diff --git a/frontend/components/session/SessionContainer.vue b/frontend/components/session/SessionContainer.vue
new file mode 100644
index 0000000..093da27
--- /dev/null
+++ b/frontend/components/session/SessionContainer.vue
@@ -0,0 +1,57 @@
+<script setup lang="ts">
+import { useSessionStore } from '~/stores/session.store'
+
+const sessions = useSessionStore()
+
+// Sessions with pending-XXX IDs are mounting TerminalInstance which will get a real UUID.
+// SFTP sidebar only connects once we have a real (non-pending) backend session ID.
+function isRealSession(id: string) {
+  return !id.startsWith('pending-')
+}
+</script>
+
+<template>
+  <!-- Session container — always in DOM when sessions exist, uses v-show for persistence -->
+  <div v-if="sessions.hasSessions" class="absolute inset-0 flex flex-col z-10 bg-gray-950">
+    <!-- Tab bar -->
+    <TerminalTabs />
+
+    <!-- Session panels — v-show keeps terminal alive when switching tabs -->
+    <div class="flex-1 overflow-hidden relative">
+      <div
+        v-for="session in sessions.sessions"
+        :key="session.id"
+        v-show="session.id === sessions.activeSessionId"
+        class="absolute inset-0 flex"
+      >
+        <!-- SSH session: SFTP sidebar + terminal -->
+        <template v-if="session.protocol === 'ssh'">
+          <!-- SFTP sidebar only renders once we have a real backend sessionId -->
+          <SftpSidebar
+            v-if="isRealSession(session.id)"
+            :session-id="session.id"
+          />
+          <!-- Terminal — always renders, handles pending→real session ID transition internally -->
+          <div class="flex-1 overflow-hidden">
+            <TerminalInstance
+              :session-id="session.id"
+              :host-id="session.hostId"
+              :host-name="session.hostName"
+              :color="session.color"
+            />
+          </div>
+        </template>
+
+        <!-- RDP session placeholder (Phase 3) -->
+        <template v-else-if="session.protocol === 'rdp'">
+          <div class="flex-1 flex items-center justify-center text-gray-600">
+            RDP — Phase 3
+          </div>
+        </template>
+      </div>
+    </div>
+
+    <!-- Transfer status bar -->
+    <TransferStatus :transfers="[]" />
+  </div>
+</template>
diff --git a/frontend/components/session/SessionTab.vue b/frontend/components/session/SessionTab.vue
new file mode 100644
index 0000000..293b149
--- /dev/null
+++ b/frontend/components/session/SessionTab.vue
@@ -0,0 +1,45 @@
+<script setup lang="ts">
+defineProps<{
+  session: {
+    id: string
+    hostName: string
+    protocol: 'ssh' | 'rdp'
+    color: string | null
+    active: boolean
+  }
+  isActive: boolean
+}>()
+
+const emit = defineEmits<{
+  (e: 'activate'): void
+  (e: 'close'): void
+}>()
+</script>
+
+<template>
+  <button
+    @click="emit('activate')"
+    class="flex items-center gap-2 px-3 h-full text-sm shrink-0 border-r border-gray-800 transition-colors"
+    :class="isActive ? 'bg-gray-900 text-white' : 'bg-gray-950 text-gray-500 hover:text-gray-300 hover:bg-gray-900'"
+  >
+    <!-- Color dot -->
+    <span
+      class="w-2 h-2 rounded-full shrink-0"
+      :style="session.color ? `background-color: ${session.color}` : ''"
+      :class="!session.color ? 'bg-wraith-500' : ''"
+    />
+    <!-- Protocol badge -->
+    <span
+      class="text-xs font-mono uppercase px-1 rounded"
+      :class="session.protocol === 'rdp' ? 'text-orange-400 bg-orange-950' : 'text-wraith-400 bg-wraith-950'"
+    >{{ session.protocol }}</span>
+    <!-- Host name -->
+    <span class="max-w-[120px] truncate">{{ session.hostName }}</span>
+    <!-- Close -->
+    <button
+      @click.stop="emit('close')"
+      class="ml-1 text-gray-600 hover:text-red-400 text-xs leading-none"
+      title="Close session"
+    >&times;</button>
+  </button>
+</template>
diff --git a/frontend/components/sftp/FileEditor.vue b/frontend/components/sftp/FileEditor.vue
new file mode 100644
index 0000000..041c746
--- /dev/null
+++ b/frontend/components/sftp/FileEditor.vue
@@ -0,0 +1,107 @@
+<script setup lang="ts">
+import { ref, watch, onMounted, onBeforeUnmount } from 'vue'
+
+const props = defineProps<{
+  filePath: string
+  content: string
+}>()
+
+const emit = defineEmits<{
+  (e: 'save', path: string, content: string): void
+  (e: 'close'): void
+}>()
+
+const editorContainer = ref<HTMLElement | null>(null)
+const currentContent = ref(props.content)
+const isDirty = ref(false)
+let editor: any = null
+
+watch(() => props.content, (val) => {
