diff --git a/site/src/pages/TerminalPage/TerminalAlerts.tsx b/site/src/pages/TerminalPage/TerminalAlerts.tsx
new file mode 100644
index 0000000000..3a5d7ebd66
--- /dev/null
+++ b/site/src/pages/TerminalPage/TerminalAlerts.tsx
@@ -0,0 +1,136 @@
+import Button from "@mui/material/Button";
+import Link from "@mui/material/Link";
+import { Alert, AlertProps } from "components/Alert/Alert";
+import { useState } from "react";
+import { docs } from "utils/docs";
+
+export const ErrorScriptAlert = () => {
+  return (
+    <TerminalAlert
+      severity="warning"
+      dismissible
+      actions={<RefreshSessionButton />}
+    >
+      The workspace{" "}
+      <Link
+        title="startup script has exited with an error"
+        href={docs("/templates#startup-script-exited-with-an-error")}
+        target="_blank"
+        rel="noreferrer"
+      >
+        startup script has exited with an error
+      </Link>
+      , we recommend reloading this session and{" "}
+      <Link
+        title=" debugging the startup script"
+        href={docs("/templates#debugging-the-startup-script")}
+        target="_blank"
+        rel="noreferrer"
+      >
+        debugging the startup script
+      </Link>{" "}
+      because{" "}
+      <Link
+        title="your workspace may be incomplete."
+        href={docs("/templates#your-workspace-may-be-incomplete")}
+        target="_blank"
+        rel="noreferrer"
+      >
+        your workspace may be incomplete.
+      </Link>{" "}
+    </TerminalAlert>
+  );
+};
+
+export const LoadingScriptsAlert = () => {
+  return (
+    <TerminalAlert
+      dismissible
+      severity="info"
+      actions={<RefreshSessionButton />}
+    >
+      Startup scripts are still running. You can continue using this terminal,
+      but{" "}
+      <Link
+        title="your workspace may be incomplete."
+        href={docs("/templates#your-workspace-may-be-incomplete")}
+        target="_blank"
+        rel="noreferrer"
+      >
+        {" "}
+        your workspace may be incomplete.
+      </Link>
+    </TerminalAlert>
+  );
+};
+
+export const LoadedScriptsAlert = () => {
+  return (
+    <TerminalAlert
+      severity="success"
+      dismissible
+      actions={<RefreshSessionButton />}
+    >
+      Startup scripts have completed successfully. The workspace is ready but
+      this{" "}
+      <Link
+        title="session was started before the startup scripts finished"
+        href={docs("/templates#your-workspace-may-be-incomplete")}
+        target="_blank"
+        rel="noreferrer"
+      >
+        session was started before the startup script finished.
+      </Link>{" "}
+      To ensure your shell environment is up-to-date, we recommend reloading
+      this session.
+    </TerminalAlert>
+  );
+};
+
+const TerminalAlert = (props: AlertProps) => {
+  return (
+    <Alert
+      {...props}
+      sx={{
+        borderRadius: 0,
+        borderWidth: 0,
+        borderBottomWidth: 1,
+        borderBottomColor: (theme) => theme.palette.divider,
+        backgroundColor: (theme) => theme.palette.background.paperLight,
+        borderLeft: (theme) =>
+          `3px solid ${theme.palette[props.severity!].light}`,
+        marginBottom: 1,
+      }}
+    />
+  );
+};
+
+export const DisconnectedAlert = (props: AlertProps) => {
+  return (
+    <TerminalAlert
+      {...props}
+      severity="warning"
+      actions={<RefreshSessionButton />}
+    >
+      Disconnected
+    </TerminalAlert>
+  );
+};
+
+const RefreshSessionButton = () => {
