diff --git a/packages/kilo-vscode/docs/ui-implementation-plan.md b/packages/kilo-vscode/docs/ui-implementation-plan.md
index 3308bb732c5..a5c1a3a9351 100644
--- a/packages/kilo-vscode/docs/ui-implementation-plan.md
+++ b/packages/kilo-vscode/docs/ui-implementation-plan.md
@@ -794,7 +794,7 @@ Each phase has specific acceptance criteria (listed above). The general verifica
 | Phase 1.4: Cards             | ✅ Complete   | 2026-02-11 | Inline-styled card divs in ProfileView (profile + balance) and DeviceAuthCard (5 state cards) replaced with `Card` component. Removed `cardStyle` constant.                                                                                                                          |
 | Phase 1.5: Icons             | ✅ Complete   | 2026-02-11 | All 15 lucide-solid icons replaced with kilo-ui `Icon`. `lucide-solid` dep removed. Many icons use approximate matches (see deviation #7).                                                                                                                                           |
 | Phase 2: Settings UI         | ✅ Complete   | 2026-02-11 | Settings shell uses kilo-ui `Tabs` with vertical orientation and `variant="settings"`. ~80 lines of inline styles removed. Tab content (stubs) unchanged. Back button in header kept with minimal CSS.                                                                               |
-| Phase 3: Chat UI             | ⬚ Not started | —          |                                                                                                                                                                                                                                                                                      |
+| Phase 3: Chat UI             | ✅ Complete   | 2026-02-11 | MarkedProvider added. Assistant text renders as Markdown. Tool calls use BasicTool. Reasoning uses Collapsible. Removed ~150 lines of tool/reasoning CSS. Code/Diff providers deferred (not needed yet).                                                                             |
 | Phase 4: Advanced            | ⬚ Not started | —          |                                                                                                                                                                                                                                                                                      |
 
 ### Deviations from plan
diff --git a/packages/kilo-vscode/esbuild.js b/packages/kilo-vscode/esbuild.js
index 54b637ab915..c6541f031c3 100644
--- a/packages/kilo-vscode/esbuild.js
+++ b/packages/kilo-vscode/esbuild.js
@@ -1,9 +1,38 @@
 const esbuild = require("esbuild")
+const path = require("path")
 const { solidPlugin } = require("esbuild-plugin-solid")
 
 const production = process.argv.includes("--production")
 const watch = process.argv.includes("--watch")
 
+/**
+ * Force all solid-js imports (from kilo-ui and the webview) to resolve to
+ * the **same** copy so SolidJS contexts are shared across packages.
+ * Without this, the monorepo hoists separate copies (pnpm vs bun) and
+ * createContext / useContext can't see each other.
+ *
+ * @type {import('esbuild').Plugin}
+ */
+const solidDedupePlugin = {
+  name: "solid-dedupe",
+  setup(build) {
+    // Resolve these bare specifiers to the kilo-vscode-local copy
+    const solidRoot = path.dirname(require.resolve("solid-js/package.json"))
+    const aliases = {
+      "solid-js": path.join(solidRoot, "dist", "solid.js"),
+      "solid-js/web": path.join(solidRoot, "web", "dist", "web.js"),
+      "solid-js/store": path.join(solidRoot, "store", "dist", "store.js"),
+    }
+
+    build.onResolve({ filter: /^solid-js(\/web|\/store)?$/ }, (args) => {
+      const key = args.path
+      if (aliases[key]) {
+        return { path: aliases[key] }
+      }
+    })
+  },
+}
+
 /**
  * @type {import('esbuild').Plugin}
  */
@@ -72,7 +101,7 @@ async function main() {
       ".woff2": "file",
       ".ttf": "file",
     },
-    plugins: [cssPackageResolvePlugin, solidPlugin(), esbuildProblemMatcherPlugin],
+    plugins: [solidDedupePlugin, cssPackageResolvePlugin, solidPlugin(), esbuildProblemMatcherPlugin],
   })
 
