diff --git a/skyvern-frontend/src/api/sse.ts b/skyvern-frontend/src/api/sse.ts
index 636df9b6..531c4156 100644
--- a/skyvern-frontend/src/api/sse.ts
+++ b/skyvern-frontend/src/api/sse.ts
@@ -2,19 +2,65 @@ import { fetchEventSource } from "@microsoft/fetch-event-source";
 import type { CredentialGetter } from "@/api/AxiosClient";
 import { getRuntimeApiKey, runsApiBaseUrl } from "@/util/env";
 
-export type SseJsonPayload = Record<string, unknown>;
+export type SseMessageHandler<T> = (payload: T, eventName: string) => boolean;
 
-type SseClient = {
-  post: <T extends SseJsonPayload>(path: string, body: unknown) => Promise<T>;
+type SseStreamingOptions = {
+  signal?: AbortSignal;
 };
 
-export async function fetchJsonSse<T extends SseJsonPayload>(
+type SseClient = {
+  postStreaming: <T>(
+    path: string,
+    body: unknown,
+    onMessage: SseMessageHandler<T>,
+    options?: SseStreamingOptions,
+  ) => Promise<void>;
+};
+
+export async function fetchStreamingSse<T>(
   input: RequestInfo | URL,
   init: RequestInit,
-): Promise<T> {
+  onMessage: SseMessageHandler<T>,
+  options?: SseStreamingOptions,
+): Promise<void> {
   const controller = new AbortController();
+  const externalSignal = options?.signal;
+  let settled = false;
+  const resolveOnce = () => {
+    if (!settled) {
+      settled = true;
+      return true;
+    }
+    return false;
+  };
+  const onExternalAbort = () => {
+    controller.abort();
+  };
+  if (externalSignal) {
+    if (externalSignal.aborted) {
+      controller.abort();
+      return;
+    }
+    externalSignal.addEventListener("abort", onExternalAbort, { once: true });
+  }
   try {
-    const parsedPayload = await new Promise<T>((resolve, reject) => {
+    await new Promise<void>((resolve, reject) => {
+      const safeResolve = () => {
+        if (resolveOnce()) {
+          resolve();
+        }
+      };
+      const safeReject = (error: unknown) => {
+        if (controller.signal.aborted) {
+          safeResolve();
+          return;
+        }
+        if (!settled) {
+          settled = true;
+          reject(error);
+        }
+      };
+
       fetchEventSource(input instanceof URL ? input.toString() : input, {
         method: init.method,
         headers: init.headers as Record<string, string>,
@@ -26,25 +72,28 @@ export async function fetchJsonSse<T extends SseJsonPayload>(
           }
           try {
             const payload = JSON.parse(event.data) as T;
-            resolve(payload);
+            if (onMessage(payload, event.event)) {
+              safeResolve();
+            }
           } catch (error) {
-            reject(error);
+            safeReject(error);
           }
         },
         onerror: (error) => {
-          reject(error);
+          safeReject(error);
         },
         onopen: async (response) => {
           if (!response.ok) {
             const errorText = await response.text();
-            reject(new Error(errorText || "Failed to send request."));
+            safeReject(new Error(errorText || "Failed to send request."));
           }
         },
-      }).catch(reject);
+      }).catch(safeReject);
     });
-
-    return parsedPayload;
   } finally {
+    if (externalSignal) {
+      externalSignal.removeEventListener("abort", onExternalAbort);
+    }
     controller.abort();
   }
 }
@@ -73,14 +122,21 @@ export async function getSseClient(
   }
 
