diff --git a/packages/cli/src/ui/App.tsx b/packages/cli/src/ui/App.tsx
index c07c623e..972f4522 100644
--- a/packages/cli/src/ui/App.tsx
+++ b/packages/cli/src/ui/App.tsx
@@ -348,7 +348,8 @@ export const App = ({
                     <Text color={Colors.AccentRed}>|⌐■_■| </Text>
                   )}
                   <Text color={Colors.SubtleComment}>
-                    Using {geminiMdFileCount} GEMINI.md files
+                    Using {geminiMdFileCount} GEMINI.md file
+                    {geminiMdFileCount > 1 ? 's' : ''}
                   </Text>
                 </Box>
               )}
diff --git a/packages/cli/src/ui/hooks/shellCommandProcessor.test.ts b/packages/cli/src/ui/hooks/shellCommandProcessor.test.ts
new file mode 100644
index 00000000..6d7ea5d6
--- /dev/null
+++ b/packages/cli/src/ui/hooks/shellCommandProcessor.test.ts
@@ -0,0 +1,285 @@
+/**
+ * @license
+ * Copyright 2025 Google LLC
+ * SPDX-License-Identifier: Apache-2.0
+ */
+
+/* eslint-disable @typescript-eslint/no-explicit-any */
+import { act, renderHook } from '@testing-library/react';
+import { useShellCommandProcessor } from './shellCommandProcessor.js';
+import { type Config } from '@gemini-code/server';
+import { type PartListUnion } from '@google/genai';
+import { existsSync, readFileSync, unlinkSync } from 'fs';
+import type * as FsMod from 'fs';
+import type { exec as ExecType } from 'child_process'; // For typing the injected mock
+
+// Mocks
+const mockAddItemToHistory = vi.fn();
+const mockOnExec = vi.fn(async (promise) => await promise);
+const mockOnDebugMessage = vi.fn();
+const mockGetTargetDir = vi.fn();
+let mockExecuteCommand: ReturnType<typeof vi.fn>; // This will be our injected mock for child_process.exec
+
+const mockConfig = {
+  getTargetDir: mockGetTargetDir,
+} as unknown as Config;
+
+vi.mock('crypto', () => ({
+  default: {
+    randomBytes: vi.fn(() => ({ toString: vi.fn(() => 'randomBytes') })),
+  },
+  randomBytes: vi.fn(() => ({ toString: vi.fn(() => 'randomBytes') })),
+}));
+
+vi.mock('path', () => ({
+  default: {
+    join: vi.fn((...args) => args.join('/')),
+    sep: '/',
+  },
+  join: vi.fn((...args) => args.join('/')),
+  sep: '/',
+}));
+
+vi.mock('os', () => ({
+  default: {
+    tmpdir: vi.fn(() => '/tmp'),
+  },
+  tmpdir: vi.fn(() => '/tmp'),
+}));
+
+// Configure the fs mock to use new vi.fn() instances created within the factory
+vi.mock('fs', async (importOriginal) => {
+  const original = (await importOriginal()) as typeof FsMod;
+  const internalMockFsExistsSync = vi.fn();
+  const internalMockFsReadFileSync = vi.fn();
+  const internalMockFsUnlinkSync = vi.fn();
+  return {
+    ...original,
+    existsSync: internalMockFsExistsSync,
+    readFileSync: internalMockFsReadFileSync,
+    unlinkSync: internalMockFsUnlinkSync,
+  };
+});
+
+describe('useShellCommandProcessor', () => {
+  // These spies will point to the vi.fn() instances created by the vi.mock('fs') factory.
+  let existsSyncSpy: ReturnType<typeof vi.mocked<typeof existsSync>>;
+  let readFileSyncSpy: ReturnType<typeof vi.mocked<typeof readFileSync>>;
+  let unlinkSyncSpy: ReturnType<typeof vi.mocked<typeof unlinkSync>>;
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+    mockExecuteCommand = vi.fn(); // Injected exec command mock
+
+    // Assign the imported (and mocked by vi.mock factory) fs functions to spies
+    existsSyncSpy = existsSync as unknown as ReturnType<
+      typeof vi.mocked<typeof existsSync>
+    >;
+    readFileSyncSpy = readFileSync as unknown as ReturnType<
+      typeof vi.mocked<typeof readFileSync>
+    >;
+    unlinkSyncSpy = unlinkSync as unknown as ReturnType<
+      typeof vi.mocked<typeof unlinkSync>
+    >;
+
+    // It's important to reset these spies if they are to be configured per test
+    existsSyncSpy.mockReset();
+    readFileSyncSpy.mockReset();
+    unlinkSyncSpy.mockReset();
+
+    mockGetTargetDir.mockReturnValue('/current/dir');
+  });
+
+  const setupHook = () =>
+    renderHook(() =>
+      useShellCommandProcessor(
+        mockAddItemToHistory,
+        mockOnExec,
+        mockOnDebugMessage,
+        mockConfig,
+        mockExecuteCommand as unknown as typeof ExecType, // Cast to satisfy TypeScript
+      ),
+    );
+
+  it('should return false for non-string input', () => {
+    const { result } = setupHook();
+    const handled = result.current.handleShellCommand([
+      { text: 'not a string' },
+    ] as PartListUnion);
+    expect(handled).toBe(false);
+    expect(mockAddItemToHistory).not.toHaveBeenCalled();
+  });
+
+  it('should handle empty shell command', () => {
+    const { result } = setupHook();
+    act(() => {
+      const handled = result.current.handleShellCommand('');
+      expect(handled).toBe(true);
+    });
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      1,
+      { type: 'user_shell', text: '' },
+      expect.any(Number),
+    );
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      2,
+      { type: 'error', text: 'Empty shell command.' },
+      expect.any(Number),
+    );
+    expect(mockExecuteCommand).not.toHaveBeenCalled();
