diff --git a/clients/terminal/tui/tui_app.py b/clients/terminal/tui/tui_app.py
index 3c7bd2c..026cc0c 100644
--- a/clients/terminal/tui/tui_app.py
+++ b/clients/terminal/tui/tui_app.py
@@ -7,7 +7,7 @@
 
 from textual.app import App, ComposeResult
 from textual.containers import Horizontal, Vertical
-from textual.widgets import Footer, Header
+from textual.widgets import Header
 
 from clients.terminal import api
 from clients.terminal.config import settings
@@ -30,7 +30,7 @@
 from clients.terminal.tui.commands.registry import get_registry
 from clients.terminal.tui.screens.command_palette import CommandPaletteScreen
 from clients.terminal.tui.screens.permission_dialog import PermissionDialogScreen
-from clients.terminal.tui.widgets import ChatPanel, InputBox, SessionsPanel, StatusPanel
+from clients.terminal.tui.widgets import ChatPanel, InputBox, SessionsPanel, StatusBar, StatusPanel
 from clients.terminal.tui.ws_bridge import WsBridge
 
 
@@ -66,6 +66,7 @@
         self._status_panel = StatusPanel()
         self._sessions_panel = SessionsPanel()
         self._input_box = InputBox()
+        self._status_bar = StatusBar()
         self._state = StateManager()
         self._ctx = TuiContext(
             state=self._state,
@@ -91,7 +92,7 @@
                 yield self._status_panel
                 yield self._sessions_panel
         yield self._input_box
-        yield Footer()
+        yield self._status_bar
 
     def on_mount(self) -> None:
         self.apply_theme()
@@ -339,12 +340,14 @@
         msg_type = payload.get("type")
         if msg_type == "stream_start":
             self._streaming = True
-            self._input_box.set_placeholder("Navi is thinking... (Esc to stop)")
+            self._input_box.set_placeholder("Esc to stop")
+            self._status_bar.activity_start("thinking")
             self._update_footer_bindings()
         elif msg_type in ("stream_end", "stream_stopped", "error"):
             self._streaming = False
             self._input_box.set_placeholder("Ask anything...")
             self._input_box.focus_input()
+            self._status_bar.activity_stop()
             self._update_footer_bindings()
         elif msg_type == "model_info":
             # The model that actually served this turn (resolved by the backend,
@@ -354,6 +357,18 @@
             if model:
                 self._status_panel.set_model(model)
             return
+        elif msg_type == "stream_delta" and self._streaming:
+            # First real output: the agent is now responding, not just thinking.
+            self._status_bar.activity_label("responding")
+        elif msg_type == "thinking_delta" and self._streaming:
+            self._status_bar.activity_label("thinking")
+        elif msg_type == "planning_status":
+            self._status_bar.activity_label("planning")
+        elif msg_type == "plan_ready":
+            self._status_bar.activity_label("planning")
+        elif msg_type == "tool_started":
+            tool = payload.get("tool", "")
+            self._status_bar.activity_label(f"running {tool}" if tool else "running tool")
 
         if msg_type == "tool_started":
             tool = payload.get("tool", "")
@@ -427,6 +442,10 @@
 
     def on_connection_status_changed(self, event: ConnectionStatusChanged) -> None:
         self._status_panel.set_connection(event.connected, event.detail)
+        # A dropped connection mid-turn will never deliver stream_end, so stop
+        # the spinner here rather than leave it spinning forever.
+        if not event.connected:
+            self._status_bar.activity_stop()
 
     def on_permission_request(self, event: PermissionRequest) -> None:
         """Manual PermissionRequest event (fallback from components)."""
diff --git a/clients/terminal/tui/widgets/__init__.py b/clients/terminal/tui/widgets/__init__.py
index 6b9fc96..42d3bfc 100644
--- a/clients/terminal/tui/widgets/__init__.py
+++ b/clients/terminal/tui/widgets/__init__.py
@@ -5,6 +5,7 @@
 from .chat_panel import ChatPanel
 from .input_box import InputBox
 from .sessions_panel import SessionsPanel
+from .status_bar import StatusBar
 from .status_panel import StatusPanel
 