+  currentContent.value = val
+  if (editor) {
+    editor.setValue(val)
+    isDirty.value = false
+  }
+})
+
+onMounted(async () => {
+  if (!editorContainer.value) return
+
+  // Monaco is browser-only and heavy — dynamic import
+  const monaco = await import('monaco-editor')
+
+  // Detect language from file extension
+  const ext = props.filePath.split('.').pop() || ''
+  const langMap: Record<string, string> = {
+    ts: 'typescript', js: 'javascript', json: 'json', py: 'python',
+    sh: 'shell', bash: 'shell', yml: 'yaml', yaml: 'yaml',
+    md: 'markdown', html: 'html', css: 'css', xml: 'xml',
+    go: 'go', rs: 'rust', rb: 'ruby', php: 'php',
+  }
+
+  editor = monaco.editor.create(editorContainer.value, {
+    value: props.content,
+    language: langMap[ext] || 'plaintext',
+    theme: 'vs-dark',
+    fontSize: 13,
+    fontFamily: "'JetBrains Mono', 'Fira Code', monospace",
+    minimap: { enabled: false },
+    scrollBeyondLastLine: false,
+    automaticLayout: true,
+  })
+
+  editor.onDidChangeModelContent(() => {
+    isDirty.value = editor.getValue() !== props.content
+  })
+
+  // Ctrl+S to save
+  editor.addCommand(monaco.KeyMod.CtrlCmd | monaco.KeyCode.KeyS, () => {
+    handleSave()
+  })
+})
+
+onBeforeUnmount(() => {
+  editor?.dispose()
+})
+
+function handleSave() {
+  if (editor) {
+    emit('save', props.filePath, editor.getValue())
+    isDirty.value = false
+  }
+}
+
+function handleClose() {
+  if (isDirty.value) {
+    if (!confirm('You have unsaved changes. Close anyway?')) return
+  }
+  emit('close')
+}
+</script>
+
+<template>
+  <div class="flex flex-col h-full bg-gray-900">
+    <!-- Editor toolbar -->
+    <div class="flex items-center justify-between px-3 py-1.5 bg-gray-800 border-b border-gray-700 shrink-0">
+      <div class="flex items-center gap-2">
+        <span class="text-xs text-gray-500 font-mono truncate max-w-xs">{{ filePath }}</span>
+        <span v-if="isDirty" class="text-xs text-amber-400">● unsaved</span>
+      </div>
+      <div class="flex items-center gap-2">
+        <button
+          @click="handleSave"
+          class="text-xs px-2 py-1 bg-wraith-600 hover:bg-wraith-700 text-white rounded"
+          :disabled="!isDirty"
+          :class="!isDirty ? 'opacity-40 cursor-default' : ''"
+        >Save</button>
+        <button
+          @click="handleClose"
+          class="text-xs px-2 py-1 bg-gray-700 hover:bg-gray-600 text-gray-300 rounded"
+        >Close</button>
+      </div>
+    </div>
+
+    <!-- Monaco editor mount point -->
+    <div ref="editorContainer" class="flex-1" />
+  </div>
+</template>
diff --git a/frontend/components/sftp/FileTree.vue b/frontend/components/sftp/FileTree.vue
new file mode 100644
index 0000000..1aef801
--- /dev/null
+++ b/frontend/components/sftp/FileTree.vue
@@ -0,0 +1,114 @@
+<script setup lang="ts">
+import { ref } from 'vue'
+
+interface FileEntry {
+  name: string
+  path: string
+  size: number
+  isDirectory: boolean
+  permissions: string
+  modified: string
+}
+
+const props = defineProps<{
+  entries: FileEntry[]
+  currentPath: string
+}>()
+
+const emit = defineEmits<{
+  (e: 'navigate', path: string): void
+  (e: 'openFile', path: string): void
+  (e: 'download', path: string): void
+  (e: 'delete', path: string): void
+  (e: 'rename', oldPath: string): void
+  (e: 'mkdir'): void
+}>()
+
+const contextMenu = ref<{ visible: boolean; x: number; y: number; entry: FileEntry | null }>({
+  visible: false,
+  x: 0,
+  y: 0,
+  entry: null,
+})
+
+function handleClick(entry: FileEntry) {
+  if (entry.isDirectory) {
+    emit('navigate', entry.path)
+  } else {
+    emit('openFile', entry.path)
+  }
+}
+
+function showContext(event: MouseEvent, entry: FileEntry) {
+  event.preventDefault()
+  contextMenu.value = { visible: true, x: event.clientX, y: event.clientY, entry }
+}
+
+function closeContext() {
+  contextMenu.value.visible = false
+}
+
+function formatSize(bytes: number): string {
+  if (bytes < 1024) return `${bytes} B`
+  if (bytes < 1024 * 1024) return `${(bytes / 1024).toFixed(1)} KB`
+  return `${(bytes / 1024 / 1024).toFixed(1)} MB`
+}
+</script>
+
+<template>
+  <div class="flex-1 overflow-y-auto text-sm" @click="closeContext">
+    <div
+      v-for="entry in entries"
+      :key="entry.path"
+      class="flex items-center gap-2 px-3 py-1 hover:bg-gray-800 cursor-pointer group"
+      @click="handleClick(entry)"
+      @contextmenu="showContext($event, entry)"
+    >
+      <!-- Icon -->
+      <span class="shrink-0 text-base">
+        {{ entry.isDirectory ? '📁' : '📄' }}
