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diff --git a/.playwright-mcp/editor-actionbar-test.png b/.playwright-mcp/editor-actionbar-test.png
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diff --git a/.playwright-mcp/terminal-actionbar-resize-issue.png b/.playwright-mcp/terminal-actionbar-resize-issue.png
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diff --git a/.playwright-mcp/terminal-with-actionbar-fix.png b/.playwright-mcp/terminal-with-actionbar-fix.png
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diff --git a/.playwright-mcp/workspace-actionbar-layout.png b/.playwright-mcp/workspace-actionbar-layout.png
new file mode 100644
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diff --git a/.playwright-mcp/workspace-file-open.png b/.playwright-mcp/workspace-file-open.png
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diff --git a/ts_web/elements/00group-workspace/dees-workspace-terminal/dees-workspace-terminal.ts b/ts_web/elements/00group-workspace/dees-workspace-terminal/dees-workspace-terminal.ts
index caf1d46..5637997 100644
--- a/ts_web/elements/00group-workspace/dees-workspace-terminal/dees-workspace-terminal.ts
+++ b/ts_web/elements/00group-workspace/dees-workspace-terminal/dees-workspace-terminal.ts
@@ -16,6 +16,8 @@ import { themeDefaultStyles } from '../../00theme.js';
 import type { IExecutionEnvironment } from '../../00group-runtime/index.js';
 import { WebContainerEnvironment } from '../../00group-runtime/index.js';
 import '../../dees-icon/dees-icon.js';
+import '../../dees-actionbar/dees-actionbar.js';
+import type { DeesActionbar } from '../../dees-actionbar/dees-actionbar.js';
 import { TerminalTabManager } from './terminal-tab-manager.js';
 import type {
   ITerminalTab,
@@ -79,6 +81,9 @@ export class DeesWorkspaceTerminal extends DeesElement {
   private terminalThemeSubscription: any = null;
   private isBright: boolean = false;
 
+  // Actionbar reference for terminal-context notifications
+  private terminalActionbar: DeesActionbar | null = null;
+
   /**
    * Promise that resolves when the environment is ready.
    * @deprecated Use executionEnvironment directly
@@ -120,17 +125,21 @@ export class DeesWorkspaceTerminal extends DeesElement {
 
       .terminal-content {
         flex: 1;
-        position: relative;
+        display: flex;
+        flex-direction: column;
         overflow: hidden;
         background: ${cssManager.bdTheme('#ffffff', '#000000')};
       }
 
       #active-terminal-container {
-        position: absolute;
-        top: 20px;
-        left: 20px;
-        right: 20px;
-        bottom: 20px;
+        flex: 1;
+        position: relative;
+        min-height: 0;
+        margin: 20px;
+      }
+
+      .terminal-content dees-actionbar {
+        flex-shrink: 0;
       }
 
       /* Tab bar on the right side */
@@ -426,6 +435,7 @@ export class DeesWorkspaceTerminal extends DeesElement {
               <span>No terminal open</span>
             </div>
           `}
+          <dees-actionbar></dees-actionbar>
         </div>
 
         <!-- Vertical tab bar on the right -->
@@ -491,11 +501,15 @@ export class DeesWorkspaceTerminal extends DeesElement {
 
   async connectedCallback(): Promise<void> {
     await super.connectedCallback();
-    this.resizeObserver.observe(this);
+    // ResizeObserver is set up in attachTerminalToContainer when the container exists
   }
 
   async disconnectedCallback(): Promise<void> {
-    this.resizeObserver.unobserve(this);
+    // Unobserve the terminal container
+    const container = this.shadowRoot?.getElementById('active-terminal-container');
+    if (container) {
+      this.resizeObserver.unobserve(container);
+    }
     if (this.terminalThemeSubscription) {
       this.terminalThemeSubscription.unsubscribe();
       this.terminalThemeSubscription = null;
@@ -558,6 +572,10 @@ export class DeesWorkspaceTerminal extends DeesElement {
     const container = this.shadowRoot?.getElementById('active-terminal-container');
     if (!container) return;
 
+    // Observe container for resize (handles actionbar appearing/disappearing)
+    // ResizeObserver.observe() is idempotent - safe to call multiple times
+    this.resizeObserver.observe(container);
+
     // Clear container
     container.innerHTML = '';
 
