diff --git a/lib/bds/desktop/shell_live.ex b/lib/bds/desktop/shell_live.ex
index ea16502..613fa8c 100644
--- a/lib/bds/desktop/shell_live.ex
+++ b/lib/bds/desktop/shell_live.ex
@@ -52,6 +52,7 @@ defmodule BDS.Desktop.ShellLive do
     |> assign(:is_mac_ui, mac_ui?())
     |> assign(:menu_groups, titlebar_menu_groups())
     |> assign(:titlebar_menu_group, nil)
+      |> assign(:titlebar_menu_item_index, nil)
      |> assign(:tab_meta, %{})
       |> assign(:project_menu_open, false)
       |> assign(:sidebar_filters_by_view, %{})
@@ -362,15 +363,22 @@ defmodule BDS.Desktop.ShellLive do
     {:noreply, handle_native_menu_action(socket, action)}
   end
 
+  def handle_event("titlebar_menu_keydown", %{"key" => key}, socket) do
+    {:noreply, handle_titlebar_menu_keydown(socket, key)}
+  end
+
   def handle_event("toggle_titlebar_menu", %{"group" => group}, socket) do
-    next_group = if socket.assigns.titlebar_menu_group == group, do: nil, else: group
-    {:noreply, assign(socket, :titlebar_menu_group, next_group)}
+    {:noreply,
+     if(socket.assigns.titlebar_menu_group == group,
+       do: close_titlebar_menu(socket),
+       else: open_titlebar_menu(socket, group)
+     )}
   end
 
   def handle_event("hover_titlebar_menu", %{"group" => group}, socket) do
     socket =
       if socket.assigns.titlebar_menu_group do
-        assign(socket, :titlebar_menu_group, group)
+        open_titlebar_menu(socket, group)
       else
         socket
       end
@@ -379,13 +387,13 @@ defmodule BDS.Desktop.ShellLive do
   end
 
   def handle_event("close_titlebar_menu", _params, socket) do
-    {:noreply, assign(socket, :titlebar_menu_group, nil)}
+    {:noreply, close_titlebar_menu(socket)}
   end
 
   def handle_event("titlebar_menu_action", %{"action" => action}, socket) do
     {:noreply,
      socket
-     |> assign(:titlebar_menu_group, nil)
+     |> close_titlebar_menu()
      |> handle_native_menu_action(action)}
   end
 
@@ -449,6 +457,7 @@ defmodule BDS.Desktop.ShellLive do
     |> assign(:panel_tabs, ShellData.panel_tabs(workbench))
     |> assign(:supported_ui_languages, ShellData.supported_ui_languages())
     |> assign(:menu_groups, socket.assigns[:menu_groups] || titlebar_menu_groups())
+    |> assign(:titlebar_menu_item_index, socket.assigns[:titlebar_menu_item_index])
     |> assign(:current_tab, current_tab(workbench))
   end
 
@@ -1407,10 +1416,149 @@ defmodule BDS.Desktop.ShellLive do
     DesktopMenuBar.groups(dev_mode?: Application.get_env(:bds, :dev_routes, false))
   end
 
+  defp titlebar_menu_dropdown_items(group) do
+    group.items
+    |> Enum.map_reduce(0, fn item, keyboard_index ->
+      if Map.get(item, :separator, false) do
+        {%{separator: true}, keyboard_index}
+      else
+        {Map.put(item, :keyboard_index, keyboard_index), keyboard_index + 1}
+      end
+    end)
+    |> elem(0)
+  end
+
   defp active_titlebar_menu_group(assigns) do
     Enum.find(assigns.menu_groups || [], fn group -> Atom.to_string(group.id) == assigns.titlebar_menu_group end)
   end
 
