diff --git a/src/components/ChatInterface.jsx b/src/components/ChatInterface.jsx
index d367edc..2039198 100755
--- a/src/components/ChatInterface.jsx
+++ b/src/components/ChatInterface.jsx
@@ -1985,19 +1985,34 @@ function ChatInterface({ selectedProject, selectedSession, ws, sendMessage, mess
     const spaceIndex = textAfterAtQuery.indexOf(' ');
     const textAfterQuery = spaceIndex !== -1 ? textAfterAtQuery.slice(spaceIndex) : '';
     
-    const newInput = textBeforeAt + '@' + file.path + textAfterQuery;
+    const newInput = textBeforeAt + '@' + file.path + ' ' + textAfterQuery;
+    const newCursorPos = textBeforeAt.length + 1 + file.path.length + 1;
+    
+    // Immediately ensure focus is maintained
+    if (textareaRef.current && !textareaRef.current.matches(':focus')) {
+      textareaRef.current.focus();
+    }
+    
+    // Update input and cursor position
     setInput(newInput);
+    setCursorPosition(newCursorPos);
+    
+    // Hide dropdown
     setShowFileDropdown(false);
     setAtSymbolPosition(-1);
     
-    // Focus back to textarea and set cursor position
+    // Set cursor position synchronously 
     if (textareaRef.current) {
-      textareaRef.current.focus();
-      const newCursorPos = textBeforeAt.length + 1 + file.path.length;
-      setTimeout(() => {
-        textareaRef.current.setSelectionRange(newCursorPos, newCursorPos);
-        setCursorPosition(newCursorPos);
-      }, 0);
+      // Use requestAnimationFrame for smoother updates
+      requestAnimationFrame(() => {
+        if (textareaRef.current) {
+          textareaRef.current.setSelectionRange(newCursorPos, newCursorPos);
+          // Ensure focus is maintained
+          if (!textareaRef.current.matches(':focus')) {
+            textareaRef.current.focus();
+          }
+        }
+      });
     }
   };
 
@@ -2238,6 +2253,37 @@ function ChatInterface({ selectedProject, selectedSession, ws, sendMessage, mess
             </div>
           )}
           
+          {/* File dropdown - positioned outside dropzone to avoid conflicts */}
+          {showFileDropdown && filteredFiles.length > 0 && (
+            <div className="absolute bottom-full left-0 right-0 mb-2 bg-white dark:bg-gray-800 border border-gray-200 dark:border-gray-600 rounded-lg shadow-lg max-h-48 overflow-y-auto z-50 backdrop-blur-sm">
+              {filteredFiles.map((file, index) => (
+                <div
+                  key={file.path}
+                  className={`px-4 py-3 cursor-pointer border-b border-gray-100 dark:border-gray-700 last:border-b-0 touch-manipulation ${
+                    index === selectedFileIndex
+                      ? 'bg-blue-50 dark:bg-blue-900/20 text-blue-700 dark:text-blue-300'
+                      : 'hover:bg-gray-50 dark:hover:bg-gray-700 text-gray-700 dark:text-gray-300'
+                  }`}
+                  onMouseDown={(e) => {
+                    // Prevent textarea from losing focus on mobile
+                    e.preventDefault();
+                    e.stopPropagation();
+                  }}
+                  onClick={(e) => {
+                    e.preventDefault();
+                    e.stopPropagation();
+                    selectFile(file);
+                  }}
+                >
+                  <div className="font-medium text-sm">{file.name}</div>
+                  <div className="text-xs text-gray-500 dark:text-gray-400 font-mono">
+                    {file.path}
+                  </div>
+                </div>
+              ))}
+            </div>
+          )}
+          
           <div {...getRootProps()} className={`relative bg-white dark:bg-gray-800 rounded-2xl shadow-lg border border-gray-200 dark:border-gray-600 focus-within:ring-2 focus-within:ring-blue-500 dark:focus-within:ring-blue-500 focus-within:border-blue-500 transition-all duration-200 ${isTextareaExpanded ? 'chat-input-expanded' : ''}`}>
             <input {...getInputProps()} />
             <textarea
@@ -2355,28 +2401,6 @@ function ChatInterface({ selectedProject, selectedSession, ws, sendMessage, mess
                 />
               </svg>
             </button>
-            
-            {/* File dropdown */}
-            {showFileDropdown && filteredFiles.length > 0 && (
-              <div className="absolute bottom-full left-0 right-0 mb-2 bg-white dark:bg-gray-800 border border-gray-200 dark:border-gray-600 rounded-lg shadow-lg max-h-48 overflow-y-auto z-50">
-                {filteredFiles.map((file, index) => (
-                  <div
-                    key={file.path}
-                    className={`px-4 py-2 cursor-pointer border-b border-gray-100 dark:border-gray-700 last:border-b-0 ${
-                      index === selectedFileIndex
-                        ? 'bg-blue-50 dark:bg-blue-900/20 text-blue-700 dark:text-blue-300'
-                        : 'hover:bg-gray-50 dark:hover:bg-gray-700 text-gray-700 dark:text-gray-300'
-                    }`}
-                    onClick={() => selectFile(file)}
-                  >
-                    <div className="font-medium text-sm">{file.name}</div>
-                    <div className="text-xs text-gray-500 dark:text-gray-400 font-mono">
-                      {file.path}
-                    </div>
-                  </div>
-                ))}
-              </div>
-            )}
           </div>
           {/* Hint text */}
           <div className="text-xs text-gray-500 dark:text-gray-400 text-center mt-2 hidden sm:block">