diff --git a/frontend/src/assets/css/terminal.css b/frontend/src/assets/css/terminal.css
index 2e67ee6..c4ff062 100644
--- a/frontend/src/assets/css/terminal.css
+++ b/frontend/src/assets/css/terminal.css
@@ -10,7 +10,6 @@
 
 .terminal-container .xterm {
   height: 100%;
-  padding: 4px;
 }
 
 .terminal-container .xterm-viewport {
diff --git a/internal/ssh/service.go b/internal/ssh/service.go
index db81178..723530e 100644
--- a/internal/ssh/service.go
+++ b/internal/ssh/service.go
@@ -142,23 +142,10 @@ func (s *SSHService) Connect(hostname string, port int, username string, authMet
 	// Launch goroutine to read stdout and forward data via the output handler
 	go s.readLoop(sessionID, stdout)
 
-	// Inject shell integration for CWD tracking (OSC 7).
-	// Uses stty -echo to suppress the command from appearing in the terminal,
-	// then restores echo. A leading space keeps it out of shell history.
-	go func() {
-		time.Sleep(500 * time.Millisecond)
-		// Suppress echo, set PROMPT_COMMAND for bash (zsh uses precmd),
-		// restore echo, then clear the current line so no visual artifact remains.
-		injection := " stty -echo 2>/dev/null; " +
-			ShellIntegrationCommand("bash") + "; " +
-			"if [ -n \"$ZSH_VERSION\" ]; then " + ShellIntegrationCommand("zsh") + "; fi; " +
-			"stty echo 2>/dev/null\n"
-		sshSession.mu.Lock()
-		if sshSession.Stdin != nil {
-			_, _ = sshSession.Stdin.Write([]byte(injection))
-		}
-		sshSession.mu.Unlock()
-	}()
+	// CWD tracking disabled — ProcessOutput() in the readLoop was corrupting
+	// ANSI escape sequences when OSC 7 sequences split across read boundaries.
+	// CWD following will be re-implemented via a separate SSH exec channel
+	// that doesn't touch the terminal data stream.
 
 	return sessionID, nil
 }
@@ -216,32 +203,13 @@ func (s *SSHService) buildHostKeyCallback(hostname string, port int) ssh.HostKey
 // (stripping OSC 7 sequences), and calls the output handler with cleaned data.
 // It stops when the reader returns an error (typically EOF when the session closes).
 func (s *SSHService) readLoop(sessionID string, reader io.Reader) {
-	// Grab the CWD tracker for this session (if any)
-	s.mu.RLock()
-	sess := s.sessions[sessionID]
-	s.mu.RUnlock()
-
 	buf := make([]byte, 32*1024)
 	for {
 		n, err := reader.Read(buf)
-		if n > 0 {
+		if n > 0 && s.outputHandler != nil {
 			data := make([]byte, n)
 			copy(data, buf[:n])
-
-			// Process CWD tracking — strips OSC 7 sequences from output
-			if sess != nil && sess.CWDTracker != nil {
-				cleaned, newCWD := sess.CWDTracker.ProcessOutput(data)
-				data = cleaned
-
-				// Emit CWD change event if a new path was detected
-				if newCWD != "" && s.cwdHandler != nil {
-					s.cwdHandler(sessionID, newCWD)
-				}
-			}
-
-			if len(data) > 0 && s.outputHandler != nil {
-				s.outputHandler(sessionID, data)
-			}
+			s.outputHandler(sessionID, data)
 		}
 		if err != nil {
 			break