diff --git a/apps/x/apps/renderer/src/App.tsx b/apps/x/apps/renderer/src/App.tsx
index 712d5e0a..1d99df14 100644
--- a/apps/x/apps/renderer/src/App.tsx
+++ b/apps/x/apps/renderer/src/App.tsx
@@ -36,6 +36,7 @@ import {
 import { Reasoning, ReasoningContent, ReasoningTrigger } from '@/components/ai-elements/reasoning';
 import { Shimmer } from '@/components/ai-elements/shimmer';
 import { Tool, ToolContent, ToolHeader, ToolInput, ToolOutput } from '@/components/ai-elements/tool';
+import { ToolActivity, type ToolActivityItem } from '@/components/ai-elements/tool-activity';
 import { PermissionRequest } from '@/components/ai-elements/permission-request';
 import { AskHumanRequest } from '@/components/ai-elements/ask-human-request';
 import { Suggestions } from '@/components/ai-elements/suggestions';
@@ -52,6 +53,7 @@ import { OnboardingModal } from '@/components/onboarding-modal'
 import { BackgroundTaskDetail } from '@/components/background-task-detail'
 import { FileCardProvider } from '@/contexts/file-card-context'
 import { MarkdownPreOverride } from '@/components/ai-elements/markdown-code-override'
+import { getToolDisplay, getToolGroupTitle } from '@/components/ai-elements/tool-display'
 import { AgentScheduleConfig } from '@x/shared/dist/agent-schedule.js'
 import { AgentScheduleState } from '@x/shared/dist/agent-schedule-state.js'
 
@@ -2037,19 +2039,21 @@ function App() {
       )
     }
 
-    if (isToolCall(item)) {
-      const errorText = item.status === 'error' ? 'Tool error' : ''
-      const output = normalizeToolOutput(item.result, item.status)
-      const input = normalizeToolInput(item.input)
-      return (
-        <Tool key={item.id}>
-          <ToolHeader
-            title={item.name}
-            type={`tool-${item.name}`}
-            state={toToolState(item.status)}
-          />
-          <ToolContent>
-            <ToolInput input={input} />
+	    if (isToolCall(item)) {
+	      const errorText = item.status === 'error' ? 'Tool error' : ''
+	      const output = normalizeToolOutput(item.result, item.status)
+	      const input = normalizeToolInput(item.input)
+	      const display = getToolDisplay(item.name)
+	      return (
+	        <Tool key={item.id}>
+	          <ToolHeader
+	            title={display.title}
+	            subtitle={display.subtitle}
+	            type={`tool-${item.name}`}
+	            state={toToolState(item.status)}
+	          />
+	          <ToolContent>
+	            <ToolInput input={input} />
             {output !== null ? (
               <ToolOutput output={output} errorText={errorText} />
             ) : null}
@@ -2085,6 +2089,84 @@ function App() {
     ? backgroundTasks.find(t => t.name === selectedBackgroundTask)
     : null
 
