diff --git a/web/src/server/services/terminal-manager.ts b/web/src/server/services/terminal-manager.ts
index 6b0af0a4..f7c4c45d 100644
--- a/web/src/server/services/terminal-manager.ts
+++ b/web/src/server/services/terminal-manager.ts
@@ -7,10 +7,39 @@ import { createLogger } from '../utils/logger.js';
 
 const logger = createLogger('terminal-manager');
 
+// Flow control configuration
+const FLOW_CONTROL_CONFIG = {
+  // When buffer exceeds this percentage of max lines, pause reading
+  // 80% gives a good buffer before hitting the scrollback limit
+  highWatermark: 0.8,
+  // Resume reading when buffer drops below this percentage
+  // 50% ensures enough space is cleared before resuming
+  lowWatermark: 0.5,
+  // Check interval for resuming paused sessions
+  // 100ms provides responsive resumption without excessive CPU usage
+  checkInterval: 100, // ms
+  // Maximum pending lines to accumulate while paused
+  // 10K lines handles bursts without excessive memory (avg ~1MB at 100 chars/line)
+  maxPendingLines: 10000,
+  // Maximum time a session can be paused before timing out
+  // 5 minutes handles temporary client issues without indefinite memory growth
+  maxPauseTime: 5 * 60 * 1000, // 5 minutes
+  // Lines to process between buffer pressure checks
+  // Checking every 100 lines balances performance with responsiveness
+  bufferCheckInterval: 100,
+};
+
 interface SessionTerminal {
   terminal: XtermTerminal;
   watcher?: fs.FSWatcher;
   lastUpdate: number;
+  isPaused?: boolean;
+  pendingLines?: string[];
+  pausedAt?: number;
+  linesProcessedSinceCheck?: number;
+  isProcessingPending?: boolean;
+  lastFileOffset?: number;
+  lineBuffer?: string;
 }
 
 type BufferChangeListener = (sessionId: string, snapshot: BufferSnapshot) => void;
@@ -47,6 +76,7 @@ export class TerminalManager {
     },
   });
   private originalConsoleWarn: typeof console.warn;
+  private flowControlTimer?: NodeJS.Timeout;
 
   constructor(controlDir: string) {
     this.controlDir = controlDir;
@@ -66,6 +96,9 @@ export class TerminalManager {
       }
       this.originalConsoleWarn.apply(console, args);
     };
+
+    // Start flow control check timer
+    this.startFlowControlTimer();
   }
 
   /**
@@ -110,8 +143,8 @@ export class TerminalManager {
     if (!sessionTerminal) return;
 
     const streamPath = path.join(this.controlDir, sessionId, 'stdout');
-    let lastOffset = 0;
-    let lineBuffer = '';
+    let lastOffset = sessionTerminal.lastFileOffset || 0;
+    let lineBuffer = sessionTerminal.lineBuffer || '';
 
     // Check if the file exists
     if (!fs.existsSync(streamPath)) {
@@ -146,6 +179,7 @@ export class TerminalManager {
 
               // Update offset
               lastOffset = stats.size;
+              sessionTerminal.lastFileOffset = lastOffset;
 
               // Process new data
               const newData = buffer.toString('utf8');
@@ -154,6 +188,7 @@ export class TerminalManager {
               // Process complete lines
               const lines = lineBuffer.split('\n');
               lineBuffer = lines.pop() || ''; // Keep incomplete line for next time
+              sessionTerminal.lineBuffer = lineBuffer;
 
               for (const line of lines) {
                 if (line.trim()) {
@@ -174,10 +209,202 @@ export class TerminalManager {
     }
   }
 