   return {
-    post: <T extends SseJsonPayload>(path: string, body: unknown) => {
-      return fetchJsonSse<T>(
+    postStreaming: <T>(
+      path: string,
+      body: unknown,
+      onMessage: SseMessageHandler<T>,
+      options?: SseStreamingOptions,
+    ) => {
+      return fetchStreamingSse<T>(
         `${runsApiBaseUrl.replace(/\/$/, "")}/${path.replace(/^\//, "")}`,
         {
           method: "POST",
           headers: requestHeaders,
           body: JSON.stringify(body),
         },
+        onMessage,
+        options,
       );
     },
   };
diff --git a/skyvern-frontend/src/routes/workflows/editor/WorkflowCopilotButton.tsx b/skyvern-frontend/src/routes/workflows/copilot/WorkflowCopilotButton.tsx
similarity index 100%
rename from skyvern-frontend/src/routes/workflows/editor/WorkflowCopilotButton.tsx
rename to skyvern-frontend/src/routes/workflows/copilot/WorkflowCopilotButton.tsx
diff --git a/skyvern-frontend/src/routes/workflows/editor/WorkflowCopilotChat.tsx b/skyvern-frontend/src/routes/workflows/copilot/WorkflowCopilotChat.tsx
similarity index 77%
rename from skyvern-frontend/src/routes/workflows/editor/WorkflowCopilotChat.tsx
rename to skyvern-frontend/src/routes/workflows/copilot/WorkflowCopilotChat.tsx
index f0d9fd24..06eacf46 100644
--- a/skyvern-frontend/src/routes/workflows/editor/WorkflowCopilotChat.tsx
+++ b/skyvern-frontend/src/routes/workflows/copilot/WorkflowCopilotChat.tsx
@@ -9,14 +9,26 @@ import { useWorkflowHasChangesStore } from "@/store/WorkflowHasChangesStore";
 import { WorkflowCreateYAMLRequest } from "@/routes/workflows/types/workflowYamlTypes";
 import { toast } from "@/components/ui/use-toast";
 import { getSseClient } from "@/api/sse";
+import {
+  WorkflowCopilotChatHistoryResponse,
+  WorkflowCopilotProcessingUpdate,
+  WorkflowCopilotStreamError,
+  WorkflowCopilotStreamResponse,
+  WorkflowCopilotChatSender,
+} from "./workflowCopilotTypes";
 
 interface ChatMessage {
   id: string;
-  sender: "ai" | "user";
+  sender: WorkflowCopilotChatSender;
   content: string;
   timestamp?: string;
 }
 
+type WorkflowCopilotSsePayload =
+  | WorkflowCopilotProcessingUpdate
+  | WorkflowCopilotStreamResponse
+  | WorkflowCopilotStreamError;
+
 const formatChatTimestamp = (value: string) => {
   let normalizedValue = value.replace(/\.(\d{3})\d*/, ".$1");
   if (!normalizedValue.endsWith("Z")) {
@@ -39,7 +51,9 @@ const MessageItem = memo(({ message }: { message: ChatMessage }) => {
         {message.sender === "ai" ? "AI" : "U"}
       </div>
       <div className="relative flex-1 rounded-lg bg-slate-800 p-3 pr-12">
-        <p className="text-sm text-slate-200">{message.content}</p>
+        <p className="whitespace-pre-wrap pr-3 text-sm text-slate-200">
+          {message.content}
+        </p>
         {message.timestamp ? (
           <span className="pointer-events-none absolute bottom-2 right-2 rounded bg-slate-900/70 px-1.5 py-0.5 text-[10px] text-slate-400">
             {formatChatTimestamp(message.timestamp)}
@@ -111,7 +125,10 @@ export function WorkflowCopilotChat({
   const [messages, setMessages] = useState<ChatMessage[]>([]);
   const [inputValue, setInputValue] = useState("");
   const [isLoading, setIsLoading] = useState(false);
+  const [processingStatus, setProcessingStatus] = useState<string>("");
   const [isLoadingHistory, setIsLoadingHistory] = useState(false);
+  const streamingAbortController = useRef<AbortController | null>(null);
+  const pendingMessageId = useRef<string | null>(null);
   const [workflowCopilotChatId, setWorkflowCopilotChatId] = useState<
     string | null
   >(null);
@@ -143,6 +160,7 @@ export function WorkflowCopilotChat({
   const credentialGetter = useCredentialGetter();
   const { workflowRunId, workflowPermanentId } = useParams();
   const messagesEndRef = useRef<HTMLDivElement>(null);
+  const textareaRef = useRef<HTMLTextAreaElement>(null);
   const { getSaveData } = useWorkflowHasChangesStore();
   const hasInitializedPosition = useRef(false);
   const hasScrolledOnLoad = useRef(false);
@@ -151,6 +169,18 @@ export function WorkflowCopilotChat({
     messagesEndRef.current?.scrollIntoView({ behavior });
   };
 