+  });
+
+  it('should execute a successful command and add output to history', async () => {
+    const { result } = setupHook();
+    const command = '!ls -l';
+    const stdout = 'total 0';
+    const stderr = '';
+
+    mockExecuteCommand.mockImplementation((_cmd, _options, callback) => {
+      if (callback) callback(null, stdout, stderr);
+      return {} as any;
+    });
+    existsSyncSpy.mockReturnValue(false);
+
+    await act(async () => {
+      result.current.handleShellCommand(command);
+      await new Promise(process.nextTick);
+    });
+
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      1,
+      { type: 'user_shell', text: command },
+      expect.any(Number),
+    );
+    expect(mockOnDebugMessage).toHaveBeenCalledWith(
+      expect.stringContaining('Executing shell command in /current/dir:'),
+    );
+    expect(mockExecuteCommand).toHaveBeenCalledWith(
+      '{ !ls -l; }; pwd >/tmp/shell_pwd_randomBytes.tmp',
+      { cwd: '/current/dir' },
+      expect.any(Function),
+    );
+    expect(mockOnExec).toHaveBeenCalled();
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      2,
+      { type: 'info', text: stdout },
+      expect.any(Number),
+    );
+  });
+
+  it('should handle command with stderr output', async () => {
+    const { result } = setupHook();
+    const command = '!some_command_with_stderr';
+    const stdout = 'some output';
+    const stderr = 'some error output';
+
+    mockExecuteCommand.mockImplementation((_cmd, _options, callback) => {
+      if (callback) callback(null, stdout, stderr);
+      return {} as any;
+    });
+    existsSyncSpy.mockReturnValue(false);
+
+    await act(async () => {
+      result.current.handleShellCommand(command);
+      await new Promise(process.nextTick);
+    });
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      1,
+      { type: 'user_shell', text: command },
+      expect.any(Number),
+    );
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      2,
+      { type: 'info', text: `${stdout}\n${stderr}` },
+      expect.any(Number),
+    );
+  });
+
+  it('should handle command with only stderr output', async () => {
+    const { result } = setupHook();
+    const command = '!command_only_stderr';
+    const stdout = '';
+    const stderr = 'just stderr';
+
+    mockExecuteCommand.mockImplementation((_cmd, _options, callback) => {
+      if (callback) callback(null, stdout, stderr);
+      return {} as any;
+    });
+    existsSyncSpy.mockReturnValue(false);
+
+    await act(async () => {
+      result.current.handleShellCommand(command);
+      await new Promise(process.nextTick);
+    });
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      1,
+      { type: 'user_shell', text: command },
+      expect.any(Number),
+    );
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      2,
+      { type: 'info', text: stderr },
+      expect.any(Number),
+    );
+  });
+
+  it('should handle command error', async () => {
+    const { result } = setupHook();
+    const command = '!failing_command';
+    const error = new Error('Command failed');
+
+    mockExecuteCommand.mockImplementation((_cmd, _options, callback) => {
+      if (callback) callback(error, '', '');
+      return {} as any;
+    });
+    existsSyncSpy.mockReturnValue(false);
+
+    await act(async () => {
+      result.current.handleShellCommand(command);
+      await new Promise(process.nextTick);
+    });
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      1,
+      { type: 'user_shell', text: command },
+      expect.any(Number),
+    );
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      2,
+      { type: 'error', text: error.message },
+      expect.any(Number),
+    );
+  });
+
+  it('should correctly handle commands ending with &', async () => {
+    const { result } = setupHook();
+    const command = '!sleep 5 &';
+    mockGetTargetDir.mockReturnValue('/current/dir');
+
+    mockExecuteCommand.mockImplementation((_cmd, _options, callback) => {
+      if (callback) callback(null, '', '');
+      return {} as any;
+    });
+    existsSyncSpy.mockReturnValue(false);
+
+    await act(async () => {
+      result.current.handleShellCommand(command);
+      await new Promise(process.nextTick);
+    });
+
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      1,
+      { type: 'user_shell', text: command },
+      expect.any(Number),
+    );
+    expect(mockExecuteCommand).toHaveBeenCalledWith(
+      '{ !sleep 5 & }; pwd >/tmp/shell_pwd_randomBytes.tmp',
+      { cwd: '/current/dir' },
+      expect.any(Function),
+    );
+    expect(mockAddItemToHistory).toHaveBeenNthCalledWith(
+      2,
+      { type: 'info', text: '(Command produced no output)' },
+      expect.any(Number),
+    );
+  });
+});
diff --git a/packages/cli/src/ui/hooks/shellCommandProcessor.ts b/packages/cli/src/ui/hooks/shellCommandProcessor.ts
index 5e43712b..35935e7d 100644
--- a/packages/cli/src/ui/hooks/shellCommandProcessor.ts
+++ b/packages/cli/src/ui/hooks/shellCommandProcessor.ts
@@ -4,7 +4,8 @@
  * SPDX-License-Identifier: Apache-2.0
  */
 