-__all__ = ["ChatPanel", "InputBox", "SessionsPanel", "StatusPanel"]
+__all__ = ["ChatPanel", "InputBox", "SessionsPanel", "StatusBar", "StatusPanel"]
diff --git a/clients/terminal/tui/widgets/activity_indicator.py b/clients/terminal/tui/widgets/activity_indicator.py
new file mode 100644
index 0000000..cea96fb
--- /dev/null
+++ b/clients/terminal/tui/widgets/activity_indicator.py
@@ -0,0 +1,69 @@
+"""Animated activity indicator for the TUI status panel.
+
+A rotating braille-spinner + phase label that runs on its own timer while the
+agent is working. Because the timer is independent of the WebSocket event flow,
+the spinner keeps moving during silent gaps (a long-running tool, the pause
+before the first token, sub-agent reasoning) — so "still spinning" means the
+agent is alive, and "frozen" means it hung. That is the whole point: make
+"hung or just thinking" answerable at a glance.
+"""
+
+from __future__ import annotations
+
+from rich.text import Text
+from textual.widgets import Static
+from textual.timer import Timer
+
+from clients.terminal.tui.themes import get_active_theme
+
+_FRAMES = "⠋⠙⠹⠸⠼⠴⠦⠧⠇⠏"
+_TICK_SECONDS = 0.1
+
+
+class ActivityIndicator(Static):
+    """Spinner + phase label, animated while started."""
+
+    def __init__(self) -> None:
+        super().__init__("")
+        self._frame = 0
+        self._label = ""
+        self._active = False
+        self._timer: Timer | None = None
+
+    def start(self, label: str) -> None:
+        """Begin animating with ``label`` as the current phase."""
+        self._label = label
+        self._active = True
+        self._render_frame()
+        if self._timer is None:
+            self._timer = self.set_interval(_TICK_SECONDS, self._tick)
+
+    def set_label(self, label: str) -> None:
+        """Update the phase label without restarting the animation."""
+        if not self._active:
+            return
+        self._label = label
+        self._render_frame()
+
+    def stop(self) -> None:
+        """Stop animating and clear the line."""
+        self._active = False
+        self._label = ""
+        if self._timer is not None:
+            self._timer.stop()
+            self._timer = None
+        if self.is_mounted:
+            self.update("")
+
+    def _tick(self) -> None:
+        if not self._active:
+            return
+        self._frame = (self._frame + 1) % len(_FRAMES)
+        self._render_frame()
+
+    def _render_frame(self) -> None:
+        if not self.is_mounted:
+            return
+        theme = get_active_theme()
+        glyph = _FRAMES[self._frame]
+        self.update(Text(f"{glyph} {self._label}", style=theme.status_online.hex))
\ No newline at end of file
diff --git a/clients/terminal/tui/widgets/input_box.py b/clients/terminal/tui/widgets/input_box.py
index 11d5e6f..c21218a 100644
--- a/clients/terminal/tui/widgets/input_box.py
+++ b/clients/terminal/tui/widgets/input_box.py
@@ -54,7 +54,7 @@
     }
     InputBox > TextArea {
         height: auto;
-        min-height: 3;
+        min-height: 1;
         max-height: 12;
         width: 100%;
         border: none;
diff --git a/clients/terminal/tui/widgets/status_bar.py b/clients/terminal/tui/widgets/status_bar.py
new file mode 100644
index 0000000..82a14d5
--- /dev/null
+++ b/clients/terminal/tui/widgets/status_bar.py
@@ -0,0 +1,58 @@
+"""Bottom status line for the TUI.
+
+Hosts the activity indicator (left) and a dim key-combo summary (right). The
+indicator is the live "agent is working" signal; the combos keep the line
+useful while idle. Sits at the very bottom, replacing Textual's Footer so the
+working indicator and the key hints share one line.
+"""
+
+from __future__ import annotations
+
+from textual.app import ComposeResult
+from textual.containers import Horizontal
+from textual.widgets import Static
+
+from clients.terminal.tui.widgets.activity_indicator import ActivityIndicator
+
+_COMBOS = "Ctrl+P palette · Ctrl+X Q quit · Esc stop"
