diff --git a/apps/cli/src/__tests__/MultilineTextInput.test.ts b/apps/cli/src/__tests__/MultilineTextInput.test.ts
new file mode 100644
index 0000000000..bc75438aa0
--- /dev/null
+++ b/apps/cli/src/__tests__/MultilineTextInput.test.ts
@@ -0,0 +1,343 @@
+/**
+ * Tests for MultilineTextInput component
+ */
+
+describe("MultilineTextInput", () => {
+	describe("cursor position calculations", () => {
+		// Test the getCursorPosition logic
+		const getCursorPosition = (value: string, cursorIndex: number): { line: number; col: number } => {
+			const lines = value.split("\n")
+			let pos = 0
+			for (let i = 0; i < lines.length; i++) {
+				const line = lines[i]!
+				const lineEnd = pos + line.length
+				if (cursorIndex <= lineEnd) {
+					return { line: i, col: cursorIndex - pos }
+				}
+				pos = lineEnd + 1 // +1 for newline
+			}
+			// Cursor at very end
+			return { line: lines.length - 1, col: (lines[lines.length - 1] || "").length }
+		}
+
+		// Test the getIndexFromPosition logic
+		const getIndexFromPosition = (value: string, line: number, col: number): number => {
+			const lines = value.split("\n")
+			let index = 0
+			for (let i = 0; i < line && i < lines.length; i++) {
+				index += lines[i]!.length + 1 // +1 for newline
+			}
+			const targetLine = lines[line] || ""
+			index += Math.min(col, targetLine.length)
+			return index
+		}
+
+		it("should calculate cursor position for single line", () => {
+			const value = "hello"
+			expect(getCursorPosition(value, 0)).toEqual({ line: 0, col: 0 })
+			expect(getCursorPosition(value, 2)).toEqual({ line: 0, col: 2 })
+			expect(getCursorPosition(value, 5)).toEqual({ line: 0, col: 5 })
+		})
+
+		it("should calculate cursor position for multiple lines", () => {
+			const value = "hello\nworld"
+			// "hello" is 5 chars, newline at index 5
+			// "world" starts at index 6
+			expect(getCursorPosition(value, 0)).toEqual({ line: 0, col: 0 })
+			expect(getCursorPosition(value, 5)).toEqual({ line: 0, col: 5 }) // End of first line
+			expect(getCursorPosition(value, 6)).toEqual({ line: 1, col: 0 }) // Start of second line
+			expect(getCursorPosition(value, 8)).toEqual({ line: 1, col: 2 }) // Middle of second line
+			expect(getCursorPosition(value, 11)).toEqual({ line: 1, col: 5 }) // End of second line
+		})
+
+		it("should calculate cursor position for three lines", () => {
+			const value = "foo\nbar\nbaz"
+			// "foo" = 3 chars, newline at 3
+			// "bar" starts at 4, ends at 6, newline at 7
+			// "baz" starts at 8
+			expect(getCursorPosition(value, 0)).toEqual({ line: 0, col: 0 })
+			expect(getCursorPosition(value, 3)).toEqual({ line: 0, col: 3 })
+			expect(getCursorPosition(value, 4)).toEqual({ line: 1, col: 0 })
+			expect(getCursorPosition(value, 7)).toEqual({ line: 1, col: 3 })
+			expect(getCursorPosition(value, 8)).toEqual({ line: 2, col: 0 })
+			expect(getCursorPosition(value, 11)).toEqual({ line: 2, col: 3 })
+		})
+
+		it("should calculate index from position for single line", () => {
+			const value = "hello"
+			expect(getIndexFromPosition(value, 0, 0)).toBe(0)
+			expect(getIndexFromPosition(value, 0, 2)).toBe(2)
+			expect(getIndexFromPosition(value, 0, 5)).toBe(5)
+		})
+
+		it("should calculate index from position for multiple lines", () => {
+			const value = "hello\nworld"
+			expect(getIndexFromPosition(value, 0, 0)).toBe(0)
+			expect(getIndexFromPosition(value, 0, 5)).toBe(5)
+			expect(getIndexFromPosition(value, 1, 0)).toBe(6)
+			expect(getIndexFromPosition(value, 1, 2)).toBe(8)
+			expect(getIndexFromPosition(value, 1, 5)).toBe(11)
+		})
+
+		it("should clamp column to line length", () => {
+			const value = "hi\nworld"
+			// First line "hi" is only 2 chars, requesting col 5 should clamp to 2
+			expect(getIndexFromPosition(value, 0, 5)).toBe(2)
+		})
+	})
+
+	describe("line splitting", () => {
+		it("should split empty string into single empty line", () => {
+			const value = ""
+			const lines = value.split("\n")
+			expect(lines).toEqual([""])
+		})
+
+		it("should split single line correctly", () => {
+			const value = "hello world"
+			const lines = value.split("\n")
+			expect(lines).toEqual(["hello world"])
+		})
+
+		it("should split multiple lines correctly", () => {
+			const value = "foo\nbar\nbaz"
+			const lines = value.split("\n")
+			expect(lines).toEqual(["foo", "bar", "baz"])
+		})
+
+		it("should handle trailing newline", () => {
+			const value = "foo\nbar\n"
+			const lines = value.split("\n")
+			expect(lines).toEqual(["foo", "bar", ""])
+		})
+
+		it("should handle empty lines in middle", () => {
+			const value = "foo\n\nbaz"
+			const lines = value.split("\n")
+			expect(lines).toEqual(["foo", "", "baz"])
+		})
+	})
+
+	describe("line normalization", () => {
+		const normalizeLineEndings = (text: string): string => {
+			if (text == null) return ""
+			return text.replace(/\r\n/g, "\n").replace(/\r/g, "\n")
+		}
+
+		it("should normalize CRLF to LF", () => {
+			expect(normalizeLineEndings("hello\r\nworld")).toBe("hello\nworld")
+		})
+
+		it("should normalize CR to LF", () => {
+			expect(normalizeLineEndings("hello\rworld")).toBe("hello\nworld")
+		})
+
+		it("should leave LF unchanged", () => {
+			expect(normalizeLineEndings("hello\nworld")).toBe("hello\nworld")
+		})
+
+		it("should handle null/undefined", () => {
+			expect(normalizeLineEndings(null as unknown as string)).toBe("")
+			expect(normalizeLineEndings(undefined as unknown as string)).toBe("")
+		})
+
+		it("should handle mixed line endings", () => {
+			expect(normalizeLineEndings("a\r\nb\rc\nd")).toBe("a\nb\nc\nd")
+		})
+	})
+
+	describe("key binding behavior", () => {
+		it("should detect Ctrl+Enter for newline insertion", () => {
+			const isNewlineKey = (key: { return: boolean; ctrl: boolean }) => key.return && key.ctrl
+			expect(isNewlineKey({ return: true, ctrl: true })).toBe(true)
+			expect(isNewlineKey({ return: true, ctrl: false })).toBe(false)
+			expect(isNewlineKey({ return: false, ctrl: true })).toBe(false)
+		})
+
+		it("should detect Enter for submit", () => {
+			const isSubmitKey = (key: { return: boolean; ctrl: boolean }) => key.return && !key.ctrl