+  const [isRefreshing, setIsRefreshing] = useState(false);
+
+  return (
+    <Button
+      disabled={isRefreshing}
+      size="small"
+      variant="text"
+      onClick={() => {
+        setIsRefreshing(true);
+        window.location.reload();
+      }}
+    >
+      {isRefreshing ? "Refreshing session..." : "Refresh session"}
+    </Button>
+  );
+};
diff --git a/site/src/pages/TerminalPage/TerminalPage.tsx b/site/src/pages/TerminalPage/TerminalPage.tsx
index da022b7c3c..9292c5c657 100644
--- a/site/src/pages/TerminalPage/TerminalPage.tsx
+++ b/site/src/pages/TerminalPage/TerminalPage.tsx
@@ -1,6 +1,5 @@
 import { makeStyles, useTheme } from "@mui/styles";
 import { useMachine } from "@xstate/react";
-import { Stack } from "components/Stack/Stack";
 import { FC, useCallback, useEffect, useRef, useState } from "react";
 import { Helmet } from "react-helmet-async";
 import { useNavigate, useParams, useSearchParams } from "react-router-dom";
@@ -18,12 +17,17 @@ import { terminalMachine } from "xServices/terminal/terminalXService";
 import { useProxy } from "contexts/ProxyContext";
 import Box from "@mui/material/Box";
 import { useDashboard } from "components/Dashboard/DashboardProvider";
-import { Region, WorkspaceAgent } from "api/typesGenerated";
+import { Region } from "api/typesGenerated";
 import { getLatencyColor } from "utils/latency";
 import Popover from "@mui/material/Popover";
 import { ProxyStatusLatency } from "components/ProxyStatusLatency/ProxyStatusLatency";
-import TerminalPageAlert, { TerminalPageAlertType } from "./TerminalPageAlert";
 import { portForwardURL } from "utils/portForward";
+import {
+  DisconnectedAlert,
+  ErrorScriptAlert,
+  LoadedScriptsAlert,
+  LoadingScriptsAlert,
+} from "./TerminalAlerts";
 
 export const Language = {
   workspaceErrorMessagePrefix: "Unable to fetch workspace: ",
@@ -31,32 +35,6 @@ export const Language = {
   websocketErrorMessagePrefix: "WebSocket failed: ",
 };
 
-const useTerminalWarning = ({ agent }: { agent?: WorkspaceAgent }) => {
-  const lifecycleState = agent?.lifecycle_state;
-  const [startupWarning, setStartupWarning] = useState<
-    TerminalPageAlertType | undefined
-  >(undefined);
-
-  useEffect(() => {
-    if (lifecycleState === "start_error") {
-      setStartupWarning("error");
-    } else if (lifecycleState === "starting") {
-      setStartupWarning("starting");
-    } else {
-      setStartupWarning((prev) => {
-        if (prev === "starting") {
-          return "success";
-        }
-        return undefined;
-      });
-    }
-  }, [lifecycleState]);
-
-  return {
-    startupWarning,
-  };
-};
-
 type TerminalPageProps = React.PropsWithChildren<{
   renderer: "webgl" | "dom";
 }>;
@@ -110,16 +88,18 @@ const TerminalPage: FC<TerminalPageProps> = ({ renderer }) => {
     workspaceAgent,
     websocketError,
   } = terminalState.context;
-  const reloading = useReloading(isDisconnected);
   const dashboard = useDashboard();
   const proxyContext = useProxy();
   const selectedProxy = proxyContext.proxy.proxy;
   const latency = selectedProxy
     ? proxyContext.proxyLatencies[selectedProxy.id]
     : undefined;
-  const { startupWarning } = useTerminalWarning({
-    agent: workspaceAgent,
-  });
+
+  const lifecycleState = workspaceAgent?.lifecycle_state;
+  const prevLifecycleState = useRef(lifecycleState);
+  useEffect(() => {
+    prevLifecycleState.current = lifecycleState;
+  }, [lifecycleState]);
 
   // handleWebLink handles opening of URLs in the terminal!