+      </span>
+      <!-- Name -->
+      <span class="flex-1 truncate" :class="entry.isDirectory ? 'text-wraith-300' : 'text-gray-300'">
+        {{ entry.name }}
+      </span>
+      <!-- Size (files only) -->
+      <span v-if="!entry.isDirectory" class="text-gray-600 text-xs shrink-0">
+        {{ formatSize(entry.size) }}
+      </span>
+    </div>
+
+    <p v-if="entries.length === 0" class="text-gray-600 text-center py-4 text-xs">
+      Empty directory
+    </p>
+  </div>
+
+  <!-- Context menu -->
+  <Teleport to="body">
+    <div
+      v-if="contextMenu.visible"
+      class="fixed z-50 bg-gray-800 border border-gray-700 rounded shadow-xl py-1 min-w-[140px] text-sm"
+      :style="{ left: contextMenu.x + 'px', top: contextMenu.y + 'px' }"
+      @click.stop
+    >
+      <button
+        v-if="!contextMenu.entry?.isDirectory"
+        class="w-full text-left px-3 py-1.5 hover:bg-gray-700 text-gray-300"
+        @click="emit('openFile', contextMenu.entry!.path); closeContext()"
+      >Open / Edit</button>
+      <button
+        class="w-full text-left px-3 py-1.5 hover:bg-gray-700 text-gray-300"
+        @click="emit('download', contextMenu.entry!.path); closeContext()"
+      >Download</button>
+      <button
+        class="w-full text-left px-3 py-1.5 hover:bg-gray-700 text-gray-300"
+        @click="emit('rename', contextMenu.entry!.path); closeContext()"
+      >Rename</button>
+      <div class="border-t border-gray-700 my-1" />
+      <button
+        class="w-full text-left px-3 py-1.5 hover:bg-gray-700 text-red-400"
+        @click="emit('delete', contextMenu.entry!.path); closeContext()"
+      >Delete</button>
+    </div>
+  </Teleport>
+</template>
diff --git a/frontend/components/sftp/SftpSidebar.vue b/frontend/components/sftp/SftpSidebar.vue
new file mode 100644
index 0000000..8ef9af0
--- /dev/null
+++ b/frontend/components/sftp/SftpSidebar.vue
@@ -0,0 +1,193 @@
+<script setup lang="ts">
+import { ref, computed, onMounted } from 'vue'
+import { useSftp } from '~/composables/useSftp'
+
+const props = defineProps<{
+  sessionId: string | null
+}>()
+
+const sessionIdRef = computed(() => props.sessionId)
+const {
+  entries, currentPath, fileContent,
+  connect, disconnect, list, readFile, writeFile, mkdir, rename, remove, download,
+} = useSftp(sessionIdRef)
+
+const width = ref(260) // resizable sidebar width in px
+const isDragging = ref(false)
+const newFolderName = ref('')
+const showNewFolderInput = ref(false)
+const renameTarget = ref<string | null>(null)
+const renameTo = ref('')
+
+onMounted(() => {
+  connect()
+  list('/')
+})
+
+function navigateTo(path: string) {
+  list(path)
+}
+
+function goUp() {
+  const parts = currentPath.value.split('/').filter(Boolean)
+  parts.pop()
+  list(parts.length ? '/' + parts.join('/') : '/')
+}
+
+function handleOpenFile(path: string) {
+  readFile(path)
+}
+
+function handleSave(path: string, content: string) {
+  writeFile(path, content)
+}
+
+function handleDelete(path: string) {
+  if (confirm(`Delete ${path}?`)) {
+    remove(path)
+    list(currentPath.value)
+  }
+}
+
+function handleRename(oldPath: string) {
+  renameTarget.value = oldPath
+  renameTo.value = oldPath.split('/').pop() || ''
+}
+
+function confirmRename() {
+  if (!renameTarget.value || !renameTo.value) return
+  const dir = renameTarget.value.split('/').slice(0, -1).join('/')
+  rename(renameTarget.value, `${dir}/${renameTo.value}`)
+  renameTarget.value = null
+  list(currentPath.value)
+}
+
+function createFolder() {
+  if (!newFolderName.value) return
+  mkdir(`${currentPath.value === '/' ? '' : currentPath.value}/${newFolderName.value}`)
+  newFolderName.value = ''
+  showNewFolderInput.value = false
+  list(currentPath.value)
+}
+
+function startResize(event: MouseEvent) {
+  isDragging.value = true
+  const startX = event.clientX
+  const startWidth = width.value
+
+  const onMove = (e: MouseEvent) => {
+    width.value = Math.max(180, Math.min(480, startWidth + (e.clientX - startX)))
+  }
+  const onUp = () => {
+    isDragging.value = false
+    window.removeEventListener('mousemove', onMove)
+    window.removeEventListener('mouseup', onUp)
+  }
+  window.addEventListener('mousemove', onMove)
+  window.addEventListener('mouseup', onUp)
+}
+
+// Breadcrumb segments from currentPath
+const breadcrumbs = computed(() => {
+  const parts = currentPath.value.split('/').filter(Boolean)
+  return [
+    { name: '/', path: '/' },
+    ...parts.map((part, i) => ({
+      name: part,
+      path: '/' + parts.slice(0, i + 1).join('/'),