+  const renderedConversationItems = (() => {
+    const nodes: React.ReactNode[] = []
+
+    const toActivityItem = (toolCall: ToolCall): ToolActivityItem => {
+      const display = getToolDisplay(toolCall.name)
+      const errorText = toolCall.status === 'error' ? 'Tool error' : ''
+      return {
+        id: toolCall.id,
+        title: display.title,
+        subtitle: display.subtitle,
+        state: toToolState(toolCall.status),
+        input: normalizeToolInput(toolCall.input),
+        output: normalizeToolOutput(toolCall.result, toolCall.status) as ToolUIPart['output'],
+        errorText,
+      }
+    }
+
+    for (let i = 0; i < conversation.length; i++) {
+      const item = conversation[i]
+
+      // Group consecutive tool calls into a single compact "activity" block when there are no permission prompts.
+      if (isToolCall(item) && !allPermissionRequests.get(item.id)) {
+        const group: ToolCall[] = [item]
+        let j = i + 1
+        while (
+          j < conversation.length
+          && isToolCall(conversation[j])
+          && !allPermissionRequests.get((conversation[j] as ToolCall).id)
+        ) {
+          group.push(conversation[j] as ToolCall)
+          j += 1
+        }
+
+        if (group.length > 1) {
+          const titles = group.map((t) => getToolDisplay(t.name).title).join(' · ')
+          nodes.push(
+            <ToolActivity
+              key={`tool-activity-${group[0].id}`}
+              title={getToolGroupTitle(group.map((t) => t.name))}
+              items={group.map(toActivityItem)}
+              summary={titles}
+            />
+          )
+          i = j - 1
+          continue
+        }
+      }
+
+      const rendered = renderConversationItem(item)
+      if (!rendered) continue
+
+      // If this is a tool call, check for permission request (pending or responded)
+      if (isToolCall(item)) {
+        const permRequest = allPermissionRequests.get(item.id)
+        if (permRequest) {
+          const response = permissionResponses.get(item.id) || null
+          nodes.push(
+            <React.Fragment key={item.id}>
+              {rendered}
+              <PermissionRequest
+                toolCall={permRequest.toolCall}
+                onApprove={() => handlePermissionResponse(permRequest.toolCall.toolCallId, permRequest.subflow, 'approve')}
+                onDeny={() => handlePermissionResponse(permRequest.toolCall.toolCallId, permRequest.subflow, 'deny')}
+                isProcessing={isProcessing}
+                response={response}
+              />
+            </React.Fragment>
+          )
+          continue
+        }
+      }
+
+      nodes.push(rendered)
+    }
+
+    return nodes
+  })()
+
   return (
     <TooltipProvider delayDuration={0}>
       <SidebarSectionProvider defaultSection="tasks" onSectionChange={handleSectionChange}>
@@ -2228,35 +2310,13 @@ function App() {
                           What are we working on?
                         </div>
                       </ConversationEmptyState>
-                    ) : (
-                      <>
-                        {conversation.map(item => {
-                          const rendered = renderConversationItem(item)
-                          // If this is a tool call, check for permission request (pending or responded)
-                          if (isToolCall(item)) {
-                            const permRequest = allPermissionRequests.get(item.id)
-                            if (permRequest) {
-                              const response = permissionResponses.get(item.id) || null
-                              return (
-                                <React.Fragment key={item.id}>
-                                  {rendered}
-                                  <PermissionRequest
-                                    toolCall={permRequest.toolCall}
-                                    onApprove={() => handlePermissionResponse(permRequest.toolCall.toolCallId, permRequest.subflow, 'approve')}
-                                    onDeny={() => handlePermissionResponse(permRequest.toolCall.toolCallId, permRequest.subflow, 'deny')}
-                                    isProcessing={isProcessing}
-                                    response={response}
-                                  />
-                                </React.Fragment>
-                              )
-                            }
-                          }
-                          return rendered
-                        })}
+	                    ) : (
+	                      <>
+	                        {renderedConversationItems}
 