+  defp active_titlebar_menu_items(assigns) do
+    assigns
+    |> active_titlebar_menu_group()
+    |> case do
+      nil -> []
+      group -> Enum.reject(group.items, &Map.get(&1, :separator, false))
+    end
+  end
+
+  defp open_titlebar_menu(socket, group) do
+    socket
+    |> assign(:titlebar_menu_group, group)
+    |> assign(:titlebar_menu_item_index, nil)
+  end
+
+  defp close_titlebar_menu(socket) do
+    socket
+    |> assign(:titlebar_menu_group, nil)
+    |> assign(:titlebar_menu_item_index, nil)
+  end
+
+  defp handle_titlebar_menu_keydown(socket, key) do
+    if socket.assigns.titlebar_menu_group do
+      case key do
+        "Escape" ->
+          close_titlebar_menu(socket)
+
+        "ArrowRight" ->
+          rotate_titlebar_menu_group(socket, 1)
+
+        "ArrowLeft" ->
+          rotate_titlebar_menu_group(socket, -1)
+
+        "ArrowDown" ->
+          advance_titlebar_menu_item_index(socket, 1)
+
+        "ArrowUp" ->
+          advance_titlebar_menu_item_index(socket, -1)
+
+        "Home" ->
+          set_first_titlebar_menu_item_index(socket)
+
+        "End" ->
+          set_last_titlebar_menu_item_index(socket)
+
+        "Enter" ->
+          invoke_active_titlebar_menu_item(socket)
+
+        " " ->
+          invoke_active_titlebar_menu_item(socket)
+
+        _other ->
+          socket
+      end
+    else
+      socket
+    end
+  end
+
+  defp rotate_titlebar_menu_group(socket, offset) do
+    groups = socket.assigns.menu_groups || []
+    current_group = socket.assigns.titlebar_menu_group
+    current_index = Enum.find_index(groups, fn group -> Atom.to_string(group.id) == current_group end)
+
+    if is_nil(current_index) or groups == [] do
+      socket
+    else
+      next_index = rem(current_index + offset + length(groups), length(groups))
+      next_group = Enum.at(groups, next_index)
+      open_titlebar_menu(socket, Atom.to_string(next_group.id))
+    end
+  end
+
+  defp advance_titlebar_menu_item_index(socket, offset) do
+    items = active_titlebar_menu_items(socket.assigns)
+    current_index = socket.assigns[:titlebar_menu_item_index]
+
+    cond do
+      items == [] ->
+        socket
+
+      current_index == nil and offset > 0 ->
+        assign(socket, :titlebar_menu_item_index, 0)
+
+      current_index == nil and offset < 0 ->
+        assign(socket, :titlebar_menu_item_index, length(items) - 1)
+
+      true ->
+        next_index = rem(current_index + offset + length(items), length(items))
+        assign(socket, :titlebar_menu_item_index, next_index)
+    end
+  end
+
+  defp set_last_titlebar_menu_item_index(socket) do
+    items = active_titlebar_menu_items(socket.assigns)
+
+    if items == [] do
+      socket
+    else
+      assign(socket, :titlebar_menu_item_index, length(items) - 1)
+    end
+  end
+
+  defp set_first_titlebar_menu_item_index(socket) do
+    items = active_titlebar_menu_items(socket.assigns)
+
+    if items == [] do
+      socket
+    else
+      assign(socket, :titlebar_menu_item_index, 0)
+    end
+  end
+
+  defp invoke_active_titlebar_menu_item(socket) do
+    items = active_titlebar_menu_items(socket.assigns)
+
+    case Enum.at(items, socket.assigns[:titlebar_menu_item_index]) do
+      %{id: id} ->
+        socket
+        |> close_titlebar_menu()
+        |> handle_native_menu_action(Atom.to_string(id))
+
+      _other ->
+        socket
+    end
+  end
+
   defp mac_ui? do
     case Application.get_env(:bds, :shell_platform) do
       nil -> match?({:unix, :darwin}, :os.type())
diff --git a/lib/bds/desktop/shell_live/index.html.heex b/lib/bds/desktop/shell_live/index.html.heex
index c53cbd9..9e680a1 100644
--- a/lib/bds/desktop/shell_live/index.html.heex
+++ b/lib/bds/desktop/shell_live/index.html.heex
@@ -9,6 +9,7 @@
       data-region="title-bar"
       data-testid="window-titlebar"
       data-open-menu-group={@titlebar_menu_group || ""}
+      phx-window-keydown={if(@titlebar_menu_group, do: "titlebar_menu_keydown")}
     >
       <div class="window-titlebar-menu-bar" data-testid="window-titlebar-menu-bar">
         <%= for group <- @menu_groups do %>
@@ -73,12 +74,15 @@
           data-testid="window-titlebar-menu-dropdown"
           phx-click-away="close_titlebar_menu"
         >
-          <%= for item <- group.items do %>
+          <%= for item <- titlebar_menu_dropdown_items(group) do %>
             <%= if item.separator do %>
               <div class="window-titlebar-menu-separator"></div>
             <% else %>
               <button
-                class="window-titlebar-menu-item"
+                class={[
+                  "window-titlebar-menu-item",
+                  if(@titlebar_menu_item_index == item.keyboard_index, do: "is-keyboard-active")
+                ]}
                 data-testid="window-titlebar-menu-item"
                 data-menu-action={item.id}
                 type="button"
@@ -588,7 +592,10 @@
         <% end %>
       </div>
       <button class="status-bar-item status-bar-task-button" data-testid="status-task-button" type="button" phx-click="open_tasks_panel">
-        <span><%= @status.left.running_task_message || translated("Idle") %></span>
+        <%= if @status.left.running_task_message do %>
+          <span class="task-spinner"></span>
+        <% end %>
+        <span class="task-message-text"><%= @status.left.running_task_message || translated("Idle") %></span>
         <%= if (@status.left.running_task_overflow || 0) > 0 do %>
           <span class="status-bar-count">+<%= @status.left.running_task_overflow %></span>
         <% end %>
diff --git a/lib/bds/git.ex b/lib/bds/git.ex
index b888453..25d5dfe 100644
--- a/lib/bds/git.ex
+++ b/lib/bds/git.ex
@@ -369,7 +369,7 @@ defmodule BDS.Git do
   end
 