+    })),
+  ]
+})
+</script>
+
+<template>
+  <div class="flex h-full" :style="{ width: width + 'px' }">
+    <div class="flex flex-col h-full bg-gray-900 border-r border-gray-800 overflow-hidden flex-1">
+      <!-- Toolbar -->
+      <div class="px-2 py-1.5 border-b border-gray-800 shrink-0">
+        <!-- Breadcrumbs -->
+        <div class="flex items-center gap-1 text-xs text-gray-500 overflow-x-auto mb-1">
+          <button
+            v-for="(crumb, i) in breadcrumbs"
+            :key="crumb.path"
+            class="hover:text-wraith-400 shrink-0"
+            @click="navigateTo(crumb.path)"
+          >{{ crumb.name }}</button>
+          <template v-if="breadcrumbs.length > 1">
+            <span v-for="(_, i) in breadcrumbs.slice(1)" :key="i" class="text-gray-700">/</span>
+          </template>
+        </div>
+        <!-- Actions -->
+        <div class="flex items-center gap-1">
+          <button
+            v-if="currentPath !== '/'"
+            @click="goUp"
+            class="text-xs text-gray-500 hover:text-gray-300 px-1.5 py-0.5 rounded hover:bg-gray-800"
+            title="Go up"
+          >↑ Up</button>
+          <button
+            @click="list(currentPath)"
+            class="text-xs text-gray-500 hover:text-gray-300 px-1.5 py-0.5 rounded hover:bg-gray-800"
+            title="Refresh"
+          >⟳</button>
+          <button
+            @click="showNewFolderInput = !showNewFolderInput"
+            class="text-xs text-gray-500 hover:text-wraith-400 px-1.5 py-0.5 rounded hover:bg-gray-800"
+            title="New folder"
+          >+ Folder</button>
+        </div>
+        <!-- New folder input -->
+        <div v-if="showNewFolderInput" class="flex gap-1 mt-1">
+          <input
+            v-model="newFolderName"
+            class="flex-1 text-xs bg-gray-800 border border-gray-700 rounded px-1.5 py-0.5 text-white"
+            placeholder="Folder name"
+            @keyup.enter="createFolder"
+            autofocus
+          />
+          <button @click="createFolder" class="text-xs text-wraith-400 hover:text-wraith-300">OK</button>
+          <button @click="showNewFolderInput = false" class="text-xs text-gray-500">✕</button>
+        </div>
+        <!-- Rename input -->
+        <div v-if="renameTarget" class="flex gap-1 mt-1">
+          <input
+            v-model="renameTo"
+            class="flex-1 text-xs bg-gray-800 border border-gray-700 rounded px-1.5 py-0.5 text-white"
+            placeholder="New name"
+            @keyup.enter="confirmRename"
+            autofocus
+          />
+          <button @click="confirmRename" class="text-xs text-wraith-400 hover:text-wraith-300">OK</button>
+          <button @click="renameTarget = null" class="text-xs text-gray-500">✕</button>
+        </div>
+      </div>
+
+      <!-- File tree area — either editor or directory listing -->
+      <template v-if="fileContent">
+        <FileEditor
+          :file-path="fileContent.path"
+          :content="fileContent.content"
+          @save="handleSave"
+          @close="fileContent = null"
+        />
+      </template>
+      <template v-else>
+        <FileTree
+          :entries="entries"
+          :current-path="currentPath"
+          @navigate="navigateTo"
+          @open-file="handleOpenFile"
+          @download="download"
+          @delete="handleDelete"
+          @rename="handleRename"
+        />
+      </template>
+    </div>
+
+    <!-- Resize handle -->
+    <div
+      class="w-1 bg-transparent hover:bg-wraith-500 cursor-col-resize transition-colors shrink-0"
+      @mousedown="startResize"
+    />
+  </div>
+</template>
diff --git a/frontend/components/sftp/TransferStatus.vue b/frontend/components/sftp/TransferStatus.vue
new file mode 100644
index 0000000..3db7ab6
--- /dev/null
+++ b/frontend/components/sftp/TransferStatus.vue
@@ -0,0 +1,43 @@
+<script setup lang="ts">
+interface Transfer {
+  id: string
+  path: string
+  total: number
+  bytes: number
+  direction: 'download' | 'upload'
+}
+
+defineProps<{
+  transfers: Transfer[]
+}>()
+
+function formatSize(bytes: number): string {
+  if (bytes < 1024) return `${bytes} B`
+  if (bytes < 1024 * 1024) return `${(bytes / 1024).toFixed(1)} KB`
+  return `${(bytes / 1024 / 1024).toFixed(1)} MB`
+}
+
+function progressPercent(transfer: Transfer): number {
+  if (!transfer.total) return 0
+  return Math.round((transfer.bytes / transfer.total) * 100)
+}
+</script>
+
+<template>
+  <div v-if="transfers.length" class="bg-gray-900 border-t border-gray-800 px-3 py-2 shrink-0">
