diff --git a/packages/cli/src/config/settingsSchema.ts b/packages/cli/src/config/settingsSchema.ts
index 7dc8772fe7..de5aa28e5d 100644
--- a/packages/cli/src/config/settingsSchema.ts
+++ b/packages/cli/src/config/settingsSchema.ts
@@ -361,6 +361,16 @@ const SETTINGS_SCHEMA = {
           'Automatically switch between default light and dark themes based on terminal background color.',
         showInDialog: true,
       },
+      terminalBackgroundPollingInterval: {
+        type: 'number',
+        label: 'Terminal Background Polling Interval',
+        category: 'UI',
+        requiresRestart: false,
+        default: 60000,
+        description:
+          'Interval in milliseconds to poll the terminal background color.',
+        showInDialog: true,
+      },
       customThemes: {
         type: 'object',
         label: 'Custom Themes',
diff --git a/packages/cli/src/ui/contexts/TerminalContext.test.tsx b/packages/cli/src/ui/contexts/TerminalContext.test.tsx
new file mode 100644
index 0000000000..6d81943e7f
--- /dev/null
+++ b/packages/cli/src/ui/contexts/TerminalContext.test.tsx
@@ -0,0 +1,76 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { render } from '../../test-utils/render.js';
+import { TerminalProvider, useTerminalContext } from './TerminalContext.js';
+import { vi, describe, it, expect } from 'vitest';
+import { useEffect , act } from 'react';
+import { EventEmitter } from 'node:events';
+
+const mockStdin = new EventEmitter() as unknown as NodeJS.ReadStream &
+  EventEmitter;
+// Add required properties for Ink's StdinProps
+(mockStdin as unknown as { write: vi.Mock }).write = vi.fn();
+(mockStdin as unknown as { setEncoding: vi.Mock }).setEncoding = vi.fn();
+(mockStdin as unknown as { setRawMode: vi.Mock }).setRawMode = vi.fn();
+(mockStdin as unknown as { isTTY: boolean }).isTTY = true;
+// Mock removeListener specifically as it is used in cleanup
+(mockStdin as unknown as { removeListener: vi.Mock }).removeListener = vi.fn(
+  (event: string, listener: (...args: unknown[]) => void) => {
+    mockStdin.off(event, listener);
+  },
+);
+
+vi.mock('ink', () => ({
+  useStdin: () => ({
+    stdin: mockStdin,
+  }),
+}));
+
+const TestComponent = ({ onColor }: { onColor: (c: string) => void }) => {
+  const { subscribe } = useTerminalContext();
+  useEffect(() => {
+    subscribe(onColor);
+  }, [subscribe, onColor]);
+  return null;
+};
+
+describe('TerminalContext', () => {
+  it('should parse OSC 11 response', () => {
+    const handleColor = vi.fn();
+    render(
+      <TerminalProvider>
+        <TestComponent onColor={handleColor} />
+      </TerminalProvider>,
+    );
+
+    act(() => {
+      mockStdin.emit('data', '\x1b]11;rgb:ffff/ffff/ffff\x1b\\');
+    });
+
+    expect(handleColor).toHaveBeenCalledWith('rgb:ffff/ffff/ffff');
+  });
+
+  it('should handle partial chunks', () => {
+    const handleColor = vi.fn();
+    render(
+      <TerminalProvider>
+        <TestComponent onColor={handleColor} />
+      </TerminalProvider>,
+    );
+
+    act(() => {
+      mockStdin.emit('data', '\x1b]11;rgb:0000/');
+    });
+    expect(handleColor).not.toHaveBeenCalled();
+
+    act(() => {
+      mockStdin.emit('data', '0000/0000\x1b\\');
+    });
+
+    expect(handleColor).toHaveBeenCalledWith('rgb:0000/0000/0000');
+  });
+});
diff --git a/packages/cli/src/ui/contexts/TerminalContext.tsx b/packages/cli/src/ui/contexts/TerminalContext.tsx
index 1ad8c37ad6..bec132f556 100644
--- a/packages/cli/src/ui/contexts/TerminalContext.tsx
+++ b/packages/cli/src/ui/contexts/TerminalContext.tsx
@@ -67,9 +67,13 @@ export function TerminalProvider({ children }: { children: React.ReactNode }) {
         for (const handler of subscribers) {
           handler(colorStr);
         }
-        buffer = buffer.slice(match.index! + match[0].length);
-      } else if (buffer.length > 1024) {
-        // Safety valve to prevent infinite buffer growth
+        // Safely remove the processed part + match
+        if (match.index !== undefined) {
+          buffer = buffer.slice(match.index + match[0].length);
+        }
+      } else if (buffer.length > 4096) {
+        // Safety valve: if buffer gets too large without a match, trim it.
+        // We keep the last 1024 bytes to avoid cutting off a partial sequence.
         buffer = buffer.slice(-1024);
       }
     };
diff --git a/packages/cli/src/ui/hooks/useTerminalTheme.test.tsx b/packages/cli/src/ui/hooks/useTerminalTheme.test.tsx
new file mode 100644
index 0000000000..b7cb0f212d
--- /dev/null
+++ b/packages/cli/src/ui/hooks/useTerminalTheme.test.tsx
