diff --git a/packages/kilo-vscode/src/services/cli-backend/sse-client.ts b/packages/kilo-vscode/src/services/cli-backend/sse-client.ts
index 69d0a45615d..ed80b4c5977 100644
--- a/packages/kilo-vscode/src/services/cli-backend/sse-client.ts
+++ b/packages/kilo-vscode/src/services/cli-backend/sse-client.ts
@@ -1,5 +1,6 @@
 import EventSource from "eventsource"
 import type { ServerConfig, SSEEvent } from "./types"
+import { unwrapSSEPayload } from "./sse-utils"
 
 // Type definitions for handlers
 export type SSEEventHandler = (event: SSEEvent) => void
@@ -67,9 +68,8 @@ export class SSEClient {
       console.log("[Kilo New] SSE: 📨 Received message event:", messageEvent.data)
       try {
         const raw = JSON.parse(messageEvent.data)
-        // Global endpoint wraps events as { directory, payload: { type, properties } }
-        const event = (raw.payload ?? raw) as SSEEvent
-        if (!event.type) {
+        const event = unwrapSSEPayload(raw)
+        if (!event) {
           console.warn("[Kilo New] SSE: ⚠️ Received event without type:", raw)
           return
         }
diff --git a/packages/kilo-vscode/src/services/cli-backend/sse-utils.ts b/packages/kilo-vscode/src/services/cli-backend/sse-utils.ts
new file mode 100644
index 00000000000..0d77a41f995
--- /dev/null
+++ b/packages/kilo-vscode/src/services/cli-backend/sse-utils.ts
@@ -0,0 +1,16 @@
+import type { SSEEvent } from "./types"
+
+/**
+ * Unwrap an SSE message payload.
+ * The global /global/event endpoint wraps events as { directory, payload: SSEEvent }.
+ * Direct event endpoints return the SSEEvent directly.
+ * Returns null if the parsed data has no `type` field (malformed or unknown event).
+ */
+export function unwrapSSEPayload(raw: unknown): SSEEvent | null {
+  if (!raw || typeof raw !== "object") return null
+  const event = ((raw as { payload?: SSEEvent }).payload ?? raw) as SSEEvent
+  if (!event || typeof event !== "object" || !("type" in event)) {
+    return null
+  }
+  return event
+}
diff --git a/packages/kilo-vscode/tests/unit/sse-client-utils.test.ts b/packages/kilo-vscode/tests/unit/sse-client-utils.test.ts
new file mode 100644
index 00000000000..1670d25e8aa
--- /dev/null
+++ b/packages/kilo-vscode/tests/unit/sse-client-utils.test.ts
@@ -0,0 +1,64 @@
+import { describe, it, expect } from "bun:test"
+import { unwrapSSEPayload } from "../../src/services/cli-backend/sse-utils"
+
+describe("unwrapSSEPayload", () => {
+  it("unwraps global endpoint payload wrapper", () => {
+    const raw = {
+      directory: "/workspace",
+      payload: { type: "session.created", properties: { info: {} } },
+    }
+    const event = unwrapSSEPayload(raw)
+    expect(event?.type).toBe("session.created")
+  })
+
+  it("returns direct event when no payload wrapper", () => {
+    const raw = { type: "server.connected", properties: {} }
+    const event = unwrapSSEPayload(raw)
+    expect(event?.type).toBe("server.connected")
+  })
+
+  it("returns null when no type field in direct event", () => {
+    const raw = { properties: {} }
+    expect(unwrapSSEPayload(raw)).toBeNull()
+  })
+
+  it("returns null when payload wrapper exists but has no type", () => {
+    const raw = { directory: "/workspace", payload: { properties: {} } }
+    expect(unwrapSSEPayload(raw)).toBeNull()
+  })
+
+  it("returns null for null input", () => {
+    expect(unwrapSSEPayload(null)).toBeNull()
+  })
+
+  it("returns null for empty object", () => {
+    expect(unwrapSSEPayload({})).toBeNull()
+  })
+
+  it("returns null for non-object input", () => {
+    expect(unwrapSSEPayload("string")).toBeNull()
+    expect(unwrapSSEPayload(42)).toBeNull()
+  })
+
+  it("uses payload over root when both have type", () => {
+    const raw = {
+      type: "root-type",
+      payload: { type: "payload-type", properties: {} },
+    }
+    const event = unwrapSSEPayload(raw)
+    expect(event?.type).toBe("payload-type")
+  })
+
+  it("handles nested event types correctly", () => {
+    const raw = {
+      payload: {
+        type: "message.updated",
+        properties: {
+          info: { id: "m1", sessionID: "s1", role: "assistant", time: { created: 0 } },
+        },
+      },
+    }
+    const event = unwrapSSEPayload(raw)
+    expect(event?.type).toBe("message.updated")
+  })
+})