+
+
+class StatusBar(Horizontal):
+    """One-line bottom bar: activity indicator + key combos."""
+
+    DEFAULT_CSS = """
+    StatusBar {
+        height: 1;
+        background: $tui-panel;
+        color: $tui-text-dim;
+        padding: 0 1;
+    }
+    StatusBar ActivityIndicator {
+        width: auto;
+        height: 1;
+    }
+    StatusBar .combos {
+        color: $tui-text-dim;
+        text-align: right;
+        width: 1fr;
+        height: 1;
+    }
+    """
+
+    def __init__(self) -> None:
+        super().__init__()
+        self._activity = ActivityIndicator()
+        self._combos = Static(_COMBOS, classes="combos")
+
+    def compose(self) -> ComposeResult:
+        yield self._activity
+        yield self._combos
+
+    def activity_start(self, label: str) -> None:
+        self._activity.start(label)
+
+    def activity_label(self, label: str) -> None:
+        self._activity.set_label(label)
+
+    def activity_stop(self) -> None:
+        self._activity.stop()
\ No newline at end of file
diff --git a/tests/clients/test_tui_app.py b/tests/clients/test_tui_app.py
index 7f00d50..eb883d5 100644
--- a/tests/clients/test_tui_app.py
+++ b/tests/clients/test_tui_app.py
@@ -502,3 +502,68 @@
         # An error was surfaced to the chat panel.
         after_errors = sum(1 for it in chat._model.items if it.kind == "error")
         assert after_errors == before_errors + 1
+
+
+@pytest.mark.anyio
+async def test_activity_indicator_runs_during_turn() -> None:
+    """stream_start starts the spinner; stream_end stops it."""
+    async with NaviCodeTui(new_session=True).run_test() as pilot:
+        await pilot.pause()
+        status_bar = pilot.app.query_one("StatusBar")
+        activity = status_bar._activity
+
+        assert activity._active is False
+
+        pilot.app.on_ws_event(WsEvent({"type": "stream_start"}))
+        await pilot.pause()
+        assert activity._active is True
+        assert activity._label == "thinking"
+
+        pilot.app.on_ws_event(WsEvent({"type": "stream_end", "content": ""}))
+        await pilot.pause()
+        assert activity._active is False
+        assert activity._label == ""
+
+
+@pytest.mark.anyio
+async def test_activity_indicator_phase_label_reflects_events() -> None:
+    """The spinner label tracks the current stage as WS events arrive."""
+    async with NaviCodeTui(new_session=True).run_test() as pilot:
+        await pilot.pause()
+        status_bar = pilot.app.query_one("StatusBar")
+        activity = status_bar._activity
+
+        pilot.app.on_ws_event(WsEvent({"type": "stream_start"}))
+        await pilot.pause()
+        assert activity._label == "thinking"
+
+        pilot.app.on_ws_event(WsEvent({"type": "planning_status", "phase": 1, "label": "Analysis", "is_subagent": False}))
+        await pilot.pause()
+        assert activity._label == "planning"
+
+        pilot.app.on_ws_event(WsEvent({"type": "stream_delta", "delta": "hi"}))
+        await pilot.pause()
+        assert activity._label == "responding"
+
+        pilot.app.on_ws_event(WsEvent({"type": "tool_started", "tool": "filesystem", "args": {}}))
+        await pilot.pause()
+        assert activity._label == "running filesystem"
+
+
+@pytest.mark.anyio
+async def test_activity_indicator_stops_on_disconnect() -> None:
+    """A dropped connection stops the spinner (no stream_end will arrive)."""
+    from clients.terminal.tui.events import ConnectionStatusChanged
+
+    async with NaviCodeTui(new_session=True).run_test() as pilot:
+        await pilot.pause()
+        status_bar = pilot.app.query_one("StatusBar")
+        activity = status_bar._activity
+
+        pilot.app.on_ws_event(WsEvent({"type": "stream_start"}))
+        await pilot.pause()
+        assert activity._active is True
+
+        pilot.app.post_message(ConnectionStatusChanged(connected=False, detail=""))
+        await pilot.pause()
+        assert activity._active is False