diff --git a/apps/web/src/components/ChatMarkdown.browser.tsx b/apps/web/src/components/ChatMarkdown.browser.tsx
new file mode 100644
index 0000000000..28f8b5fb53
--- /dev/null
+++ b/apps/web/src/components/ChatMarkdown.browser.tsx
@@ -0,0 +1,76 @@
+import "../index.css";
+
+import { page } from "vitest/browser";
+import { afterEach, describe, expect, it, vi } from "vitest";
+import { render } from "vitest-browser-react";
+
+const { openInPreferredEditorMock, readLocalApiMock } = vi.hoisted(() => ({
+  openInPreferredEditorMock: vi.fn(async () => "vscode"),
+  readLocalApiMock: vi.fn(() => ({
+    server: { getConfig: vi.fn(async () => ({ availableEditors: ["vscode"] })) },
+    shell: { openInEditor: vi.fn(async () => undefined) },
+  })),
+}));
+
+vi.mock("../editorPreferences", () => ({
+  openInPreferredEditor: openInPreferredEditorMock,
+}));
+
+vi.mock("../localApi", () => ({
+  readLocalApi: readLocalApiMock,
+}));
+
+import ChatMarkdown from "./ChatMarkdown";
+
+describe("ChatMarkdown", () => {
+  afterEach(() => {
+    openInPreferredEditorMock.mockClear();
+    readLocalApiMock.mockClear();
+    localStorage.clear();
+    document.body.innerHTML = "";
+  });
+
+  it("rewrites file uri hrefs into direct paths before rendering", async () => {
+    const filePath =
+      "/Users/yashsingh/p/sco/claude-code-extract/src/utils/permissions/PermissionRule.ts";
+    const screen = await render(
+      <ChatMarkdown text={`[PermissionRule.ts](file://${filePath})`} cwd="/repo/project" />,
+    );
+
+    try {
+      const link = page.getByRole("link", { name: "PermissionRule.ts" });
+      await expect.element(link).toBeInTheDocument();
+      await expect.element(link).toHaveAttribute("href", filePath);
+
+      await link.click();
+
+      await vi.waitFor(() => {
+        expect(openInPreferredEditorMock).toHaveBeenCalledWith(expect.anything(), filePath);
+      });
+    } finally {
+      await screen.unmount();
+    }
+  });
+
+  it("keeps line anchors working after rewriting file uri hrefs", async () => {
+    const filePath =
+      "/Users/yashsingh/p/sco/claude-code-extract/src/utils/permissions/PermissionRule.ts";
+    const screen = await render(
+      <ChatMarkdown text={`[PermissionRule.ts:1](file://${filePath}#L1)`} cwd="/repo/project" />,
+    );
+
+    try {
+      const link = page.getByRole("link", { name: "PermissionRule.ts:1" });
+      await expect.element(link).toBeInTheDocument();
+      await expect.element(link).toHaveAttribute("href", `${filePath}#L1`);
+
+      await link.click();
+
+      await vi.waitFor(() => {
+        expect(openInPreferredEditorMock).toHaveBeenCalledWith(expect.anything(), `${filePath}:1`);
+      });
+    } finally {
+      await screen.unmount();
+    }
+  });
+});
diff --git a/apps/web/src/components/ChatMarkdown.tsx b/apps/web/src/components/ChatMarkdown.tsx
index 11926cd95c..327e77e57c 100644
--- a/apps/web/src/components/ChatMarkdown.tsx
+++ b/apps/web/src/components/ChatMarkdown.tsx
@@ -15,13 +15,14 @@ import React, {
 } from "react";
 import type { Components } from "react-markdown";
 import ReactMarkdown from "react-markdown";
+import { defaultUrlTransform } from "react-markdown";
 import remarkGfm from "remark-gfm";
 import { openInPreferredEditor } from "../editorPreferences";
 import { resolveDiffThemeName, type DiffThemeName } from "../lib/diffRendering";
 import { fnv1a32 } from "../lib/diffRendering";
 import { LRUCache } from "../lib/lruCache";
 import { useTheme } from "../hooks/useTheme";
-import { resolveMarkdownFileLinkTarget } from "../markdown-links";
+import { resolveMarkdownFileLinkTarget, rewriteMarkdownFileUriHref } from "../markdown-links";
 import { readLocalApi } from "../localApi";
 
