diff --git a/src/renderer/src/components/onboarding/OnboardingInlineCommandTerminal.command-finished.test.tsx b/src/renderer/src/components/onboarding/OnboardingInlineCommandTerminal.command-finished.test.tsx
new file mode 100644
index 00000000000..1b55391dec4
--- /dev/null
+++ b/src/renderer/src/components/onboarding/OnboardingInlineCommandTerminal.command-finished.test.tsx
@@ -0,0 +1,117 @@
+// @vitest-environment happy-dom
+
+import { act } from 'react'
+import { createRoot, type Root } from 'react-dom/client'
+import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest'
+import { OnboardingInlineCommandTerminal } from './OnboardingInlineCommandTerminal'
+import {
+  ORCA_TERMINAL_COMMAND_FINISHED_EVENT,
+  type TerminalCommandFinishedEventDetail
+} from '@/hooks/terminal-command-finished-event'
+
+const mocks = vi.hoisted(() => ({
+  createTab: vi.fn(() => ({ id: 'tab-1' })),
+  closeTab: vi.fn(),
+  setActiveTabForWorktree: vi.fn(),
+  setTabCustomTitle: vi.fn()
+}))
+
+vi.mock('@/store', () => ({
+  useAppStore: (selector: (state: Record<string, unknown>) => unknown) =>
+    selector({
+      createTab: mocks.createTab,
+      closeTab: mocks.closeTab,
+      setActiveTabForWorktree: mocks.setActiveTabForWorktree,
+      setTabCustomTitle: mocks.setTabCustomTitle
+    })
+}))
+
+vi.mock('@/components/terminal-pane/TerminalPane', () => ({
+  default: () => <div data-testid="terminal-pane" />
+}))
+
+vi.mock('@/lib/focus-terminal-tab-surface', () => ({
+  focusTerminalTabSurface: vi.fn()
+}))
+
+function dispatchCommandFinished(worktreeId: string, exitCode: number | null): void {
+  window.dispatchEvent(
+    new CustomEvent<TerminalCommandFinishedEventDetail>(ORCA_TERMINAL_COMMAND_FINISHED_EVENT, {
+      detail: { worktreeId, exitCode }
+    })
+  )
+}
+
+let root: Root | null = null
+let container: HTMLDivElement | null = null
+
+describe('OnboardingInlineCommandTerminal command-finished forwarding', () => {
+  beforeEach(() => {
+    mocks.createTab.mockClear()
+    mocks.closeTab.mockClear()
+    Object.defineProperty(window, 'api', {
+      configurable: true,
+      value: {
+        app: {
+          getFloatingTerminalCwd: vi.fn(async () => '/tmp')
+        }
+      }
+    })
+  })
+
+  afterEach(async () => {
+    if (root) {
+      await act(async () => {
+        root?.unmount()
+      })
+    }
+    root = null
+    container?.remove()
+    container = null
+    Reflect.deleteProperty(window, 'api')
+  })
+
+  it('forwards exit codes only for its own branded worktree id', async () => {
+    const onCommandFinished = vi.fn()
+    container = document.createElement('div')
+    document.body.appendChild(container)
+    root = createRoot(container)
+    await act(async () => {
+      root?.render(
+        <OnboardingInlineCommandTerminal
+          command="npx skills add --skill orchestration --global"
+          title="Skill setup"
+          ariaLabel="Skill setup terminal"
+          worktreeId="settings-orchestration-skill-terminal"
+          onCommandFinished={onCommandFinished}
+        />
+      )
+    })
+    await act(async () => {})
+
+    await act(async () => {
+      dispatchCommandFinished('some-other-worktree', 1)
+    })
+    expect(onCommandFinished).not.toHaveBeenCalled()
+
+    // Why unbranded-miss matters: pty-connection dispatches the BRANDED id;
+    // matching the raw panel id would silently never fire in production.
+    await act(async () => {
+      dispatchCommandFinished('settings-orchestration-skill-terminal', 1)
+    })
+    expect(onCommandFinished).not.toHaveBeenCalled()
+
+    await act(async () => {
+      dispatchCommandFinished('ephemeral-setup-terminal:settings-orchestration-skill-terminal', 1)
+    })
+    expect(onCommandFinished).toHaveBeenCalledWith(1)
+
+    await act(async () => {
+      dispatchCommandFinished(
+        'ephemeral-setup-terminal:settings-orchestration-skill-terminal',
+        null
+      )
+    })
+    expect(onCommandFinished).toHaveBeenLastCalledWith(null)
+  })
+})
diff --git a/src/renderer/src/components/onboarding/OnboardingInlineCommandTerminal.tsx b/src/renderer/src/components/onboarding/OnboardingInlineCommandTerminal.tsx
index a0b8e894b47..0a7f0ae7a8f 100644
--- a/src/renderer/src/components/onboarding/OnboardingInlineCommandTerminal.tsx
+++ b/src/renderer/src/components/onboarding/OnboardingInlineCommandTerminal.tsx
@@ -3,6 +3,10 @@ import { Loader2 } from 'lucide-react'
 import TerminalPane from '@/components/terminal-pane/TerminalPane'
 import { PASTE_TERMINAL_TEXT_EVENT, type PasteTerminalTextDetail } from '@/constants/terminal'
 import { focusTerminalTabSurface } from '@/lib/focus-terminal-tab-surface'
+import {
+  ORCA_TERMINAL_COMMAND_FINISHED_EVENT,
+  type TerminalCommandFinishedEventDetail
+} from '@/hooks/terminal-command-finished-event'
 import { useAppStore } from '@/store'
 import { translate } from '@/i18n/i18n'
 import { brandEphemeralSetupTerminalWorktreeId } from '../../../../shared/ephemeral-setup-terminal-worktree-id'
@@ -29,6 +33,8 @@ type OnboardingInlineCommandTerminalProps = {
   onOpened?: () => void
   onInteracted?: (method: 'keyboard' | 'pointer', event?: KeyboardEvent<HTMLElement>) => void
   onTerminalExit?: () => void
+  // OSC 133;D reports the command outcome while the shell remains alive.
+  onCommandFinished?: (bestEffortExitCode: number | null) => void
 }
 
