diff --git a/src/extension.ts b/src/extension.ts
index e8f92d0..aa79de3 100644
--- a/src/extension.ts
+++ b/src/extension.ts
@@ -693,6 +693,36 @@ class ClaudeChatProvider {
 							mcpServers: jsonData.mcp_servers || []
 						}
 					});
+				} else if (jsonData.subtype === 'status') {
+					// Handle status changes (e.g., compacting)
+					if (jsonData.status === 'compacting') {
+						console.log('Conversation compacting started');
+						this._sendAndSaveMessage({
+							type: 'compacting',
+							data: { isCompacting: true }
+						});
+					} else if (jsonData.status === null) {
+						console.log('Status cleared');
+						this._sendAndSaveMessage({
+							type: 'compacting',
+							data: { isCompacting: false }
+						});
+					}
+				} else if (jsonData.subtype === 'compact_boundary') {
+					// Compact boundary - conversation was compacted, reset token counts
+					console.log('Compact boundary received', jsonData.compact_metadata);
+
+					// Reset tokens since the conversation is now summarized
+					this._totalTokensInput = 0;
+					this._totalTokensOutput = 0;
+
+					this._sendAndSaveMessage({
+						type: 'compactBoundary',
+						data: {
+							trigger: jsonData.compact_metadata?.trigger,
+							preTokens: jsonData.compact_metadata?.pre_tokens
+						}
+					});
 				}
 				break;
 
diff --git a/src/script.ts b/src/script.ts
index 3d5b069..cc8b56c 100644
--- a/src/script.ts
+++ b/src/script.ts
@@ -2192,7 +2192,23 @@ const getScript = (isTelemetryEnabled: boolean) => `<script>
 					requestCount = 0;
 					updateStatusWithTotals();
 					break;
-					
+
+				case 'compacting':
+					if (message.data.isCompacting) {
+						addMessage('📦 Compacting conversation...', 'system');
+					}
+					break;
+
+				case 'compactBoundary':
+					// Reset token counts since conversation was compacted
+					totalTokensInput = 0;
+					totalTokensOutput = 0;
+					updateStatusWithTotals();
+
+					const preTokens = message.data.preTokens ? message.data.preTokens.toLocaleString() : 'unknown';
+					addMessage('✅ Compacted (' + preTokens + ' tokens → summary)', 'system');
+					break;
+
 				case 'loginRequired':
 					sendStats('Login required');
 					addMessage('🔐 Login Required\\n\\nYour Claude API key is invalid or expired.\\nA terminal has been opened - please run the login process there.\\n\\nAfter logging in, come back to this chat to continue.', 'error');
diff --git a/src/ui-styles.ts b/src/ui-styles.ts
index d95da60..2fc5ce5 100644
--- a/src/ui-styles.ts
+++ b/src/ui-styles.ts
@@ -2980,6 +2980,7 @@ const styles = `
             transform: scale(1.2) rotate(315deg);
         }
     }
+
 </style>`
 
 export default styles
\ No newline at end of file