+  const adjustTextareaHeight = () => {
+    const textarea = textareaRef.current;
+    if (!textarea) return;
+
+    textarea.style.height = "auto";
+    textarea.style.height = `${Math.min(textarea.scrollHeight, 150)}px`;
+  };
+
+  useEffect(() => {
+    adjustTextareaHeight();
+  }, [inputValue]);
+
   const handleNewChat = () => {
     setMessages([]);
     setWorkflowCopilotChatId(null);
@@ -194,16 +224,12 @@ export function WorkflowCopilotChat({
       hasScrolledOnLoad.current = false;
       try {
         const client = await getClient(credentialGetter, "sans-api-v1");
-        const response = await client.get<{
-          workflow_copilot_chat_id: string | null;
-          chat_history: Array<{
-            sender: "ai" | "user";
-            content: string;
-            created_at: string;
-          }>;
-        }>("/workflow/copilot/chat-history", {
-          params: { workflow_permanent_id: workflowPermanentId },
-        });
+        const response = await client.get<WorkflowCopilotChatHistoryResponse>(
+          "/workflow/copilot/chat-history",
+          {
+            params: { workflow_permanent_id: workflowPermanentId },
+          },
+        );
 
         if (!isMounted) return;
 
@@ -233,6 +259,33 @@ export function WorkflowCopilotChat({
     };
   }, [credentialGetter, workflowPermanentId]);
 
+  useEffect(() => {
+    const handleKeyDown = (event: KeyboardEvent) => {
+      if (event.key !== "Escape" || !isOpen || !isLoading) {
+        return;
+      }
+      cancelSend();
+    };
+
+    window.addEventListener("keydown", handleKeyDown);
+    return () => {
+      window.removeEventListener("keydown", handleKeyDown);
+    };
+  }, [isLoading, isOpen]);
+
+  const cancelSend = async () => {
+    if (!streamingAbortController.current) return;
+
+    if (pendingMessageId.current) {
+      const messageId = pendingMessageId.current;
+      pendingMessageId.current = null;
+      setMessages((prev) => prev.filter((message) => message.id !== messageId));
+    }
+    setIsLoading(false);
+    setProcessingStatus("");
+    streamingAbortController.current?.abort();
+  };
+
   const handleSend = async () => {
     if (!inputValue.trim() || isLoading) return;
     if (!workflowPermanentId) {
@@ -251,10 +304,16 @@ export function WorkflowCopilotChat({
       content: inputValue,
     };
 
+    pendingMessageId.current = userMessageId;
     setMessages((prev) => [...prev, userMessage]);
     const messageContent = inputValue;
     setInputValue("");
     setIsLoading(true);
+    setProcessingStatus("Starting...");
+
+    const abortController = new AbortController();
+    streamingAbortController.current?.abort();
+    streamingAbortController.current = abortController;
 
     try {
       const saveData = getSaveData();
@@ -314,69 +373,97 @@ export function WorkflowCopilotChat({
         workflowYaml = convertToYAML(requestBody);
       }
 
-      const client = await getSseClient(credentialGetter);
-      const response = await client.post<{
-        workflow_copilot_chat_id?: string;
-        message?: string;
-        updated_workflow_yaml?: string | null;
-        request_time?: string;
-        response_time?: string;
-        error?: string;
-      }>("/workflow/copilot/chat-post", {
-        workflow_permanent_id: workflowPermanentId,
-        workflow_copilot_chat_id: workflowCopilotChatId,
-        workflow_run_id: workflowRunId,
-        message: messageContent,
-        workflow_yaml: workflowYaml,
-      });
+      const handleProcessingUpdate = (
+        payload: WorkflowCopilotProcessingUpdate,
+      ) => {
+        if (payload.status) {
+          setProcessingStatus(payload.status);
+        }
 
-      if (response.error) {
-        throw new Error(response.error);
-      }
+        const pendingId = pendingMessageId.current;
+        if (!pendingId || !payload.timestamp) {
+          return;
+        }
 
-      if (
-        !response.workflow_copilot_chat_id ||
-        !response.message ||
-        !response.request_time ||
-        !response.response_time
-      ) {
-        throw new Error("No response received.");
-      }
-
-      setWorkflowCopilotChatId(response.workflow_copilot_chat_id);
-
-      const aiMessage: ChatMessage = {
-        id: Date.now().toString(),
-        sender: "ai",
-        content: response.message || "I received your message.",
-        timestamp: response.response_time,
+        setMessages((prev) =>
+          prev.map((message) =>
+            message.id === pendingId
+              ? {
+                  ...message,
+                  timestamp: payload.timestamp,
+                }
+              : message,
+          ),
+        );
       };
 
-      setMessages((prev) => [
-        ...prev.map((message) =>
-          message.id === userMessageId
-            ? {
-                ...message,
-                timestamp: response.request_time,
-              }
-            : message,
-        ),
-        aiMessage,
-      ]);
+      const handleResponse = (response: WorkflowCopilotStreamResponse) => {
+        setWorkflowCopilotChatId(response.workflow_copilot_chat_id);
 