 /**
@@ -48,7 +54,8 @@ export function OnboardingInlineCommandTerminal({
   shellOverride,
   onOpened,
   onInteracted,
-  onTerminalExit
+  onTerminalExit,
+  onCommandFinished
 }: OnboardingInlineCommandTerminalProps): React.JSX.Element {
   // Why: brand the id so a remote runtime scopes this ephemeral terminal to the
   // floating terminal instead of rejecting the synthetic id.
@@ -80,6 +87,24 @@ export function OnboardingInlineCommandTerminal({
     onOpened?.()
   }, [onOpened])
 
+  // Why: the branded id isolates command outcomes to this inline terminal.
+  useEffect(() => {
+    if (!onCommandFinished) {
+      return
+    }
+    const handleCommandFinished = (event: Event): void => {
+      const detail = (event as CustomEvent<TerminalCommandFinishedEventDetail>).detail
+      if (detail?.worktreeId !== worktreeId) {
+        return
+      }
+      onCommandFinished(detail.exitCode)
+    }
+    window.addEventListener(ORCA_TERMINAL_COMMAND_FINISHED_EVENT, handleCommandFinished)
+    return () => {
+      window.removeEventListener(ORCA_TERMINAL_COMMAND_FINISHED_EVENT, handleCommandFinished)
+    }
+  }, [onCommandFinished, worktreeId])
+
   useEffect(() => {
     let cancelled = false
     void window.api.app.getFloatingTerminalCwd({ path: '~' }).then((nextCwd) => {
diff --git a/src/renderer/src/components/settings/AgentSkillSetupFailureNotice.tsx b/src/renderer/src/components/settings/AgentSkillSetupFailureNotice.tsx
new file mode 100644
index 00000000000..eba25d637a4
--- /dev/null
+++ b/src/renderer/src/components/settings/AgentSkillSetupFailureNotice.tsx
@@ -0,0 +1,18 @@
+import { translate } from '@/i18n/i18n'
+
+export function AgentSkillSetupFailureNotice(props: {
+  exitCode: number | null
+}): React.JSX.Element | null {
+  if (props.exitCode === null) {
+    return null
+  }
+  return (
+    <p className="mt-2 text-[12px] leading-snug text-destructive">
+      {translate(
+        'auto.components.settings.AgentSkillSetupPanel.setupCommandFailed',
+        'The setup command exited with code {{value0}}. This error will clear after a successful retry.',
+        { value0: props.exitCode }
+      )}
+    </p>
+  )
+}
diff --git a/src/renderer/src/components/settings/AgentSkillSetupPanel.test.tsx b/src/renderer/src/components/settings/AgentSkillSetupPanel.test.tsx
index 533144f8bdf..ac44ed3285c 100644
--- a/src/renderer/src/components/settings/AgentSkillSetupPanel.test.tsx
+++ b/src/renderer/src/components/settings/AgentSkillSetupPanel.test.tsx
@@ -1,6 +1,6 @@
 // @vitest-environment happy-dom
 