   defp parse_count(value) do
-    case Integer.parse(to_string(value || "")) do
+    case Integer.parse(to_string(value)) do
       {count, _rest} -> count
       :error -> 0
     end
diff --git a/priv/ui/app.css b/priv/ui/app.css
index 83d0da5..273a570 100644
--- a/priv/ui/app.css
+++ b/priv/ui/app.css
@@ -161,7 +161,7 @@ button {
 .window-titlebar-menu-dropdown {
   position: absolute;
   top: 30px;
-  left: 6px;
+  left: var(--bds-titlebar-menu-left, 6px);
   min-width: 210px;
   padding: 6px;
   display: flex;
@@ -2046,7 +2046,7 @@ button {
   display: flex;
   flex-direction: column;
   gap: 12px;
-  padding: 14px;
+  padding: 12px;
 }
 
 .assistant-sidebar-header {
@@ -2086,10 +2086,10 @@ button {
   display: flex;
   flex-direction: column;
   gap: 10px;
-  padding: 12px;
+  padding: 8px;
   border: 1px solid var(--vscode-panel-border);
-  border-radius: 10px;
-  background: color-mix(in srgb, var(--vscode-sideBar-background) 78%, var(--vscode-editor-background));
+  border-radius: 6px;
+  background: var(--vscode-editorWidget-background, rgba(0, 0, 0, 0.2));
 }
 
 .assistant-sidebar-context-row {
@@ -2127,13 +2127,13 @@ button {
 
 .assistant-sidebar-prompt {
   width: 100%;
-  min-height: 112px;
+  min-height: 120px;
   resize: vertical;
   border: 1px solid var(--vscode-input-border);
-  border-radius: 10px;
+  border-radius: 6px;
   background: var(--vscode-input-background);
   color: var(--vscode-input-foreground);
-  padding: 10px 12px;
+  padding: 10px;
   font: inherit;
 }
 