   const handleWebLink = useCallback(
@@ -326,29 +306,12 @@ const TerminalPage: FC<TerminalPageProps> = ({ renderer }) => {
             : ""}
         </title>
       </Helmet>
-      {/* This overlay makes it more obvious that the terminal is disconnected. */}
-      {/* It's nice for situations where Coder restarts, and they are temporarily disconnected. */}
-      <div className={`${styles.overlay} ${isDisconnected ? "" : "connected"}`}>
-        {reloading.status === "reloading" ? (
-          <span className={styles.overlayText}>Reloading...</span>
-        ) : (
-          <Stack spacing={0.5} alignItems="center">
-            <span className={styles.overlayText}>Disconnected</span>
-            <span className={styles.overlaySubtext}>
-              Press any key to retry
-            </span>
-          </Stack>
-        )}
-      </div>
       <Box display="flex" flexDirection="column" height="100vh">
-        {startupWarning && (
-          <TerminalPageAlert
-            alertType={startupWarning}
-            onDismiss={() => {
-              fitAddon?.fit();
-            }}
-          />
-        )}
+        {lifecycleState === "start_error" && <ErrorScriptAlert />}
+        {lifecycleState === "starting" && <LoadingScriptsAlert />}
+        {lifecycleState === "ready" &&
+          prevLifecycleState.current === "starting" && <LoadedScriptsAlert />}
+        {isDisconnected && <DisconnectedAlert />}
         <div
           className={styles.terminal}
           ref={xtermRef}
@@ -463,61 +426,6 @@ const BottomBar = ({ proxy, latency }: { proxy: Region; latency?: number }) => {
   );
 };
 
-const useReloading = (isDisconnected: boolean) => {
-  const [status, setStatus] = useState<"reloading" | "notReloading">(
-    "notReloading",
-  );
-
-  // Retry connection on key press when it is disconnected
-  useEffect(() => {
-    if (!isDisconnected || status === "reloading") {
-      return;
-    }
-
-    // Modifier keys should not trigger a reload.
-    const ignoredKeys = [
-      "Alt",
-      "AltGraph",
-      "CapsLock",
-      "Control",
-      "Fn",
-      "FnLock",
-      "Meta",
-      "NumLock",
-      "ScrollLock",
-      "Shift",
-      "Symbol",
-      "SymbolLock",
-    ];
-
-    const keyDownHandler = (event: KeyboardEvent) => {
-      // In addition to ignored keys, avoid reloading while modifiers are held
-      // to cover cases where the terminal unexpectedly tries to reconnect like
-      // when pressing ctrl+w, ctrl+r, and so on.
-      if (
-        !ignoredKeys.includes(event.key) &&
-        !event.altKey &&
-        !event.ctrlKey &&
-        !event.metaKey &&
-        !event.shiftKey
-      ) {
-        setStatus("reloading");
-        window.location.reload();
-      }
-    };
-
-    document.addEventListener("keydown", keyDownHandler, true);
-
-    return () => {
-      document.removeEventListener("keydown", keyDownHandler, true);
-    };
-  }, [status, isDisconnected]);
-
-  return {
-    status,
-  };
-};
-
 const useStyles = makeStyles((theme) => ({
   overlay: {
     position: "absolute",
diff --git a/site/src/pages/TerminalPage/TerminalPageAlert.stories.tsx b/site/src/pages/TerminalPage/TerminalPageAlert.stories.tsx
deleted file mode 100644
index 265769c5ce..0000000000
--- a/site/src/pages/TerminalPage/TerminalPageAlert.stories.tsx
+++ /dev/null
@@ -1,37 +0,0 @@
-import type { Meta, StoryObj } from "@storybook/react";
-
-import TerminalPageAlert from "./TerminalPageAlert";
-
-const meta: Meta<typeof TerminalPageAlert> = {
-  component: TerminalPageAlert,
-  title: "components/TerminalPageAlert",
-  argTypes: {
-    alertType: {
-      control: {
-        type: "radio",
-      },
-      options: ["error", "starting", "success"],
-    },
-  },
-};
-type Story = StoryObj<typeof TerminalPageAlert>;
-
-export const Error: Story = {
-  args: {
-    alertType: "error",
-  },
-};
-
-export const Starting: Story = {
-  args: {
-    alertType: "starting",
-  },
-};
-
-export const Success: Story = {
-  args: {
-    alertType: "success",