+    <div v-for="transfer in transfers" :key="transfer.id" class="flex items-center gap-3 text-xs mb-1">
+      <span class="text-gray-500">{{ transfer.direction === 'download' ? '↓' : '↑' }}</span>
+      <span class="text-gray-400 truncate max-w-[200px] font-mono">{{ transfer.path.split('/').pop() }}</span>
+      <div class="flex-1 bg-gray-800 rounded-full h-1.5">
+        <div
+          class="bg-wraith-500 h-1.5 rounded-full transition-all"
+          :style="{ width: progressPercent(transfer) + '%' }"
+        />
+      </div>
+      <span class="text-gray-500 shrink-0">
+        {{ formatSize(transfer.bytes) }} / {{ formatSize(transfer.total) }}
+      </span>
+      <span class="text-gray-600 shrink-0">{{ progressPercent(transfer) }}%</span>
+    </div>
+  </div>
+</template>
diff --git a/frontend/components/terminal/SplitPane.vue b/frontend/components/terminal/SplitPane.vue
new file mode 100644
index 0000000..bea0475
--- /dev/null
+++ b/frontend/components/terminal/SplitPane.vue
@@ -0,0 +1,74 @@
+<script setup lang="ts">
+import { ref } from 'vue'
+
+const direction = ref<'horizontal' | 'vertical'>('horizontal')
+const splitRatio = ref(50) // percentage for first pane
+const isDragging = ref(false)
+
+function toggleDirection() {
+  direction.value = direction.value === 'horizontal' ? 'vertical' : 'horizontal'
+}
+
+function startDrag(event: MouseEvent) {
+  isDragging.value = true
+  const container = (event.target as HTMLElement).closest('.split-pane-container') as HTMLElement
+  if (!container) return
+
+  const onMove = (e: MouseEvent) => {
+    if (!isDragging.value) return
+    const rect = container.getBoundingClientRect()
+    if (direction.value === 'horizontal') {
+      splitRatio.value = Math.min(80, Math.max(20, ((e.clientX - rect.left) / rect.width) * 100))
+    } else {
+      splitRatio.value = Math.min(80, Math.max(20, ((e.clientY - rect.top) / rect.height) * 100))
+    }
+  }
+
+  const onUp = () => {
+    isDragging.value = false
+    window.removeEventListener('mousemove', onMove)
+    window.removeEventListener('mouseup', onUp)
+  }
+
+  window.addEventListener('mousemove', onMove)
+  window.addEventListener('mouseup', onUp)
+}
+</script>
+
+<template>
+  <div
+    class="split-pane-container w-full h-full flex"
+    :class="direction === 'horizontal' ? 'flex-row' : 'flex-col'"
+  >
+    <!-- First pane -->
+    <div
+      class="overflow-hidden"
+      :style="direction === 'horizontal'
+        ? `width: ${splitRatio}%; flex-shrink: 0`
+        : `height: ${splitRatio}%; flex-shrink: 0`"
+    >
+      <slot name="first" />
+    </div>
+
+    <!-- Divider -->
+    <div
+      class="bg-gray-700 hover:bg-wraith-500 transition-colors cursor-col-resize shrink-0"
+      :class="direction === 'horizontal' ? 'w-1 cursor-col-resize' : 'h-1 cursor-row-resize'"
+      @mousedown="startDrag"
+    />
+
+    <!-- Second pane -->
+    <div class="flex-1 overflow-hidden">
+      <slot name="second" />
+    </div>
+
+    <!-- Direction toggle button (slot for external control) -->
+    <slot name="controls">
+      <button
+        @click="toggleDirection"
+        class="absolute top-2 right-2 text-xs text-gray-600 hover:text-gray-400 z-10"
+        title="Toggle split direction"
+      >{{ direction === 'horizontal' ? '⇅' : '⇄' }}</button>
+    </slot>
+  </div>
+</template>
diff --git a/frontend/components/terminal/TerminalInstance.vue b/frontend/components/terminal/TerminalInstance.vue
new file mode 100644
index 0000000..080c242
--- /dev/null
+++ b/frontend/components/terminal/TerminalInstance.vue
@@ -0,0 +1,49 @@
+<script setup lang="ts">
+import { ref, onMounted, onBeforeUnmount } from 'vue'
+import { useTerminal } from '~/composables/useTerminal'
+import { useSessionStore } from '~/stores/session.store'
+
+const props = defineProps<{
+  sessionId: string    // may be a pending-XXX id initially
+  hostId: number
+  hostName: string
+  color: string | null
+}>()
+
+const termContainer = ref<HTMLElement | null>(null)
+const sessions = useSessionStore()
+const { createTerminal, connectToHost, disconnect } = useTerminal()
+
+let termInstance: ReturnType<typeof createTerminal> | null = null
+// Track the real backend sessionId once connected (replaces pending-XXX)
+let realSessionId: string | null = null
+
+onMounted(() => {
+  if (!termContainer.value) return
+
+  termInstance = createTerminal(termContainer.value)
+  const { term, fitAddon } = termInstance
+
+  // Connect — useTerminal will call sessions.addSession with the real backend sessionId.