@@ -0,0 +1,154 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+import { renderHook } from '../../test-utils/render.js';
+import { useTerminalTheme } from './useTerminalTheme.js';
+import { vi, describe, it, expect, beforeEach, afterEach } from 'vitest';
+import { makeFakeConfig } from '@google/gemini-cli-core';
+import os from 'node:os';
+
+// Mocks
+const mockWrite = vi.fn();
+const mockSubscribe = vi.fn();
+const mockUnsubscribe = vi.fn();
+const mockHandleThemeSelect = vi.fn();
+const mockSetTerminalBackground = vi.fn();
+
+vi.mock('ink', async () => ({
+    useStdout: () => ({
+      stdout: {
+        write: mockWrite,
+      },
+    }),
+  }));
+
+vi.mock('../contexts/TerminalContext.js', () => ({
+  useTerminalContext: () => ({
+    subscribe: mockSubscribe,
+    unsubscribe: mockUnsubscribe,
+  }),
+}));
+
+const mockSettings = {
+  merged: {
+    ui: {
+      theme: 'default', // DEFAULT_THEME.name
+      autoThemeSwitching: true,
+      terminalBackgroundPollingInterval: 100, // Short interval for testing
+    },
+  },
+};
+
+vi.mock('../contexts/SettingsContext.js', () => ({
+  useSettings: () => mockSettings,
+}));
+
+vi.mock('../themes/theme-manager.js', async () => {
+  const actual = await vi.importActual('../themes/theme-manager.js');
+  return {
+    ...actual,
+    themeManager: {
+      isDefaultTheme: (name: string) =>
+        name === 'default' || name === 'default-light',
+    },
+    DEFAULT_THEME: { name: 'default' },
+  };
+});
+
+vi.mock('../themes/default-light.js', () => ({
+  DefaultLight: { name: 'default-light' },
+}));
+
+describe('useTerminalTheme', () => {
+  let config: Config;
+
+  beforeEach(() => {
+    vi.useFakeTimers();
+    config = makeFakeConfig({
+      targetDir: os.tmpdir(),
+    });
+    config.setTerminalBackground = mockSetTerminalBackground;
+    mockWrite.mockClear();
+    mockSubscribe.mockClear();
+    mockUnsubscribe.mockClear();
+    mockHandleThemeSelect.mockClear();
+    mockSetTerminalBackground.mockClear();
+  });
+
+  afterEach(() => {
+    vi.useRealTimers();
+    vi.restoreAllMocks();
+  });
+
+  it('should subscribe to terminal background events on mount', () => {
+    renderHook(() => useTerminalTheme(mockHandleThemeSelect, config));
+    expect(mockSubscribe).toHaveBeenCalled();
+  });
+
+  it('should unsubscribe on unmount', () => {
+    const { unmount } = renderHook(() =>
+      useTerminalTheme(mockHandleThemeSelect, config),
+    );
+    unmount();
+    expect(mockUnsubscribe).toHaveBeenCalled();
+  });
+
+  it('should poll for terminal background', () => {
+    renderHook(() => useTerminalTheme(mockHandleThemeSelect, config));
+
+    // Fast-forward time
+    vi.advanceTimersByTime(100);
+    expect(mockWrite).toHaveBeenCalledWith('\x1b]11;?\x1b\\');
+  });
+
+  it('should switch to light theme when background is light', () => {
+    renderHook(() => useTerminalTheme(mockHandleThemeSelect, config));
+
+    const handler = mockSubscribe.mock.calls[0][0];
+
+    // Simulate light background response (white)
+    // OSC 11 response format: rgb:rrrr/gggg/bbbb
+    handler('rgb:ffff/ffff/ffff');
+
+    expect(mockSetTerminalBackground).toHaveBeenCalledWith('#ffffff');
+    expect(mockHandleThemeSelect).toHaveBeenCalledWith(
+      'default-light',
+      expect.anything(),
+    );
+  });
+
+  it('should switch to dark theme when background is dark', () => {
+    // Start with light theme
+    mockSettings.merged.ui.theme = 'default-light';
+
+    renderHook(() => useTerminalTheme(mockHandleThemeSelect, config));
+
+    const handler = mockSubscribe.mock.calls[0][0];
+
+    // Simulate dark background response (black)
+    handler('rgb:0000/0000/0000');
+
+    expect(mockSetTerminalBackground).toHaveBeenCalledWith('#000000');
+    expect(mockHandleThemeSelect).toHaveBeenCalledWith(
+      'default',
+      expect.anything(),
+    );
+
+    // Reset theme
+    mockSettings.merged.ui.theme = 'default';
+  });
+
+  it('should not switch theme if autoThemeSwitching is disabled', () => {
+    mockSettings.merged.ui.autoThemeSwitching = false;
+    renderHook(() => useTerminalTheme(mockHandleThemeSelect, config));
+
+    // Poll should not happen
+    vi.advanceTimersByTime(100);
+    expect(mockWrite).not.toHaveBeenCalled();
+
+    mockSettings.merged.ui.autoThemeSwitching = true;
+  });
+});
diff --git a/packages/cli/src/ui/hooks/useTerminalTheme.ts b/packages/cli/src/ui/hooks/useTerminalTheme.ts
index 93b9bb48bc..b70eb30efd 100644
--- a/packages/cli/src/ui/hooks/useTerminalTheme.ts
+++ b/packages/cli/src/ui/hooks/useTerminalTheme.ts
@@ -6,7 +6,11 @@
 