+			expect(isSubmitKey({ return: true, ctrl: false })).toBe(true)
+			expect(isSubmitKey({ return: true, ctrl: true })).toBe(false)
+			expect(isSubmitKey({ return: false, ctrl: false })).toBe(false)
+		})
+	})
+
+	describe("newline insertion", () => {
+		it("should insert newline at cursor position", () => {
+			const value = "hello"
+			const cursorIndex = 2
+			const newValue = value.slice(0, cursorIndex) + "\n" + value.slice(cursorIndex)
+			expect(newValue).toBe("he\nllo")
+		})
+
+		it("should insert newline at end", () => {
+			const value = "hello"
+			const cursorIndex = 5
+			const newValue = value.slice(0, cursorIndex) + "\n" + value.slice(cursorIndex)
+			expect(newValue).toBe("hello\n")
+		})
+
+		it("should insert newline at start", () => {
+			const value = "hello"
+			const cursorIndex = 0
+			const newValue = value.slice(0, cursorIndex) + "\n" + value.slice(cursorIndex)
+			expect(newValue).toBe("\nhello")
+		})
+	})
+
+	describe("backspace behavior", () => {
+		it("should delete character before cursor", () => {
+			const value = "hello"
+			const cursorIndex = 3
+			const newValue = value.slice(0, cursorIndex - 1) + value.slice(cursorIndex)
+			expect(newValue).toBe("helo")
+		})
+
+		it("should delete newline character (merge lines)", () => {
+			const value = "hello\nworld"
+			const cursorIndex = 6 // Start of "world" line
+			const newValue = value.slice(0, cursorIndex - 1) + value.slice(cursorIndex)
+			expect(newValue).toBe("helloworld")
+		})
+
+		it("should do nothing at start of input", () => {
+			const value = "hello"
+			const cursorIndex = 0
+			// In real implementation, we check if cursorIndex > 0
+			if (cursorIndex > 0) {
+				const newValue = value.slice(0, cursorIndex - 1) + value.slice(cursorIndex)
+				expect(newValue).not.toBe(value)
+			}
+			// At position 0, backspace does nothing
+			expect(value).toBe("hello")
+		})
+	})
+
+	describe("arrow key navigation", () => {
+		describe("up arrow", () => {
+			it("should move to previous line preserving column", () => {
+				const value = "hello\nworld"
+				const getCursorPosition = (v: string, i: number) => {
+					const lines = v.split("\n")
+					let pos = 0
+					for (let li = 0; li < lines.length; li++) {
+						const line = lines[li]!
+						const lineEnd = pos + line.length
+						if (i <= lineEnd) {
+							return { line: li, col: i - pos }
+						}
+						pos = lineEnd + 1
+					}
+					return { line: lines.length - 1, col: (lines[lines.length - 1] || "").length }
+				}
+
+				const getIndexFromPosition = (v: string, line: number, col: number) => {
+					const lines = v.split("\n")
+					let index = 0
+					for (let i = 0; i < line && i < lines.length; i++) {
+						index += lines[i]!.length + 1
+					}
+					const targetLine = lines[line] || ""
+					index += Math.min(col, targetLine.length)
+					return index
+				}
+
+				// Cursor at "world"[2] (index 8)
+				const cursorIndex = 8
+				const { line, col } = getCursorPosition(value, cursorIndex)
+				expect(line).toBe(1)
+				expect(col).toBe(2)
+
+				// Move up: should go to line 0, same column
+				const targetLine = 0
+				const newIndex = getIndexFromPosition(value, targetLine, col)
+				expect(newIndex).toBe(2) // "he|llo"
+			})
+
+			it("should clamp column if target line is shorter", () => {
+				const value = "hi\nworld"
+				const getIndexFromPosition = (v: string, line: number, col: number) => {
+					const lines = v.split("\n")
+					let index = 0
+					for (let i = 0; i < line && i < lines.length; i++) {
+						index += lines[i]!.length + 1
+					}
+					const targetLine = lines[line] || ""
+					index += Math.min(col, targetLine.length)
+					return index
+				}
+
+				// Cursor at "world"[4] (index 7)
+				// Moving up to "hi" which is only 2 chars, should clamp to col 2
+				const targetLine = 0
+				const col = 4
+				const newIndex = getIndexFromPosition(value, targetLine, col)
+				expect(newIndex).toBe(2) // End of "hi"
+			})
+		})
+
+		describe("down arrow", () => {
+			it("should move to next line preserving column", () => {
+				const value = "hello\nworld"
+				const getIndexFromPosition = (v: string, line: number, col: number) => {
+					const lines = v.split("\n")
+					let index = 0
+					for (let i = 0; i < line && i < lines.length; i++) {
+						index += lines[i]!.length + 1
+					}
+					const targetLine = lines[line] || ""
+					index += Math.min(col, targetLine.length)
+					return index
+				}
+
+				// Cursor at "hello"[2] (index 2)
+				const col = 2
+				const targetLine = 1
+				const newIndex = getIndexFromPosition(value, targetLine, col)
+				expect(newIndex).toBe(8) // "wo|rld"
+			})
+		})
+
+		describe("left/right arrows", () => {
+			it("should move left by 1", () => {
+				const cursorIndex = 5
+				const newIndex = Math.max(0, cursorIndex - 1)
+				expect(newIndex).toBe(4)
+			})
+
+			it("should not move left past 0", () => {
+				const cursorIndex = 0
+				const newIndex = Math.max(0, cursorIndex - 1)
+				expect(newIndex).toBe(0)
+			})
+
+			it("should move right by 1", () => {
+				const value = "hello"
+				const cursorIndex = 2
+				const newIndex = Math.min(value.length, cursorIndex + 1)
+				expect(newIndex).toBe(3)
+			})
+
+			it("should not move right past end", () => {
+				const value = "hello"
+				const cursorIndex = 5
+				const newIndex = Math.min(value.length, cursorIndex + 1)
+				expect(newIndex).toBe(5)
+			})
+		})
+	})
+})
+
+describe("multi-line history integration", () => {
+	it("should store multi-line entries with newlines", () => {
+		const entry = "foo\nbar\nbaz"
+		expect(entry.includes("\n")).toBe(true)
+		expect(entry.split("\n").length).toBe(3)
+	})
+
+	it("should restore multi-line entries correctly", () => {
+		const storedEntry = "foo\nbar\nbaz"
+		const lines = storedEntry.split("\n")
+		expect(lines).toEqual(["foo", "bar", "baz"])
+	})
+})
diff --git a/apps/cli/src/__tests__/useInputHistory.test.ts b/apps/cli/src/__tests__/useInputHistory.test.ts
index d6be84275d..5d8d07d5ee 100644
--- a/apps/cli/src/__tests__/useInputHistory.test.ts
+++ b/apps/cli/src/__tests__/useInputHistory.test.ts
@@ -4,7 +4,6 @@ vi.mock("../utils/historyStorage.js")
 