+  // Remove the pending placeholder first to avoid duplicate entries.
+  sessions.removeSession(props.sessionId)
+
+  connectToHost(props.hostId, props.hostName, 'ssh', props.color, term, fitAddon)
+})
+
+onBeforeUnmount(() => {
+  if (termInstance) {
+    termInstance.resizeObserver.disconnect()
+    termInstance.term.dispose()
+  }
+  if (realSessionId) {
+    disconnect(realSessionId)
+  }
+})
+</script>
+
+<template>
+  <div class="w-full h-full bg-[#0a0a0f]">
+    <div ref="termContainer" class="w-full h-full" />
+  </div>
+</template>
diff --git a/frontend/components/terminal/TerminalTabs.vue b/frontend/components/terminal/TerminalTabs.vue
new file mode 100644
index 0000000..63910eb
--- /dev/null
+++ b/frontend/components/terminal/TerminalTabs.vue
@@ -0,0 +1,18 @@
+<script setup lang="ts">
+import { useSessionStore } from '~/stores/session.store'
+
+const sessions = useSessionStore()
+</script>
+
+<template>
+  <div class="flex h-8 bg-gray-950 border-b border-gray-800 overflow-x-auto shrink-0">
+    <SessionTab
+      v-for="session in sessions.sessions"
+      :key="session.id"
+      :session="session"
+      :is-active="session.id === sessions.activeSessionId"
+      @activate="sessions.setActive(session.id)"
+      @close="sessions.removeSession(session.id)"
+    />
+  </div>
+</template>
diff --git a/frontend/composables/useSftp.ts b/frontend/composables/useSftp.ts
new file mode 100644
index 0000000..9bdbdca
--- /dev/null
+++ b/frontend/composables/useSftp.ts
@@ -0,0 +1,69 @@
+import { ref, type Ref } from 'vue'
+import { useAuthStore } from '~/stores/auth.store'
+
+export function useSftp(sessionId: Ref<string | null>) {
+  const auth = useAuthStore()
+  let ws: WebSocket | null = null
+  const entries = ref<any[]>([])
+  const currentPath = ref('/')
+  const fileContent = ref<{ path: string; content: string } | null>(null)
+  const transfers = ref<any[]>([])
+
+  function connect() {
+    const wsUrl = `${location.protocol === 'https:' ? 'wss' : 'ws'}://${location.host}/ws/sftp?token=${auth.token}`
+    ws = new WebSocket(wsUrl)
+
+    ws.onmessage = (event) => {
+      const msg = JSON.parse(event.data)
+      switch (msg.type) {
+        case 'list':
+          entries.value = msg.entries.sort((a: any, b: any) => {
+            if (a.isDirectory !== b.isDirectory) return a.isDirectory ? -1 : 1
+            return a.name.localeCompare(b.name)
+          })
+          currentPath.value = msg.path
+          break
+        case 'fileContent':
+          fileContent.value = { path: msg.path, content: msg.content }
+          break
+        case 'saved':
+          fileContent.value = null
+          list(currentPath.value)
+          break
+        case 'progress':
+          // Update transfer progress
+          break
+        case 'error':
+          console.error('SFTP error:', msg.message)
+          break
+      }
+    }
+
+    return ws
+  }
+
+  function send(msg: any) {
+    if (ws?.readyState === WebSocket.OPEN && sessionId.value) {
+      ws.send(JSON.stringify({ ...msg, sessionId: sessionId.value }))
+    }
+  }
+
+  function list(path: string) { send({ type: 'list', path }) }
+  function readFile(path: string) { send({ type: 'read', path }) }
+  function writeFile(path: string, data: string) { send({ type: 'write', path, data }) }
+  function mkdir(path: string) { send({ type: 'mkdir', path }) }
+  function rename(oldPath: string, newPath: string) { send({ type: 'rename', oldPath, newPath }) }
+  function remove(path: string) { send({ type: 'delete', path }) }
+  function chmod(path: string, mode: string) { send({ type: 'chmod', path, mode }) }
+  function download(path: string) { send({ type: 'download', path }) }
+
+  function disconnect() {
+    ws?.close()
+    ws = null
+  }
+
+  return {
+    entries, currentPath, fileContent, transfers,
+    connect, disconnect, list, readFile, writeFile, mkdir, rename, remove, chmod, download,
+  }
+}
diff --git a/frontend/composables/useTerminal.ts b/frontend/composables/useTerminal.ts
new file mode 100644
index 0000000..32309e6
--- /dev/null
+++ b/frontend/composables/useTerminal.ts
@@ -0,0 +1,116 @@
+import { Terminal } from '@xterm/xterm'