 import { useEffect } from 'react';
 import { useStdout } from 'ink';
-import { getLuminance, parseColor } from '../themes/color-utils.js';
+import {
+  getLuminance,
+  parseColor,
+  shouldSwitchTheme,
+} from '../themes/color-utils.js';
 import { themeManager, DEFAULT_THEME } from '../themes/theme-manager.js';
 import { DefaultLight } from '../themes/default-light.js';
 import { useSettings } from '../contexts/SettingsContext.js';
@@ -37,7 +41,7 @@ export function useTerminalTheme(
       }
 
       stdout.write('\x1b]11;?\x1b\\');
-    }, 3000);
+    }, settings.merged.ui.terminalBackgroundPollingInterval);
 
     const handleTerminalBackground = (colorStr: string) => {
       // Parse the response "rgb:rrrr/gggg/bbbb"
@@ -51,25 +55,17 @@ export function useTerminalTheme(
       const luminance = getLuminance(hexColor);
       config.setTerminalBackground(hexColor);
 
-      // Check if we need to switch theme
       const currentThemeName = settings.merged.ui.theme;
-      const isDefaultTheme =
-        currentThemeName === DEFAULT_THEME.name ||
-        currentThemeName === undefined;
-      const isDefaultLightTheme = currentThemeName === DefaultLight.name;
 
-      // Hysteresis thresholds to prevent flickering when the background color
-      // is ambiguous (near the midpoint).
-      const LIGHT_THEME_LUMINANCE_THRESHOLD = 140;
-      const DARK_THEME_LUMINANCE_THRESHOLD = 110;
+      const newTheme = shouldSwitchTheme(
+        currentThemeName,
+        luminance,
+        DEFAULT_THEME.name,
+        DefaultLight.name,
+      );
 
-      if (luminance > LIGHT_THEME_LUMINANCE_THRESHOLD && isDefaultTheme) {
-        handleThemeSelect(DefaultLight.name, SettingScope.User);
-      } else if (
-        luminance < DARK_THEME_LUMINANCE_THRESHOLD &&
-        isDefaultLightTheme
-      ) {
-        handleThemeSelect(DEFAULT_THEME.name, SettingScope.User);
+      if (newTheme) {
+        handleThemeSelect(newTheme, SettingScope.User);
       }
     };
 
@@ -82,6 +78,7 @@ export function useTerminalTheme(
   }, [
     settings.merged.ui.theme,
     settings.merged.ui.autoThemeSwitching,
+    settings.merged.ui.terminalBackgroundPollingInterval,
     stdout,
     config,
     handleThemeSelect,
diff --git a/packages/cli/src/ui/themes/color-utils.test.ts b/packages/cli/src/ui/themes/color-utils.test.ts
index 5e40abc9b0..96b5ed404e 100644
--- a/packages/cli/src/ui/themes/color-utils.test.ts
+++ b/packages/cli/src/ui/themes/color-utils.test.ts
@@ -14,6 +14,7 @@ import {
   getThemeTypeFromBackgroundColor,
   getLuminance,
   parseColor,
+  shouldSwitchTheme,
 } from './color-utils.js';
 
