diff --git a/src/slop_code/agent_runner/agents/cli_utils.py b/src/slop_code/agent_runner/agents/cli_utils.py
index 3871ba55c..8fb75605d 100644
--- a/src/slop_code/agent_runner/agents/cli_utils.py
+++ b/src/slop_code/agent_runner/agents/cli_utils.py
@@ -56,37 +56,49 @@ def stream_cli_command(
         parse_stderr: If True, also parse stderr lines through the parser
     """
     env = dict(env or {})
-    stdout_buffer = ""
-    stderr_buffer = ""
-    stdout = stderr = ""
+    stdout_buffer_parts: list[str] = []
+    stderr_buffer_parts: list[str] = []
+    stdout_parts: list[str] = []
+    stderr_parts: list[str] = []
     start = time.monotonic()
     result: RuntimeResult | None = None
 
     for event in runtime.stream(command=command, env=env, timeout=timeout):
         if event.kind == "stdout":
-            stdout += event.text or ""
-            stdout_buffer += event.text or ""
-            while "\n" in stdout_buffer:
-                line, stdout_buffer = stdout_buffer.split("\n", 1)
-                line = line.strip()
-                if not line:
-                    continue
-                yield parser(line)
-        elif event.kind == "stderr":
-            stderr += event.text or ""
-            if parse_stderr:
-                stderr_buffer += event.text or ""
-                while "\n" in stderr_buffer:
-                    line, stderr_buffer = stderr_buffer.split("\n", 1)
+            chunk = event.text or ""
+            stdout_parts.append(chunk)
+            stdout_buffer_parts.append(chunk)
+            if "\n" in chunk:
+                stdout_buffer = "".join(stdout_buffer_parts)
+                while "\n" in stdout_buffer:
+                    line, stdout_buffer = stdout_buffer.split("\n", 1)
                     line = line.strip()
                     if not line:
                         continue
                     yield parser(line)
+                stdout_buffer_parts = [stdout_buffer] if stdout_buffer else []
+        elif event.kind == "stderr":
+            chunk = event.text or ""
+            stderr_parts.append(chunk)
+            if parse_stderr:
+                stderr_buffer_parts.append(chunk)
+                if "\n" in chunk:
+                    stderr_buffer = "".join(stderr_buffer_parts)
+                    while "\n" in stderr_buffer:
+                        line, stderr_buffer = stderr_buffer.split("\n", 1)
+                        line = line.strip()
+                        if not line:
+                            continue
+                        yield parser(line)
+                    stderr_buffer_parts = (
+                        [stderr_buffer] if stderr_buffer else []
+                    )
         elif event.kind == "finished":
             result = event.result
             break
 
     # Flush remaining stdout buffer
+    stdout_buffer = "".join(stdout_buffer_parts)
     for line in stdout_buffer.split("\n"):
         line = line.strip()
         if not line:
@@ -95,6 +107,7 @@ def stream_cli_command(
 
     # Flush remaining stderr buffer if parsing stderr
     if parse_stderr:
+        stderr_buffer = "".join(stderr_buffer_parts)
         for line in stderr_buffer.split("\n"):
             line = line.strip()
             if not line:
@@ -104,8 +117,8 @@ def stream_cli_command(
     if result is None:
         result = RuntimeResult(
             exit_code=0,
-            stdout=stdout,
-            stderr=stderr,
+            stdout="".join(stdout_parts),
+            stderr="".join(stderr_parts),
             setup_stdout="",
             setup_stderr="",
             elapsed=time.monotonic() - start,
diff --git a/src/slop_code/execution/stream_processor.py b/src/slop_code/execution/stream_processor.py
index 6e5497fbb..ef62d31a4 100644
--- a/src/slop_code/execution/stream_processor.py
+++ b/src/slop_code/execution/stream_processor.py
@@ -98,8 +98,8 @@ def process_stream(
         tuple[Literal["stdout", "stderr", "finished"], str | None]
     ] = queue.Queue()
     thread = start_stream_pump(stream, event_queue, stop_event)
-    stdout = ""
-    stderr = ""
+    stdout_parts: list[str] = []
+    stderr_parts: list[str] = []
     setup_stdout = ""
     setup_stderr = ""
     yielding_stdout = yield_only_after is None
@@ -110,34 +110,32 @@ def handle_event(
         kind: Literal["stdout", "stderr"],
         payload: str,
     ) -> Iterator[RuntimeEvent]:
-        nonlocal stdout, stderr, setup_stdout, setup_stderr
+        nonlocal stdout_parts, stderr_parts, setup_stdout, setup_stderr
         nonlocal yielding_stdout, yielding_stderr
 
