogleGenerativeAI,
+          createGateway,
+          collectAiContext,
+          createBashTool,
+        },
+      }),
+    ).rejects.toThrow('boom');
+  });
+
   it('requires at least one AI key environment variable', async () => {
     await writeConfig({ aiAssistantEnabled: true }, dir);
     delete process.env.DUBSTACK_GEMINI_API_KEY;
diff --git a/src/commands/ai.ts b/src/commands/ai.ts
index fa2fdbb..d77331c 100644
--- a/src/commands/ai.ts
+++ b/src/commands/ai.ts
@@ -13,6 +13,7 @@ import { DubError } from '../lib/errors';
 
 interface WritableLike {
   write: (chunk: string | Uint8Array) => unknown;
+  isTTY?: boolean;
 }
 
 interface AskAiDependencies {
@@ -45,10 +46,13 @@ const THINKING_PROVIDER_OPTIONS = {
   google: {
     thinkingConfig: {
       thinkingLevel: 'high' as const,
+      includeThoughts: true,
     },
   },
 };
 
+const SPINNER_FRAMES = ['-', '\\', '|', '/'] as const;
+
 export async function askAi(
   prompt: string,
   cwd: string,
@@ -89,11 +93,39 @@ export async function askAi(
     providerOptions: THINKING_PROVIDER_OPTIONS,
   });
 
+  const thinkingRenderer = createThinkingRenderer(output);
   let wroteOutput = false;
-  for await (const part of result.textStream) {
-    output.write(part);
-    wroteOutput = true;
+  for await (const part of result.fullStream) {
+    switch (part.type) {
+      case 'reasoning-start': {
+        thinkingRenderer.start();
+        break;
+      }
+      case 'reasoning-delta': {
+        thinkingRenderer.update(part.text);
+        break;
+      }
+      case 'reasoning-end': {
+        thinkingRenderer.stop();
+        break;
+      }
+      case 'text-delta': {
+        thinkingRenderer.pauseForText();
+        output.write(part.text);
+        wroteOutput = true;
+        break;
+      }
+      case 'error': {
+        throw part.error instanceof Error
+          ? part.error
+          : new DubError('AI assistant stream failed unexpectedly.');
+      }
+      default: {
+        break;
+      }
+    }
   }
+  thinkingRenderer.stop();
 
   if (wroteOutput) {
     output.write('\n');
@@ -134,3 +166,65 @@ function resolveModel(deps: AskAiDependencies): {
     "AI assistant requires DUBSTACK_GEMINI_API_KEY or DUBSTACK_AI_GATEWAY_API_KEY. Run 'dub ai env --gemini-key <key>' or 'dub ai env --gateway-key <key>'.",
   );
 }
+
+function createThinkingRenderer(output: WritableLike): {
+  start: () => void;
+  update: (delta: string) => void;
+  pauseForText: () => void;
+  stop: () => void;
+} {
+  if (!output.isTTY) {
+    return {
+      start() {},
+      update() {},
+      pauseForText() {},
+      stop() {},
+    };
+  }
+
+  let spinnerIndex = 0;
+  let preview = '';
+  let lineLength = 0;
+  let active = false;
+  let hasRendered = false;
+
+  const clearLine = () => {
+    if (!hasRendered) return;
+    output.write(`\r${' '.repeat(lineLength)}\r`);
+    lineLength = 0;
+    hasRendered = false;
+  };
+
+  const render = () => {
+    const frame = SPINNER_FRAMES[spinnerIndex];
+    spinnerIndex = (spinnerIndex + 1) % SPINNER_FRAMES.length;
+
+    const summary =
+      preview.length > 96 ? `${preview.slice(0, 93)}...` : preview;
+    const line = `${frame} thinking: ${summary || 'working...'}`;
+    output.write(`\r${line}`);
+    lineLength = line.length;
+    hasRendered = true;
+  };
+
+  return {
+    start() {
+      if (active) return;
+      active = true;
+      render();
+    },
+    update(delta: string) {
+      if (!active) return;
+      preview += delta;
+      render();
+    },
+    pauseForText() {
+      clearLine();
+    },
+    stop() {
+      active = false;
+      preview = '';
+      clearLine();
+    },
+  };
+}
diff --git a/src/index.ts b/src/index.ts
index ef8768e..8945979 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -55,6 +55,7 @@ import { DubError } from './lib/errors';
 import { getCurrentBranch } from './lib/git';
 import {
   appendHistoryEntry,
+  normalizeHistoryLine,
   redactSensitiveText,
   sanitizeCommandArgs,
 } from './lib/history';
@@ -1146,8 +1147,10 @@ function beginHistoryCapture(): void {
   const originalStderrWrite = process.stderr.write.bind(process.stderr);
 
   const captureLine = (line: string) => {
+    const normalized = normalizeHistoryLine(line);
+    if (normalized.length === 0) return;
     if (output.length >= MAX_HISTORY_OUTPUT_LINES) return;
-    output.push(truncateHistoryLine(redactSensitiveText(line)));
+    output.push(truncateHistoryLine(redactSensitiveText(normalized)));
   };
 
   const captureChunk = (
diff --git a/src/lib/history.test.ts b/src/lib/history.test.ts
index a79391c..740ca6a 100644
--- a/src/lib/history.test.ts
+++ b/src/lib/history.test.ts
@@ -2,6 +2,7 @@ import { afterEach, beforeEach, describe, expect, it } from 'vitest';
 import { createTestRepo } from '../../test/helpers';
 import {
   appendHistoryEntry,
+  normalizeHistoryLine,
   readHistory,
   redactSensitiveText,
   sanitizeCommandArgs,
@@ -76,4 +77,18 @@ describe('history', () => {
     expect(redacted).not.toContain('super-secret-token');
     expect(redacted).toContain('[REDACTED]');
   });
+
+  it('normalizes carriage-return spinner lines to the final visible content', () => {
+    expect(normalizeHistoryLine('- thinking\r\\ thinking\rfinal output')).toBe(
+      'final output',
+    );
+  });
+
+  it('returns empty string when normalized content is whitespace only', () => {
+    expect(normalizeHistoryLine('progress\r   \t   ')).toBe('');
+  });
+
+  it('keeps regular lines without carriage returns unchanged', () => {
+    expect(normalizeHistoryLine('plain output line')).toBe('plain output line');
+  });
 });
diff --git a/src/lib/history.ts b/src/lib/history.ts
index b542dd0..7cd8f29 100644
--- a/src/lib/history.ts
+++ b/src/lib/history.ts
@@ -138,3 +138,8 @@ export function redactSensitiveText(value: string): string {
 
   return redacted;
 }
+
+export function normalizeHistoryLine(line: string): string {
+  const visible = line.split('\r').pop() ?? '';
+  return visible.trim().length === 0 ? '' : visible;
+}