diff --git a/packages/cli/src/ui/components/SettingsDialog.tsx b/packages/cli/src/ui/components/SettingsDialog.tsx
index f41d9cd2ed..e0a85d97ba 100644
--- a/packages/cli/src/ui/components/SettingsDialog.tsx
+++ b/packages/cli/src/ui/components/SettingsDialog.tsx
@@ -628,9 +628,9 @@ export function SettingsDialog({
     const DIALOG_PADDING = 2; // Top and bottom borders
     const SETTINGS_TITLE_HEIGHT = 1;
     const SEARCH_BOX_HEIGHT = 3;
-    const SCROLL_ARROWS_HEIGHT = 2;
-    const SPACING_HEIGHT = 2;
-    const SCOPE_SELECTION_HEIGHT = 4;
+    const SCROLL_ARROWS_HEIGHT = 3;
+    const SPACING_HEIGHT = 5;
+    const SCOPE_SELECTION_HEIGHT = 7;
     const BOTTOM_HELP_TEXT_HEIGHT = 1;
     const RESTART_PROMPT_HEIGHT = showRestartPrompt ? 1 : 0;
     const ITEM_HEIGHT = 3; // Label + description + spacing
diff --git a/packages/cli/src/ui/components/__snapshots__/SettingsDialog.test.tsx.snap b/packages/cli/src/ui/components/__snapshots__/SettingsDialog.test.tsx.snap
index da745e2843..24b0938382 100644
--- a/packages/cli/src/ui/components/__snapshots__/SettingsDialog.test.tsx.snap
+++ b/packages/cli/src/ui/components/__snapshots__/SettingsDialog.test.tsx.snap
@@ -10,6 +10,7 @@ exports[`SettingsDialog > Initial Rendering > should render settings list with v
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │  ● Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -38,9 +39,12 @@ exports[`SettingsDialog > Initial Rendering > should render settings list with v
 │                                                                                                  │
 │    Apply To                                                                                      │
 │  ● User Settings                                                                                 │
+│                                                                                                  │
 │    Workspace Settings                                                                            │
+│                                                                                                  │
 │    System Settings                                                                               │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
@@ -56,6 +60,7 @@ exports[`SettingsDialog > Snapshot Tests > should render 'accessibility settings
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │  ● Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -84,9 +89,12 @@ exports[`SettingsDialog > Snapshot Tests > should render 'accessibility settings
 │                                                                                                  │
 │    Apply To                                                                                      │
 │  ● User Settings                                                                                 │
+│                                                                                                  │
 │    Workspace Settings                                                                            │
+│                                                                                                  │
 │    System Settings                                                                               │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
@@ -102,6 +110,7 @@ exports[`SettingsDialog > Snapshot Tests > should render 'all boolean settings d
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │  ● Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -130,9 +139,12 @@ exports[`SettingsDialog > Snapshot Tests > should render 'all boolean settings d
 │                                                                                                  │
 │    Apply To                                                                                      │
 │  ● User Settings                                                                                 │
+│                                                                                                  │
 │    Workspace Settings                                                                            │
+│                                                                                                  │
 │    System Settings                                                                               │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
@@ -148,6 +160,7 @@ exports[`SettingsDialog > Snapshot Tests > should render 'default state' correct
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │  ● Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -176,9 +189,12 @@ exports[`SettingsDialog > Snapshot Tests > should render 'default state' correct
 │                                                                                                  │
 │    Apply To                                                                                      │
 │  ● User Settings                                                                                 │
+│                                                                                                  │
 │    Workspace Settings                                                                            │
+│                                                                                                  │
 │    System Settings                                                                               │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
@@ -194,6 +210,7 @@ exports[`SettingsDialog > Snapshot Tests > should render 'file filtering setting
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │  ● Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -222,9 +239,12 @@ exports[`SettingsDialog > Snapshot Tests > should render 'file filtering setting
 │                                                                                                  │
 │    Apply To                                                                                      │
 │  ● User Settings                                                                                 │
+│                                                                                                  │
 │    Workspace Settings                                                                            │
+│                                                                                                  │
 │    System Settings                                                                               │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
@@ -240,6 +260,7 @@ exports[`SettingsDialog > Snapshot Tests > should render 'focused on scope selec
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │    Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -268,9 +289,12 @@ exports[`SettingsDialog > Snapshot Tests > should render 'focused on scope selec
 │                                                                                                  │
 │  > Apply To                                                                                      │
 │  ● 1. User Settings                                                                              │
+│                                                                                                  │
 │    2. Workspace Settings                                                                         │
+│                                                                                                  │
 │    3. System Settings                                                                            │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
@@ -286,6 +310,7 @@ exports[`SettingsDialog > Snapshot Tests > should render 'mixed boolean and numb
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │  ● Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -314,9 +339,12 @@ exports[`SettingsDialog > Snapshot Tests > should render 'mixed boolean and numb
 │                                                                                                  │
 │    Apply To                                                                                      │
 │  ● User Settings                                                                                 │
+│                                                                                                  │
 │    Workspace Settings                                                                            │
+│                                                                                                  │
 │    System Settings                                                                               │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
@@ -332,6 +360,7 @@ exports[`SettingsDialog > Snapshot Tests > should render 'tools and security set
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │  ● Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -360,9 +389,12 @@ exports[`SettingsDialog > Snapshot Tests > should render 'tools and security set
 │                                                                                                  │
 │    Apply To                                                                                      │
 │  ● User Settings                                                                                 │
+│                                                                                                  │
 │    Workspace Settings                                                                            │
+│                                                                                                  │
 │    System Settings                                                                               │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
@@ -378,6 +410,7 @@ exports[`SettingsDialog > Snapshot Tests > should render 'various boolean settin
 │ ╰──────────────────────────────────────────────────────────────────────────────────────────────╯ │
 │                                                                                                  │
 │  ▲                                                                                               │
+│                                                                                                  │
 │  ● Preview Features (e.g., models)                                                        false  │
 │    Enable preview features (e.g., preview models).                                               │
 │                                                                                                  │
@@ -406,9 +439,12 @@ exports[`SettingsDialog > Snapshot Tests > should render 'various boolean settin
 │                                                                                                  │
 │    Apply To                                                                                      │
 │  ● User Settings                                                                                 │
+│                                                                                                  │
 │    Workspace Settings                                                                            │
+│                                                                                                  │
 │    System Settings                                                                               │
 │                                                                                                  │
+│                                                                                                  │
 │  (Use Enter to select, Ctrl+L to reset, Tab to change focus, Esc to close)                       │
 │                                                                                                  │
 ╰──────────────────────────────────────────────────────────────────────────────────────────────────╯"
diff --git a/packages/cli/src/ui/components/shared/BaseSelectionList.tsx b/packages/cli/src/ui/components/shared/BaseSelectionList.tsx
index dbe6d7b075..9a236cdbac 100644
--- a/packages/cli/src/ui/components/shared/BaseSelectionList.tsx
+++ b/packages/cli/src/ui/components/shared/BaseSelectionList.tsx
@@ -4,8 +4,7 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import type React from 'react';
-import { useEffect, useState } from 'react';
+import React, { useEffect, useState } from 'react';
 import { Text, Box } from 'ink';
 import { theme } from '../../semantic-colors.js';
 import { useSelectionList } from '../../hooks/useSelectionList.js';
@@ -134,38 +133,41 @@ export function BaseSelectionList<
         )}.`;
 