         if kind == "stdout":
-            stdout += payload
-            if (
-                not yielding_stdout
-                and yield_only_after
-                and yield_only_after in stdout
-            ):
-                yielding_stdout = True
-                setup_stdout, stdout = stdout.split(yield_only_after, 1)
-                payload = stdout
+            stdout_parts.append(payload)
+            if not yielding_stdout and yield_only_after:
+                stdout = "".join(stdout_parts)
+                if yield_only_after in stdout:
+                    yielding_stdout = True
+                    setup_stdout, stdout = stdout.split(yield_only_after, 1)
+                    stdout_parts = [stdout]
+                    payload = stdout
 
             if yielding_stdout and payload.strip():
                 yield RuntimeEvent(kind="stdout", text=payload)
             return
 
         if kind == "stderr":
-            stderr += payload
-            if (
-                not yielding_stderr
-                and yield_only_after
-                and yield_only_after in stderr
-            ):
-                yielding_stderr = True
-                setup_stderr, stderr = stderr.split(yield_only_after, 1)
-                payload = stderr
+            stderr_parts.append(payload)
+            if not yielding_stderr and yield_only_after:
+                stderr = "".join(stderr_parts)
+                if yield_only_after in stderr:
+                    yielding_stderr = True
+                    setup_stderr, stderr = stderr.split(yield_only_after, 1)
+                    stderr_parts = [stderr]
+                    payload = stderr
 
             if yielding_stderr and payload.strip():
                 yield RuntimeEvent(kind="stderr", text=payload)
@@ -196,8 +194,8 @@ def handle_event(
     )
     return RuntimeResult(
         exit_code=exit_code,
-        stdout=stdout,
-        stderr=stderr,
+        stdout="".join(stdout_parts),
+        stderr="".join(stderr_parts),
         setup_stdout=setup_stdout,
         setup_stderr=setup_stderr,
         elapsed=elapsed,
diff --git a/tests/agent_runner/agents/cli_utils_test.py b/tests/agent_runner/agents/cli_utils_test.py
new file mode 100644
index 000000000..0ffe74a37
--- /dev/null
+++ b/tests/agent_runner/agents/cli_utils_test.py
@@ -0,0 +1,72 @@
+"""Tests for shared CLI agent helpers."""
+
+from __future__ import annotations
+
+from collections.abc import Iterator
+from typing import TYPE_CHECKING, cast
+
+from slop_code.agent_runner.agents.cli_utils import stream_cli_command
+from slop_code.common.llms import TokenUsage
+from slop_code.execution.runtime import RuntimeEvent
+from slop_code.execution.runtime import RuntimeResult
+
+if TYPE_CHECKING:
+    from slop_code.execution.protocols import StreamingRuntime
+
+
+class FakeRuntime:
+    def __init__(self, events: list[RuntimeEvent]) -> None:
+        self.events = events
+
+    def stream(
+        self,
+        command: str,
+        env: dict[str, str],
+        timeout: float | None,
+    ) -> Iterator[RuntimeEvent]:
+        yield from self.events
+
+
+def _parse_line(line: str) -> tuple[float | None, TokenUsage | None, dict]:
+    return None, None, {"line": line}
+
+
+def test_stream_cli_command_parses_lines_across_chunk_boundaries() -> None:
+    result = RuntimeResult(
+        exit_code=0,
+        stdout='{"step": 1}\n{"step": 2}\n',
+        stderr='{"err": true}\n',
+        setup_stdout="",
+        setup_stderr="",
+        elapsed=0.1,
+        timed_out=False,
+    )
+    runtime = cast(
+        "StreamingRuntime",
+        FakeRuntime(
+            [
+                RuntimeEvent(kind="stdout", text='{"step"'),
+                RuntimeEvent(kind="stdout", text=': 1}\n{"step":'),
+                RuntimeEvent(kind="stdout", text=" 2}\n"),
+                RuntimeEvent(kind="stderr", text='{"err"'),
+                RuntimeEvent(kind="stderr", text=": true}\n"),
+                RuntimeEvent(kind="finished", result=result),
+            ]
+        ),
+    )
+
+    items = list(
+        stream_cli_command(
+            runtime=runtime,
+            command="agent --json",
+            parser=_parse_line,
+            parse_stderr=True,
+        )
+    )
+
+    assert items == [
+        (None, None, {"line": '{"step": 1}'}),
+        (None, None, {"line": '{"step": 2}'}),
+        (None, None, {"line": '{"err": true}'}),
+        result,
+    ]
diff --git a/tests/execution/stream_processor_test.py b/tests/execution/stream_processor_test.py
index b37e555a1..fac1b3016 100644
--- a/tests/execution/stream_processor_test.py
+++ b/tests/execution/stream_processor_test.py
@@ -2,7 +2,33 @@
 
