diff --git a/src/tests/tools.test.ts b/src/tests/tools.test.ts
index 3370249b..c4a9970b 100644
--- a/src/tests/tools.test.ts
+++ b/src/tests/tools.test.ts
@@ -502,6 +502,23 @@ describe("Bash terminal output", () => {
       });
     });
 
+    it("should route failed commands through the terminal when supportsTerminalOutput is true", () => {
+      const toolResult: ToolResultBlockParam = {
+        type: "tool_result",
+        tool_use_id: "toolu_bash",
+        content: "some error output",
+        is_error: true,
+      };
+      const update = toolUpdateFromToolResult(toolResult, bashToolUse, true);
+
+      expect(update.content).toEqual([{ type: "terminal", terminalId: "toolu_bash" }]);
+      expect(update._meta).toEqual({
+        terminal_info: { terminal_id: "toolu_bash" },
+        terminal_output: { terminal_id: "toolu_bash", data: "some error output" },
+        terminal_exit: { terminal_id: "toolu_bash", exit_code: 1, signal: null },
+      });
+    });
+
     it("should fall back to stderr when stdout is empty", () => {
       const toolResult = makeBashResult("", "some error output", 1);
       const update = toolUpdateFromToolResult(toolResult, bashToolUse, false);
@@ -610,10 +627,25 @@ describe("Bash terminal output", () => {
         });
       });
 
-      it("should use error handler when is_error is true (early return before Bash case)", () => {
+      it("should route is_error through the terminal when supportsTerminalOutput is true", () => {
         const toolResult = makeStringBashResult("command not found: bad_cmd", true);
         const update = toolUpdateFromToolResult(toolResult, bashToolUse, true);
 
+        // Failed Bash commands skip the early error return and reach the Bash
+        // case so the client receives terminal output with a non-zero exit code
+        // instead of plain markdown details.
+        expect(update.content).toEqual([{ type: "terminal", terminalId: "toolu_bash" }]);
+        expect(update._meta).toEqual({
+          terminal_info: { terminal_id: "toolu_bash" },
+          terminal_output: { terminal_id: "toolu_bash", data: "command not found: bad_cmd" },
+          terminal_exit: { terminal_id: "toolu_bash", exit_code: 1, signal: null },
+        });
+      });
+
+      it("should use error handler when is_error is true and terminal output is unsupported", () => {
+        const toolResult = makeStringBashResult("command not found: bad_cmd", true);
+        const update = toolUpdateFromToolResult(toolResult, bashToolUse, false);
+
         // is_error with content hits the early error return at the top of
         // toolUpdateFromToolResult, before reaching the Bash switch case.
         // So there's no terminal _meta, just error-formatted content.
diff --git a/src/tools.ts b/src/tools.ts
index 3d6a63af..18f06206 100644
--- a/src/tools.ts
+++ b/src/tools.ts
@@ -485,7 +485,8 @@ export function toolUpdateFromToolResult(
     "is_error" in toolResult &&
     toolResult.is_error &&
     toolResult.content &&
-    toolResult.content.length > 0
+    toolResult.content.length > 0 &&
+    !(toolUse?.name === "Bash" && supportsTerminalOutput)
   ) {
     // Only return errors
     return toAcpContentUpdate(toolResult.content, true);