+import { FitAddon } from '@xterm/addon-fit'
+import { SearchAddon } from '@xterm/addon-search'
+import { WebLinksAddon } from '@xterm/addon-web-links'
+import { WebglAddon } from '@xterm/addon-webgl'
+import { useAuthStore } from '~/stores/auth.store'
+import { useSessionStore } from '~/stores/session.store'
+
+export function useTerminal() {
+  const auth = useAuthStore()
+  const sessions = useSessionStore()
+  let ws: WebSocket | null = null
+
+  function createTerminal(container: HTMLElement, options?: Partial<{ fontSize: number; scrollback: number }>) {
+    const term = new Terminal({
+      cursorBlink: true,
+      fontSize: options?.fontSize || 14,
+      fontFamily: "'JetBrains Mono', 'Fira Code', 'Cascadia Code', monospace",
+      scrollback: options?.scrollback || 10000,
+      theme: {
+        background: '#0a0a0f',
+        foreground: '#e4e4ef',
+        cursor: '#5c7cfa',
+        selectionBackground: '#364fc744',
+      },
+    })
+
+    const fitAddon = new FitAddon()
+    const searchAddon = new SearchAddon()
+    term.loadAddon(fitAddon)
+    term.loadAddon(searchAddon)
+    term.loadAddon(new WebLinksAddon())
+
+    term.open(container)
+
+    try {
+      term.loadAddon(new WebglAddon())
+    } catch {
+      // WebGL not available, fall back to canvas
+    }
+
+    fitAddon.fit()
+    const resizeObserver = new ResizeObserver(() => fitAddon.fit())
+    resizeObserver.observe(container)
+
+    return { term, fitAddon, searchAddon, resizeObserver }
+  }
+
+  function connectToHost(hostId: number, hostName: string, protocol: 'ssh', color: string | null, term: Terminal, fitAddon: FitAddon) {
+    const wsUrl = `${location.protocol === 'https:' ? 'wss' : 'ws'}://${location.host}/ws/terminal?token=${auth.token}`
+    ws = new WebSocket(wsUrl)
+
+    ws.onopen = () => {
+      ws!.send(JSON.stringify({ type: 'connect', hostId }))
+    }
+
+    ws.onmessage = (event) => {
+      const msg = JSON.parse(event.data)
+      switch (msg.type) {
+        case 'connected':
+          sessions.addSession({ id: msg.sessionId, hostId, hostName, protocol, color, active: true })
+          // Send initial terminal size
+          ws!.send(JSON.stringify({ type: 'resize', sessionId: msg.sessionId, cols: term.cols, rows: term.rows }))
+          break
+        case 'data':
+          term.write(msg.data)
+          break
+        case 'disconnected':
+          sessions.removeSession(msg.sessionId)
+          break
+        case 'host-key-verify':
+          // Auto-accept for now — full UX in polish phase
+          ws!.send(JSON.stringify({ type: 'host-key-accept' }))
+          break
+        case 'error':
+          term.write(`\r\n\x1b[31mError: ${msg.message}\x1b[0m\r\n`)
+          break
+      }
+    }
+
+    ws.onclose = () => {
+      term.write('\r\n\x1b[33mConnection closed.\x1b[0m\r\n')
+    }
+
+    // Terminal input → WebSocket
+    term.onData((data) => {
+      if (ws?.readyState === WebSocket.OPEN) {
+        const sessionId = sessions.activeSession?.id
+        if (sessionId) {
+          ws.send(JSON.stringify({ type: 'data', sessionId, data }))
+        }
+      }
+    })
+
+    // Terminal resize → WebSocket
+    term.onResize(({ cols, rows }) => {
+      if (ws?.readyState === WebSocket.OPEN) {
+        const sessionId = sessions.activeSession?.id
+        if (sessionId) {
+          ws.send(JSON.stringify({ type: 'resize', sessionId, cols, rows }))
+        }
+      }
+    })
+
+    return ws
+  }
+
+  function disconnect(sessionId: string) {
+    if (ws?.readyState === WebSocket.OPEN) {
+      ws.send(JSON.stringify({ type: 'disconnect', sessionId }))
+    }
+    sessions.removeSession(sessionId)
+  }
+
+  return { createTerminal, connectToHost, disconnect }
+}
diff --git a/frontend/layouts/default.vue b/frontend/layouts/default.vue
index 191e82e..22778b8 100644
--- a/frontend/layouts/default.vue
+++ b/frontend/layouts/default.vue
@@ -20,9 +20,11 @@ if (!auth.isAuthenticated) {
         <button @click="auth.logout()" class="text-sm text-gray-500 hover:text-red-400">Logout</button>
       </div>
     </header>
-    <!-- Main content -->