-import { exec as _exec } from 'child_process';
+import { exec as defaultExec } from 'child_process';
+import type { exec as ExecType } from 'child_process';
 import { useCallback } from 'react';
 import { Config } from '@gemini-code/server';
 import { type PartListUnion } from '@google/genai';
@@ -13,6 +14,7 @@ import crypto from 'crypto';
 import path from 'path';
 import os from 'os';
 import fs from 'fs';
+
 /**
  * Hook to process shell commands (e.g., !ls, $pwd).
  * Executes the command in the target directory and adds output/errors to history.
@@ -22,6 +24,7 @@ export const useShellCommandProcessor = (
   onExec: (command: Promise<void>) => void,
   onDebugMessage: (message: string) => void,
   config: Config,
+  executeCommand: typeof ExecType = defaultExec, // Injectable for testing
 ) => {
   /**
    * Checks if the query is a shell command, executes it, and adds results to history.
@@ -33,7 +36,7 @@ export const useShellCommandProcessor = (
         return false;
       }
 
-      let commandToExecute = rawQuery.trim().slice(1).trimStart();
+      let commandToExecute = rawQuery.trim().trimStart();
 
       // wrap command to write pwd to temporary file
       const pwdFileName = `shell_pwd_${crypto.randomBytes(6).toString('hex')}.tmp`;
@@ -48,7 +51,7 @@ export const useShellCommandProcessor = (
         userMessageTimestamp,
       );
 
-      if (!commandToExecute) {
+      if (rawQuery.trim() === '') {
         addItemToHistory(
           { type: 'error', text: 'Empty shell command.' },
           userMessageTimestamp,
@@ -65,37 +68,44 @@ export const useShellCommandProcessor = (
       };
 
       const execPromise = new Promise<void>((resolve) => {
-        _exec(commandToExecute, execOptions, (error, stdout, stderr) => {
-          if (error) {
-            addItemToHistory(
-              { type: 'error', text: error.message },
-              userMessageTimestamp,
-            );
-          } else {
-            let output = '';
-            if (stdout) output += stdout;
-            if (stderr) output += (output ? '\n' : '') + stderr; // Include stderr as info
+        executeCommand(
+          commandToExecute,
+          execOptions,
+          (error, stdout, stderr) => {
+            if (error) {
+              addItemToHistory(
+                { type: 'error', text: error.message },
+                userMessageTimestamp,
+              );
+            } else {
+              let output = '';
+              if (stdout) output += stdout;
+              if (stderr) output += (output ? '\n' : '') + stderr; // Include stderr as info
 
-            addItemToHistory(
-              { type: 'info', text: output || '(Command produced no output)' },
-              userMessageTimestamp,
-            );
-          }
-          if (fs.existsSync(pwdFilePath)) {
-            const pwd = fs.readFileSync(pwdFilePath, 'utf8').trim();
-            if (pwd !== targetDir) {
               addItemToHistory(
                 {
                   type: 'info',
-                  text: `WARNING: shell mode is stateless; \`cd ${pwd}\` will not apply to next command`,
+                  text: output || '(Command produced no output)',
                 },
                 userMessageTimestamp,
               );
             }
-            fs.unlinkSync(pwdFilePath);
-          }
-          resolve();
-        });
+            if (fs.existsSync(pwdFilePath)) {
+              const pwd = fs.readFileSync(pwdFilePath, 'utf8').trim();
+              if (pwd !== targetDir) {
+                addItemToHistory(
+                  {
+                    type: 'info',
+                    text: `WARNING: shell mode is stateless; \`cd ${pwd}\` will not apply to next command`,
+                  },
+                  userMessageTimestamp,
+                );
+              }
+              fs.unlinkSync(pwdFilePath);
+            }
+            resolve();
+          },
+        );
       });
 
       try {
@@ -106,7 +116,7 @@ export const useShellCommandProcessor = (
 
       return true; // Command was initiated
     },
-    [config, onDebugMessage, addItemToHistory, onExec],
+    [config, onDebugMessage, addItemToHistory, onExec, executeCommand],
   );
 
   return { handleShellCommand };