diff --git a/packages/cli/src/ui/contexts/KeypressContext.test.tsx b/packages/cli/src/ui/contexts/KeypressContext.test.tsx
index 99f4dbf9..5b383642 100644
--- a/packages/cli/src/ui/contexts/KeypressContext.test.tsx
+++ b/packages/cli/src/ui/contexts/KeypressContext.test.tsx
@@ -526,7 +526,7 @@ describe('KeypressContext - Kitty Protocol', () => {
         });
 
         await waitFor(() => {
-          expect(keyHandler).toHaveBeenCalledTimes(2); // 1 paste event + 1 paste event for 'after'
+          expect(keyHandler).toHaveBeenCalledTimes(6); // 1 paste event + 5 individual chars for 'after'
         });
 
         // Should emit paste event first
@@ -538,12 +538,40 @@ describe('KeypressContext - Kitty Protocol', () => {
           }),
         );
 
-        // Then process 'after' as a paste event (since it's > 2 chars)
+        // Then process 'after' as individual characters (since it doesn't contain return)
         expect(keyHandler).toHaveBeenNthCalledWith(
           2,
           expect.objectContaining({
-            paste: true,
-            sequence: 'after',
+            name: 'a',
+            paste: false,
+          }),
+        );
+        expect(keyHandler).toHaveBeenNthCalledWith(
+          3,
+          expect.objectContaining({
+            name: 'f',
+            paste: false,
+          }),
+        );
+        expect(keyHandler).toHaveBeenNthCalledWith(
+          4,
+          expect.objectContaining({
+            name: 't',
+            paste: false,
+          }),
+        );
+        expect(keyHandler).toHaveBeenNthCalledWith(
+          5,
+          expect.objectContaining({
+            name: 'e',
+            paste: false,
+          }),
+        );
+        expect(keyHandler).toHaveBeenNthCalledWith(
+          6,
+          expect.objectContaining({
+            name: 'r',
+            paste: false,
           }),
         );
       });
@@ -571,7 +599,7 @@ describe('KeypressContext - Kitty Protocol', () => {
         });
 
         await waitFor(() => {
-          expect(keyHandler).toHaveBeenCalledTimes(14); // Adjusted based on actual behavior
+          expect(keyHandler).toHaveBeenCalledTimes(16); // 5 + 1 + 6 + 1 + 3 = 16 calls
         });
 
         // Check the sequence: 'start' (5 chars) + paste1 + 'middle' (6 chars) + paste2 + 'end' (3 chars as paste)
@@ -643,13 +671,18 @@ describe('KeypressContext - Kitty Protocol', () => {
           }),
         );
 
-        // 'end' as paste event (since it's > 2 chars)
+        // 'end' as individual characters (since it doesn't contain return)
         expect(keyHandler).toHaveBeenNthCalledWith(
           callIndex++,
-          expect.objectContaining({
-            paste: true,
-            sequence: 'end',
-          }),
+          expect.objectContaining({ name: 'e' }),
+        );
+        expect(keyHandler).toHaveBeenNthCalledWith(
+          callIndex++,
+          expect.objectContaining({ name: 'n' }),
+        );
+        expect(keyHandler).toHaveBeenNthCalledWith(
+          callIndex++,
+          expect.objectContaining({ name: 'd' }),
         );
       });
 
@@ -738,16 +771,18 @@ describe('KeypressContext - Kitty Protocol', () => {
         });
 
         await waitFor(() => {
-          // With the current implementation, fragmented data gets processed differently
-          // The first fragment '\x1b[20' gets processed as individual characters
-          // The second fragment '0~content\x1b[2' gets processed as paste + individual chars
-          // The third fragment '01~' gets processed as individual characters
-          expect(keyHandler).toHaveBeenCalled();
+          // With the current implementation, fragmented paste markers get reconstructed
+          // into a single paste event for 'content'
+          expect(keyHandler).toHaveBeenCalledTimes(1);
         });
 