-                        {/* Render pending ask-human requests */}
-                        {Array.from(pendingAskHumanRequests.values()).map((request) => (
-                          <AskHumanRequest
+	                        {/* Render pending ask-human requests */}
+	                        {Array.from(pendingAskHumanRequests.values()).map((request) => (
+	                          <AskHumanRequest
                             key={request.toolCallId}
                             query={request.query}
                             onResponse={(response) => handleAskHumanResponse(request.toolCallId, request.subflow, response)}
diff --git a/apps/x/apps/renderer/src/components/ai-elements/tool-activity.tsx b/apps/x/apps/renderer/src/components/ai-elements/tool-activity.tsx
new file mode 100644
index 00000000..ba9a407c
--- /dev/null
+++ b/apps/x/apps/renderer/src/components/ai-elements/tool-activity.tsx
@@ -0,0 +1,107 @@
+"use client";
+
+import { Badge } from "@/components/ui/badge";
+import {
+  Collapsible,
+  CollapsibleContent,
+  CollapsibleTrigger,
+} from "@/components/ui/collapsible";
+import { cn } from "@/lib/utils";
+import type { ToolUIPart } from "ai";
+import { ChevronDownIcon, WrenchIcon } from "lucide-react";
+import type { ReactNode } from "react";
+
+import { ToolInput, ToolOutput, ToolStatusBadge, type ToolStatus } from "@/components/ai-elements/tool";
+
+export type ToolActivityItem = {
+  id: string;
+  title: string;
+  subtitle?: string;
+  state: ToolStatus;
+  input: ToolUIPart["input"];
+  output: ToolUIPart["output"];
+  errorText: ToolUIPart["errorText"];
+};
+
+function getGroupState(items: ToolActivityItem[]): ToolStatus {
+  const states = items.map((i) => i.state);
+
+  if (states.includes("output-error")) return "output-error";
+  if (states.includes("output-denied")) return "output-denied";
+  if (states.includes("approval-requested")) return "approval-requested";
+  if (states.includes("input-available")) return "input-available";
+  if (states.includes("input-streaming")) return "input-streaming";
+  if (states.includes("approval-responded")) return "approval-responded";
+  return "output-available";
+}
+
+export type ToolActivityProps = {
+  title: string;
+  items: ToolActivityItem[];
+  className?: string;
+  defaultOpen?: boolean;
+  summary?: ReactNode;
+};
+
+export function ToolActivity({
+  title,
+  items,
+  className,
+  defaultOpen = false,
+  summary,
+}: ToolActivityProps) {
+  const groupState = getGroupState(items);
+
+  return (
+    <Collapsible
+      defaultOpen={defaultOpen}
+      className={cn("not-prose mb-2 w-full rounded-md border bg-background/50", className)}
+    >
+      <CollapsibleTrigger className="group flex w-full items-center justify-between gap-4 p-3">
+        <div className="flex min-w-0 items-center gap-2">
+          <WrenchIcon className="size-4 text-muted-foreground" />
+          <div className="min-w-0">
+            <div className="flex min-w-0 items-center gap-2">
+              <span className="min-w-0 truncate font-medium text-sm">{title}</span>
+              <Badge variant="secondary" className="rounded-full text-xs">
+                {items.length} step{items.length === 1 ? "" : "s"}
+              </Badge>
+              <ToolStatusBadge status={groupState} />
+            </div>
+            {summary ? (
+              <div className="mt-0.5 text-xs text-muted-foreground truncate">{summary}</div>
+            ) : null}
+          </div>
+        </div>
+        <ChevronDownIcon className="size-4 text-muted-foreground transition-transform group-data-[state=open]:rotate-180" />
+      </CollapsibleTrigger>
+
+      <CollapsibleContent className="border-t">
+        <div className="divide-y">
+          {items.map((item) => (
+            <Collapsible key={item.id} className="w-full">
+              <CollapsibleTrigger className="group flex w-full items-center justify-between gap-3 px-3 py-2 hover:bg-muted/30">
+                <div className="min-w-0">
+                  <div className="min-w-0 truncate text-sm">{item.title}</div>
+                  {item.subtitle ? (
+                    <div className="mt-0.5 min-w-0 truncate text-xs text-muted-foreground font-mono">