@@ -656,6 +674,36 @@ export class DeesWorkspaceTerminal extends DeesElement {
         detail: { tabId, exitCode },
       })
     );
+
+    // Show actionbar to offer closing the tab (only if tab is closeable)
+    if (tab.closeable) {
+      this.showExitedTabActionbar(tabId, tab.label, exitCode);
+    }
+  }
+
+  /**
+   * Show actionbar offering to close an exited tab
+   */
+  private async showExitedTabActionbar(tabId: string, tabLabel: string, exitCode: number): Promise<void> {
+    const isSuccess = exitCode === 0;
+    const result = await this.showActionbar({
+      message: isSuccess
+        ? `"${tabLabel}" completed. Close tab?`
+        : `"${tabLabel}" exited (code ${exitCode}). Close tab?`,
+      type: isSuccess ? 'info' : 'warning',
+      icon: isSuccess ? 'lucide:checkCircle' : 'lucide:alertTriangle',
+      actions: [
+        { id: 'close', label: 'Close Tab', primary: true },
+        { id: 'keep', label: 'Keep Open' },
+      ],
+      timeout: { duration: 10000, defaultActionId: 'close' },
+      dismissible: true,
+    });
+
+    // Close tab if user clicked "Close Tab" or timeout triggered auto-close
+    if (result.actionId === 'close') {
+      this.closeTab(tabId);
+    }
   }
 
   // ========== Public API ==========
@@ -816,6 +864,19 @@ export class DeesWorkspaceTerminal extends DeesElement {
     return true;
   }
 
+  /**
+   * Show an actionbar notification in the terminal panel context.
+   * Use this for terminal-related decisions (e.g., retry failed process, kill process, etc.)
+   */
+  public async showActionbar(
+    options: Parameters<DeesActionbar['show']>[0]
+  ): Promise<ReturnType<DeesActionbar['show']>> {
+    if (!this.terminalActionbar) {
+      this.terminalActionbar = this.shadowRoot?.querySelector('dees-actionbar') as DeesActionbar;
+    }
+    return this.terminalActionbar?.show(options);
+  }
+
   // ========== Utility Methods ==========
 
   public async waitForPrompt(term: Terminal, prompt: string): Promise<void> {
diff --git a/ts_web/elements/00group-workspace/dees-workspace/dees-workspace.ts b/ts_web/elements/00group-workspace/dees-workspace/dees-workspace.ts
index c6a255b..296d6ee 100644
--- a/ts_web/elements/00group-workspace/dees-workspace/dees-workspace.ts
+++ b/ts_web/elements/00group-workspace/dees-workspace/dees-workspace.ts
@@ -957,6 +957,7 @@ testSmartPromise();
                   ></dees-workspace-monaco>
                 `}
               </div>
+              <dees-actionbar></dees-actionbar>
             </div>
 
             <!-- Horizontal resize handle for terminal -->
@@ -1021,9 +1022,6 @@ testSmartPromise();
           .executionEnvironment=${this.executionEnvironment}
           @run-process=${this.handleRunProcess}
         ></dees-workspace-bottombar>
-
-        <!-- Action Bar for notifications -->
-        <dees-actionbar></dees-actionbar>
       </div>
     `;
   }
@@ -1056,9 +1054,6 @@ testSmartPromise();
     this.currentFileTreeWidth = this.fileTreeWidth;
     this.currentTerminalHeight = this.terminalHeight;
 
-    // Get actionbar reference for file change notifications
-    this.actionbarElement = this.shadowRoot?.querySelector('dees-actionbar') as DeesActionbar;
-
     if (this.executionEnvironment) {
       await this.initializeWorkspace();
     }
@@ -1068,6 +1063,11 @@ testSmartPromise();
     if (changedProperties.has('executionEnvironment') && this.executionEnvironment) {
       await this.initializeWorkspace();
     }
+
+    // Capture actionbar reference when it becomes available (after initialization completes)
+    if (!this.actionbarElement) {
+      this.actionbarElement = this.shadowRoot?.querySelector('.editor-panel dees-actionbar') as DeesActionbar;
+    }
   }
 
   private async initializeWorkspace() {
diff --git a/ts_web/elements/dees-actionbar/dees-actionbar.ts b/ts_web/elements/dees-actionbar/dees-actionbar.ts
index 29e29d3..fa55ccb 100644
--- a/ts_web/elements/dees-actionbar/dees-actionbar.ts
+++ b/ts_web/elements/dees-actionbar/dees-actionbar.ts
@@ -130,12 +130,12 @@ export class DeesActionbar extends DeesElement {
       :host {
         display: block;
         overflow: hidden;
-        height: 0;
-        transition: height 0.2s ease-out;
+        max-height: 0;
+        transition: max-height 0.2s ease-out;
       }
 
       :host(.visible) {
-        height: auto;
+        max-height: 100px; /* Enough for actionbar content */
       }
 
       .actionbar-item {