diff --git a/package-lock.json b/package-lock.json
index 8158c40..ed6cdfc 100755
--- a/package-lock.json
+++ b/package-lock.json
@@ -1,12 +1,12 @@
 {
   "name": "claude-code-ui",
-  "version": "1.1.4",
+  "version": "1.2.0",
   "lockfileVersion": 3,
   "requires": true,
   "packages": {
     "": {
       "name": "claude-code-ui",
-      "version": "1.1.4",
+      "version": "1.2.0",
       "license": "MIT",
       "dependencies": {
         "@anthropic-ai/claude-code": "^1.0.24",
diff --git a/src/components/ChatInterface.jsx b/src/components/ChatInterface.jsx
index b3238fb..b0caae7 100755
--- a/src/components/ChatInterface.jsx
+++ b/src/components/ChatInterface.jsx
@@ -1597,6 +1597,14 @@ function ChatInterface({ selectedProject, selectedSession, ws, sendMessage, mess
     }
   }, []); // Only run once on mount
 
+  // Reset textarea height when input is cleared programmatically
+  useEffect(() => {
+    if (textareaRef.current && !input.trim()) {
+      textareaRef.current.style.height = 'auto';
+      setIsTextareaExpanded(false);
+    }
+  }, [input]);
+
   const handleTranscript = useCallback((text) => {
     if (text.trim()) {
       setInput(prevInput => {
@@ -1689,6 +1697,12 @@ function ChatInterface({ selectedProject, selectedSession, ws, sendMessage, mess
 
     setInput('');
     setIsTextareaExpanded(false);
+    
+    // Reset textarea height to minimal state
+    if (textareaRef.current) {
+      textareaRef.current.style.height = 'auto';
+    }
+    
     // Clear the saved draft since message was sent
     if (selectedProject) {
       localStorage.removeItem(`draft_input_${selectedProject.name}`);
@@ -1776,8 +1790,15 @@ function ChatInterface({ selectedProject, selectedSession, ws, sendMessage, mess
   };
 
   const handleInputChange = (e) => {
-    setInput(e.target.value);
+    const newValue = e.target.value;
+    setInput(newValue);
     setCursorPosition(e.target.selectionStart);
+    
+    // Handle height reset when input becomes empty
+    if (!newValue.trim()) {
+      e.target.style.height = 'auto';
+      setIsTextareaExpanded(false);
+    }
   };
 
   const handleTextareaClick = (e) => {
diff --git a/src/components/Sidebar.jsx b/src/components/Sidebar.jsx
index 9528919..5e9c566 100755
--- a/src/components/Sidebar.jsx
+++ b/src/components/Sidebar.jsx
@@ -3,7 +3,7 @@ import { ScrollArea } from './ui/scroll-area';
 import { Button } from './ui/button';
 import { Badge } from './ui/badge';
 import { Input } from './ui/input';
-import { FolderOpen, Folder, Plus, MessageSquare, Clock, ChevronDown, ChevronRight, Edit3, Check, X, Trash2, Settings, FolderPlus, RefreshCw, Sparkles, Edit2 } from 'lucide-react';
+import { FolderOpen, Folder, Plus, MessageSquare, Clock, ChevronDown, ChevronRight, Edit3, Check, X, Trash2, Settings, FolderPlus, RefreshCw, Sparkles, Edit2, Star } from 'lucide-react';
 import { cn } from '../lib/utils';
 import ClaudeLogo from './ClaudeLogo';
 import { api } from '../utils/api';
@@ -66,6 +66,17 @@ function Sidebar({
   const [editingSession, setEditingSession] = useState(null);
   const [editingSessionName, setEditingSessionName] = useState('');
   const [generatingSummary, setGeneratingSummary] = useState({});
+  
+  // Starred projects state - persisted in localStorage
+  const [starredProjects, setStarredProjects] = useState(() => {
+    try {
+      const saved = localStorage.getItem('starredProjects');
+      return saved ? new Set(JSON.parse(saved)) : new Set();
+    } catch (error) {
+      console.error('Error loading starred projects:', error);
+      return new Set();
+    }
+  });
 
   // Touch handler to prevent double-tap issues on iPad (only for buttons, not scroll areas)
   const handleTouchClick = (callback) => {
@@ -164,6 +175,37 @@ function Sidebar({
     setExpandedProjects(newExpanded);
   };
 