+  /**
+   * Start flow control timer to check paused sessions
+   */
+  private startFlowControlTimer(): void {
+    let checkIndex = 0;
+    const sessionIds: string[] = [];
+
+    this.flowControlTimer = setInterval(() => {
+      // Rebuild session list periodically
+      if (checkIndex === 0) {
+        sessionIds.length = 0;
+        for (const [sessionId, sessionTerminal] of this.terminals) {
+          if (sessionTerminal.isPaused) {
+            sessionIds.push(sessionId);
+          }
+        }
+      }
+
+      // Process one session per tick to avoid thundering herd
+      if (sessionIds.length > 0) {
+        const sessionId = sessionIds[checkIndex % sessionIds.length];
+        const sessionTerminal = this.terminals.get(sessionId);
+
+        if (sessionTerminal?.isPaused) {
+          // Check for timeout
+          if (
+            sessionTerminal.pausedAt &&
+            Date.now() - sessionTerminal.pausedAt > FLOW_CONTROL_CONFIG.maxPauseTime
+          ) {
+            logger.warn(
+              chalk.red(
+                `Session ${sessionId} has been paused for too long. ` +
+                  `Dropping ${sessionTerminal.pendingLines?.length || 0} pending lines.`
+              )
+            );
+            sessionTerminal.isPaused = false;
+            sessionTerminal.pendingLines = [];
+            sessionTerminal.pausedAt = undefined;
+
+            // Resume file watching after timeout
+            this.resumeFileWatcher(sessionId).catch((error) => {
+              logger.error(
+                `Failed to resume file watcher for session ${sessionId} after timeout:`,
+                error
+              );
+            });
+          } else {
+            this.checkBufferPressure(sessionId);
+          }
+        }
+
+        checkIndex = (checkIndex + 1) % Math.max(sessionIds.length, 1);
+      }
+    }, FLOW_CONTROL_CONFIG.checkInterval);
+  }
+
+  /**
+   * Check buffer pressure and pause/resume as needed
+   */
+  private checkBufferPressure(sessionId: string): boolean {
+    const sessionTerminal = this.terminals.get(sessionId);
+    if (!sessionTerminal) return false;
+
+    const terminal = sessionTerminal.terminal;
+    const buffer = terminal.buffer.active;
+    const maxLines = terminal.options.scrollback || 10000;
+    const currentLines = buffer.length;
+    const bufferUtilization = currentLines / maxLines;
+
+    const wasPaused = sessionTerminal.isPaused || false;
+
+    // Check if we should pause
+    if (!wasPaused && bufferUtilization > FLOW_CONTROL_CONFIG.highWatermark) {
+      sessionTerminal.isPaused = true;
+      sessionTerminal.pendingLines = [];
+      sessionTerminal.pausedAt = Date.now();
+
+      // Apply backpressure by closing the file watcher
+      if (sessionTerminal.watcher) {
+        sessionTerminal.watcher.close();
+        sessionTerminal.watcher = undefined;
+      }
+
+      logger.warn(
+        chalk.yellow(
+          `Buffer pressure high for session ${sessionId}: ${Math.round(bufferUtilization * 100)}% ` +
+            `(${currentLines}/${maxLines} lines). Pausing file watcher.`
+        )
+      );
+      return true;
+    }
+
+    // Check if we should resume
+    if (wasPaused && bufferUtilization < FLOW_CONTROL_CONFIG.lowWatermark) {
+      // Avoid race condition: mark as processing pending before resuming
+      if (
+        sessionTerminal.pendingLines &&
+        sessionTerminal.pendingLines.length > 0 &&
+        !sessionTerminal.isProcessingPending
+      ) {
+        sessionTerminal.isProcessingPending = true;
+
+        const pendingCount = sessionTerminal.pendingLines.length;
+        logger.log(
+          chalk.green(
+            `Buffer pressure normalized for session ${sessionId}: ${Math.round(bufferUtilization * 100)}% ` +
+              `(${currentLines}/${maxLines} lines). Processing ${pendingCount} pending lines.`
+          )
+        );
+
+        // Process pending lines asynchronously to avoid blocking
+        setImmediate(() => {
+          const lines = sessionTerminal.pendingLines || [];
+          sessionTerminal.pendingLines = [];
+          sessionTerminal.isPaused = false;
+          sessionTerminal.pausedAt = undefined;
+          sessionTerminal.isProcessingPending = false;
+
+          for (const pendingLine of lines) {
+            this.processStreamLine(sessionId, sessionTerminal, pendingLine);
+          }
+
+          // Resume file watching after processing pending lines
+          this.resumeFileWatcher(sessionId).catch((error) => {
+            logger.error(`Failed to resume file watcher for session ${sessionId}:`, error);
+          });
+        });
+      } else if (!sessionTerminal.pendingLines || sessionTerminal.pendingLines.length === 0) {
+        // No pending lines, just resume
+        sessionTerminal.isPaused = false;
+        sessionTerminal.pausedAt = undefined;
+
+        // Resume file watching
+        this.resumeFileWatcher(sessionId).catch((error) => {
+          logger.error(`Failed to resume file watcher for session ${sessionId}:`, error);
+        });
+
+        logger.log(
+          chalk.green(
+            `Buffer pressure normalized for session ${sessionId}: ${Math.round(bufferUtilization * 100)}% ` +
+              `(${currentLines}/${maxLines} lines). Resuming file watcher.`
+          )
+        );
+      }
+      return false;
+    }
+
+    return wasPaused;
+  }
+
   /**
    * Handle stream line
    */
   private handleStreamLine(sessionId: string, sessionTerminal: SessionTerminal, line: string) {
+    // Initialize line counter if needed
+    if (sessionTerminal.linesProcessedSinceCheck === undefined) {
+      sessionTerminal.linesProcessedSinceCheck = 0;
+    }
+
+    // Check buffer pressure periodically or if already paused
+    let isPaused = sessionTerminal.isPaused || false;
+    if (
+      !isPaused &&
+      sessionTerminal.linesProcessedSinceCheck >= FLOW_CONTROL_CONFIG.bufferCheckInterval
+    ) {
+      isPaused = this.checkBufferPressure(sessionId);
+      sessionTerminal.linesProcessedSinceCheck = 0;
+    }
+
+    if (isPaused) {
+      // Queue the line for later processing
+      if (!sessionTerminal.pendingLines) {
+        sessionTerminal.pendingLines = [];
+      }
+
+      // Limit pending lines to prevent memory issues
+      if (sessionTerminal.pendingLines.length < FLOW_CONTROL_CONFIG.maxPendingLines) {
+        sessionTerminal.pendingLines.push(line);
+      } else {
+        logger.warn(
+          chalk.red(
+            `Pending lines limit reached for session ${sessionId}. Dropping new data to prevent memory overflow.`
+          )
+        );
+      }
+      return;
+    }
+
+    sessionTerminal.linesProcessedSinceCheck++;
+    this.processStreamLine(sessionId, sessionTerminal, line);
+  }
+
+  /**
+   * Process a stream line (separated from handleStreamLine for flow control)
+   */
+  private processStreamLine(sessionId: string, sessionTerminal: SessionTerminal, line: string) {
     try {
       const data = JSON.parse(line);
 