@@ -2164,17 +2164,17 @@ button {
   gap: 6px;
   padding: 12px;
   border: 1px solid var(--vscode-panel-border);
-  border-radius: 10px;
+  border-radius: 6px;
   border-bottom-width: 1px;
-  background: color-mix(in srgb, var(--vscode-sideBar-background) 82%, var(--vscode-editor-background));
+  background: var(--vscode-editorWidget-background, rgba(0, 0, 0, 0.2));
 }
 
 .assistant-sidebar-message.user {
-  background: color-mix(in srgb, var(--vscode-list-hoverBackground) 76%, transparent);
+  background: var(--vscode-list-hoverBackground);
 }
 
 .assistant-sidebar-message.assistant {
-  background: color-mix(in srgb, var(--vscode-sideBar-background) 70%, var(--vscode-editor-background));
+  background: var(--vscode-editorWidget-background, rgba(0, 0, 0, 0.2));
 }
 
 .status-bar {
@@ -2216,6 +2216,55 @@ button {
   font-size: 12px;
 }
 
+.status-bar-item .task-message-text {
+  overflow: hidden;
+  text-overflow: ellipsis;
+  white-space: nowrap;
+  max-width: 300px;
+}
+
+.task-spinner {
+  width: 10px;
+  height: 10px;
+  border: 2px solid rgba(255, 255, 255, 0.3);
+  border-top-color: white;
+  border-radius: 50%;
+  animation: spin 0.8s linear infinite;
+}
+
+@keyframes spin {
+  to { transform: rotate(360deg); }
+}
+
+.panel-content {
+  padding: 8px;
+}
+
+.task-list {
+  gap: 4px;
+}
+
+.output-list,
+.git-log-list {
+  gap: 6px;
+}
+
+.task-entry {
+  padding: 8px;
+  border-bottom: none;
+  border-radius: 4px;
+  background-color: var(--vscode-sideBar-background);
+}
+
+.output-entry {
+  padding: 8px;
+  border-bottom: none;
+  border-radius: 4px;
+  background-color: var(--vscode-sideBar-background);
+  font-size: 12px;
+  color: var(--vscode-editor-foreground);
+}
+
 @media (max-width: 1100px) {
   .editor-frame {
     grid-template-columns: 1fr;
diff --git a/priv/ui/live.js b/priv/ui/live.js
index 79593a2..52d3dd5 100644
--- a/priv/ui/live.js
+++ b/priv/ui/live.js
@@ -129,6 +129,28 @@ document.addEventListener("DOMContentLoaded", () => {
         this.syncStoredUiLanguage();
         this.destroyOverlaySync = syncTitlebarOverlayInsets();
 
+        this.syncTitlebarMenuAnchor = () => {
+          const titlebar = this.el.querySelector("[data-testid='window-titlebar']");
+          const dropdown = this.el.querySelector("[data-testid='window-titlebar-menu-dropdown']");
+          const openGroup = titlebar?.dataset.openMenuGroup;
+
+          if (!dropdown || !titlebar || !openGroup) {
+            return;
+          }
+
+          const button = this.getTitlebarMenuButtons().find((candidate) => candidate.dataset.menuGroup === openGroup);
+
+          if (!button) {
+            return;
+          }
+
+          const titlebarRect = titlebar.getBoundingClientRect();
+          const buttonRect = button.getBoundingClientRect();
+          const left = Math.max(6, Math.round(buttonRect.left - titlebarRect.left));
+
+          dropdown.style.setProperty("--bds-titlebar-menu-left", `${left}px`);
+        };
+
         this.handleMouseDown = (event) => {
           const handle = event.target.closest("[data-role='resize-handle']");
 
@@ -183,27 +205,6 @@ document.addEventListener("DOMContentLoaded", () => {
           }
         };
 
-        this.menuIsOpen = () => {
-          const titlebar = this.el.querySelector("[data-testid='window-titlebar']");
-          return Boolean(titlebar?.dataset.openMenuGroup);
-        };
-
-        this.handleTitlebarPointerDown = (event) => {
-          if (!this.menuIsOpen()) {
-            return;
-          }
-
-          if (event.target.closest("[data-testid='window-titlebar-menu-button']")) {
-            return;
-          }
-
-          if (event.target.closest("[data-testid='window-titlebar-menu-dropdown']")) {
-            return;
-          }
-
-          this.pushEvent("close_titlebar_menu", {});
-        };
-
         this.handleChange = (event) => {
           const select = event.target.closest(".status-bar-language-select");
 