+                      {item.subtitle}
+                    </div>
+                  ) : null}
+                </div>
+                <div className="flex shrink-0 items-center gap-2">
+                  <ToolStatusBadge status={item.state} />
+                  <ChevronDownIcon className="size-4 text-muted-foreground transition-transform group-data-[state=open]:rotate-180" />
+                </div>
+              </CollapsibleTrigger>
+              <CollapsibleContent className="bg-background">
+                <ToolInput input={item.input ?? {}} className="p-3" />
+                <ToolOutput output={item.output} errorText={item.errorText} className="p-3 pt-0" />
+              </CollapsibleContent>
+            </Collapsible>
+          ))}
+        </div>
+      </CollapsibleContent>
+    </Collapsible>
+  );
+}
diff --git a/apps/x/apps/renderer/src/components/ai-elements/tool-display.ts b/apps/x/apps/renderer/src/components/ai-elements/tool-display.ts
new file mode 100644
index 00000000..6ef327d5
--- /dev/null
+++ b/apps/x/apps/renderer/src/components/ai-elements/tool-display.ts
@@ -0,0 +1,95 @@
+export type ToolDisplay = {
+  title: string
+  subtitle?: string
+}
+
+const SPECIAL_TITLES: Record<string, string> = {
+  loadSkill: 'Understanding MCP tools',
+  listMcpServers: 'Listing MCP servers',
+  listMcpTools: 'Listing MCP tools',
+  listMcpResources: 'Listing MCP resources',
+  listMcpResourceTemplates: 'Listing MCP resource templates',
+  readMcpResource: 'Reading MCP resource',
+}
+
+function toWords(name: string): string[] {
+  if (!name) return []
+
+  // Split on separators first (workspace:readFile, runs:list, etc.)
+  const normalized = name
+    .replace(/[:/_.-]+/g, ' ')
+    .trim()
+
+  const parts: string[] = []
+  for (const token of normalized.split(/\s+/)) {
+    // Split camelCase/PascalCase within each token
+    const camel = token
+      .replace(/([a-z0-9])([A-Z])/g, '$1 $2')
+      .replace(/([A-Z]+)([A-Z][a-z])/g, '$1 $2')
+    parts.push(...camel.split(/\s+/).filter(Boolean))
+  }
+
+  return parts
+}
+
+function titleCase(words: string[]): string {
+  const acronyms = new Set(['mcp', 'url', 'id', 'api', 'ipc', 'json'])
+  return words
+    .map((w) => {
+      const lower = w.toLowerCase()
+      if (acronyms.has(lower)) return lower.toUpperCase()
+      if (w.length <= 1) return w.toUpperCase()
+      return w[0].toUpperCase() + w.slice(1)
+    })
+    .join(' ')
+}
+
+function verbToGerund(verb: string): string {
+  const lower = verb.toLowerCase()
+  const irregular: Record<string, string> = {
+    run: 'Running',
+    get: 'Getting',
+    set: 'Setting',
+    list: 'Listing',
+    load: 'Loading',
+    read: 'Reading',
+    write: 'Writing',
+    create: 'Creating',
+    update: 'Updating',
+    delete: 'Deleting',
+    remove: 'Removing',
+    rename: 'Renaming',
+    open: 'Opening',
+    close: 'Closing',
+    toggle: 'Toggling',
+    fetch: 'Fetching',
+    search: 'Searching',
+    provide: 'Providing',
+  }
+  if (irregular[lower]) return irregular[lower]
+  return titleCase([lower + 'ing'])
+}
+
+export function getToolDisplay(name: string): ToolDisplay {
+  const special = SPECIAL_TITLES[name]
+  if (special) return { title: special, subtitle: name }
+
+  const words = toWords(name)
+  if (words.length === 0) return { title: 'Tool', subtitle: name }
+
+  const [first, ...rest] = words
+  const title =
+    rest.length > 0
+      ? `${verbToGerund(first)} ${titleCase(rest).replace(/\s+/g, ' ')}`
+      : titleCase(words)
+
+  return { title, subtitle: name }
+}
+
+export function getToolGroupTitle(toolNames: string[]): string {
+  const joined = toolNames.join(' ')
+  if (/mcp/i.test(joined)) return 'MCP activity'
+  if (toolNames.some((n) => /search/i.test(n))) return 'Search activity'
+  return 'Tool activity'
+}
+
diff --git a/apps/x/apps/renderer/src/components/ai-elements/tool.tsx b/apps/x/apps/renderer/src/components/ai-elements/tool.tsx
index d9453aa1..c215e804 100644
--- a/apps/x/apps/renderer/src/components/ai-elements/tool.tsx
+++ b/apps/x/apps/renderer/src/components/ai-elements/tool.tsx
@@ -49,23 +49,31 @@ export type ToolProps = ComponentProps<typeof Collapsible>;
 