   if (watch) {
diff --git a/packages/kilo-vscode/src/KiloProvider.ts b/packages/kilo-vscode/src/KiloProvider.ts
index bd8bb3a024c..c0d1c41a029 100644
--- a/packages/kilo-vscode/src/KiloProvider.ts
+++ b/packages/kilo-vscode/src/KiloProvider.ts
@@ -829,7 +829,7 @@ export class KiloProvider implements vscode.WebviewViewProvider {
     const csp = [
       "default-src 'none'",
       `style-src 'unsafe-inline' ${webview.cspSource}`,
-      `script-src 'nonce-${nonce}'`,
+      `script-src 'nonce-${nonce}' 'wasm-unsafe-eval'`,
       `font-src ${webview.cspSource}`,
       "connect-src http://127.0.0.1:* http://localhost:* ws://127.0.0.1:* ws://localhost:*",
       `img-src ${webview.cspSource} data: https:`,
diff --git a/packages/kilo-vscode/webview-ui/src/App.tsx b/packages/kilo-vscode/webview-ui/src/App.tsx
index b03e610b2c4..d079ffe6b8d 100644
--- a/packages/kilo-vscode/webview-ui/src/App.tsx
+++ b/packages/kilo-vscode/webview-ui/src/App.tsx
@@ -2,6 +2,7 @@ import { Component, createSignal, Switch, Match, onMount, onCleanup } from "soli
 import { ThemeProvider } from "@kilocode/kilo-ui/theme"
 import { I18nProvider } from "@kilocode/kilo-ui/context"
 import { DialogProvider } from "@kilocode/kilo-ui/context/dialog"
+import { MarkedProvider } from "@kilocode/kilo-ui/context/marked"
 import Settings from "./components/Settings"
 import ProfileView from "./components/ProfileView"
 import { VSCodeProvider } from "./context/vscode"
@@ -116,15 +117,17 @@ const App: Component = () => {
     <ThemeProvider defaultTheme="kilo-vscode">
       <I18nProvider value={{ locale: () => "en", t: (key) => key }}>
         <DialogProvider>
-          <VSCodeProvider>
-            <ServerProvider>
-              <ProviderProvider>
-                <SessionProvider>
-                  <AppContent />
-                </SessionProvider>
-              </ProviderProvider>
-            </ServerProvider>
-          </VSCodeProvider>
+          <MarkedProvider>
+            <VSCodeProvider>
+              <ServerProvider>
+                <ProviderProvider>
+                  <SessionProvider>
+                    <AppContent />
+                  </SessionProvider>
+                </ProviderProvider>
+              </ServerProvider>
+            </VSCodeProvider>
+          </MarkedProvider>
         </DialogProvider>
       </I18nProvider>
     </ThemeProvider>
diff --git a/packages/kilo-vscode/webview-ui/src/components/chat/Message.tsx b/packages/kilo-vscode/webview-ui/src/components/chat/Message.tsx
index c6b30656c81..8cb54050453 100644
--- a/packages/kilo-vscode/webview-ui/src/components/chat/Message.tsx
+++ b/packages/kilo-vscode/webview-ui/src/components/chat/Message.tsx
@@ -1,10 +1,19 @@
 /**
  * Message component
  * Displays a single chat message with its parts (text, tool calls, reasoning)
+ *
+ * Uses kilo-ui components:
+ * - Markdown for rendering assistant text (headings, lists, code blocks, links)
+ * - BasicTool for tool call display (collapsible with icon, title, subtitle)
+ * - Collapsible for reasoning blocks
+ * - Spinner for pending/running tool status
  */
 
-import { Component, For, Show, createSignal, JSX } from "solid-js"
+import { Component, For, Show, JSX } from "solid-js"
+import { Markdown } from "@kilocode/kilo-ui/markdown"
 import { Spinner } from "@kilocode/kilo-ui/spinner"
+import { BasicTool } from "@kilocode/kilo-ui/basic-tool"
+import { Collapsible } from "@kilocode/kilo-ui/collapsible"
 import { useSession } from "../../context/session"
 import type { Message as MessageType, Part, TextPart, ToolPart, ReasoningPart } from "../../types/messages"
 
@@ -12,89 +21,97 @@ interface MessageProps {
   message: MessageType
 }
 
-// Text part display
-const TextPartView: Component<{ part: TextPart }> = (props) => {
-  return <div class="message-text">{props.part.text}</div>
-}
-
-// Reasoning part display
-const ReasoningPartView: Component<{ part: ReasoningPart }> = (props) => {
-  const [expanded, setExpanded] = createSignal(false)
-
+// Text part display — renders markdown for assistant, plain text for user
+const TextPartView: Component<{ part: TextPart; role: string }> = (props) => {
   return (
-    <div class="message-reasoning">
-      <button class="reasoning-header" onClick={() => setExpanded(!expanded())} aria-expanded={expanded()}>
-        <span class="reasoning-icon">💭</span>
-        <span class="reasoning-label">Thinking...</span>
-        <span class="reasoning-toggle">{expanded() ? "▼" : "▶"}</span>
-      </button>
-      <Show when={expanded()}>
-        <div class="reasoning-content">{props.part.text}</div>
-      </Show>
-    </div>
+    <Show when={props.role === "assistant"} fallback={<div class="message-text">{props.part.text}</div>}>
+      <Markdown text={props.part.text} />
+    </Show>
   )
 }
 
