diff --git a/packages/adapters/cursor-local/src/ui/parse-stdout.ts b/packages/adapters/cursor-local/src/ui/parse-stdout.ts
index 43e56d55e6..0ba02307cd 100644
--- a/packages/adapters/cursor-local/src/ui/parse-stdout.ts
+++ b/packages/adapters/cursor-local/src/ui/parse-stdout.ts
@@ -334,10 +334,15 @@ export function parseCursorStdoutLine(line: string, ts: string): TranscriptEntry
   }
 
   if (type === "text") {
+    // Streamed assistant text arrives as many small `text` events (often a token
+    // or word each). Tag them as deltas — without trimming, so inter-token
+    // whitespace is preserved — and let the render-time coalescer
+    // (appendTranscriptEntry) merge consecutive deltas into one assistant block.
+    // A tool_call/tool_result between deltas correctly breaks the run.
     const part = asRecord(parsed.part);
-    const text = asString(part?.text).trim();
+    const text = asString(part?.text);
     if (!text) return [];
-    return [{ kind: "assistant", ts, text }];
+    return [{ kind: "assistant", ts, text, delta: true }];
   }
 
   if (type === "tool_use") {
diff --git a/ui/src/adapters/cursor-coalescing.test.ts b/ui/src/adapters/cursor-coalescing.test.ts
new file mode 100644
index 0000000000..1181f67ac1
--- /dev/null
+++ b/ui/src/adapters/cursor-coalescing.test.ts
@@ -0,0 +1,78 @@
+import { describe, expect, it } from "vitest";
+import { parseCursorStdoutLine } from "@paperclipai/adapter-cursor-local/ui";
+import { parseCursorCloudStdoutLine } from "@paperclipai/adapter-cursor-cloud/ui";
+import { buildTranscript, type RunLogChunk } from "./transcript";
+
+const ts = "2026-06-23T12:00:00.000Z";
+
+function lines(...jsonLines: unknown[]): RunLogChunk[] {
+  return [{ ts, stream: "stdout", chunk: jsonLines.map((l) => JSON.stringify(l)).join("\n") + "\n" }];
+}
+
+// The canonical "nice view" shape both adapters must produce for the run:
+//   assistant text -> tool_call -> tool_result -> assistant text  (+ a separate result footer)
+// i.e. exactly two prose blocks with the tool between them, and zero duplication
+// of the streamed text into separate per-token bubbles or a re-rendered final.
+function assertCanonicalShape(entries: ReturnType<typeof buildTranscript>) {
+  const assistantTexts = entries.filter((e) => e.kind === "assistant").map((e) => (e as { text: string }).text);
+  expect(assistantTexts).toEqual(["Hello world", "Done"]);
+
+  expect(entries.filter((e) => e.kind === "tool_call")).toHaveLength(1);
+  expect(entries.filter((e) => e.kind === "tool_result")).toHaveLength(1);
+
+  const runShape = entries
+    .filter((e) => e.kind === "assistant" || e.kind === "tool_call" || e.kind === "tool_result")
+    .map((e) => e.kind);
+  expect(runShape).toEqual(["assistant", "tool_call", "tool_result", "assistant"]);
+}
+
+describe("cursor transcript coalescing (render-time projection)", () => {
+  it("cursor local: coalesces streamed text deltas into prose blocks, preserves tool boundary", () => {
+    // Six streamed `text` events (token/word granularity) around one tool call.
+    const chunks = lines(
+      { type: "text", part: { text: "Hello" } },
+      { type: "text", part: { text: " world" } },
+      { type: "tool_call", subtype: "started", call_id: "c1", tool_call: { shellToolCall: { args: { command: "ls" } } } },
+      {
+        type: "tool_call",
+        subtype: "completed",
+        call_id: "c1",
+        tool_call: { shellToolCall: { result: { success: { exitCode: 0, stdout: "file.txt" } } } },
+      },
+      { type: "text", part: { text: "Done" } },
+      { type: "result", subtype: "success", result: "Hello world\nDone", usage: { input_tokens: 1, output_tokens: 2 } },
+    );
+
+    const entries = buildTranscript(chunks, parseCursorStdoutLine);
+    assertCanonicalShape(entries);
+
+    // The consolidated final must not be re-rendered as a third prose block.
+    expect(entries.some((e) => e.kind === "result")).toBe(true);
+    expect(entries.filter((e) => e.kind === "assistant")).toHaveLength(2);
+  });
+
+  it("cursor local: preserves inter-token whitespace when coalescing deltas", () => {
+    const chunks = lines(
+      { type: "text", part: { text: "foo" } },
+      { type: "text", part: { text: " bar" } },
+      { type: "text", part: { text: " baz" } },
+    );
+    const entries = buildTranscript(chunks, parseCursorStdoutLine);
+    const assistantTexts = entries.filter((e) => e.kind === "assistant").map((e) => (e as { text: string }).text);
+    expect(assistantTexts).toEqual(["foo bar baz"]);
+  });
+
+  it("cursor cloud: SDK messages render as prose blocks with tool boundary, no duplication", () => {
+    const chunks = lines(
+      { type: "cursor_cloud.message", message: { type: "assistant", message: { content: [{ type: "text", text: "Hello world" }] } } },
+      { type: "cursor_cloud.message", message: { type: "tool_call", id: "c1", name: "bash", status: "running", args: { command: "ls" } } },
+      { type: "cursor_cloud.message", message: { type: "tool_call", id: "c1", name: "bash", status: "completed", result: { stdout: "file.txt" } } },
+      { type: "cursor_cloud.message", message: { type: "assistant", message: { content: [{ type: "text", text: "Done" }] } } },
+      { type: "cursor_cloud.result", status: "finished", result: "Hello world\nDone" },
+    );
+
+    const entries = buildTranscript(chunks, parseCursorCloudStdoutLine);
+    assertCanonicalShape(entries);
+    expect(entries.some((e) => e.kind === "result")).toBe(true);
+  });
+});