-import { act, type ComponentProps } from 'react'
+import { act, useState, type ComponentProps } from 'react'
 import { createRoot, type Root } from 'react-dom/client'
 import { renderToStaticMarkup } from 'react-dom/server'
 import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest'
@@ -12,11 +12,17 @@ const UPDATE_COMMAND = 'npx skills update orca-cli --global'
 
 const mocks = vi.hoisted(() => ({
   clipboardWrite: vi.fn(),
-  terminalProps: [] as { command: string; description: string }[],
+  terminalProps: [] as {
+    command: string
+    description: string
+    onTerminalExit?: () => void
+    onCommandFinished?: (bestEffortExitCode: number | null) => void
+  }[],
   toastError: vi.fn(),
   toastSuccess: vi.fn(),
   skillsChanged: vi.fn(),
-  skillsRefreshed: vi.fn()
+  skillsRefreshed: vi.fn(),
+  terminalInstanceCount: 0
 }))
 
 vi.mock('sonner', () => ({
@@ -32,13 +38,23 @@ vi.mock('@/hooks/useInstalledAgentSkills', () => ({
 }))
 
 vi.mock('../onboarding/OnboardingInlineCommandTerminal', () => ({
-  OnboardingInlineCommandTerminal: (props: { command: string; description: string }) => {
+  OnboardingInlineCommandTerminal: (props: {
+    command: string
+    description: string
+    onTerminalExit?: () => void
+    onCommandFinished?: (bestEffortExitCode: number | null) => void
+  }) => {
+    const [instance] = useState(() => {
+      mocks.terminalInstanceCount += 1
+      return mocks.terminalInstanceCount
+    })
     mocks.terminalProps.push(props)
     return (
       <div
         data-testid="inline-command-terminal"
         data-command={props.command}
         data-description={props.description}
+        data-instance={instance}
       >
         {props.command}
       </div>
@@ -139,6 +155,7 @@ describe('AgentSkillSetupPanel', () => {
     mocks.toastSuccess.mockReset()
     mocks.skillsChanged.mockReset()
     mocks.skillsRefreshed.mockReset()
+    mocks.terminalInstanceCount = 0
     Object.defineProperty(window, 'api', {
       configurable: true,
       value: {
@@ -354,4 +371,167 @@ describe('AgentSkillSetupPanel', () => {
     expect(container?.textContent).toContain(INSTALL_COMMAND)
     expect(mocks.terminalProps.at(-1)).toMatchObject({ command: INSTALL_COMMAND })
   })
+
+  it('keeps a failed setup command visible with durable recovery', async () => {
+    const onRecheck = vi.fn()
+    await renderInteractivePanel({ onRecheck })
+    await clickButton('Install')
+    onRecheck.mockClear()
+
+    await act(async () => {
+      const onCommandFinished = mocks.terminalProps.at(-1)?.onCommandFinished
+      onCommandFinished?.(1)
+      onCommandFinished?.(0)
+    })
+
+    expect(container?.textContent).toContain(
+      'The setup command exited with code 1. This error will clear after a successful retry.'
+    )
+    expect(container?.textContent).toContain('Setup failed')
+    expect(container?.querySelector('[data-testid="inline-command-terminal"]')).not.toBeNull()
+    expect(findButton('Retry').disabled).toBe(false)
+    expect(onRecheck).toHaveBeenCalledTimes(1)
+  })
+
+  it('clears the failure notice when a later command succeeds', async () => {
+    await renderInteractivePanel()
+    await clickButton('Install')
+
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onCommandFinished?.(1)
+    })
+    await clickButton('Retry')
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onCommandFinished?.(0)
+    })
+
+    expect(container?.textContent).not.toContain('exited with code')
+  })
+
+  it('keeps the failure verdict when a command finishes without an exit code', async () => {
+    await renderInteractivePanel()
+    await clickButton('Install')
+
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onCommandFinished?.(1)
+    })
+    await clickButton('Retry')
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onCommandFinished?.(null)
+    })
+
+    expect(container?.textContent).toContain(
+      'The setup command exited with code 1. This error will clear after a successful retry.'
+    )
+  })
+
+  it('retries a failed command in a fresh interactive terminal', async () => {
+    let finishRetryPreflight: (() => void) | null = null
+    const retryPreflight = new Promise<void>((resolve) => {
+      finishRetryPreflight = resolve
+    })
+    let preflightCount = 0
+    await renderInteractivePanel({
+      onBeforeOpenTerminal: () => {
+        preflightCount += 1
+        return preflightCount === 1 ? undefined : retryPreflight
+      }
+    })
+    await clickButton('Install')
+    const firstInstance = container
+      ?.querySelector('[data-testid="inline-command-terminal"]')