-// Tool part display
-const ToolPartView: Component<{ part: ToolPart }> = (props) => {
-  const [expanded, setExpanded] = createSignal(false)
+// Reasoning part display — collapsible "Thinking..." block
+const ReasoningPartView: Component<{ part: ReasoningPart }> = (props) => {
+  return (
+    <Collapsible variant="ghost">
+      <Collapsible.Trigger>
+        <span>💭 Thinking...</span>
+        <Collapsible.Arrow />
+      </Collapsible.Trigger>
+      <Collapsible.Content>
+        <div class="message-text" style={{ "font-style": "italic", opacity: 0.8 }}>
+          {props.part.text}
+        </div>
+      </Collapsible.Content>
+    </Collapsible>
+  )
+}
 
-  const getStatusIcon = (): JSX.Element | string => {
+// Tool part display — uses BasicTool for collapsible tool header
+const ToolPartView: Component<{ part: ToolPart }> = (props) => {
+  const getStatusIcon = (): string => {
     switch (props.part.state.status) {
       case "pending":
       case "running":
-        return <Spinner style={{ width: "14px", height: "14px" }} />
+        return "settings-gear"
       case "completed":
-        return "✓"
+        return "check-small"
       case "error":
-        return "✕"
+        return "circle-x"
     }
   }
 
-  const getStatusClass = () => {
-    return `tool-status-${props.part.state.status}`
-  }
-
   const getTitle = () => {
     if ("title" in props.part.state && props.part.state.title) {
-      return props.part.state.title
+      return props.part.state.title as string
     }
     return props.part.tool
   }
 
+  const isActive = () => props.part.state.status === "pending" || props.part.state.status === "running"
+
   return (
-    <div class={`message-tool ${getStatusClass()}`}>
-      <button class="tool-header" onClick={() => setExpanded(!expanded())} aria-expanded={expanded()}>
-        <span class="tool-icon">{getStatusIcon()}</span>
-        <span class="tool-name">{getTitle()}</span>
-        <span class="tool-toggle">{expanded() ? "▼" : "▶"}</span>
-      </button>
-      <Show when={expanded()}>
-        <div class="tool-details">
-          <div class="tool-input">
+    <div data-component="tool-part-wrapper">
+      <BasicTool
+        icon={getStatusIcon()}
+        defaultOpen={false}
+        trigger={{
+          title: getTitle(),
+          subtitle: props.part.tool !== getTitle() ? props.part.tool : undefined,
+          action: isActive() ? ((<Spinner style={{ width: "14px", height: "14px" }} />) as JSX.Element) : undefined,
+        }}
+      >
+        <div style={{ padding: "8px", "font-size": "12px" }}>
+          <div>
             <strong>Input:</strong>
-            <pre>{JSON.stringify(props.part.state.input, null, 2)}</pre>
+            <pre style={{ margin: "4px 0 8px", "white-space": "pre-wrap", "word-break": "break-word" }}>
+              {JSON.stringify(props.part.state.input, null, 2)}
+            </pre>
           </div>
           <Show when={props.part.state.status === "completed" && "output" in props.part.state}>
-            <div class="tool-output">
+            <div>
               <strong>Output:</strong>
-              <pre>{(props.part.state as { output: string }).output}</pre>
+              <pre style={{ margin: "4px 0 0", "white-space": "pre-wrap", "word-break": "break-word" }}>
+                {(props.part.state as { output: string }).output}
+              </pre>
             </div>
           </Show>
           <Show when={props.part.state.status === "error" && "error" in props.part.state}>
-            <div class="tool-error">
+            <div style={{ color: "var(--vscode-errorForeground)" }}>
               <strong>Error:</strong>
-              <pre>{(props.part.state as { error: string }).error}</pre>
+              <pre style={{ margin: "4px 0 0", "white-space": "pre-wrap", "word-break": "break-word" }}>
+                {(props.part.state as { error: string }).error}
+              </pre>
             </div>
           </Show>
         </div>
-      </Show>
+      </BasicTool>
     </div>
   )
 }
 