 // Track state and callbacks for testing.
 let mockState: Record<string, unknown> = {}
-let mockInputHandler: ((input: string, key: { upArrow: boolean; downArrow: boolean }) => void) | null = null
 let effectCallbacks: Array<() => void | (() => void)> = []
 
 vi.mock("react", () => ({
@@ -31,22 +30,10 @@ vi.mock("react", () => ({
 	useRef: vi.fn((initial: unknown) => ({ current: initial })),
 }))
 
-vi.mock("ink", () => ({
-	useInput: vi.fn(
-		(
-			handler: (input: string, key: { upArrow: boolean; downArrow: boolean }) => void,
-			_options?: { isActive?: boolean },
-		) => {
-			mockInputHandler = handler
-		},
-	),
-}))
-
 describe("useInputHistory", () => {
 	beforeEach(() => {
 		vi.resetAllMocks()
 		mockState = {}
-		mockInputHandler = null
 		effectCallbacks = []
 
 		// Default mock for loadHistory
@@ -110,11 +97,12 @@ describe("useInputHistory", () => {
 			expect(result.isBrowsing).toBe(false)
 		})
 
-		it("should register input handler with ink useInput", async () => {
+		it("should export navigateUp and navigateDown functions for manual navigation", async () => {
 			const { useInputHistory } = await import("../ui/hooks/useInputHistory.js")
-			useInputHistory()
+			const result = useInputHistory()
 
-			expect(mockInputHandler).not.toBeNull()
+			expect(typeof result.navigateUp).toBe("function")
+			expect(typeof result.navigateDown).toBe("function")
 		})
 	})
 
