diff --git a/gadget-code/frontend/src/components/ChatTurn.tsx b/gadget-code/frontend/src/components/ChatTurn.tsx
index d514cd5..98f878d 100644
--- a/gadget-code/frontend/src/components/ChatTurn.tsx
+++ b/gadget-code/frontend/src/components/ChatTurn.tsx
@@ -200,7 +200,7 @@ function SubagentDisplay({ subagent }: { subagent: NonNullable<ChatTurnBlockTool
             <div>
               <div className="text-xs text-text-muted font-mono mb-1">Thinking</div>
               <div
-                className="p-2 bg-bg-secondary rounded text-xs text-text-muted whitespace-pre-wrap font-mono py-1"
+                className="subagent-compact gadget-markdown bg-bg-secondary rounded p-1.5 text-xs text-text-muted whitespace-pre-wrap font-mono"
                 dangerouslySetInnerHTML={{
                   __html: marked.parse(subagent.thinking) as string,
                 }}
@@ -231,7 +231,7 @@ function SubagentDisplay({ subagent }: { subagent: NonNullable<ChatTurnBlockTool
             <div>
               <div className="text-xs text-text-muted font-mono mb-1">Response</div>
               <div
-                className="subagent-markdown gadget-markdown"
+                className="subagent-compact gadget-markdown"
                 dangerouslySetInnerHTML={{
                   __html: marked.parse(subagent.response) as string,
                 }}
diff --git a/gadget-code/frontend/src/index.css b/gadget-code/frontend/src/index.css
index 212c560..de80cae 100644
--- a/gadget-code/frontend/src/index.css
+++ b/gadget-code/frontend/src/index.css
@@ -243,43 +243,61 @@ input, textarea {
   font-weight: 600;
 }
 
-/* ── Subagent Markdown Styles ── */
-/* Handles cascading markdown nested inside markdown blocks */
-.subagent-markdown {
-  display: inline-block;
-  width: 100%;
-  margin: 0;
-}
-
-.subagent-markdown p {
-  margin-top: 0.25rem !important;
-  margin-bottom: 0.5rem !important;
-  padding-top: 0.25rem;
-  padding-bottom: 0.25rem;
-}
-
-.subagent-markdown pre {
-  margin-bottom: 0.5rem !important;
-}
-
-.subagent-markdown ul,
-.subagent-markdown ol {
-  margin-bottom: 0.5rem !important;
-  padding-left: 1.2rem;
-}
-
-.subagent-markdown code:not(pre code) {
-  background: #1a1a1a;
-  padding: 0.15rem 0.4rem;
-  border-radius: 3px;
-}
-
-.subagent-markdown blockquote {
-  border-left-color: #2a2a2a;
-  background: #111111;
-}
-
 
 .gadget-markdown em {
   color: #c4c4c4;
+}
+
+/* ── Subagent Compact Markdown ── */
+/* Higher-specificity overrides (.subagent-compact.gadget-markdown > .gadget-markdown)
+   to crush the generous spacing that looks fine at top-level but explodes when nested. */
+.subagent-compact.gadget-markdown {
+  font-size: 12px;
+  line-height: 1.4;
+}
+
+.subagent-compact.gadget-markdown h1,
+.subagent-compact.gadget-markdown h2,
+.subagent-compact.gadget-markdown h3,
+.subagent-compact.gadget-markdown h4,
+.subagent-compact.gadget-markdown h5,
+.subagent-compact.gadget-markdown h6 {
+  margin-top: 0.5rem;
+  margin-bottom: 0.25rem;
+  line-height: 1.2;
+}
+
+.subagent-compact.gadget-markdown p {
+  margin-top: 0;
+  margin-bottom: 0.35rem;
+}
+
+.subagent-compact.gadget-markdown pre {
+  margin-top: 0.35rem;
+  margin-bottom: 0.35rem;
+  padding: 0.5rem 0.6rem;
+}
+
+.subagent-compact.gadget-markdown ul,
+.subagent-compact.gadget-markdown ol {
+  margin-bottom: 0.35rem;
+  padding-left: 1.1rem;
+}
+
+.subagent-compact.gadget-markdown li {
+  margin-bottom: 0.15rem;
+}
+
+.subagent-compact.gadget-markdown blockquote {
+  margin-top: 0.25rem;
+  margin-bottom: 0.25rem;
+  padding: 0.25rem 0.6rem;
+}
+
+.subagent-compact.gadget-markdown hr {
+  margin: 0.4rem 0;
+}
+
+.subagent-compact.gadget-markdown table {
+  margin-bottom: 0.5rem;
 }
\ No newline at end of file