 class CodeHighlightErrorBoundary extends React.Component<
@@ -238,6 +239,9 @@ function SuspenseShikiCodeBlock({
 function ChatMarkdown({ text, cwd, isStreaming = false }: ChatMarkdownProps) {
   const { resolvedTheme } = useTheme();
   const diffThemeName = resolveDiffThemeName(resolvedTheme);
+  const markdownUrlTransform = useCallback((href: string) => {
+    return rewriteMarkdownFileUriHref(href) ?? defaultUrlTransform(href);
+  }, []);
   const markdownComponents = useMemo<Components>(
     () => ({
       a({ node: _node, href, ...props }) {
@@ -290,7 +294,11 @@ function ChatMarkdown({ text, cwd, isStreaming = false }: ChatMarkdownProps) {
 
   return (
     <div className="chat-markdown w-full min-w-0 text-sm leading-relaxed text-foreground/80">
-      <ReactMarkdown remarkPlugins={[remarkGfm]} components={markdownComponents}>
+      <ReactMarkdown
+        remarkPlugins={[remarkGfm]}
+        components={markdownComponents}
+        urlTransform={markdownUrlTransform}
+      >
         {text}
       </ReactMarkdown>
     </div>
diff --git a/apps/web/src/markdown-links.test.ts b/apps/web/src/markdown-links.test.ts
index 5f0a0cd711..d3ca8bc99a 100644
--- a/apps/web/src/markdown-links.test.ts
+++ b/apps/web/src/markdown-links.test.ts
@@ -1,6 +1,20 @@
 import { describe, expect, it } from "vitest";
 
-import { resolveMarkdownFileLinkTarget } from "./markdown-links";
+import { resolveMarkdownFileLinkTarget, rewriteMarkdownFileUriHref } from "./markdown-links";
+
+describe("rewriteMarkdownFileUriHref", () => {
+  it("rewrites file uri hrefs into direct path hrefs", () => {
+    expect(rewriteMarkdownFileUriHref("file:///Users/julius/project/src/main.ts#L42")).toBe(
+      "/Users/julius/project/src/main.ts#L42",
+    );
+  });
+
+  it("preserves encoded octets so file paths are decoded only once later", () => {
+    expect(rewriteMarkdownFileUriHref("file:///Users/julius/project/file%2520name.md")).toBe(
+      "/Users/julius/project/file%2520name.md",
+    );
+  });
+});
 
 describe("resolveMarkdownFileLinkTarget", () => {
   it("resolves absolute posix file paths", () => {
diff --git a/apps/web/src/markdown-links.ts b/apps/web/src/markdown-links.ts
index aa5f0f1498..b5dcab0100 100644
--- a/apps/web/src/markdown-links.ts
+++ b/apps/web/src/markdown-links.ts
@@ -38,25 +38,36 @@ function stripSearchAndHash(value: string): { path: string; hash: string } {
   return { path, hash: rawHash };
 }
 
-function parseFileUrlHref(href: string): { path: string; hash: string } | null {
+function parseFileUrlHref(
+  href: string,
+  options?: { readonly decodePath?: boolean },
+): { path: string; hash: string } | null {
   try {
     const parsed = new URL(href);
     if (parsed.protocol.toLowerCase() !== "file:") return null;
 
-    const decodedPath = safeDecode(parsed.pathname);
-    if (decodedPath.length === 0) return null;
+    const rawPath = parsed.pathname;
+    if (rawPath.length === 0) return null;
 
     // Browser URL parser encodes "C:/foo" as "/C:/foo" for file URLs.
-    const normalizedPath = /^\/[A-Za-z]:[\\/]/.test(decodedPath)
-      ? decodedPath.slice(1)
-      : decodedPath;
+    const normalizedPath = /^\/[A-Za-z]:[\\/]/.test(rawPath) ? rawPath.slice(1) : rawPath;
 
-    return { path: normalizedPath, hash: parsed.hash };
+    return {
+      path: options?.decodePath === false ? normalizedPath : safeDecode(normalizedPath),
+      hash: parsed.hash,
+    };
   } catch {
     return null;
   }
 }
 
+export function rewriteMarkdownFileUriHref(href: string | undefined): string | null {
+  if (!href) return null;
+  const target = parseFileUrlHref(href.trim(), { decodePath: false });
+  if (!target) return null;
+  return `${target.path}${target.hash}`;
+}
+
 function looksLikePosixFilesystemPath(path: string): boolean {
   if (!path.startsWith("/")) return false;
   if (POSIX_FILE_ROOT_PREFIXES.some((prefix) => path.startsWith(prefix))) return true;