@@ -138,9 +126,13 @@ describe("useInputHistory", () => {
 			expect(result).toHaveProperty("resetBrowsing")
 			expect(result).toHaveProperty("history")
 			expect(result).toHaveProperty("draft")
+			expect(result).toHaveProperty("navigateUp")
+			expect(result).toHaveProperty("navigateDown")
 
 			expect(typeof result.addEntry).toBe("function")
 			expect(typeof result.resetBrowsing).toBe("function")
+			expect(typeof result.navigateUp).toBe("function")
+			expect(typeof result.navigateDown).toBe("function")
 			expect(Array.isArray(result.history)).toBe(true)
 		})
 	})
diff --git a/apps/cli/src/ui/App.tsx b/apps/cli/src/ui/App.tsx
index 5ddae9b45f..6b20ef3f7f 100644
--- a/apps/cli/src/ui/App.tsx
+++ b/apps/cli/src/ui/App.tsx
@@ -1,5 +1,5 @@
 import { Box, Text, useApp, useInput } from "ink"
-import { TextInput, Select } from "@inkjs/ui"
+import { Select } from "@inkjs/ui"
 import { useState, useEffect, useCallback, useRef, useMemo } from "react"
 import { EventEmitter } from "events"
 import { randomUUID } from "crypto"
@@ -745,20 +745,26 @@ export function App({
 							) : (
 								<Box flexDirection="column" marginTop={1}>
 									<HorizontalLine />
-									<Box>
-										<Text color={theme.promptColor}>&gt; </Text>
-										<TextInput
-											placeholder="Type your response..."
-											onSubmit={(text) => {
-												// Only submit if there's actual text
-												if (text && text.trim()) {
-													handleSubmit(text)
-													setShowCustomInput(false)
-													isTransitioningToCustomInput.current = false
-												}
-											}}
-										/>
-									</Box>
+									<FilePickerInput
+										placeholder="Type your response..."
+										onSubmit={(text: string) => {
+											// Only submit if there's actual text
+											if (text && text.trim()) {
+												handleSubmit(text)
+												setShowCustomInput(false)
+												isTransitioningToCustomInput.current = false
+											}
+										}}
+										isActive={true}
+										onFileSearch={handleFileSearch}
+										onFileSelect={handleFileSelect}
+										onFilePickerClose={handleFilePickerClose}
+										fileSearchResults={fileSearchResults}
+										isFilePickerOpen={isFilePickerOpen}
+										filePickerSelectedIndex={filePickerSelectedIndex}
+										onFilePickerIndexChange={setFilePickerSelectedIndex}
+										prompt="> "
+									/>
 									<HorizontalLine />
 									{statusBarMessage}
 								</Box>
@@ -775,21 +781,19 @@ export function App({
 					) : isComplete ? (
 						<Box flexDirection="column">
 							<HorizontalLine />
-							<Box>
-								<Text color={theme.promptColor}>&gt; </Text>
-								<FilePickerInput
-									placeholder="Type to continue..."
-									onSubmit={handleSubmit}
-									isActive={view === "UserInput"}
-									onFileSearch={handleFileSearch}
-									onFileSelect={handleFileSelect}
-									onFilePickerClose={handleFilePickerClose}
-									fileSearchResults={fileSearchResults}
-									isFilePickerOpen={isFilePickerOpen}
-									filePickerSelectedIndex={filePickerSelectedIndex}
-									onFilePickerIndexChange={setFilePickerSelectedIndex}
-								/>
-							</Box>
+							<FilePickerInput
+								placeholder="Type to continue..."
+								onSubmit={handleSubmit}
+								isActive={view === "UserInput"}
+								onFileSearch={handleFileSearch}
+								onFileSelect={handleFileSelect}
+								onFilePickerClose={handleFilePickerClose}
+								fileSearchResults={fileSearchResults}
+								isFilePickerOpen={isFilePickerOpen}
+								filePickerSelectedIndex={filePickerSelectedIndex}
+								onFilePickerIndexChange={setFilePickerSelectedIndex}
+								prompt="> "
+							/>
 							<HorizontalLine />
 							{!isFilePickerOpen && statusBarMessage}
 							{isFilePickerOpen && (
@@ -807,21 +811,19 @@ export function App({
 					) : (
 						<Box flexDirection="column">
 							<HorizontalLine />
-							<Box>
-								<Text color={theme.promptColor}>› </Text>
-								<FilePickerInput
-									placeholder=""
-									onSubmit={handleSubmit}
-									isActive={view === "UserInput"}
-									onFileSearch={handleFileSearch}
-									onFileSelect={handleFileSelect}
-									onFilePickerClose={handleFilePickerClose}
-									fileSearchResults={fileSearchResults}
-									isFilePickerOpen={isFilePickerOpen}
-									filePickerSelectedIndex={filePickerSelectedIndex}
-									onFilePickerIndexChange={setFilePickerSelectedIndex}
-								/>
-							</Box>
+							<FilePickerInput
+								placeholder=""
+								onSubmit={handleSubmit}
+								isActive={view === "UserInput"}
+								onFileSearch={handleFileSearch}
+								onFileSelect={handleFileSelect}
+								onFilePickerClose={handleFilePickerClose}
+								fileSearchResults={fileSearchResults}
+								isFilePickerOpen={isFilePickerOpen}
+								filePickerSelectedIndex={filePickerSelectedIndex}
+								onFilePickerIndexChange={setFilePickerSelectedIndex}
+								prompt="› "
+							/>
 							<HorizontalLine />
 							{!isFilePickerOpen && statusBarMessage}
 							{isFilePickerOpen && (
diff --git a/apps/cli/src/ui/components/FilePickerInput.tsx b/apps/cli/src/ui/components/FilePickerInput.tsx
index 6b1da785f6..8543948954 100644
--- a/apps/cli/src/ui/components/FilePickerInput.tsx
+++ b/apps/cli/src/ui/components/FilePickerInput.tsx
@@ -1,7 +1,7 @@
 import { useInput } from "ink"
-import { TextInput } from "@inkjs/ui"
 import { useState, useCallback, useEffect, useRef } from "react"
 