-      if (response.updated_workflow_yaml && onWorkflowUpdate) {
-        try {
-          onWorkflowUpdate(response.updated_workflow_yaml);
-        } catch (updateError) {
-          console.error("Failed to update workflow:", updateError);
-          toast({
-            title: "Update failed",
-            description: "Failed to apply workflow changes. Please try again.",
-            variant: "destructive",
-          });
+        const aiMessage: ChatMessage = {
+          id: Date.now().toString(),
+          sender: "ai",
+          content: response.message,
+          timestamp: response.response_time,
+        };
+
+        setMessages((prev) => [...prev, aiMessage]);
+
+        if (response.updated_workflow_yaml && onWorkflowUpdate) {
+          try {
+            onWorkflowUpdate(response.updated_workflow_yaml);
+          } catch (updateError) {
+            console.error("Failed to update workflow:", updateError);
+            toast({
+              title: "Update failed",
+              description:
+                "Failed to apply workflow changes. Please try again.",
+              variant: "destructive",
+            });
+          }
         }
-      }
+      };
+
+      const handleError = (payload: WorkflowCopilotStreamError) => {
+        const errorMessage: ChatMessage = {
+          id: Date.now().toString(),
+          sender: "ai",
+          content: payload.error,
+        };
+        setMessages((prev) => [...prev, errorMessage]);
+      };
+
+      const client = await getSseClient(credentialGetter);
+      await client.postStreaming<WorkflowCopilotSsePayload>(
+        "/workflow/copilot/chat-post",
+        {
+          workflow_permanent_id: workflowPermanentId,
+          workflow_copilot_chat_id: workflowCopilotChatId,
+          workflow_run_id: workflowRunId,
+          message: messageContent,
+          workflow_yaml: workflowYaml,
+        },
+        (payload) => {
+          switch (payload.type) {
+            case "processing_update":
+              handleProcessingUpdate(payload);
+              return false;
+            case "response":
+              handleResponse(payload);
+              return true;
+            case "error":
+              handleError(payload);
+              return true;
+            default:
+              return false;
+          }
+        },
+        { signal: abortController.signal },
+      );
     } catch (error) {
+      if (abortController.signal.aborted) {
+        return;
+      }
       console.error("Failed to send message:", error);
       const errorMessage: ChatMessage = {
         id: Date.now().toString(),
@@ -385,12 +472,18 @@ export function WorkflowCopilotChat({
       };
       setMessages((prev) => [...prev, errorMessage]);
     } finally {
+      if (streamingAbortController.current === abortController) {
+        streamingAbortController.current = null;
+      }
+      pendingMessageId.current = null;
       setIsLoading(false);
+      setProcessingStatus("");
     }
   };
 
-  const handleKeyPress = (e: React.KeyboardEvent<HTMLInputElement>) => {
-    if (e.key === "Enter") {
+  const handleKeyPress = (e: React.KeyboardEvent<HTMLTextAreaElement>) => {
+    if (e.key === "Enter" && !e.shiftKey) {
+      e.preventDefault();
       handleSend();
     }
   };
@@ -614,7 +707,7 @@ export function WorkflowCopilotChat({
               <div className="flex-1 rounded-lg bg-slate-800 p-3">
                 <div className="flex items-center gap-2 text-sm text-slate-400">
                   <ReloadIcon className="h-4 w-4 animate-spin" />
-                  <span>Processing...</span>
+                  <span>{processingStatus || "Processing..."}</span>
                 </div>
               </div>
             </div>
@@ -625,15 +718,21 @@ export function WorkflowCopilotChat({
 