+  // Starred projects utility functions
+  const toggleStarProject = (projectName) => {
+    const newStarred = new Set(starredProjects);
+    if (newStarred.has(projectName)) {
+      newStarred.delete(projectName);
+    } else {
+      newStarred.add(projectName);
+    }
+    setStarredProjects(newStarred);
+    
+    // Persist to localStorage
+    try {
+      localStorage.setItem('starredProjects', JSON.stringify([...newStarred]));
+    } catch (error) {
+      console.error('Error saving starred projects:', error);
+    }
+  };
+
+  const isProjectStarred = (projectName) => {
+    return starredProjects.has(projectName);
+  };
+
+  // Sort projects to show starred ones first
+  const sortedProjects = [...projects].sort((a, b) => {
+    const aStarred = isProjectStarred(a.name);
+    const bStarred = isProjectStarred(b.name);
+    
+    if (aStarred && !bStarred) return -1;
+    if (!aStarred && bStarred) return 1;
+    return 0; // Keep original order for same star status
+  });
 
   const startEditing = (project) => {
     setEditingProject(project.name);
@@ -571,6 +613,7 @@ function Sidebar({
             sortedProjects.map((project) => {
               const isExpanded = expandedProjects.has(project.name);
               const isSelected = selectedProject?.name === project.name;
+              const isStarred = isProjectStarred(project.name);
               
               return (
                 <div key={project.name} className="md:space-y-1">
@@ -581,7 +624,8 @@ function Sidebar({
                       <div
                         className={cn(
                           "p-3 mx-3 my-1 rounded-lg bg-card border border-border/50 active:scale-[0.98] transition-all duration-150",
-                          isSelected && "bg-primary/5 border-primary/20"
+                          isSelected && "bg-primary/5 border-primary/20",
+                          isStarred && !isSelected && "bg-yellow-50/50 dark:bg-yellow-900/5 border-yellow-200/30 dark:border-yellow-800/30"
                         )}
                         onClick={() => {
                           // On mobile, just toggle the folder - don't select the project
@@ -663,6 +707,28 @@ function Sidebar({
                               </>
                             ) : (
                               <>
+                                {/* Star button */}
+                                <button
+                                  className={cn(
+                                    "w-8 h-8 rounded-lg flex items-center justify-center active:scale-90 transition-all duration-150 border",
+                                    isStarred 
+                                      ? "bg-yellow-500/10 dark:bg-yellow-900/30 border-yellow-200 dark:border-yellow-800" 
+                                      : "bg-gray-500/10 dark:bg-gray-900/30 border-gray-200 dark:border-gray-800"
+                                  )}
+                                  onClick={(e) => {
+                                    e.stopPropagation();
+                                    toggleStarProject(project.name);
+                                  }}
+                                  onTouchEnd={handleTouchClick(() => toggleStarProject(project.name))}
+                                  title={isStarred ? "Remove from favorites" : "Add to favorites"}
+                                >
+                                  <Star className={cn(
+                                    "w-4 h-4 transition-colors",
+                                    isStarred 
+                                      ? "text-yellow-600 dark:text-yellow-400 fill-current" 
+                                      : "text-gray-600 dark:text-gray-400"
+                                  )} />
+                                </button>
                                 {getAllSessions(project).length === 0 && (
                                   <button
                                     className="w-8 h-8 rounded-lg bg-red-500/10 dark:bg-red-900/30 flex items-center justify-center active:scale-90 border border-red-200 dark:border-red-800"
@@ -704,7 +770,8 @@ function Sidebar({
                       variant="ghost"
                       className={cn(
                         "hidden md:flex w-full justify-between p-2 h-auto font-normal hover:bg-accent/50",
-                        isSelected && "bg-accent text-accent-foreground"
+                        isSelected && "bg-accent text-accent-foreground",
+                        isStarred && !isSelected && "bg-yellow-50/50 dark:bg-yellow-900/10 hover:bg-yellow-100/50 dark:hover:bg-yellow-900/20"
                       )}
                       onClick={() => {
                         // Desktop behavior: select project and toggle
@@ -791,6 +858,27 @@ function Sidebar({
                           </>
                         ) : (
                           <>
+                            {/* Star button */}
+                            <div
+                              className={cn(
+                                "w-6 h-6 opacity-0 group-hover:opacity-100 transition-all duration-200 flex items-center justify-center rounded cursor-pointer touch:opacity-100",
+                                isStarred 
+                                  ? "hover:bg-yellow-50 dark:hover:bg-yellow-900/20 opacity-100" 
+                                  : "hover:bg-accent"
+                              )}
+                              onClick={(e) => {
+                                e.stopPropagation();
+                                toggleStarProject(project.name);
+                              }}
+                              title={isStarred ? "Remove from favorites" : "Add to favorites"}
+                            >
+                              <Star className={cn(
+                                "w-3 h-3 transition-colors",
+                                isStarred 
+                                  ? "text-yellow-600 dark:text-yellow-400 fill-current" 
+                                  : "text-muted-foreground"
+                              )} />
+                            </div>
                             <div
                               className="w-6 h-6 opacity-0 group-hover:opacity-100 transition-all duration-200 hover:bg-accent flex items-center justify-center rounded cursor-pointer touch:opacity-100"
                               onClick={(e) => {