+import { MultilineTextInput } from "./MultilineTextInput.js"
 import { useInputHistory } from "../hooks/useInputHistory.js"
 import type { FileSearchResult } from "../types.js"
 
@@ -16,6 +16,14 @@ export interface FilePickerInputProps {
 	onFileSelect: (result: FileSearchResult) => void
 	onFilePickerClose: () => void
 	onFilePickerIndexChange: (index: number) => void
+	/**
+	 * Prompt character for the first line (default: "> ")
+	 */
+	prompt?: string
+	/**
+	 * Indent string for continuation lines (default: "  ")
+	 */
+	continuationIndent?: string
 }
 
 const SEARCH_DEBOUNCE_MS = 150
@@ -29,39 +37,38 @@ export function FilePickerInput({
 	isFilePickerOpen,
 	filePickerSelectedIndex,
 	onFilePickerClose,
+	prompt = "> ",
+	continuationIndent = "  ",
 }: FilePickerInputProps) {
-	const currentInputRef = useRef("")
 	const debounceTimerRef = useRef<NodeJS.Timeout | null>(null)
 	const lastSearchQueryRef = useRef<string | null>(null)
 
-	const [inputKey, setInputKey] = useState(0)
-	const [displayValue, setDisplayValue] = useState("")
+	const [inputValue, setInputValue] = useState("")
 
-	const { addEntry, historyValue, isBrowsing, resetBrowsing, history, draft, setDraft } = useInputHistory({
-		isActive: isActive && !isFilePickerOpen,
-		getCurrentInput: () => currentInputRef.current,
-	})
+	const { addEntry, historyValue, isBrowsing, resetBrowsing, history, draft, setDraft, navigateUp, navigateDown } =
+		useInputHistory({
+			isActive: isActive && !isFilePickerOpen,
+			getCurrentInput: () => inputValue,
+		})
 
 	const [wasBrowsing, setWasBrowsing] = useState(false)
 
+	// Handle history navigation
 	useEffect(() => {
 		if (isBrowsing && !wasBrowsing) {
 			if (historyValue !== null) {
-				setDisplayValue(historyValue)
-				setInputKey((k) => k + 1)
+				setInputValue(historyValue)
 			}
 		} else if (!isBrowsing && wasBrowsing) {
-			setDisplayValue(draft)
-			setInputKey((k) => k + 1)
-			currentInputRef.current = draft
-		} else if (isBrowsing && historyValue !== null && historyValue !== displayValue) {
-			setDisplayValue(historyValue)
-			setInputKey((k) => k + 1)
+			setInputValue(draft)
+		} else if (isBrowsing && historyValue !== null && historyValue !== inputValue) {
+			setInputValue(historyValue)
 		}
 
 		setWasBrowsing(isBrowsing)
-	}, [isBrowsing, wasBrowsing, historyValue, draft, displayValue])
+	}, [isBrowsing, wasBrowsing, historyValue, draft, inputValue])
 
+	// Cleanup debounce timer
 	useEffect(() => {
 		return () => {
 			if (debounceTimerRef.current) {
@@ -72,7 +79,10 @@ export function FilePickerInput({
 
 	const checkForAtTrigger = useCallback(
 		(value: string) => {
-			const atIndex = value.lastIndexOf("@")
+			// Check on the last line for @ trigger
+			const lines = value.split("\n")
+			const lastLine = lines[lines.length - 1] || ""
+			const atIndex = lastLine.lastIndexOf("@")
 
 			if (atIndex === -1) {
 				if (isFilePickerOpen) {
@@ -82,7 +92,7 @@ export function FilePickerInput({
 				return
 			}
 
-			const query = value.substring(atIndex + 1)
+			const query = lastLine.substring(atIndex + 1)
 
 			if (query.includes(" ")) {
 				if (isFilePickerOpen) {
@@ -116,8 +126,7 @@ export function FilePickerInput({
 
 	const handleChange = useCallback(
 		(value: string) => {
-			currentInputRef.current = value
-
+			setInputValue(value)
 			checkForAtTrigger(value)
 
 			if (!isBrowsing) {
@@ -129,23 +138,24 @@ export function FilePickerInput({
 
 	const handleFileSelect = useCallback(
 		(result: FileSearchResult) => {
-			const currentValue = currentInputRef.current
-			const atIndex = currentValue.lastIndexOf("@")
+			// Find and replace the @ trigger on the last line
+			const lines = inputValue.split("\n")
+			const lastLineIndex = lines.length - 1
+			const lastLine = lines[lastLineIndex] || ""
+			const atIndex = lastLine.lastIndexOf("@")
 
 			if (atIndex !== -1) {
-				const beforeAt = currentValue.substring(0, atIndex)
-				const newValue = `${beforeAt}@/${result.path} `
+				const beforeAt = lastLine.substring(0, atIndex)
+				lines[lastLineIndex] = `${beforeAt}@/${result.path} `
+				const newValue = lines.join("\n")
 