 export const Tool = ({ className, ...props }: ToolProps) => (
   <Collapsible
-    className={cn("not-prose mb-4 w-full rounded-md border", className)}
+    className={cn("not-prose mb-2 w-full rounded-md border", className)}
     {...props}
   />
 );
 
+// AI SDK v5's ToolUIPart["state"] is narrower than what we want to render in the UI.
+// Keep this type permissive so we can display additional states when present.
+export type ToolStatus =
+  | ToolUIPart["state"]
+  | "approval-requested"
+  | "approval-responded"
+  | "output-denied";
+
 export type ToolHeaderProps = {
   title?: string;
+  subtitle?: string;
   type: ToolUIPart["type"];
-  state: ToolUIPart["state"];
+  state: ToolStatus;
   className?: string;
 };
 
-const getStatusBadge = (status: ToolUIPart["state"]) => {
-  const labels: Record<ToolUIPart["state"], string> = {
+export const ToolStatusBadge = ({ status }: { status: ToolStatus }) => {
+  const labels: Record<ToolStatus, string> = {
     "input-streaming": "Pending",
     "input-available": "Running",
-    // @ts-expect-error state only available in AI SDK v6
     "approval-requested": "Awaiting Approval",
     "approval-responded": "Responded",
     "output-available": "Completed",
@@ -73,10 +81,9 @@ const getStatusBadge = (status: ToolUIPart["state"]) => {
     "output-denied": "Denied",
   };
 
-  const icons: Record<ToolUIPart["state"], ReactNode> = {
+  const icons: Record<ToolStatus, ReactNode> = {
     "input-streaming": <CircleIcon className="size-4" />,
     "input-available": <ClockIcon className="size-4 animate-pulse" />,
-    // @ts-expect-error state only available in AI SDK v6
     "approval-requested": <ClockIcon className="size-4 text-yellow-600" />,
     "approval-responded": <CheckCircleIcon className="size-4 text-blue-600" />,
     "output-available": <CheckCircleIcon className="size-4 text-green-600" />,
@@ -95,23 +102,33 @@ const getStatusBadge = (status: ToolUIPart["state"]) => {
 export const ToolHeader = ({
   className,
   title,
+  subtitle,
   type,
   state,
   ...props
 }: ToolHeaderProps) => (
   <CollapsibleTrigger
     className={cn(
-      "flex w-full items-center justify-between gap-4 p-3",
+      "group flex w-full items-center justify-between gap-4 p-3",
       className
     )}
     {...props}
   >
     <div className="flex items-center gap-2">
       <WrenchIcon className="size-4 text-muted-foreground" />
-      <span className="font-medium text-sm">
-        {title ?? type.split("-").slice(1).join("-")}
-      </span>
-      {getStatusBadge(state)}
+      <div className="min-w-0">
+        <div className="flex min-w-0 items-center gap-2">
+          <span className="min-w-0 truncate font-medium text-sm">
+            {title ?? type.split("-").slice(1).join("-")}
+          </span>
+          <ToolStatusBadge status={state} />
+        </div>
+        {subtitle ? (
+          <div className="mt-0.5 text-xs text-muted-foreground font-mono truncate">
+            {subtitle}
+          </div>
+        ) : null}
+      </div>
     </div>
     <ChevronDownIcon className="size-4 text-muted-foreground transition-transform group-data-[state=open]:rotate-180" />
   </CollapsibleTrigger>
diff --git a/apps/x/apps/renderer/src/components/chat-sidebar.tsx b/apps/x/apps/renderer/src/components/chat-sidebar.tsx
index e0048781..cb5840ca 100644
--- a/apps/x/apps/renderer/src/components/chat-sidebar.tsx
+++ b/apps/x/apps/renderer/src/components/chat-sidebar.tsx
@@ -22,6 +22,8 @@ import {
 import { Reasoning, ReasoningContent, ReasoningTrigger } from '@/components/ai-elements/reasoning'
 import { Shimmer } from '@/components/ai-elements/shimmer'
 import { Tool, ToolContent, ToolHeader, ToolInput, ToolOutput } from '@/components/ai-elements/tool'
+import { ToolActivity, type ToolActivityItem } from '@/components/ai-elements/tool-activity'
+import { getToolDisplay, getToolGroupTitle } from '@/components/ai-elements/tool-display'
 import { PermissionRequest } from '@/components/ai-elements/permission-request'
 import { AskHumanRequest } from '@/components/ai-elements/ask-human-request'
 import { Suggestions } from '@/components/ai-elements/suggestions'
@@ -410,10 +412,12 @@ export function ChatSidebar({
       const errorText = item.status === 'error' ? 'Tool error' : ''
       const output = normalizeToolOutput(item.result, item.status)
       const input = normalizeToolInput(item.input)
+      const display = getToolDisplay(item.name)
       return (
         <Tool key={item.id}>
           <ToolHeader
-            title={item.name}
+            title={display.title}
+            subtitle={display.subtitle}
             type={`tool-${item.name}`}
             state={toToolState(item.status)}
           />
@@ -439,6 +443,85 @@ export function ChatSidebar({
     return null
   }
 