-  },
-};
-
-export default meta;
diff --git a/site/src/pages/TerminalPage/TerminalPageAlert.tsx b/site/src/pages/TerminalPage/TerminalPageAlert.tsx
deleted file mode 100644
index 6c5e3862fb..0000000000
--- a/site/src/pages/TerminalPage/TerminalPageAlert.tsx
+++ /dev/null
@@ -1,131 +0,0 @@
-import { AlertColor } from "@mui/material/Alert/Alert";
-import Button from "@mui/material/Button";
-import Link from "@mui/material/Link";
-import { Alert } from "components/Alert/Alert";
-import { ReactNode } from "react";
-import { docs } from "utils/docs";
-
-export type TerminalPageAlertType = "error" | "starting" | "success";
-
-type MapAlertTypeToComponent = {
-  [key in TerminalPageAlertType]: {
-    severity: AlertColor;
-    children: ReactNode | undefined;
-  };
-};
-
-const mapAlertTypeToText: MapAlertTypeToComponent = {
-  error: {
-    severity: "warning",
-    children: (
-      <>
-        The workspace{" "}
-        <Link
-          title="startup script has exited with an error"
-          href={docs("/templates#startup-script-exited-with-an-error")}
-          target="_blank"
-          rel="noreferrer"
-        >
-          startup script has exited with an error
-        </Link>
-        , we recommend reloading this session and{" "}
-        <Link
-          title=" debugging the startup script"
-          href={docs("/templates#debugging-the-startup-script")}
-          target="_blank"
-          rel="noreferrer"
-        >
-          debugging the startup script
-        </Link>{" "}
-        because{" "}
-        <Link
-          title="your workspace may be incomplete."
-          href={docs("/templates#your-workspace-may-be-incomplete")}
-          target="_blank"
-          rel="noreferrer"
-        >
-          your workspace may be incomplete.
-        </Link>{" "}
-      </>
-    ),
-  },
-  starting: {
-    severity: "info",
-    children: (
-      <>
-        Startup scripts are still running. You can continue using this terminal,
-        but{" "}
-        <Link
-          title="your workspace may be incomplete."
-          href={docs("/templates#your-workspace-may-be-incomplete")}
-          target="_blank"
-          rel="noreferrer"
-        >
-          {" "}
-          your workspace may be incomplete.
-        </Link>
-      </>
-    ),
-  },
-  success: {
-    severity: "success",
-    children: (
-      <>
-        Startup scripts have completed successfully. The workspace is ready but
-        this{" "}
-        <Link
-          title="session was started before the startup scripts finished"
-          href={docs("/templates#your-workspace-may-be-incomplete")}
-          target="_blank"
-          rel="noreferrer"
-        >
-          session was started before the startup script finished.
-        </Link>{" "}
-        To ensure your shell environment is up-to-date, we recommend reloading
-        this session.
-      </>
-    ),
-  },
-};
-
-export default ({
-  alertType,
-  onDismiss,
-}: {
-  alertType: TerminalPageAlertType;
-  onDismiss: () => void;
-}) => {
-  const severity = mapAlertTypeToText[alertType].severity;
-  return (
-    <Alert
-      severity={severity}
-      sx={{
-        borderRadius: 0,
-        borderWidth: 0,
-        borderBottomWidth: 1,
-        borderBottomColor: (theme) => theme.palette.divider,
-        backgroundColor: (theme) => theme.palette.background.paperLight,
-        borderLeft: (theme) => `3px solid ${theme.palette[severity].light}`,
-        marginBottom: 1,
-      }}
-      onDismiss={onDismiss}
-      dismissible
-      actions={[
-        <Button
-          key="refresh-session"
-          size="small"
-          variant="text"
-          onClick={() => {
-            // By redirecting the user without the session in the URL we
-            // create a new one
-            window.location.href = window.location.pathname;
-          }}
-        >
-          Refresh session
-        </Button>,
-      ]}
-    >
-      {mapAlertTypeToText[alertType].children}
-    </Alert>
-  );
-};