-				currentInputRef.current = newValue
-				setDisplayValue(newValue)
-				setInputKey((k) => k + 1)
+				setInputValue(newValue)
 				setDraft(newValue)
-
 				lastSearchQueryRef.current = null
 				onFilePickerClose()
 			}
 		},
-		[onFilePickerClose, setDraft],
+		[inputValue, onFilePickerClose, setDraft],
 	)
 
 	const handleSubmit = useCallback(
@@ -163,16 +173,26 @@ export function FilePickerInput({
 			await addEntry(trimmed)
 
 			resetBrowsing("")
-			currentInputRef.current = ""
 			lastSearchQueryRef.current = null
-			setDisplayValue("")
-			setInputKey((k) => k + 1)
+			setInputValue("")
 
 			onSubmit(trimmed)
 		},
 		[isFilePickerOpen, addEntry, resetBrowsing, onSubmit],
 	)
 
+	const handleEscape = useCallback(() => {
+		// Clear all input on Escape
+		setInputValue("")
+		setDraft("")
+		resetBrowsing("")
+		lastSearchQueryRef.current = null
+		if (isFilePickerOpen) {
+			onFilePickerClose()
+		}
+	}, [setDraft, resetBrowsing, isFilePickerOpen, onFilePickerClose])
+
+	// Handle file picker selection with Enter
 	useInput(
 		(_input, key) => {
 			if (!isActive || !isFilePickerOpen) {
@@ -191,12 +211,19 @@ export function FilePickerInput({
 	)
 