+      ?.getAttribute('data-instance')
+
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onCommandFinished?.(1)
+    })
+    await clickButton('Retry')
+    expect(container?.querySelector('[data-testid="inline-command-terminal"]')).toBeNull()
+
+    await act(async () => {
+      finishRetryPreflight?.()
+      await retryPreflight
+    })
+    await act(async () => {})
+
+    expect(mocks.terminalProps.at(-1)).toMatchObject({ command: INSTALL_COMMAND })
+    expect(
+      container
+        ?.querySelector('[data-testid="inline-command-terminal"]')
+        ?.getAttribute('data-instance')
+    ).not.toBe(firstInstance)
+    expect(findButton('Retry').disabled).toBe(true)
+  })
+
+  it('keeps the command failure authoritative over presence discovery', async () => {
+    await renderInteractivePanel({ freshnessSkillName: 'orca-cli' })
+    await clickButton('Install')
+
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onCommandFinished?.(1)
+    })
+    await rerenderInteractivePanel({ installed: true, freshnessSkillName: 'orca-cli' })
+
+    expect(container?.textContent).toContain('Setup failed')
+    expect(container?.textContent).toContain('exited with code 1')
+    expect(container?.textContent).not.toContain('Installed')
+    expect(container?.querySelector('[data-testid="skill-freshness"]')).toBeNull()
+    expect(findButton('Retry').disabled).toBe(false)
+  })
+
+  it('keeps failed updates recoverable when installed re-check is hidden', async () => {
+    await renderInteractivePanel({
+      installed: true,
+      installedCommand: UPDATE_COMMAND,
+      showRecheckWhenInstalled: false
+    })
+    await clickButton('Update')
+
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onCommandFinished?.(1)
+    })
+
+    expect(container?.textContent).toContain('Setup failed')
+    expect(container?.textContent).toContain('exited with code 1')
+    expect(findButton('Retry').disabled).toBe(false)
+
+    await clickButton('Retry')
+    expect(mocks.terminalProps.at(-1)).toMatchObject({ command: UPDATE_COMMAND })
+  })
+
+  it('invalidates shared skill state before the direct completion re-check', async () => {
+    const calls: string[] = []
+    mocks.skillsChanged.mockImplementation(() => calls.push('invalidate'))
+    const onRecheck = vi.fn(() => {
+      calls.push('recheck')
+    })
+    await renderInteractivePanel({ freshnessSkillName: 'orca-cli', onRecheck })
+    await clickButton('Install')
+    calls.length = 0
+
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onCommandFinished?.(0)
+    })
+
+    expect(calls).toEqual(['invalidate', 'recheck'])
+  })
+
+  it('re-enables Install after the setup shell exits so a failed attempt can retry', async () => {
+    await renderInteractivePanel()
+    await clickButton('Install')
+
+    expect(findButton('Install').disabled).toBe(true)
+
+    await act(async () => {
+      mocks.terminalProps.at(-1)?.onTerminalExit?.()
+    })
+
+    expect(findButton('Install').disabled).toBe(false)
+    expect(container?.querySelector('[data-testid="inline-command-terminal"]')).toBeNull()
+
+    await clickButton('Install')
+
+    expect(findButton('Install').disabled).toBe(true)
+    expect(mocks.terminalProps.at(-1)).toMatchObject({ command: INSTALL_COMMAND })
+  })
 })
diff --git a/src/renderer/src/components/settings/AgentSkillSetupPanel.tsx b/src/renderer/src/components/settings/AgentSkillSetupPanel.tsx
index 96bf0af5a8a..c141b9bf472 100644
--- a/src/renderer/src/components/settings/AgentSkillSetupPanel.tsx
+++ b/src/renderer/src/components/settings/AgentSkillSetupPanel.tsx
@@ -1,9 +1,11 @@
-import { useCallback, useEffect, useState, type ComponentProps, type ReactNode } from 'react'
+import { useCallback, useEffect, useRef, useState } from 'react'
 import { Copy, Loader2, RefreshCw, Terminal } from 'lucide-react'
 import { toast } from 'sonner'
 import { IntegrationStatusPill } from '../integration-status-pill'
 import { SkillFreshnessStatusPill } from '../skills/SkillFreshnessStatusPill'
 import { OnboardingInlineCommandTerminal } from '../onboarding/OnboardingInlineCommandTerminal'
+import { AgentSkillSetupFailureNotice } from './AgentSkillSetupFailureNotice'
+import type { AgentSkillSetupPanelProps } from './agent-skill-setup-panel-props'
 import { Button } from '../ui/button'
 import { Tooltip, TooltipContent, TooltipTrigger } from '../ui/tooltip'
 import {
@@ -15,51 +17,6 @@ import { isOrcaCliAvailableOnPath } from '@/lib/agent-skill-cli-prerequisite'
 import { cn } from '@/lib/utils'
 import { translate } from '@/i18n/i18n'
 
