diff --git a/packages/cli/src/ui/components/LoadingIndicator.test.tsx b/packages/cli/src/ui/components/LoadingIndicator.test.tsx
index 9df7dec8a0..cb4b65097a 100644
--- a/packages/cli/src/ui/components/LoadingIndicator.test.tsx
+++ b/packages/cli/src/ui/components/LoadingIndicator.test.tsx
@@ -12,6 +12,7 @@ import { StreamingContext } from '../contexts/StreamingContext.js';
 import { StreamingState } from '../types.js';
 import { vi } from 'vitest';
 import * as useTerminalSize from '../hooks/useTerminalSize.js';
+import * as terminalUtils from '../utils/terminalUtils.js';
 
 // Mock GeminiRespondingSpinner
 vi.mock('./GeminiRespondingSpinner.js', () => ({
@@ -34,7 +35,12 @@ vi.mock('../hooks/useTerminalSize.js', () => ({
   useTerminalSize: vi.fn(),
 }));
 
+vi.mock('../utils/terminalUtils.js', () => ({
+  shouldUseEmoji: vi.fn(() => true),
+}));
+
 const useTerminalSizeMock = vi.mocked(useTerminalSize.useTerminalSize);
+const shouldUseEmojiMock = vi.mocked(terminalUtils.shouldUseEmoji);
 
 const renderWithContext = (
   ui: React.ReactElement,
@@ -258,17 +264,15 @@ describe('<LoadingIndicator />', () => {
     const output = lastFrame();
     expect(output).toBeDefined();
     if (output) {
-      expect(output).toContain('Thinking: ');
+      expect(output).toContain('💬');
       expect(output).toContain('Thinking about something...');
       expect(output).not.toContain('and other stuff.');
     }
     unmount();
   });
 
-<<<<<<< HEAD
-  it('should prioritize thought.subject over currentLoadingPhrase', async () => {
-=======
-  it('should use "Thinking: " as the thought indicator', () => {
+  it('should use ASCII fallback thought indicator when emoji is unavailable', async () => {
+    shouldUseEmojiMock.mockReturnValue(false);
     const props = {
       thought: {
         subject: 'Thinking with fallback',
@@ -276,17 +280,19 @@ describe('<LoadingIndicator />', () => {
       },
       elapsedTime: 5,
     };
-    const { lastFrame, unmount } = renderWithContext(
+    const { lastFrame, unmount, waitUntilReady } = renderWithContext(
       <LoadingIndicator {...props} />,
       StreamingState.Responding,
     );
+    await waitUntilReady();
     const output = lastFrame();
-    expect(output).toContain('Thinking: Thinking with fallback');
+    expect(output).toContain('o Thinking with fallback');
+    expect(output).not.toContain('💬');
+    shouldUseEmojiMock.mockReturnValue(true);
     unmount();
   });
 
-  it('should prioritize thought.subject over currentLoadingPhrase', () => {
->>>>>>> 3e1e540d7 (feat(cli): overhaul inline thinking UI to match mock and update status bar indicator)
+  it('should prioritize thought.subject over currentLoadingPhrase', async () => {
     const props = {
       thought: {
         subject: 'This should be displayed',
@@ -301,31 +307,22 @@ describe('<LoadingIndicator />', () => {
     );
     await waitUntilReady();
     const output = lastFrame();
-    expect(output).toContain('Thinking: ');
+    expect(output).toContain('💬');
     expect(output).toContain('This should be displayed');
     expect(output).not.toContain('This should not be displayed');
     unmount();
   });
 
-<<<<<<< HEAD
   it('should not display thought icon for non-thought loading phrases', async () => {
     const { lastFrame, unmount, waitUntilReady } = renderWithContext(
-=======
-  it('should not display thought indicator for non-thought loading phrases', () => {
-    const { lastFrame, unmount } = renderWithContext(
->>>>>>> 3e1e540d7 (feat(cli): overhaul inline thinking UI to match mock and update status bar indicator)
       <LoadingIndicator
         currentLoadingPhrase="some random tip..."
         elapsedTime={3}
       />,
       StreamingState.Responding,
     );
-<<<<<<< HEAD
     await waitUntilReady();
     expect(lastFrame()).not.toContain('💬');
-=======
-    expect(lastFrame()).not.toContain('Thinking: ');
->>>>>>> 3e1e540d7 (feat(cli): overhaul inline thinking UI to match mock and update status bar indicator)
     unmount();
   });
 
diff --git a/packages/cli/src/ui/components/LoadingIndicator.tsx b/packages/cli/src/ui/components/LoadingIndicator.tsx
index de4db32391..3d6a838370 100644
--- a/packages/cli/src/ui/components/LoadingIndicator.tsx
+++ b/packages/cli/src/ui/components/LoadingIndicator.tsx
@@ -15,6 +15,7 @@ import { formatDuration } from '../utils/formatters.js';
 import { useTerminalSize } from '../hooks/useTerminalSize.js';
 import { isNarrowWidth } from '../utils/isNarrowWidth.js';
 import { INTERACTIVE_SHELL_WAITING_PHRASE } from '../hooks/usePhraseCycler.js';
+import { shouldUseEmoji } from '../utils/terminalUtils.js';
 
 interface LoadingIndicatorProps {
   currentLoadingPhrase?: string;
@@ -58,7 +59,9 @@ export const LoadingIndicator: React.FC<LoadingIndicatorProps> = ({
   const hasThoughtIndicator =
     currentLoadingPhrase !== INTERACTIVE_SHELL_WAITING_PHRASE &&
     Boolean(thought?.subject?.trim());
-  const thinkingIndicator = hasThoughtIndicator ? 'Thinking: ' : '';
+  const thinkingIndicator = hasThoughtIndicator
+    ? `${shouldUseEmoji() ? '💬' : 'o'} `
+    : '';
 
   const cancelAndTimerContent =
     showCancelAndTimer &&
diff --git a/packages/cli/src/ui/utils/terminalUtils.ts b/packages/cli/src/ui/utils/terminalUtils.ts
index 18cd08f952..b0a3b93034 100644
--- a/packages/cli/src/ui/utils/terminalUtils.ts
+++ b/packages/cli/src/ui/utils/terminalUtils.ts
@@ -43,3 +43,25 @@ export function isITerm2(): boolean {
 export function resetITerm2Cache(): void {
   cachedIsITerm2 = undefined;
 }
+
+/**
+ * Returns true if the terminal likely supports emoji.
+ */
+export function shouldUseEmoji(): boolean {
+  const locale = (
+    process.env['LC_ALL'] ||
+    process.env['LC_CTYPE'] ||
+    process.env['LANG'] ||
+    ''
+  ).toLowerCase();
+  const supportsUtf8 = locale.includes('utf-8') || locale.includes('utf8');
+  if (!supportsUtf8) {
+    return false;
+  }
+
+  if (process.env['TERM'] === 'linux') {
+    return false;
+  }
+
+  return true;
+}