@@ -246,8 +473,12 @@ export class TerminalManager {
   async getBufferStats(sessionId: string) {
     const terminal = await this.getTerminal(sessionId);
     const buffer = terminal.buffer.active;
+    const sessionTerminal = this.terminals.get(sessionId);
     logger.debug(`Getting buffer stats for session ${sessionId}: ${buffer.length} total rows`);
 
+    const maxLines = terminal.options.scrollback || 10000;
+    const bufferUtilization = buffer.length / maxLines;
+
     return {
       totalRows: buffer.length,
       cols: terminal.cols,
@@ -256,6 +487,11 @@ export class TerminalManager {
       cursorX: buffer.cursorX,
       cursorY: buffer.cursorY,
       scrollback: terminal.options.scrollback || 0,
+      // Flow control metrics
+      isPaused: sessionTerminal?.isPaused || false,
+      pendingLines: sessionTerminal?.pendingLines?.length || 0,
+      bufferUtilization: Math.round(bufferUtilization * 100),
+      maxBufferLines: maxLines,
     };
   }
 
@@ -816,6 +1052,18 @@ export class TerminalManager {
     }
   }
 
+  /**
+   * Resume file watching for a paused session
+   */
+  private async resumeFileWatcher(sessionId: string): Promise<void> {
+    const sessionTerminal = this.terminals.get(sessionId);
+    if (!sessionTerminal || sessionTerminal.watcher) {
+      return; // Already watching or session doesn't exist
+    }
+
+    await this.watchStreamFile(sessionId);
+  }
+
   /**
    * Destroy the terminal manager and restore console overrides
    */
@@ -840,6 +1088,12 @@ export class TerminalManager {
     // Clear write queues
     this.writeQueues.clear();
 
+    // Clear flow control timer
+    if (this.flowControlTimer) {
+      clearInterval(this.flowControlTimer);
+      this.flowControlTimer = undefined;
+    }
+
     // Restore original console.warn
     console.warn = this.originalConsoleWarn;
   }