@@ -237,17 +238,14 @@ document.addEventListener("DOMContentLoaded", () => {
           });
         };
 
-        this.handleEscapeKey = (event) => {
-          if (event.key === "Escape" && this.menuIsOpen()) {
-            this.pushEvent("close_titlebar_menu", {});
-          }
-        };
-
         window.addEventListener("bds:native-menu-action", this.handleNativeMenuAction);
         window.addEventListener("keydown", this.handleShortcutKeyDown, true);
-        window.addEventListener("keydown", this.handleEscapeKey, true);
-        window.addEventListener("pointerdown", this.handleTitlebarPointerDown, true);
         this.el.addEventListener("change", this.handleChange);
+        this.syncTitlebarMenuAnchor();
+      },
+
+      updated() {
+        this.syncTitlebarMenuAnchor();
       },
 
       destroyed() {
@@ -255,8 +253,6 @@ document.addEventListener("DOMContentLoaded", () => {
         this.el.removeEventListener("change", this.handleChange);
         window.removeEventListener("bds:native-menu-action", this.handleNativeMenuAction);
         window.removeEventListener("keydown", this.handleShortcutKeyDown, true);
-        window.removeEventListener("keydown", this.handleEscapeKey, true);
-        window.removeEventListener("pointerdown", this.handleTitlebarPointerDown, true);
         if (this.destroyOverlaySync) {
           this.destroyOverlaySync();
         }
diff --git a/test/bds/desktop/shell_live_test.exs b/test/bds/desktop/shell_live_test.exs
index 365b8df..11d1e62 100644
--- a/test/bds/desktop/shell_live_test.exs
+++ b/test/bds/desktop/shell_live_test.exs
@@ -176,6 +176,35 @@ defmodule BDS.Desktop.ShellLiveTest do
     refute html =~ ~s(data-testid="window-titlebar-menu-dropdown")
   end
 
+  test "titlebar menu keyboard navigation is owned by liveview on windows and linux" do
+    Application.put_env(:bds, :shell_platform, {:unix, :linux})
+
+    {:ok, view, _html} = live_isolated(build_conn(), BDS.Desktop.ShellLive)
+
+    html =
+      view
+      |> element("[data-testid='window-titlebar-menu-button'][data-menu-group='file']")
+      |> render_click()
+
+    assert html =~ ~s(data-open-menu-group="file")
+
+    html = render_keydown(view, "titlebar_menu_keydown", %{key: "ArrowRight"})
+
+    assert html =~ ~s(data-open-menu-group="edit")
+    assert html =~ ~s(data-menu-action="edit_preferences")
+
+    html = render_keydown(view, "titlebar_menu_keydown", %{key: "End"})
+
+    assert html =~ ~s(class="window-titlebar-menu-item is-keyboard-active")
+    assert html =~ ~s(data-menu-action="edit_preferences")
+
+    html = render_keydown(view, "titlebar_menu_keydown", %{key: "Enter"})
+
+    assert html =~ ~s(data-tab-type="settings")
+    assert html =~ ">Settings<"
+    refute html =~ ~s(data-testid="window-titlebar-menu-dropdown")
+  end
+
   test "shell live renders the legacy git activity badge from remote behind count" do
     Application.put_env(:bds, :git_remote_state_provider, fn _project_id, _opts ->
       {:ok, %{local_branch: "main", upstream_branch: "origin/main", has_upstream: true, ahead: 0, behind: 7}}
diff --git a/test/bds/ui/shell_test.exs b/test/bds/ui/shell_test.exs
index 89ae325..d1cf54e 100644
--- a/test/bds/ui/shell_test.exs
+++ b/test/bds/ui/shell_test.exs
@@ -164,6 +164,58 @@ defmodule BDS.UI.ShellTest do
     assert template =~ "tab-dirty-indicator"
   end
 