       {/* Input */}
       <div className="border-t border-slate-700 p-3">
-        <div className="flex gap-2">
-          <input
-            type="text"
-            placeholder="Type your message..."
+        <div className="flex items-end gap-2">
+          <textarea
+            ref={textareaRef}
+            placeholder="Type your message... (Shift+Enter for new line)"
             value={inputValue}
             onChange={(e) => setInputValue(e.target.value)}
-            onKeyPress={handleKeyPress}
+            onKeyDown={handleKeyPress}
             disabled={isLoading}
-            className="flex-1 rounded-md border border-slate-600 bg-slate-800 px-3 py-2 text-sm text-slate-200 placeholder-slate-500 focus:border-blue-500 focus:outline-none disabled:cursor-not-allowed disabled:opacity-50"
+            rows={1}
+            className="flex-1 resize-none rounded-md border border-slate-600 bg-slate-800 px-3 py-2 text-sm text-slate-200 placeholder-slate-500 focus:border-blue-500 focus:outline-none disabled:cursor-not-allowed disabled:opacity-50"
+            style={{
+              minHeight: "38px",
+              maxHeight: "150px",
+              overflow: "auto",
+            }}
           />
           <button
             onClick={handleSend}
diff --git a/skyvern-frontend/src/routes/workflows/copilot/workflowCopilotTypes.ts b/skyvern-frontend/src/routes/workflows/copilot/workflowCopilotTypes.ts
new file mode 100644
index 00000000..b70ba1bf
--- /dev/null
+++ b/skyvern-frontend/src/routes/workflows/copilot/workflowCopilotTypes.ts
@@ -0,0 +1,62 @@
+export type WorkflowCopilotChatSender = "user" | "ai";
+
+export interface WorkflowCopilotChat {
+  workflow_copilot_chat_id: string;
+  organization_id: string;
+  workflow_permanent_id: string;
+  created_at: string;
+  modified_at: string;
+}
+
+export interface WorkflowCopilotChatMessage {
+  workflow_copilot_chat_message_id: string;
+  workflow_copilot_chat_id: string;
+  sender: WorkflowCopilotChatSender;
+  content: string;
+  global_llm_context: string | null;
+  created_at: string;
+  modified_at: string;
+}
+
+export interface WorkflowCopilotChatRequest {
+  workflow_permanent_id: string;
+  workflow_copilot_chat_id?: string | null;
+  workflow_run_id?: string | null;
+  message: string;
+  workflow_yaml: string;
+}
+
+export interface WorkflowCopilotChatHistoryMessage {
+  sender: WorkflowCopilotChatSender;
+  content: string;
+  created_at: string;
+}
+
+export interface WorkflowCopilotChatHistoryResponse {
+  workflow_copilot_chat_id: string | null;
+  chat_history: WorkflowCopilotChatHistoryMessage[];
+}
+
+export type WorkflowCopilotStreamMessageType =
+  | "processing_update"
+  | "response"
+  | "error";
+
+export interface WorkflowCopilotProcessingUpdate {
+  type: "processing_update";
+  status: string;
+  timestamp: string;
+}
+
+export interface WorkflowCopilotStreamResponse {
+  type: "response";
+  workflow_copilot_chat_id: string;
+  message: string;
+  updated_workflow_yaml?: string | null;
+  response_time: string;
+}
+
+export interface WorkflowCopilotStreamError {
+  type: "error";
+  error: string;
+}
diff --git a/skyvern-frontend/src/routes/workflows/editor/Workspace.tsx b/skyvern-frontend/src/routes/workflows/editor/Workspace.tsx
index 09577a87..2c5a9376 100644
--- a/skyvern-frontend/src/routes/workflows/editor/Workspace.tsx
+++ b/skyvern-frontend/src/routes/workflows/editor/Workspace.tsx
@@ -103,8 +103,8 @@ import {
   upgradeWorkflowBlocksV1toV2,
 } from "./workflowEditorUtils";
 import { constructCacheKeyValue, getInitialParameters } from "./utils";
-import { WorkflowCopilotChat } from "./WorkflowCopilotChat";
-import { WorkflowCopilotButton } from "./WorkflowCopilotButton";
+import { WorkflowCopilotChat } from "../copilot/WorkflowCopilotChat";
+import { WorkflowCopilotButton } from "../copilot/WorkflowCopilotButton";
 import { parse as parseYAML } from "yaml";
 import {
   BlockYAML,
diff --git a/skyvern/forge/sdk/routes/workflow_copilot.py b/skyvern/forge/sdk/routes/workflow_copilot.py
index d0b3fa25..c09a2146 100644
--- a/skyvern/forge/sdk/routes/workflow_copilot.py
+++ b/skyvern/forge/sdk/routes/workflow_copilot.py
@@ -6,7 +6,7 @@ from typing import Any, AsyncGenerator
 
 import structlog
 import yaml
-from fastapi import Depends, HTTPException, status
+from fastapi import Depends, HTTPException, Request, status
 from sse_starlette import EventSourceResponse, JSONServerSentEvent, ServerSentEvent
 