 // Part renderer
-const PartView: Component<{ part: Part }> = (props) => {
+const PartView: Component<{ part: Part; role: string }> = (props) => {
   // Skip step-start and step-finish parts - they're metadata, not displayable content
   if (props.part.type === "step-start" || props.part.type === "step-finish") {
     return null
@@ -103,7 +120,7 @@ const PartView: Component<{ part: Part }> = (props) => {
   return (
     <>
       <Show when={props.part.type === "text"}>
-        <TextPartView part={props.part as TextPart} />
+        <TextPartView part={props.part as TextPart} role={props.role} />
       </Show>
       <Show when={props.part.type === "tool"}>
         <ToolPartView part={props.part as ToolPart} />
@@ -134,11 +151,16 @@ export const Message: Component<MessageProps> = (props) => {
           when={hasParts()}
           fallback={
             <Show when={props.message.content}>
-              <div class="message-text">{props.message.content}</div>
+              <Show
+                when={props.message.role === "assistant"}
+                fallback={<div class="message-text">{props.message.content}</div>}
+              >
+                <Markdown text={props.message.content!} />
+              </Show>
             </Show>
           }
         >
-          <For each={parts()}>{(part) => <PartView part={part} />}</For>
+          <For each={parts()}>{(part) => <PartView part={part} role={props.message.role} />}</For>
         </Show>
       </div>
     </div>
diff --git a/packages/kilo-vscode/webview-ui/src/styles/chat.css b/packages/kilo-vscode/webview-ui/src/styles/chat.css
index 50903bcb89d..1c4a4792f38 100644
--- a/packages/kilo-vscode/webview-ui/src/styles/chat.css
+++ b/packages/kilo-vscode/webview-ui/src/styles/chat.css
@@ -130,158 +130,6 @@
   line-height: 1.5;
 }
 
-/* ============================================
-   Tool Parts
-   ============================================ */
-
-.message-tool {
-  border: 1px solid var(--vscode-panel-border);
-  border-radius: 4px;
-  overflow: hidden;
-}
-
-.tool-header {
-  display: flex;
-  align-items: center;
-  gap: 8px;
-  width: 100%;
-  padding: 6px 10px;
-  background: var(--vscode-sideBar-background);
-  border: none;
-  cursor: pointer;
-  text-align: left;
-  color: var(--vscode-foreground);
-  font-size: 12px;
-}
-
-.tool-header:hover {
-  background: var(--vscode-list-hoverBackground);
-}
-
-.tool-icon {
-  font-size: 12px;
-}
-
-.tool-name {
-  flex: 1;
-  font-family: var(--vscode-editor-font-family);
-}
-
-.tool-toggle {
-  font-size: 10px;
-  color: var(--vscode-descriptionForeground);
-}
-
-.tool-details {
-  padding: 8px 10px;
-  background: var(--vscode-editor-background);
-  font-size: 11px;
-}
-
-.tool-input,
-.tool-output,
-.tool-error {
-  margin-bottom: 8px;
-}
-
-.tool-input:last-child,
-.tool-output:last-child,
-.tool-error:last-child {
-  margin-bottom: 0;
-}
-
-.tool-details pre {
-  margin: 4px 0 0 0;
-  font-family: var(--vscode-editor-font-family);
-  font-size: 11px;
-  white-space: pre-wrap;
-  word-break: break-word;
-  overflow-x: auto;
-}
-
-/* Tool status styles */
-.tool-status-pending .tool-icon {
-  color: var(--vscode-charts-yellow);
-}
-
-.tool-status-running .tool-icon {
-  color: var(--vscode-charts-blue);
-  animation: spin 1s linear infinite;
-}
-
-.tool-status-completed .tool-icon {
-  color: var(--vscode-charts-green);
-}
-
-.tool-status-error .tool-icon {
-  color: var(--vscode-errorForeground);
-}
-
-.tool-error {
-  color: var(--vscode-errorForeground);
-}
-
-@keyframes spin {
-  from {
-    transform: rotate(0deg);
-  }
-  to {
-    transform: rotate(360deg);
-  }
-}
-
-/* ============================================
-   Reasoning Parts
-   ============================================ */
-
-.message-reasoning {
-  border: 1px solid var(--vscode-panel-border);
-  border-radius: 4px;
-  overflow: hidden;
-  opacity: 0.8;
-}
-
-.reasoning-header {
-  display: flex;
-  align-items: center;
-  gap: 8px;
-  width: 100%;
-  padding: 6px 10px;
-  background: var(--vscode-sideBar-background);
-  border: none;
-  cursor: pointer;
-  text-align: left;
-  color: var(--vscode-descriptionForeground);
-  font-size: 12px;
-  font-style: italic;
-}
-
-.reasoning-header:hover {
-  background: var(--vscode-list-hoverBackground);
-}
-
-.reasoning-icon {
-  font-size: 12px;
-}
-
-.reasoning-label {
-  flex: 1;
-}
-
-.reasoning-toggle {
-  font-size: 10px;
-}
-
-.reasoning-content {
-  padding: 8px 10px;
-  background: var(--vscode-editor-background);
-  font-size: 12px;
-  font-style: italic;
-  color: var(--vscode-descriptionForeground);
-  white-space: pre-wrap;
-  word-break: break-word;
-}
-
 /* ============================================
    Prompt Input
    ============================================ */