diff --git a/agent/agentproc/proc_other.go b/agent/agentproc/proc_other.go
new file mode 100644
index 0000000000..e56cc5d953
--- /dev/null
+++ b/agent/agentproc/proc_other.go
@@ -0,0 +1,26 @@
+//go:build !windows
+
+package agentproc
+
+import (
+	"os"
+	"syscall"
+)
+
+// procSysProcAttr returns the SysProcAttr to use when spawning
+// processes. On Unix, Setpgid creates a new process group so
+// that signals can be delivered to the entire group (the shell
+// and all its children).
+func procSysProcAttr() *syscall.SysProcAttr {
+	return &syscall.SysProcAttr{
+		Setpgid: true,
+	}
+}
+
+// signalProcess sends a signal to the process group rooted at p.
+// Using the negative PID sends the signal to every process in the
+// group, ensuring child processes (e.g. from shell pipelines) are
+// also signaled.
+func signalProcess(p *os.Process, sig syscall.Signal) error {
+	return syscall.Kill(-p.Pid, sig)
+}
diff --git a/agent/agentproc/proc_windows.go b/agent/agentproc/proc_windows.go
new file mode 100644
index 0000000000..5efbb3efbb
--- /dev/null
+++ b/agent/agentproc/proc_windows.go
@@ -0,0 +1,20 @@
+package agentproc
+
+import (
+	"os"
+	"syscall"
+)
+
+// procSysProcAttr returns the SysProcAttr to use when spawning
+// processes. On Windows, process groups are not supported in the
+// same way as Unix, so this returns an empty struct.
+func procSysProcAttr() *syscall.SysProcAttr {
+	return &syscall.SysProcAttr{}
+}
+
+// signalProcess sends a signal directly to the process. Windows
+// does not support process group signaling, so we fall back to
+// sending the signal to the process itself.
+func signalProcess(p *os.Process, _ syscall.Signal) error {
+	return p.Kill()
+}
diff --git a/agent/agentproc/process.go b/agent/agentproc/process.go
index b29446f3dc..57cbb0fbfb 100644
--- a/agent/agentproc/process.go
+++ b/agent/agentproc/process.go
@@ -113,6 +113,7 @@ func (m *manager) start(req workspacesdk.StartProcessRequest, chatID string) (*p
 		cmd.Dir = req.WorkDir
 	}
 	cmd.Stdin = nil
+	cmd.SysProcAttr = procSysProcAttr()
 
 	// WaitDelay ensures cmd.Wait returns promptly after
 	// the process is killed, even if child processes are
@@ -272,13 +273,15 @@ func (m *manager) signal(id string, sig string) error {
 
 	switch sig {
 	case "kill":
-		if err := proc.cmd.Process.Kill(); err != nil {
+		// Use process group kill to ensure child processes
+		// (e.g. from shell pipelines) are also killed.
+		if err := signalProcess(proc.cmd.Process, syscall.SIGKILL); err != nil {
 			return xerrors.Errorf("kill process: %w", err)
 		}
 	case "terminate":
-		//nolint:revive // syscall.SIGTERM is portable enough
-		// for our supported platforms.
-		if err := proc.cmd.Process.Signal(syscall.SIGTERM); err != nil {
+		// Use process group signal to ensure child processes
+		// are also terminated.
+		if err := signalProcess(proc.cmd.Process, syscall.SIGTERM); err != nil {
 			return xerrors.Errorf("terminate process: %w", err)
 		}
 	default:
diff --git a/coderd/chatd/chattool/execute.go b/coderd/chatd/chattool/execute.go
index 6dec92eb08..d22e65bea0 100644
--- a/coderd/chatd/chattool/execute.go
+++ b/coderd/chatd/chattool/execute.go
@@ -78,10 +78,10 @@ type ProcessToolOptions struct {
 
 // ExecuteArgs are the parameters accepted by the execute tool.
 type ExecuteArgs struct {
-	Command         string  `json:"command"`
-	Timeout         *string `json:"timeout,omitempty"`
-	WorkDir         *string `json:"workdir,omitempty"`
-	RunInBackground *bool   `json:"run_in_background,omitempty"`
+	Command         string  `json:"command" description:"The shell command to execute."`
+	Timeout         *string `json:"timeout,omitempty" description:"Timeout duration (e.g. '30s', '5m'). Default is 10s. Only applies to foreground commands."`
+	WorkDir         *string `json:"workdir,omitempty" description:"Working directory for the command."`
+	RunInBackground *bool   `json:"run_in_background,omitempty" description:"Run this command in the background without blocking. Use for long-running processes like dev servers, file watchers, or builds that run longer than 5 seconds. Do NOT use shell & to background processes — it will not work correctly. Always use this parameter instead."`
 }
 
 // Execute returns an AgentTool that runs a shell command in the
@@ -89,7 +89,7 @@ type ExecuteArgs struct {
 func Execute(options ExecuteOptions) fantasy.AgentTool {
 	return fantasy.NewAgentTool(
 		"execute",
-		"Execute a shell command in the workspace.",
+		"Execute a shell command in the workspace. Use run_in_background=true for long-running processes (dev servers, file watchers, builds). Never use shell '&' for backgrounding.",
 		func(ctx context.Context, args ExecuteArgs, _ fantasy.ToolCall) (fantasy.ToolResponse, error) {
 			if options.GetWorkspaceConn == nil {
 				return fantasy.NewTextErrorResponse("workspace connection resolver is not configured"), nil
@@ -122,6 +122,16 @@ func executeTool(
 
 	background := args.RunInBackground != nil && *args.RunInBackground
 
+	// Detect shell-style backgrounding (trailing &) and promote to
+	// background mode. Models sometimes use "cmd &" instead of the
+	// run_in_background parameter, which causes the shell to fork
+	// and exit immediately, leaving an untracked orphan process.
+	trimmed := strings.TrimSpace(args.Command)
+	if !background && strings.HasSuffix(trimmed, "&") && !strings.HasSuffix(trimmed, "&&") {
+		background = true
+		args.Command = strings.TrimSpace(strings.TrimSuffix(trimmed, "&"))
+	}
+
 	var workDir string
 	if args.WorkDir != nil {
 		workDir = *args.WorkDir