 from skyvern.forge import app
@@ -22,8 +22,11 @@ from skyvern.forge.sdk.schemas.workflow_copilot import (
     WorkflowCopilotChatHistoryResponse,
     WorkflowCopilotChatMessage,
     WorkflowCopilotChatRequest,
-    WorkflowCopilotChatResponse,
     WorkflowCopilotChatSender,
+    WorkflowCopilotProcessingUpdate,
+    WorkflowCopilotStreamErrorUpdate,
+    WorkflowCopilotStreamMessageType,
+    WorkflowCopilotStreamResponseUpdate,
 )
 from skyvern.forge.sdk.services import org_auth_service
 from skyvern.schemas.workflows import LoginBlockYAML, WorkflowCreateYAMLRequest
@@ -236,66 +239,81 @@ async def _process_workflow_yaml(action_data: dict[str, Any]) -> None | str:
 
 @base_router.post("/workflow/copilot/chat-post", include_in_schema=False)
 async def workflow_copilot_chat_post(
+    request: Request,
     chat_request: WorkflowCopilotChatRequest,
     organization: Organization = Depends(org_auth_service.get_current_org),
 ) -> EventSourceResponse:
-    LOG.info(
-        "Workflow copilot chat request",
-        workflow_copilot_chat_id=chat_request.workflow_copilot_chat_id,
-        workflow_run_id=chat_request.workflow_run_id,
-        message=chat_request.message,
-        workflow_yaml_length=len(chat_request.workflow_yaml),
-        organization_id=organization.organization_id,
-    )
-
-    request_started_at = datetime.now(timezone.utc)
-
-    if chat_request.workflow_copilot_chat_id:
-        chat = await app.DATABASE.get_workflow_copilot_chat_by_id(
-            organization_id=organization.organization_id,
-            workflow_copilot_chat_id=chat_request.workflow_copilot_chat_id,
-        )
-        if not chat:
-            raise HTTPException(status_code=status.HTTP_404_NOT_FOUND, detail="Chat not found")
-        if chat_request.workflow_permanent_id != chat.workflow_permanent_id:
-            raise HTTPException(status_code=status.HTTP_400_BAD_REQUEST, detail="Wrong workflow permanent ID")
-    else:
-        chat = await app.DATABASE.create_workflow_copilot_chat(
-            organization_id=organization.organization_id,
-            workflow_permanent_id=chat_request.workflow_permanent_id,
-        )
-
-    chat_messages = await app.DATABASE.get_workflow_copilot_chat_messages(
-        workflow_copilot_chat_id=chat.workflow_copilot_chat_id,
-    )
-    global_llm_context = None
-    for message in reversed(chat_messages):
-        if message.global_llm_context is not None:
-            global_llm_context = message.global_llm_context
-            break
-
-    debug_run_info = await _get_debug_run_info(organization.organization_id, chat_request.workflow_run_id)
-
-    # Format debug run info for prompt
-    debug_run_info_text = ""
-    if debug_run_info:
-        debug_run_info_text = f"Block Label: {debug_run_info.block_label}"
-        debug_run_info_text += f" Block Type: {debug_run_info.block_type}"
-        debug_run_info_text += f" Status: {debug_run_info.block_status}"
-        if debug_run_info.failure_reason:
-            debug_run_info_text += f"\nFailure Reason: {debug_run_info.failure_reason}"
-        if debug_run_info.html:
-            debug_run_info_text += f"\n\nVisible Elements Tree (HTML):\n{debug_run_info.html}"
-
-    await app.DATABASE.create_workflow_copilot_chat_message(
-        organization_id=chat.organization_id,
-        workflow_copilot_chat_id=chat.workflow_copilot_chat_id,
-        sender=WorkflowCopilotChatSender.USER,
-        content=chat_request.message,
-    )
-
     async def event_stream() -> AsyncGenerator[JSONServerSentEvent, None]:
+        LOG.info(
+            "Workflow copilot chat request",
+            workflow_copilot_chat_id=chat_request.workflow_copilot_chat_id,
+            workflow_run_id=chat_request.workflow_run_id,
+            message=chat_request.message,
+            workflow_yaml_length=len(chat_request.workflow_yaml),
+            organization_id=organization.organization_id,
+        )
+
         try:
+            yield JSONServerSentEvent(
+                data=WorkflowCopilotProcessingUpdate(
+                    type=WorkflowCopilotStreamMessageType.PROCESSING_UPDATE,
+                    status="Processing...",
+                    timestamp=datetime.now(timezone.utc),
+                ).model_dump(mode="json"),
+            )
+
+            if chat_request.workflow_copilot_chat_id:
+                chat = await app.DATABASE.get_workflow_copilot_chat_by_id(
+                    organization_id=organization.organization_id,
+                    workflow_copilot_chat_id=chat_request.workflow_copilot_chat_id,
+                )
+                if not chat:
+                    raise HTTPException(status_code=status.HTTP_404_NOT_FOUND, detail="Chat not found")
+                if chat_request.workflow_permanent_id != chat.workflow_permanent_id:
+                    raise HTTPException(status_code=status.HTTP_400_BAD_REQUEST, detail="Wrong workflow permanent ID")
+            else:
+                chat = await app.DATABASE.create_workflow_copilot_chat(
+                    organization_id=organization.organization_id,
+                    workflow_permanent_id=chat_request.workflow_permanent_id,
+                )
+
+            chat_messages = await app.DATABASE.get_workflow_copilot_chat_messages(
+                workflow_copilot_chat_id=chat.workflow_copilot_chat_id,
+            )
+            global_llm_context = None
+            for message in reversed(chat_messages):
+                if message.global_llm_context is not None:
+                    global_llm_context = message.global_llm_context
+                    break
+
+            debug_run_info = await _get_debug_run_info(organization.organization_id, chat_request.workflow_run_id)
+
+            # Format debug run info for prompt
+            debug_run_info_text = ""
+            if debug_run_info:
+                debug_run_info_text = f"Block Label: {debug_run_info.block_label}"
+                debug_run_info_text += f" Block Type: {debug_run_info.block_type}"
+                debug_run_info_text += f" Status: {debug_run_info.block_status}"
+                if debug_run_info.failure_reason:
+                    debug_run_info_text += f"\nFailure Reason: {debug_run_info.failure_reason}"
+                if debug_run_info.html:
+                    debug_run_info_text += f"\n\nVisible Elements Tree (HTML):\n{debug_run_info.html}"
+
+            yield JSONServerSentEvent(
+                data=WorkflowCopilotProcessingUpdate(
+                    type=WorkflowCopilotStreamMessageType.PROCESSING_UPDATE,
+                    status="Thinking...",
+                    timestamp=datetime.now(timezone.utc),
+                ).model_dump(mode="json"),
+            )
+
+            if await request.is_disconnected():
+                LOG.info(
+                    "Workflow copilot chat request is disconnected before LLM call",
+                    workflow_copilot_chat_id=chat_request.workflow_copilot_chat_id,
+                )
+                return
+
             user_response, updated_workflow_yaml, updated_global_llm_context = await copilot_call_llm(
                 organization.organization_id,
                 chat_request,
@@ -303,6 +321,21 @@ async def workflow_copilot_chat_post(
                 global_llm_context,
                 debug_run_info_text,
             )
+
+            if await request.is_disconnected():
+                LOG.info(
+                    "Workflow copilot chat request is disconnected after LLM call",
+                    workflow_copilot_chat_id=chat_request.workflow_copilot_chat_id,
+                )
+                return
+
+            await app.DATABASE.create_workflow_copilot_chat_message(
+                organization_id=chat.organization_id,
+                workflow_copilot_chat_id=chat.workflow_copilot_chat_id,
+                sender=WorkflowCopilotChatSender.USER,
+                content=chat_request.message,
+            )
+
             assistant_message = await app.DATABASE.create_workflow_copilot_chat_message(
                 organization_id=chat.organization_id,
                 workflow_copilot_chat_id=chat.workflow_copilot_chat_id,
@@ -311,32 +344,53 @@ async def workflow_copilot_chat_post(
                 global_llm_context=updated_global_llm_context,
             )
 