 from __future__ import annotations
 
+from collections.abc import Iterator
+
+from slop_code.execution.runtime import RuntimeEvent
+from slop_code.execution.runtime import RuntimeResult
+from slop_code.execution.shared import SPLIT_STRING
 from slop_code.execution.stream_processor import ensure_string
+from slop_code.execution.stream_processor import process_stream
+
+
+def _collect_process_stream(
+    chunks: Iterator[tuple[str, str]],
+    *,
+    yield_only_after: str | None = None,
+) -> tuple[list[RuntimeEvent], RuntimeResult]:
+    events: list[RuntimeEvent] = []
+    generator = process_stream(
+        chunks,
+        timeout=1,
+        poll_fn=lambda: None,
+        yield_only_after=yield_only_after,
+    )
+
+    while True:
+        try:
+            events.append(next(generator))
+        except StopIteration as stop:
+            return events, stop.value
 
 
 def test_ensure_string_preserves_text_around_invalid_utf8_bytes() -> None:
@@ -10,3 +36,34 @@ def test_ensure_string_preserves_text_around_invalid_utf8_bytes() -> None:
 
     assert '{"type":"message_update","data":"ok"}' in decoded
     assert decoded.endswith("\n")
+
+
+def test_process_stream_splits_setup_marker_across_chunks() -> None:
+    marker_start, marker_end = SPLIT_STRING[:10], SPLIT_STRING[10:]
+
+    events, result = _collect_process_stream(
+        iter(
+            [
+                ("setup stdout\n", ""),
+                (marker_start, ""),
+                (marker_end, ""),
+                ("\ncommand stdout", ""),
+                (" continued", ""),
+                ("", "setup stderr\n"),
+                ("", marker_start),
+                ("", marker_end),
+                ("", "\ncommand stderr"),
+            ]
+        ),
+        yield_only_after=SPLIT_STRING,
+    )
+
+    assert [(event.kind, event.text) for event in events] == [
+        ("stdout", "\ncommand stdout"),
+        ("stdout", " continued"),
+        ("stderr", "\ncommand stderr"),
+    ]
+    assert result.setup_stdout == "setup stdout\n"
+    assert result.stdout == "\ncommand stdout continued"
+    assert result.setup_stderr == "setup stderr\n"
+    assert result.stderr == "\ncommand stderr"