-type AgentSkillSetupPanelVariant = 'card' | 'inline'
-type SkillPrerequisiteStatus = Awaited<ReturnType<typeof window.api.cli.getInstallStatus>>
-
-type AgentSkillSetupPanelProps = {
-  title: string
-  description: ReactNode
-  command: string
-  installedCommand?: string
-  terminalTitle: string
-  terminalAriaLabel: string
-  terminalWorktreeId: string
-  installed: boolean
-  loading: boolean
-  error: string | null
-  installDisabled?: boolean
-  terminalHeightPx?: number
-  terminalShellOverride?: string
-  leading?: ReactNode
-  icon?: ReactNode
-  variant?: AgentSkillSetupPanelVariant
-  className?: string
-  // Why: when an enclosing surface (e.g. a modal) already shows the title and
-  // status, hide the panel's own header row to avoid a duplicate heading.
-  hideHeader?: boolean
-  preInstallNotice?: ReactNode
-  getPrerequisiteStatus?: () => Promise<SkillPrerequisiteStatus>
-  isPrerequisiteAvailable?: (status: SkillPrerequisiteStatus) => boolean
-  onBeforeOpenTerminal?: () => void | Promise<void>
-  showInstallWhenInstalled?: boolean
-  showRecheckWhenInstalled?: boolean
-  installLabel?: string
-  installedInstallLabel?: string
-  // Why: defaults to 'outline' so settings panels stay unchanged; modals that make
-  // Install the sole footer CTA pass 'default' for a filled primary hierarchy.
-  installVariant?: ComponentProps<typeof Button>['variant']
-  actionHint?: ReactNode
-  openingHint?: ReactNode
-  footer?: ReactNode
-  onRecheck: () => void | Promise<unknown>
-  // Why: when set, the installed pill reflects skill freshness and Re-check also
-  // refreshes the freshness inventory. Callers omit it for non-local runtimes,
-  // which the local-host-only freshness scan cannot vouch for.
-  freshnessSkillName?: string
-}
-
 export function AgentSkillSetupPanel({
   title,
   description,
@@ -102,7 +59,11 @@ export function AgentSkillSetupPanel({
     translate('auto.components.settings.AgentSkillSetupPanel.updateLabel', 'Update')
   const [terminalOpen, setTerminalOpen] = useState(false)
   const [terminalCommand, setTerminalCommand] = useState<string | null>(null)
+  const [terminalAttempt, setTerminalAttempt] = useState(0)
   const [terminalOpening, setTerminalOpening] = useState(false)
+  const [setupAttemptRunning, setSetupAttemptRunning] = useState(false)
+  const [setupCommandFailedCode, setSetupCommandFailedCode] = useState<number | null>(null)
+  const setupAttemptRunningRef = useRef(false)
   const [preInstallNoticeVisible, setPreInstallNoticeVisible] = useState(
     Boolean(preInstallNotice && !installed)
   )
@@ -116,6 +77,68 @@ export function AgentSkillSetupPanel({
   // already-open terminal pinned to the command selected by the user's click.
   const openTerminalCommand = terminalCommand ?? activeCommand
 
+  const openSetupTerminal = (): void => {
+    if (terminalOpening || setupAttemptRunning) {
+      return
+    }
+    const nextCommand =
+      setupCommandFailedCode !== null && terminalCommand ? terminalCommand : activeCommand
+    setTerminalOpening(true)
+    if (setupCommandFailedCode !== null) {
+      setTerminalOpen(false)
+    }
+    void (async () => {
+      let shouldOpenTerminal = false
+      try {
+        await onBeforeOpenTerminal?.()
+        await refreshPreInstallNotice()
+        shouldOpenTerminal = true
+      } catch {
+        shouldOpenTerminal = false
+      } finally {
+        if (mountedRef.current) {
+          setTerminalOpening(false)
+          if (shouldOpenTerminal) {
+            setTerminalCommand(nextCommand)
+            setTerminalAttempt((attempt) => attempt + 1)
+            setTerminalOpen(true)
+            setupAttemptRunningRef.current = true
+            setSetupAttemptRunning(true)
+          }
+        }
+      }
+    })()
+  }
+
+  // Why: PTY exit is the shell's status; OSC 133;D reports the install command.
+  const handleSetupCommandFinished = useCallback(
+    (bestEffortExitCode: number | null): void => {
+      // Nested shells can emit duplicate completion markers in one PTY chunk.
+      if (!setupAttemptRunningRef.current) {
+        return
+      }
+      setupAttemptRunningRef.current = false
+      setSetupAttemptRunning(false)
+      if (bestEffortExitCode !== null) {
+        setSetupCommandFailedCode(bestEffortExitCode === 0 ? null : bestEffortExitCode)
+      }
+      if (freshnessSkillName) {
+        notifyInstalledAgentSkillsChanged()
+      }
+      void onRecheck()
+    },
+    [freshnessSkillName, onRecheck]
+  )
+
+  const handleTerminalExit = useCallback((): void => {
+    if (mountedRef.current) {
+      setupAttemptRunningRef.current = false
+      setTerminalOpen(false)
+      setSetupAttemptRunning(false)
+    }
+    notifyInstalledAgentSkillsChanged()
+  }, [mountedRef])
+
   useEffect(() => {
     if (!preInstallNotice) {
       setPreInstallNoticeVisible(false)
@@ -180,36 +203,12 @@ export function AgentSkillSetupPanel({
 