-    <div class="flex-1 flex overflow-hidden">
+    <!-- Main content area — relative for SessionContainer absolute positioning -->
+    <div class="flex-1 flex overflow-hidden relative">
       <slot />
+      <!-- Session container persists across page navigation, overlays content when sessions are active -->
+      <SessionContainer />
     </div>
   </div>
 </template>
diff --git a/frontend/nuxt.config.ts b/frontend/nuxt.config.ts
index 4ad4390..dfd666e 100644
--- a/frontend/nuxt.config.ts
+++ b/frontend/nuxt.config.ts
@@ -6,7 +6,7 @@ export default defineNuxtConfig({
     '@nuxtjs/tailwindcss',
     '@primevue/nuxt-module',
   ],
-  css: ['~/assets/css/main.css'],
+  css: ['~/assets/css/main.css', '@xterm/xterm/css/xterm.css'],
   primevue: {
     options: {
       theme: 'none',
diff --git a/frontend/pages/index.vue b/frontend/pages/index.vue
index a881258..8ac1260 100644
--- a/frontend/pages/index.vue
+++ b/frontend/pages/index.vue
@@ -1,9 +1,14 @@
 <script setup lang="ts">
+import { useTerminal } from '~/composables/useTerminal'
+
 const connections = useConnectionStore()
 const showHostDialog = ref(false)
 const editingHost = ref<any>(null)
 const showGroupDialog = ref(false)
 
+// Terminal composable for connect-on-click
+const { createTerminal, connectToHost } = useTerminal()
+
 onMounted(async () => {
   await Promise.all([connections.fetchHosts(), connections.fetchTree()])
 })
@@ -17,6 +22,28 @@ function openEditHost(host: any) {
   editingHost.value = host
   showHostDialog.value = true
 }
+
+function connectHost(host: any) {
+  if (host.protocol !== 'ssh') {
+    // RDP support in Phase 3
+    return
+  }
+  // We connect via useTerminal — TerminalInstance will handle the actual mount
+  // Here we just trigger SessionContainer to render a new TerminalInstance
+  // The terminal composable is invoked inside TerminalInstance on mount
+  // We signal the session store directly to open a pending session slot
+  // TerminalInstance picks up the hostId prop and opens the WS connection
+  const sessions = useSessionStore()
+  const pendingId = `pending-${Date.now()}`
+  sessions.addSession({
+    id: pendingId,
+    hostId: host.id,
+    hostName: host.name,
+    protocol: 'ssh',
+    color: host.color,
+    active: true,
+  })
+}
 </script>
 
 <template>
@@ -33,13 +60,14 @@ function openEditHost(host: any) {
       <HostTree :groups="connections.groups" @select-host="openEditHost" @new-host="openNewHost" />
     </aside>
 
-    <!-- Main: host list or active sessions (sessions added in Phase 2) -->
+    <!-- Main: host list -->
     <main class="flex-1 p-4 overflow-y-auto">
       <div class="grid grid-cols-1 sm:grid-cols-2 lg:grid-cols-3 gap-3">
         <HostCard
           v-for="host in connections.hosts"
           :key="host.id"
           :host="host"
+          @connect="connectHost(host)"
           @edit="openEditHost(host)"
           @delete="connections.deleteHost(host.id)"
         />
diff --git a/frontend/stores/session.store.ts b/frontend/stores/session.store.ts
new file mode 100644
index 0000000..9f338a6
--- /dev/null
+++ b/frontend/stores/session.store.ts
@@ -0,0 +1,36 @@
+import { defineStore } from 'pinia'
+
+interface Session {
+  id: string        // uuid from backend
+  hostId: number
+  hostName: string
+  protocol: 'ssh' | 'rdp'
+  color: string | null
+  active: boolean
+}
+
+export const useSessionStore = defineStore('sessions', {
+  state: () => ({
+    sessions: [] as Session[],
+    activeSessionId: null as string | null,
+  }),
+  getters: {
+    activeSession: (state) => state.sessions.find(s => s.id === state.activeSessionId),
+    hasSessions: (state) => state.sessions.length > 0,
+  },
+  actions: {
+    addSession(session: Session) {
+      this.sessions.push(session)
+      this.activeSessionId = session.id
+    },
+    removeSession(id: string) {
+      this.sessions = this.sessions.filter(s => s.id !== id)
+      if (this.activeSessionId === id) {
+        this.activeSessionId = this.sessions.length ? this.sessions[this.sessions.length - 1].id : null
+      }
+    },
+    setActive(id: string) {
+      this.activeSessionId = id
+    },
+  },
+})