+  const renderedConversationItems = (() => {
+    const nodes: React.ReactNode[] = []
+
+    const toActivityItem = (toolCall: ToolCall): ToolActivityItem => {
+      const display = getToolDisplay(toolCall.name)
+      const errorText = toolCall.status === 'error' ? 'Tool error' : ''
+      return {
+        id: toolCall.id,
+        title: display.title,
+        subtitle: display.subtitle,
+        state: toToolState(toolCall.status),
+        input: normalizeToolInput(toolCall.input),
+        output: normalizeToolOutput(toolCall.result, toolCall.status) as ToolUIPart['output'],
+        errorText,
+      }
+    }
+
+    for (let i = 0; i < conversation.length; i++) {
+      const item = conversation[i]
+
+      const hasPermissionPrompt = isToolCall(item) && onPermissionResponse && allPermissionRequests.get(item.id)
+
+      // Group consecutive tool calls into a single compact "activity" block when there are no permission prompts.
+      if (isToolCall(item) && !hasPermissionPrompt) {
+        const group: ToolCall[] = [item]
+        let j = i + 1
+        while (j < conversation.length && isToolCall(conversation[j])) {
+          const next = conversation[j] as ToolCall
+          const nextHasPrompt = onPermissionResponse && allPermissionRequests.get(next.id)
+          if (nextHasPrompt) break
+          group.push(next)
+          j += 1
+        }
+
+        if (group.length > 1) {
+          const titles = group.map((t) => getToolDisplay(t.name).title).join(' · ')
+          nodes.push(
+            <ToolActivity
+              key={`tool-activity-${group[0].id}`}
+              title={getToolGroupTitle(group.map((t) => t.name))}
+              items={group.map(toActivityItem)}
+              summary={titles}
+            />
+          )
+          i = j - 1
+          continue
+        }
+      }
+
+      const rendered = renderConversationItem(item)
+      if (!rendered) continue
+
+      // If this is a tool call, check for permission request (pending or responded)
+      if (isToolCall(item) && onPermissionResponse) {
+        const permRequest = allPermissionRequests.get(item.id)
+        if (permRequest) {
+          const response = permissionResponses.get(item.id) || null
+          nodes.push(
+            <React.Fragment key={item.id}>
+              {rendered}
+              <PermissionRequest
+                toolCall={permRequest.toolCall}
+                onApprove={() => onPermissionResponse(permRequest.toolCall.toolCallId, permRequest.subflow, 'approve')}
+                onDeny={() => onPermissionResponse(permRequest.toolCall.toolCallId, permRequest.subflow, 'deny')}
+                isProcessing={isProcessing}
+                response={response}
+              />
+            </React.Fragment>
+          )
+          continue
+        }
+      }
+
+      nodes.push(rendered)
+    }
+
+    return nodes
+  })()
+
   const displayWidth = isOpen ? width : 0
 
   return (
@@ -501,29 +584,7 @@ export function ChatSidebar({
               </ConversationEmptyState>
             ) : (
               <>
-                {conversation.map(item => {
-                  const rendered = renderConversationItem(item)
-                  // If this is a tool call, check for permission request (pending or responded)
-                  if (isToolCall(item) && onPermissionResponse) {
-                    const permRequest = allPermissionRequests.get(item.id)
-                    if (permRequest) {
-                      const response = permissionResponses.get(item.id) || null
-                      return (
-                        <React.Fragment key={item.id}>
-                          {rendered}
-                          <PermissionRequest
-                            toolCall={permRequest.toolCall}
-                            onApprove={() => onPermissionResponse(permRequest.toolCall.toolCallId, permRequest.subflow, 'approve')}
-                            onDeny={() => onPermissionResponse(permRequest.toolCall.toolCallId, permRequest.subflow, 'deny')}
-                            isProcessing={isProcessing}
-                            response={response}
-                          />
-                        </React.Fragment>
-                      )
-                    }
-                  }
-                  return rendered
-                })}
+                {renderedConversationItems}
 
                 {/* Render pending ask-human requests */}
                 {onAskHumanResponse && Array.from(pendingAskHumanRequests.values()).map((request) => (