   const actionRow = (
     <div className="mt-3 flex flex-wrap items-center gap-2">
-      {!installed || showInstallWhenInstalled ? (
+      {(!installed || showInstallWhenInstalled) && setupCommandFailedCode === null ? (
         <Button
           type="button"
           variant={installVariant}
           size="sm"
-          onClick={() => {
-            if (terminalOpening) {
-              return
-            }
-            const nextCommand = activeCommand
-            setTerminalOpening(true)
-            void (async () => {
-              let shouldOpenTerminal = false
-              try {
-                await onBeforeOpenTerminal?.()
-                await refreshPreInstallNotice()
-                shouldOpenTerminal = true
-              } catch {
-                shouldOpenTerminal = false
-              } finally {
-                if (mountedRef.current) {
-                  setTerminalOpening(false)
-                  if (shouldOpenTerminal) {
-                    setTerminalCommand(nextCommand)
-                    setTerminalOpen(true)
-                  }
-                }
-              }
-            })()
-          }}
+          onClick={openSetupTerminal}
           disabled={terminalOpen || installDisabled || terminalOpening}
         >
           {terminalOpening ? (
@@ -224,22 +223,32 @@ export function AgentSkillSetupPanel({
               : resolvedInstallLabel}
         </Button>
       ) : null}
-      {!installed || showRecheckWhenInstalled ? (
+      {setupCommandFailedCode !== null || !installed || showRecheckWhenInstalled ? (
         <Button
           type="button"
           variant="ghost"
           size="sm"
           className="gap-1.5"
           onClick={() => {
+            if (setupCommandFailedCode !== null) {
+              openSetupTerminal()
+              return
+            }
             void Promise.resolve(onRecheck()).then(() => {
               // Reuse the completed scan so sibling surfaces sync without rediscovery.
               notifyInstalledAgentSkillsRefreshed()
             })
           }}
-          disabled={loading}
+          disabled={
+            setupCommandFailedCode !== null
+              ? installDisabled || terminalOpening || setupAttemptRunning
+              : loading
+          }
         >
-          <RefreshCw className={cn('size-3.5', loading && 'animate-spin')} />
-          {translate('auto.components.settings.AgentSkillSetupPanel.c689392435', 'Re-check')}
+          <RefreshCw className={cn('size-3.5', (loading || terminalOpening) && 'animate-spin')} />
+          {setupCommandFailedCode !== null
+            ? translate('auto.components.settings.AgentSkillSetupPanel.retrySetup', 'Retry')
+            : translate('auto.components.settings.AgentSkillSetupPanel.c689392435', 'Re-check')}
         </Button>
       ) : null}
       {terminalOpening ? (
@@ -269,7 +278,7 @@ export function AgentSkillSetupPanel({
           <>
             {error ? <p className="text-[12px] text-destructive">{error}</p> : null}
             {/* hideHeader drops the title row; keep freshness so guided hubs still surface updates. */}
-            {installed && freshnessSkillName ? (
+            {installed && freshnessSkillName && setupCommandFailedCode === null ? (
               <div className="mb-2">
                 <SkillFreshnessStatusPill skillName={freshnessSkillName} />
               </div>
@@ -286,7 +295,14 @@ export function AgentSkillSetupPanel({
             <div className="min-w-0 flex-1 self-center">
               <div className="flex flex-wrap items-center gap-x-3 gap-y-1">
                 <h3 className="text-[15px] font-semibold leading-tight text-foreground">{title}</h3>
-                {loading && !installed ? (
+                {setupCommandFailedCode !== null ? (
+                  <IntegrationStatusPill tone="attention">
+                    {translate(