 	return (
-		<TextInput
-			key={`file-picker-input-${inputKey}-${history.length}`}
-			defaultValue={displayValue}
-			placeholder={placeholder}
+		<MultilineTextInput
+			key={`file-picker-input-${history.length}`}
+			value={inputValue}
 			onChange={handleChange}
 			onSubmit={handleSubmit}
+			onEscape={handleEscape}
+			onUpAtFirstLine={navigateUp}
+			onDownAtLastLine={navigateDown}
+			placeholder={placeholder}
+			isActive={isActive}
+			showCursor={true}
+			prompt={prompt}
+			continuationIndent={continuationIndent}
 		/>
 	)
 }
diff --git a/apps/cli/src/ui/components/MultilineTextInput.tsx b/apps/cli/src/ui/components/MultilineTextInput.tsx
new file mode 100644
index 0000000000..2b367554d6
--- /dev/null
+++ b/apps/cli/src/ui/components/MultilineTextInput.tsx
@@ -0,0 +1,285 @@
+/**
+ * MultilineTextInput Component
+ *
+ * A multi-line text input for Ink CLI applications.
+ * Based on ink-multiline-input but simplified for our needs.
+ *
+ * Key behaviors:
+ * - Ctrl+Enter: Add new line
+ * - Enter: Submit
+ * - Backspace at start of line: Merge with previous line
+ * - Escape: Clear all lines
+ * - Arrow keys: Navigate within and between lines
+ */
+
+import { useState, useEffect, useMemo, useCallback } from "react"
+import { Box, Text, useInput, type Key } from "ink"
+
+export interface MultilineTextInputProps {
+	/**
+	 * Current value (can contain newlines)
+	 */
+	value: string
+	/**
+	 * Called when the value changes
+	 */
+	onChange: (value: string) => void
+	/**
+	 * Called when user submits (Enter without Ctrl)
+	 */
+	onSubmit?: (value: string) => void
+	/**
+	 * Called when user presses Escape
+	 */
+	onEscape?: () => void
+	/**
+	 * Called when up arrow is pressed while cursor is on the first line
+	 * Use this to trigger history navigation
+	 */
+	onUpAtFirstLine?: () => void
+	/**
+	 * Called when down arrow is pressed while cursor is on the last line
+	 * Use this to trigger history navigation
+	 */
+	onDownAtLastLine?: () => void
+	/**
+	 * Placeholder text when empty
+	 */
+	placeholder?: string
+	/**
+	 * Whether the input is active/focused
+	 */
+	isActive?: boolean
+	/**
+	 * Whether to show the cursor
+	 */
+	showCursor?: boolean
+	/**
+	 * Prompt character for the first line
+	 */
+	prompt?: string
+	/**
+	 * Indent string for continuation lines
+	 */
+	continuationIndent?: string
+}
+
+/**
+ * Normalize line endings to LF (\n)
+ */
+function normalizeLineEndings(text: string): string {
+	if (text == null) return ""
+	return text.replace(/\r\n/g, "\n").replace(/\r/g, "\n")
+}
+
+/**
+ * Calculate line and column position from cursor index
+ */
+function getCursorPosition(value: string, cursorIndex: number): { line: number; col: number } {
+	const lines = value.split("\n")
+	let pos = 0
+	for (let i = 0; i < lines.length; i++) {
+		const line = lines[i]!
+		const lineEnd = pos + line.length
+		if (cursorIndex <= lineEnd) {
+			return { line: i, col: cursorIndex - pos }
+		}
+		pos = lineEnd + 1 // +1 for newline
+	}
+	// Cursor at very end
+	return { line: lines.length - 1, col: (lines[lines.length - 1] || "").length }
+}
+
+/**
+ * Calculate cursor index from line and column position
+ */
+function getIndexFromPosition(value: string, line: number, col: number): number {
+	const lines = value.split("\n")
+	let index = 0
+	for (let i = 0; i < line && i < lines.length; i++) {
+		index += lines[i]!.length + 1 // +1 for newline
+	}
+	const targetLine = lines[line] || ""
+	index += Math.min(col, targetLine.length)
+	return index
+}
+
+export function MultilineTextInput({
+	value,
+	onChange,
+	onSubmit,
+	onEscape,
+	onUpAtFirstLine,
+	onDownAtLastLine,
+	placeholder = "",
+	isActive = true,
+	showCursor = true,
+	prompt = "> ",
+	continuationIndent = "  ",
+}: MultilineTextInputProps) {
+	const [cursorIndex, setCursorIndex] = useState(value.length)
+
+	// Clamp cursor if value changes externally
+	useEffect(() => {
+		if (cursorIndex > value.length) {
+			setCursorIndex(value.length)
+		}
+	}, [value, cursorIndex])
+
+	// Handle keyboard input
+	useInput(
+		(input: string, key: Key) => {
+			// Escape: clear all
+			if (key.escape) {
+				onEscape?.()
+				return
+			}
+
+			// Ctrl+C: ignore (handled elsewhere)
+			if (key.ctrl && input === "c") {
+				return
+			}
+
+			// Ctrl+Enter: add new line
+			if (key.return && key.ctrl) {
+				const newValue = value.slice(0, cursorIndex) + "\n" + value.slice(cursorIndex)
+				onChange(newValue)
+				setCursorIndex(cursorIndex + 1)
+				return
+			}
+
+			// Enter (without Ctrl): submit
+			if (key.return) {
+				onSubmit?.(value)
+				return
+			}
+
+			// Tab: ignore for now
+			if (key.tab) {
+				return
+			}
+
+			// Arrow up: move cursor up one line, or trigger history if on first line
+			if (key.upArrow) {
+				if (!showCursor) return
+				const lines = value.split("\n")
+				const { line, col } = getCursorPosition(value, cursorIndex)
+
+				if (line > 0) {
+					// Move to previous line
+					const targetLine = lines[line - 1]!
+					const newCol = Math.min(col, targetLine.length)
+					setCursorIndex(getIndexFromPosition(value, line - 1, newCol))
+				} else {
+					// On first line - trigger history navigation callback
+					onUpAtFirstLine?.()
+				}
+				return
+			}
+
+			// Arrow down: move cursor down one line, or trigger history if on last line
+			if (key.downArrow) {
+				if (!showCursor) return
+				const lines = value.split("\n")
+				const { line, col } = getCursorPosition(value, cursorIndex)
+
+				if (line < lines.length - 1) {
+					// Move to next line
+					const targetLine = lines[line + 1]!
+					const newCol = Math.min(col, targetLine.length)
+					setCursorIndex(getIndexFromPosition(value, line + 1, newCol))
+				} else {
+					// On last line - trigger history navigation callback
+					onDownAtLastLine?.()
+				}
+				return
+			}
+
+			// Arrow left: move cursor left
+			if (key.leftArrow) {
+				if (!showCursor) return
+				setCursorIndex(Math.max(0, cursorIndex - 1))
+				return
+			}
+
+			// Arrow right: move cursor right
+			if (key.rightArrow) {
+				if (!showCursor) return
+				setCursorIndex(Math.min(value.length, cursorIndex + 1))
+				return
+			}
+
+			// Backspace/Delete
+			if (key.backspace || key.delete) {
+				if (cursorIndex > 0) {
+					const newValue = value.slice(0, cursorIndex - 1) + value.slice(cursorIndex)
+					onChange(newValue)
+					setCursorIndex(cursorIndex - 1)
+				}
+				return
+			}
+
+			// Normal character input
+			if (input) {
+				const normalized = normalizeLineEndings(input)
+				const newValue = value.slice(0, cursorIndex) + normalized + value.slice(cursorIndex)
+				onChange(newValue)
+				setCursorIndex(cursorIndex + normalized.length)
+			}
+		},
+		{ isActive },
+	)
+
+	// Split value into lines for rendering
+	const lines = useMemo(() => {
+		if (!value && !isActive) {
+			return [placeholder]
+		}
+		if (!value) {
+			return [""]
+		}
+		return value.split("\n")
+	}, [value, placeholder, isActive])
+
+	// Determine which line and column the cursor is on
+	const cursorPosition = useMemo(() => {
+		if (!showCursor || !isActive) return null
+		return getCursorPosition(value, cursorIndex)
+	}, [value, cursorIndex, showCursor, isActive])
+
+	// Render a line with optional cursor
+	const renderLine = useCallback(
+		(lineText: string, lineIndex: number) => {
+			const isPlaceholder = !value && !isActive && lineIndex === 0
+			const isFirstLine = lineIndex === 0
+			const linePrefix = isFirstLine ? prompt : continuationIndent
+
+			// Check if cursor is on this line
+			if (cursorPosition && cursorPosition.line === lineIndex && isActive) {
+				const { col } = cursorPosition
+				const beforeCursor = lineText.slice(0, col)
+				const cursorChar = lineText[col] || " "
+				const afterCursor = lineText.slice(col + 1)
+
+				return (
+					<Box key={lineIndex}>
+						<Text dimColor={!isFirstLine}>{linePrefix}</Text>
+						<Text>{beforeCursor}</Text>
+						<Text inverse>{cursorChar}</Text>
+						<Text>{afterCursor}</Text>
+					</Box>
+				)
+			}
+
+			return (
+				<Box key={lineIndex}>
+					<Text dimColor={!isFirstLine}>{linePrefix}</Text>
+					<Text dimColor={isPlaceholder}>{lineText}</Text>
+				</Box>
+			)
+		},
+		[prompt, continuationIndent, cursorPosition, value, isActive],
+	)
+
+	return <Box flexDirection="column">{lines.map((line, index) => renderLine(line, index))}</Box>
+}
diff --git a/apps/cli/src/ui/hooks/useInputHistory.ts b/apps/cli/src/ui/hooks/useInputHistory.ts
index 32e74aac50..3a698f43ca 100644
--- a/apps/cli/src/ui/hooks/useInputHistory.ts
+++ b/apps/cli/src/ui/hooks/useInputHistory.ts
@@ -2,18 +2,17 @@
  * useInputHistory Hook
  *
  * Provides input history navigation for CLI text inputs.
- * Uses up/down arrow keys to navigate through previously entered prompts.
+ * Navigation is triggered via navigateUp/navigateDown functions.
  * History is persisted to ~/.roo/cli-history.json
  */
 