-        // The current implementation processes fragmented paste markers as separate events
-        // rather than reconstructing them into a single paste event
-        expect(keyHandler.mock.calls.length).toBeGreaterThan(1);
+        // Should reconstruct the fragmented paste markers into a single paste event
+        expect(keyHandler).toHaveBeenCalledWith(
+          expect.objectContaining({
+            paste: true,
+            sequence: 'content',
+          }),
+        );
       });
     });
 
@@ -851,19 +886,38 @@ describe('KeypressContext - Kitty Protocol', () => {
           stdin.emit('data', Buffer.from('lo'));
         });
 
-        // With the current implementation, data is processed as it arrives
-        // First chunk 'hel' is treated as paste (multi-character)
+        // With the current implementation, data is processed as individual characters
+        // since 'hel' doesn't contain return (0x0d)
         expect(keyHandler).toHaveBeenNthCalledWith(
           1,
           expect.objectContaining({
-            paste: true,
-            sequence: 'hel',
+            name: 'h',
+            sequence: 'h',
+            paste: false,
           }),
         );
 
-        // Second chunk 'lo' is processed as individual characters
         expect(keyHandler).toHaveBeenNthCalledWith(
           2,
+          expect.objectContaining({
+            name: 'e',
+            sequence: 'e',
+            paste: false,
+          }),
+        );
+
+        expect(keyHandler).toHaveBeenNthCalledWith(
+          3,
+          expect.objectContaining({
+            name: 'l',
+            sequence: 'l',
+            paste: false,
+          }),
+        );
+
+        // Second chunk 'lo' is also processed as individual characters
+        expect(keyHandler).toHaveBeenNthCalledWith(
+          4,
           expect.objectContaining({
             name: 'l',
             sequence: 'l',
@@ -872,7 +926,7 @@ describe('KeypressContext - Kitty Protocol', () => {
         );
 
         expect(keyHandler).toHaveBeenNthCalledWith(
-          3,
+          5,
           expect.objectContaining({
             name: 'o',
             sequence: 'o',
@@ -880,7 +934,7 @@ describe('KeypressContext - Kitty Protocol', () => {
           }),
         );
 
-        expect(keyHandler).toHaveBeenCalledTimes(3);
+        expect(keyHandler).toHaveBeenCalledTimes(5);
       } finally {
         vi.useRealTimers();
       }
@@ -907,14 +961,20 @@ describe('KeypressContext - Kitty Protocol', () => {
         });
 
         // Should flush immediately without waiting for timeout
-        // Large data gets treated as paste event
-        expect(keyHandler).toHaveBeenCalledTimes(1);
-        expect(keyHandler).toHaveBeenCalledWith(
-          expect.objectContaining({
-            paste: true,
-            sequence: largeData,
-          }),
-        );
+        // Large data without return gets treated as individual characters
+        expect(keyHandler).toHaveBeenCalledTimes(65);
+
+        // Each character should be processed individually
+        for (let i = 0; i < 65; i++) {
+          expect(keyHandler).toHaveBeenNthCalledWith(
+            i + 1,
+            expect.objectContaining({
+              name: 'x',
+              sequence: 'x',
+              paste: false,
+            }),
+          );
+        }
 
         // Advancing timer should not cause additional calls
         const callCountBefore = keyHandler.mock.calls.length;
diff --git a/packages/cli/src/ui/contexts/KeypressContext.tsx b/packages/cli/src/ui/contexts/KeypressContext.tsx
index 0bdc4168..9eb55185 100644
--- a/packages/cli/src/ui/contexts/KeypressContext.tsx
+++ b/packages/cli/src/ui/contexts/KeypressContext.tsx
@@ -407,7 +407,11 @@ export function KeypressProvider({
         return;
       }
 
-      if (rawDataBuffer.length <= 2 || isPaste) {
+      if (
+        (rawDataBuffer.length <= 2 && rawDataBuffer.includes(0x0d)) ||
+        !rawDataBuffer.includes(0x0d) ||
+        isPaste
+      ) {
         keypressStream.write(rawDataBuffer);
       } else {
         // Flush raw data buffer as a paste event