+  test "desktop shell assets keep legacy titlebar menu keyboard and anchoring behavior" do
+    css = File.read!("/Users/gb/Projects/bDS2/priv/ui/app.css")
+    live_js = File.read!("/Users/gb/Projects/bDS2/priv/ui/live.js")
+    live_ex = File.read!("/Users/gb/Projects/bDS2/lib/bds/desktop/shell_live.ex")
+    template = File.read!("/Users/gb/Projects/bDS2/lib/bds/desktop/shell_live/index.html.heex")
+
+    assert css =~ "left: var(--bds-titlebar-menu-left, 6px);"
+    assert live_js =~ "--bds-titlebar-menu-left"
+    refute live_js =~ "handleTitlebarMenuKeyDown"
+    refute live_js =~ "keyboardMenuIndex"
+    assert template =~ "phx-window-keydown={if(@titlebar_menu_group, do: \"titlebar_menu_keydown\")}" 
+    assert live_ex =~ ~s(def handle_event("titlebar_menu_keydown")
+    assert live_ex =~ "titlebar_menu_item_index"
+  end
+
+  test "desktop shell status task area keeps the compact running-task markup" do
+    template = File.read!("/Users/gb/Projects/bDS2/lib/bds/desktop/shell_live/index.html.heex")
+
+    assert template =~ "task-message-text"
+    assert template =~ "task-spinner"
+    assert template =~ "status-bar-count"
+  end
+
+  test "desktop shell css keeps old panel and output density" do
+    css = File.read!("/Users/gb/Projects/bDS2/priv/ui/app.css")
+
+    assert css =~ ".panel-content {"
+    assert css =~ "padding: 8px;"
+    assert css =~ ".task-spinner {"
+    assert css =~ ".task-message-text"
+    assert css =~ ".output-entry {"
+    assert css =~ "background-color: var(--vscode-sideBar-background);"
+    assert css =~ "border-radius: 4px;"
+    assert css =~ ".task-entry {"
+    assert css =~ "background-color: var(--vscode-sideBar-background);"
+  end
+
+  test "desktop shell css keeps legacy sidebar header and post list layout" do
+    css = File.read!("/Users/gb/Projects/bDS2/priv/ui/app.css")
+
+    assert css =~ ".sidebar-section {"
+    assert css =~ "margin-bottom: 4px;"
+    assert css =~ "border-left: 2px solid transparent;"
+    assert css =~ "border-left-color: var(--vscode-focusBorder);"
+    assert css =~ ".sidebar-section-header {"
+    assert css =~ "justify-content: space-between;"
+    assert css =~ "font-weight: 600;"
+    assert css =~ ".sidebar-item {"
+    assert css =~ "align-items: flex-start;"
+    assert css =~ "gap: 8px;"
+  end
+
   test "desktop shell assets keep the assistant sidebar chat surface contract" do
     css = File.read!("/Users/gb/Projects/bDS2/priv/ui/app.css")
     template = File.read!("/Users/gb/Projects/bDS2/lib/bds/desktop/shell_live/index.html.heex")
@@ -178,4 +230,18 @@ defmodule BDS.UI.ShellTest do
     assert template =~ "data-testid=\"assistant-start-button\""
     assert template =~ "assistant-sidebar-transcript"
   end
+
+  test "desktop shell css keeps the old assistant sidebar panel styling" do
+    css = File.read!("/Users/gb/Projects/bDS2/priv/ui/app.css")
+
+    assert css =~ ".assistant-content {"
+    assert css =~ "padding: 12px;"
+    assert css =~ ".assistant-sidebar-context {"
+    assert css =~ "padding: 8px;"
+    assert css =~ "border-radius: 6px;"
+    assert css =~ "background: var(--vscode-editorWidget-background, rgba(0, 0, 0, 0.2));"
+    assert css =~ ".assistant-sidebar-prompt {"
+    assert css =~ "min-height: 120px;"
+    assert css =~ "padding: 10px;"
+  end
 end