 import { useState, useEffect, useCallback, useRef } from "react"
-import { useInput } from "ink"
 
 import { loadHistory, addToHistory } from "../../utils/historyStorage.js"
 
 export interface UseInputHistoryOptions {
 	/**
-	 * Whether the hook should respond to arrow key input.
+	 * Whether the hook should respond to navigation calls.
 	 * Set to false when input is not active/focused.
 	 * @default true
 	 */
@@ -63,6 +62,16 @@ export interface UseInputHistoryReturn {
 	 * Set the current draft value (call from onChange)
 	 */
 	setDraft: (value: string) => void
+
+	/**
+	 * Navigate to older history entry (call when up arrow at first line)
+	 */
+	navigateUp: () => void
+
+	/**
+	 * Navigate to newer history entry (call when down arrow at last line)
+	 */
+	navigateDown: () => void
 }
 
 /**
@@ -112,42 +121,38 @@ export function useInputHistory(options: UseInputHistoryOptions = {}): UseInputH
 		}
 	}, [])
 
-	// Handle up/down arrow keys for history navigation
-	useInput(
-		(_input, key) => {
-			if (!isActive) return
+	// Navigate to older history entry
+	const navigateUp = useCallback(() => {
+		if (!isActive) return
+		if (history.length === 0) return
 
-			if (key.upArrow) {
-				// Navigate to older entry
-				if (history.length === 0) return
-
-				if (historyIndex === -1) {
-					// Starting to browse - save current input as draft
-					if (getCurrentInput) {
-						setDraft(getCurrentInput())
-					}
-					// Go to newest entry
-					setHistoryIndex(history.length - 1)
-				} else if (historyIndex > 0) {
-					// Go to older entry
-					setHistoryIndex(historyIndex - 1)
-				}
-				// At oldest entry - stay there
-			} else if (key.downArrow) {
-				// Navigate to newer entry
-				if (historyIndex === -1) return // Not browsing
-
-				if (historyIndex < history.length - 1) {
-					// Go to newer entry
-					setHistoryIndex(historyIndex + 1)
-				} else {
-					// At newest entry - return to draft
-					setHistoryIndex(-1)
-				}
+		if (historyIndex === -1) {
+			// Starting to browse - save current input as draft
+			if (getCurrentInput) {
+				setDraft(getCurrentInput())
 			}
-		},
-		{ isActive },
-	)
+			// Go to newest entry
+			setHistoryIndex(history.length - 1)
+		} else if (historyIndex > 0) {
+			// Go to older entry
+			setHistoryIndex(historyIndex - 1)
+		}
+		// At oldest entry - stay there
+	}, [isActive, history, historyIndex, getCurrentInput])
+
+	// Navigate to newer history entry
+	const navigateDown = useCallback(() => {
+		if (!isActive) return
+		if (historyIndex === -1) return // Not browsing
+
+		if (historyIndex < history.length - 1) {
+			// Go to newer entry
+			setHistoryIndex(historyIndex + 1)
+		} else {
+			// At newest entry - return to draft
+			setHistoryIndex(-1)
+		}
+	}, [isActive, historyIndex, history.length])
 
 	// Add new entry to history
 	const addEntry = useCallback(async (entry: string) => {
@@ -191,5 +196,7 @@ export function useInputHistory(options: UseInputHistoryOptions = {}): UseInputH
 		history,
 		draft,
 		setDraft,
+		navigateUp,
+		navigateDown,
 	}
 }