-            response_payload = WorkflowCopilotChatResponse(
-                workflow_copilot_chat_id=chat.workflow_copilot_chat_id,
-                message=user_response,
-                updated_workflow_yaml=updated_workflow_yaml,
-                request_time=request_started_at,
-                response_time=assistant_message.created_at,
-            ).model_dump(mode="json")
-            yield JSONServerSentEvent(response_payload)
+            yield JSONServerSentEvent(
+                data=WorkflowCopilotStreamResponseUpdate(
+                    type=WorkflowCopilotStreamMessageType.RESPONSE,
+                    workflow_copilot_chat_id=chat.workflow_copilot_chat_id,
+                    message=user_response,
+                    updated_workflow_yaml=updated_workflow_yaml,
+                    response_time=assistant_message.created_at,
+                ).model_dump(mode="json"),
+            )
         except HTTPException as exc:
-            yield JSONServerSentEvent({"error": exc.detail})
+            if await request.is_disconnected():
+                return
+            yield JSONServerSentEvent(
+                data=WorkflowCopilotStreamErrorUpdate(
+                    type=WorkflowCopilotStreamMessageType.ERROR,
+                    error=exc.detail,
+                ).model_dump(mode="json"),
+            )
         except LLMProviderError as exc:
+            if await request.is_disconnected():
+                return
             LOG.error(
                 "LLM provider error",
                 organization_id=organization.organization_id,
                 error=str(exc),
                 exc_info=True,
             )
-            yield JSONServerSentEvent({"error": "Failed to process your request. Please try again."})
+            yield JSONServerSentEvent(
+                data=WorkflowCopilotStreamErrorUpdate(
+                    type=WorkflowCopilotStreamMessageType.ERROR,
+                    error="Failed to process your request. Please try again.",
+                ).model_dump(mode="json"),
+            )
         except Exception as exc:
+            if await request.is_disconnected():
+                return
             LOG.error(
                 "Unexpected error in workflow copilot",
                 organization_id=organization.organization_id,
                 error=str(exc),
                 exc_info=True,
             )
-            yield JSONServerSentEvent({"error": "An error occurred. Please try again."})
+            yield JSONServerSentEvent(
+                data=WorkflowCopilotStreamErrorUpdate(
+                    type=WorkflowCopilotStreamMessageType.ERROR, error="An error occurred. Please try again."
+                ).model_dump(mode="json"),
+            )
 