+                      'auto.components.settings.AgentSkillSetupPanel.setupFailed',
+                      'Setup failed'
+                    )}
+                  </IntegrationStatusPill>
+                ) : loading && !installed ? (
                   <IntegrationStatusPill tone="neutral">
                     {translate(
                       'auto.components.settings.AgentSkillSetupPanel.68a468752e',
@@ -322,6 +338,7 @@ export function AgentSkillSetupPanel({
             <p className="text-[13px] leading-snug text-muted-foreground">{description}</p>
           ) : null}
           {actionRow}
+          <AgentSkillSetupFailureNotice exitCode={setupCommandFailedCode} />
           {actionHint ? <div className="mt-2">{actionHint}</div> : null}
           {!installed && preInstallNotice && preInstallNoticeVisible ? (
             <p className="mt-3 text-[12px] leading-snug text-muted-foreground">
@@ -373,6 +390,7 @@ export function AgentSkillSetupPanel({
             </Tooltip>
           </div>
           <OnboardingInlineCommandTerminal
+            key={terminalAttempt}
             worktreeId={terminalWorktreeId}
             command={openTerminalCommand}
             title={terminalTitle}
@@ -386,7 +404,8 @@ export function AgentSkillSetupPanel({
             terminalTopMarginPx={8}
             descriptionPaddingClassName="px-4 py-2"
             autoScrollIntoView={false}
-            onTerminalExit={notifyInstalledAgentSkillsChanged}
+            onTerminalExit={handleTerminalExit}
+            onCommandFinished={handleSetupCommandFinished}
           />
         </div>
       ) : null}
diff --git a/src/renderer/src/components/settings/agent-skill-setup-panel-props.ts b/src/renderer/src/components/settings/agent-skill-setup-panel-props.ts
new file mode 100644
index 00000000000..9596d47d911
--- /dev/null
+++ b/src/renderer/src/components/settings/agent-skill-setup-panel-props.ts
@@ -0,0 +1,43 @@
+import type { ComponentProps, ReactNode } from 'react'
+import type { Button } from '../ui/button'
+
+type AgentSkillSetupPanelVariant = 'card' | 'inline'
+type SkillPrerequisiteStatus = Awaited<ReturnType<typeof window.api.cli.getInstallStatus>>
+
+export type AgentSkillSetupPanelProps = {
+  title: string
+  description: ReactNode
+  command: string
+  installedCommand?: string
+  terminalTitle: string
+  terminalAriaLabel: string
+  terminalWorktreeId: string
+  installed: boolean
+  loading: boolean
+  error: string | null
+  installDisabled?: boolean
+  terminalHeightPx?: number
+  terminalShellOverride?: string
+  leading?: ReactNode
+  icon?: ReactNode
+  variant?: AgentSkillSetupPanelVariant
+  className?: string
+  // Enclosing modals can own the title and status.
+  hideHeader?: boolean
+  preInstallNotice?: ReactNode
+  getPrerequisiteStatus?: () => Promise<SkillPrerequisiteStatus>
+  isPrerequisiteAvailable?: (status: SkillPrerequisiteStatus) => boolean
+  onBeforeOpenTerminal?: () => void | Promise<void>
+  showInstallWhenInstalled?: boolean
+  showRecheckWhenInstalled?: boolean
+  installLabel?: string
+  installedInstallLabel?: string
+  // Modal footers can promote Install to the primary action.
+  installVariant?: ComponentProps<typeof Button>['variant']
+  actionHint?: ReactNode
+  openingHint?: ReactNode
+  footer?: ReactNode
+  onRecheck: () => void | Promise<unknown>
+  // Freshness inventory is local-host-only.
+  freshnessSkillName?: string
+}
diff --git a/src/renderer/src/components/terminal-pane/parked-terminal-command-status.test.ts b/src/renderer/src/components/terminal-pane/parked-terminal-command-status.test.ts
index c2479267e24..24991e01914 100644
--- a/src/renderer/src/components/terminal-pane/parked-terminal-command-status.test.ts
+++ b/src/renderer/src/components/terminal-pane/parked-terminal-command-status.test.ts
@@ -271,7 +271,7 @@ describe('createParkedTerminalCommandStatusPolicy', () => {
     ssh.dispose()
 