 describe('Color Utils', () => {
@@ -339,4 +340,91 @@ describe('Color Utils', () => {
       expect(parseColor('Ffff', 'fFFF', 'ffFF')).toBe('#ffffff');
     });
   });
+
+  describe('shouldSwitchTheme', () => {
+    const DEFAULT_THEME = 'default';
+    const DEFAULT_LIGHT_THEME = 'default-light';
+    const LIGHT_THRESHOLD = 140;
+    const DARK_THRESHOLD = 110;
+
+    it('should switch to light theme if luminance > threshold and current is default', () => {
+      // 141 > 140
+      expect(
+        shouldSwitchTheme(
+          DEFAULT_THEME,
+          LIGHT_THRESHOLD + 1,
+          DEFAULT_THEME,
+          DEFAULT_LIGHT_THEME,
+        ),
+      ).toBe(DEFAULT_LIGHT_THEME);
+
+      // Undefined current theme counts as default
+      expect(
+        shouldSwitchTheme(
+          undefined,
+          LIGHT_THRESHOLD + 1,
+          DEFAULT_THEME,
+          DEFAULT_LIGHT_THEME,
+        ),
+      ).toBe(DEFAULT_LIGHT_THEME);
+    });
+
+    it('should NOT switch to light theme if luminance <= threshold', () => {
+      // 140 <= 140
+      expect(
+        shouldSwitchTheme(
+          DEFAULT_THEME,
+          LIGHT_THRESHOLD,
+          DEFAULT_THEME,
+          DEFAULT_LIGHT_THEME,
+        ),
+      ).toBeUndefined();
+    });
+
+    it('should NOT switch to light theme if current theme is not default', () => {
+      expect(
+        shouldSwitchTheme(
+          'custom-theme',
+          LIGHT_THRESHOLD + 1,
+          DEFAULT_THEME,
+          DEFAULT_LIGHT_THEME,
+        ),
+      ).toBeUndefined();
+    });
+
+    it('should switch to dark theme if luminance < threshold and current is default light', () => {
+      // 109 < 110
+      expect(
+        shouldSwitchTheme(
+          DEFAULT_LIGHT_THEME,
+          DARK_THRESHOLD - 1,
+          DEFAULT_THEME,
+          DEFAULT_LIGHT_THEME,
+        ),
+      ).toBe(DEFAULT_THEME);
+    });
+
+    it('should NOT switch to dark theme if luminance >= threshold', () => {
+      // 110 >= 110
+      expect(
+        shouldSwitchTheme(
+          DEFAULT_LIGHT_THEME,
+          DARK_THRESHOLD,
+          DEFAULT_THEME,
+          DEFAULT_LIGHT_THEME,
+        ),
+      ).toBeUndefined();
+    });
+
+    it('should NOT switch to dark theme if current theme is not default light', () => {
+      expect(
+        shouldSwitchTheme(
+          'custom-theme',
+          DARK_THRESHOLD - 1,
+          DEFAULT_THEME,
+          DEFAULT_LIGHT_THEME,
+        ),
+      ).toBeUndefined();
+    });
+  });
 });
diff --git a/packages/cli/src/ui/themes/color-utils.ts b/packages/cli/src/ui/themes/color-utils.ts
index fed63b93ef..ecfec6ab08 100644
--- a/packages/cli/src/ui/themes/color-utils.ts
+++ b/packages/cli/src/ui/themes/color-utils.ts
@@ -309,6 +309,43 @@ export function getLuminance(backgroundColor: string): number {
   return 0.2126 * r + 0.7152 * g + 0.0722 * b;
 }
 
+// Hysteresis thresholds to prevent flickering when the background color
+// is ambiguous (near the midpoint).
+export const LIGHT_THEME_LUMINANCE_THRESHOLD = 140;
+export const DARK_THEME_LUMINANCE_THRESHOLD = 110;
+
+/**
+ * Determines if the theme should be switched based on background luminance.
+ * Uses hysteresis to prevent flickering.
+ *
+ * @param currentThemeName The name of the currently active theme
+ * @param luminance The calculated relative luminance of the background (0-255)
+ * @param defaultThemeName The name of the default (dark) theme
+ * @param defaultLightThemeName The name of the default light theme
+ * @returns The name of the theme to switch to, or undefined if no switch is needed.
+ */
+export function shouldSwitchTheme(
+  currentThemeName: string | undefined,
+  luminance: number,
+  defaultThemeName: string,
+  defaultLightThemeName: string,
+): string | undefined {
+  const isDefaultTheme =
+    currentThemeName === defaultThemeName || currentThemeName === undefined;
+  const isDefaultLightTheme = currentThemeName === defaultLightThemeName;
+
+  if (luminance > LIGHT_THEME_LUMINANCE_THRESHOLD && isDefaultTheme) {
+    return defaultLightThemeName;
+  } else if (
+    luminance < DARK_THEME_LUMINANCE_THRESHOLD &&
+    isDefaultLightTheme
+  ) {
+    return defaultThemeName;
+  }
+
+  return undefined;
+}
+
 /**
  * Parses an X11 RGB string (e.g. from OSC 11) into a hex color string.
  * Supports 1-4 digit hex values per channel (e.g., F, FF, FFF, FFFF).