     def ping_message_factory() -> ServerSentEvent:
         return ServerSentEvent(comment="keep-alive")
diff --git a/skyvern/forge/sdk/schemas/workflow_copilot.py b/skyvern/forge/sdk/schemas/workflow_copilot.py
index 29de4618..801a5402 100644
--- a/skyvern/forge/sdk/schemas/workflow_copilot.py
+++ b/skyvern/forge/sdk/schemas/workflow_copilot.py
@@ -39,14 +39,6 @@ class WorkflowCopilotChatRequest(BaseModel):
     workflow_yaml: str = Field(..., description="Current workflow YAML including unsaved changes")
 
 
-class WorkflowCopilotChatResponse(BaseModel):
-    workflow_copilot_chat_id: str = Field(..., description="The chat ID")
-    message: str = Field(..., description="The message sent to the user")
-    updated_workflow_yaml: str | None = Field(None, description="The updated workflow yaml")
-    request_time: datetime = Field(..., description="When the request was received")
-    response_time: datetime = Field(..., description="When the assistant message was created")
-
-
 class WorkflowCopilotChatHistoryMessage(BaseModel):
     sender: WorkflowCopilotChatSender = Field(..., description="Message sender")
     content: str = Field(..., description="Message content")
@@ -56,3 +48,32 @@ class WorkflowCopilotChatHistoryMessage(BaseModel):
 class WorkflowCopilotChatHistoryResponse(BaseModel):
     workflow_copilot_chat_id: str | None = Field(None, description="Latest chat ID for the workflow")
     chat_history: list[WorkflowCopilotChatHistoryMessage] = Field(default_factory=list, description="Chat messages")
+
+
+class WorkflowCopilotStreamMessageType(StrEnum):
+    PROCESSING_UPDATE = "processing_update"
+    RESPONSE = "response"
+    ERROR = "error"
+
+
+class WorkflowCopilotProcessingUpdate(BaseModel):
+    type: WorkflowCopilotStreamMessageType = Field(
+        WorkflowCopilotStreamMessageType.PROCESSING_UPDATE, description="Message type"
+    )
+    status: str = Field(..., description="Processing status text")
+    timestamp: datetime = Field(..., description="Server timestamp")
+
+
+class WorkflowCopilotStreamResponseUpdate(BaseModel):
+    type: WorkflowCopilotStreamMessageType = Field(
+        WorkflowCopilotStreamMessageType.RESPONSE, description="Message type"
+    )
+    workflow_copilot_chat_id: str = Field(..., description="The chat ID")
+    message: str = Field(..., description="The message sent to the user")
+    updated_workflow_yaml: str | None = Field(None, description="The updated workflow yaml")
+    response_time: datetime = Field(..., description="When the assistant message was created")
+
+
+class WorkflowCopilotStreamErrorUpdate(BaseModel):
+    type: WorkflowCopilotStreamMessageType = Field(WorkflowCopilotStreamMessageType.ERROR, description="Message type")
+    error: str = Field(..., description="Error message")