     expect(dispatchTerminalCommandFinishedEvent).toHaveBeenCalledTimes(2)
-    expect(dispatchTerminalCommandFinishedEvent).toHaveBeenCalledWith(WORKTREE_ID)
+    expect(dispatchTerminalCommandFinishedEvent).toHaveBeenCalledWith(WORKTREE_ID, 0)
   })
 
   it('drops a same-turn status row on command finished for SSH PTYs only', async () => {
diff --git a/src/renderer/src/components/terminal-pane/parked-terminal-command-status.ts b/src/renderer/src/components/terminal-pane/parked-terminal-command-status.ts
index ff422e55de5..781625318bd 100644
--- a/src/renderer/src/components/terminal-pane/parked-terminal-command-status.ts
+++ b/src/renderer/src/components/terminal-pane/parked-terminal-command-status.ts
@@ -126,13 +126,13 @@ export function createParkedTerminalCommandStatusPolicy(options: {
   )
 
   return {
-    onCommandFinished: (): void => {
+    onCommandFinished: (bestEffortExitCode: number | null): void => {
       if (disposed) {
         return
       }
       // Why: the finished command may have moved HEAD or the index (an agent running
       // `git checkout` in a parked worktree); nudge git UI now instead of waiting for a poll.
-      dispatchTerminalCommandFinishedEvent(worktreeId)
+      dispatchTerminalCommandFinishedEvent(worktreeId, bestEffortExitCode)
       // Why: drop the same-turn status row only for SSH PTYs — exact parity with the mounted
       // path, whose foreground tracker refuses SSH ids and drops un-probed. Local PTYs need
       // pty-connection's process-confirm ladder to tell a leaked nested-shell 133;D from a
diff --git a/src/renderer/src/components/terminal-pane/pty-connection.ts b/src/renderer/src/components/terminal-pane/pty-connection.ts
index 49c11f55cb3..f4a4da3b9ac 100644
--- a/src/renderer/src/components/terminal-pane/pty-connection.ts
+++ b/src/renderer/src/components/terminal-pane/pty-connection.ts
@@ -2095,13 +2095,13 @@ export function connectPanePty(
   // (remote PTYs, kill switch off) or as a main-derived pty:sideEffect fact —
   // routing both through this handler keeps the drop/interrupt semantics
   // identical across authority modes.
-  const handleCommandFinished = (_bestEffortExitCode: number | null): void => {
+  const handleCommandFinished = (bestEffortExitCode: number | null): void => {
     clearCommandInferredPaneAgentAfterPtySideEffects()
     visibleForegroundSamplePending = false
     const shouldDeferStatusDrop = paneForegroundAgentTracker.onCommandFinished()
     // Why: the finished command may have moved HEAD or the index (e.g.
     // `git checkout`); nudge git UI now instead of waiting for a poll.
-    dispatchTerminalCommandFinishedEvent(deps.worktreeId)
+    dispatchTerminalCommandFinishedEvent(deps.worktreeId, bestEffortExitCode)
     const state = useAppStore.getState()
     const entry = state.agentStatusByPaneKey[cacheKey]
     const inferenceResult = flushPendingInterruptInference()
diff --git a/src/renderer/src/hooks/terminal-command-finished-event.ts b/src/renderer/src/hooks/terminal-command-finished-event.ts
index 5a304b41846..2bdd0e4b666 100644
--- a/src/renderer/src/hooks/terminal-command-finished-event.ts
+++ b/src/renderer/src/hooks/terminal-command-finished-event.ts
@@ -2,12 +2,16 @@ export const ORCA_TERMINAL_COMMAND_FINISHED_EVENT = 'orca:terminal-command-finis
 
 export type TerminalCommandFinishedEventDetail = {
   worktreeId: string
+  // OSC 133;D may omit the command's exit code.
+  exitCode: number | null
 }
 
 // Why: the OSC 133;D handler lives in a per-pane closure; a window event lets
-// decoupled consumers (e.g. git status refresh) react to shell commands
-// finishing without reaching into terminal internals.
-export function dispatchTerminalCommandFinishedEvent(worktreeId: string): void {
+// decoupled consumers react without reaching into terminal internals.
+export function dispatchTerminalCommandFinishedEvent(
+  worktreeId: string,
+  exitCode: number | null
+): void {
   // Why: unit tests and non-DOM renderer shims may expose only the preload API.
   if (typeof window.dispatchEvent !== 'function') {
     return
@@ -15,7 +19,7 @@ export function dispatchTerminalCommandFinishedEvent(worktreeId: string): void {
 
   window.dispatchEvent(
     new CustomEvent<TerminalCommandFinishedEventDetail>(ORCA_TERMINAL_COMMAND_FINISHED_EVENT, {
-      detail: { worktreeId }
+      detail: { worktreeId, exitCode }
     })
   )
 }
diff --git a/src/renderer/src/i18n/locales/en.json b/src/renderer/src/i18n/locales/en.json
index 9e1cd986862..76557b35550 100644
--- a/src/renderer/src/i18n/locales/en.json
+++ b/src/renderer/src/i18n/locales/en.json
@@ -5319,7 +5319,10 @@
           "5f818f12ab": "Preparing...",
           "4c05b9d7cb": "Preparing setup terminal.",
           "installLabel": "Install",
-          "updateLabel": "Update"
+          "updateLabel": "Update",
+          "setupCommandFailed": "The setup command exited with code {{value0}}. This error will clear after a successful retry.",
+          "setupFailed": "Setup failed",
+          "retrySetup": "Retry"
         },
         "AgentsPane": {
           "d83834f5e6": "Detecting installed agents…",