         return (
-          <Box key={item.key} alignItems="flex-start">
-            {/* Radio button indicator */}
-            <Box minWidth={2} flexShrink={0}>
-              <Text
-                color={isSelected ? theme.status.success : theme.text.primary}
-                aria-hidden
-              >
-                {isSelected ? '●' : ' '}
-              </Text>
-            </Box>
-
-            {/* Item number */}
-            {showNumbers && !item.hideNumber && (
-              <Box
-                marginRight={1}
-                flexShrink={0}
-                minWidth={itemNumberText.length}
-                aria-state={{ checked: isSelected }}
-              >
-                <Text color={numberColor}>{itemNumberText}</Text>
+          <React.Fragment key={item.key}>
+            <Box alignItems="flex-start">
+              {/* Radio button indicator */}
+              <Box minWidth={2} flexShrink={0}>
+                <Text
+                  color={isSelected ? theme.status.success : theme.text.primary}
+                  aria-hidden
+                >
+                  {isSelected ? '●' : ' '}
+                </Text>
               </Box>
-            )}
 
-            {/* Custom content via render prop */}
-            <Box flexGrow={1}>
-              {renderItem(item, {
-                isSelected,
-                titleColor,
-                numberColor,
-              })}
+              {/* Item number */}
+              {showNumbers && !item.hideNumber && (
+                <Box
+                  marginRight={1}
+                  flexShrink={0}
+                  minWidth={itemNumberText.length}
+                  aria-state={{ checked: isSelected }}
+                >
+                  <Text color={numberColor}>{itemNumberText}</Text>
+                </Box>
+              )}
+
+              {/* Custom content via render prop */}
+              <Box flexGrow={1}>
+                {renderItem(item, {
+                  isSelected,
+                  titleColor,
+                  numberColor,
+                })}
+              </Box>
             </Box>
-          </Box>
+            <Box height={1} flexShrink={0} />
+          </React.Fragment>
         );
       })}
 
diff --git a/packages/cli/src/ui/components/shared/BaseSettingsDialog.tsx b/packages/cli/src/ui/components/shared/BaseSettingsDialog.tsx
index 4492c56df2..066effca17 100644
--- a/packages/cli/src/ui/components/shared/BaseSettingsDialog.tsx
+++ b/packages/cli/src/ui/components/shared/BaseSettingsDialog.tsx
@@ -431,7 +431,7 @@ export function BaseSettingsDialog({
           </Box>
         )}
 
-        <Box height={1} />
+        <Box height={1} flexShrink={0} />
 
         {/* Items list */}
         {visibleItems.length === 0 ? (
@@ -445,6 +445,7 @@ export function BaseSettingsDialog({
                 <Text color={theme.text.secondary}>▲</Text>
               </Box>
             )}
+            {showScrollUp && <Box height={1} flexShrink={0} />}
             {visibleItems.map((item, idx) => {
               const globalIndex = idx + scrollOffset;
               const isActive =
@@ -533,7 +534,7 @@ export function BaseSettingsDialog({
                       </Box>
                     </Box>
                   </Box>
-                  <Box height={1} />
+                  <Box height={1} flexShrink={0} />
                 </React.Fragment>
               );
             })}
@@ -545,7 +546,7 @@ export function BaseSettingsDialog({
           </>
         )}
 
-        <Box height={1} />
+        <Box height={1} flexShrink={0} />
 
         {/* Scope Selection */}
         {showScopeSelector && (
@@ -566,7 +567,7 @@ export function BaseSettingsDialog({
           </Box>
         )}
 
-        <Box height={1} />
+        <Box height={1} flexShrink={0} />
 
         {/* Help text */}
         <Box marginX={1}>