diff --git a/apps/agent/components/sidebar/AppSidebar.tsx b/apps/agent/components/sidebar/AppSidebar.tsx
index 19aa522a..8fb07f1b 100644
--- a/apps/agent/components/sidebar/AppSidebar.tsx
+++ b/apps/agent/components/sidebar/AppSidebar.tsx
@@ -1,4 +1,5 @@
 import type { FC } from 'react'
+import { useCallback } from 'react'
 import { cn } from '@/lib/utils'
 import { SidebarBranding } from './SidebarBranding'
 import { SidebarNavigation } from './SidebarNavigation'
@@ -6,26 +7,43 @@ import { SidebarUserFooter } from './SidebarUserFooter'
 
 interface AppSidebarProps {
   expanded?: boolean
+  onToggle?: () => void
   onOpenShortcuts?: () => void
 }
 
 export const AppSidebar: FC<AppSidebarProps> = ({
   expanded = false,
+  onToggle,
   onOpenShortcuts,
 }) => {
+  const handleSidebarClick = useCallback(
+    (event: React.MouseEvent<HTMLElement>) => {
+      const target = event.target as HTMLElement
+      if (target.closest('[data-sidebar-interactive]')) {
+        return
+      }
+      onToggle?.()
+    },
+    [onToggle],
+  )
+
   return (
-    <div
-      className={cn(
-        'flex h-full flex-col border-r bg-sidebar text-sidebar-foreground transition-all duration-200 ease-in-out',
-        expanded ? 'w-64' : 'w-14',
-      )}
-    >
-      <SidebarBranding expanded={expanded} />
-      <SidebarNavigation expanded={expanded} />
-      <SidebarUserFooter
-        expanded={expanded}
-        onOpenShortcuts={onOpenShortcuts}
-      />
-    </div>
+    <>
+      {/* biome-ignore lint/a11y/useKeyWithClickEvents: sidebar toggles via empty-space click */}
+      <aside
+        onClick={handleSidebarClick}
+        className={cn(
+          'relative z-20 flex min-h-screen shrink-0 flex-col border-r bg-sidebar text-sidebar-foreground transition-all duration-200 ease-in-out',
+          expanded ? 'w-64' : 'w-14',
+        )}
+      >
+        <SidebarBranding expanded={expanded} onToggle={onToggle} />
+        <SidebarNavigation expanded={expanded} />
+        <SidebarUserFooter
+          expanded={expanded}
+          onOpenShortcuts={onOpenShortcuts}
+        />
+      </aside>
+    </>
   )
 }
diff --git a/apps/agent/components/sidebar/SidebarBranding.tsx b/apps/agent/components/sidebar/SidebarBranding.tsx
index 0d0c4e63..8aeeb467 100644
--- a/apps/agent/components/sidebar/SidebarBranding.tsx
+++ b/apps/agent/components/sidebar/SidebarBranding.tsx
@@ -6,18 +6,29 @@ import { useWorkspace } from '@/lib/workspace/use-workspace'
 
 interface SidebarBrandingProps {
   expanded?: boolean
+  onToggle?: () => void
 }
 
 export const SidebarBranding: FC<SidebarBrandingProps> = ({
   expanded = true,
+  onToggle,
 }) => {
   const { selectedFolder } = useWorkspace()
 
   return (
     <div className="flex h-14 items-center border-b">
-      <div className="flex w-14 shrink-0 items-center justify-center">
-        <img src={ProductLogo} alt="BrowserOS" className="size-8" />
-      </div>
+      <button
+        type="button"
+        onClick={(event) => {
+          event.stopPropagation()
+          onToggle?.()
+        }}
+        className="flex w-14 shrink-0 items-center justify-center transition-opacity hover:opacity-70 active:opacity-50"
+        aria-label={expanded ? 'Collapse sidebar' : 'Expand sidebar'}
+        data-sidebar-toggle
+      >
+        <img src={ProductLogo} alt="BrowserOS" className="size-9" />
+      </button>
       <div
         className={cn(
           'flex min-w-0 flex-1 items-center justify-between pr-3 transition-opacity duration-200',
@@ -30,7 +41,9 @@ export const SidebarBranding: FC<SidebarBrandingProps> = ({
           </span>
           <span className="text-muted-foreground text-xs">Personal</span>
         </div>
-        <ThemeToggle className="h-8 w-8 shrink-0" iconClassName="h-4 w-4" />
+        <div data-sidebar-interactive>
+          <ThemeToggle className="h-8 w-8 shrink-0" iconClassName="h-4 w-4" />
+        </div>
       </div>
     </div>
   )
diff --git a/apps/agent/components/sidebar/SidebarNavigation.tsx b/apps/agent/components/sidebar/SidebarNavigation.tsx
index cce470b0..ae2bd1b7 100644
--- a/apps/agent/components/sidebar/SidebarNavigation.tsx
+++ b/apps/agent/components/sidebar/SidebarNavigation.tsx
@@ -64,13 +64,14 @@ export const SidebarNavigation: FC<SidebarNavigationProps> = ({
             const navItem = (
               <NavLink
                 to={item.to}
+                data-sidebar-interactive
                 className={cn(
                   'flex h-9 items-center gap-2 overflow-hidden whitespace-nowrap rounded-md px-3 font-medium text-sm transition-colors hover:bg-sidebar-accent hover:text-sidebar-accent-foreground',
                   isActive &&
                     'bg-sidebar-accent text-sidebar-accent-foreground',
                 )}
               >
-                <Icon className="size-4 shrink-0" />
+                <Icon className="size-5 shrink-0" />
                 <span
                   className={cn(
                     'truncate transition-opacity duration-200',
diff --git a/apps/agent/components/sidebar/SidebarUserFooter.tsx b/apps/agent/components/sidebar/SidebarUserFooter.tsx
index 64f24824..6a5b7b96 100644
--- a/apps/agent/components/sidebar/SidebarUserFooter.tsx
+++ b/apps/agent/components/sidebar/SidebarUserFooter.tsx
@@ -41,9 +41,10 @@ export const SidebarUserFooter: FC<SidebarUserFooterProps> = ({
       href="https://docs.browseros.com/"
       target="_blank"
       rel="noopener noreferrer"
+      data-sidebar-interactive
       className="flex h-9 items-center gap-2 overflow-hidden whitespace-nowrap rounded-md px-3 font-medium text-sm transition-colors hover:bg-sidebar-accent hover:text-sidebar-accent-foreground"
     >
-      <Info className="size-4 shrink-0" />
+      <Info className="size-5 shrink-0" />
       <span
         className={cn(
           'truncate transition-opacity duration-200',
@@ -59,9 +60,10 @@ export const SidebarUserFooter: FC<SidebarUserFooterProps> = ({
     <Button
       variant="ghost"
       onClick={onOpenShortcuts}
+      data-sidebar-interactive
       className="flex h-9 w-full items-center justify-start gap-2 overflow-hidden whitespace-nowrap rounded-md px-3 font-medium text-sm transition-colors hover:bg-sidebar-accent hover:text-sidebar-accent-foreground"
     >
-      <Keyboard className="size-4 shrink-0" />
+      <Keyboard className="size-5 shrink-0" />
       <span
         className={cn(
           'truncate transition-opacity duration-200',
diff --git a/apps/agent/entrypoints/app/layout/SidebarLayout.tsx b/apps/agent/entrypoints/app/layout/SidebarLayout.tsx
index d7c7495d..49e82802 100644
--- a/apps/agent/entrypoints/app/layout/SidebarLayout.tsx
+++ b/apps/agent/entrypoints/app/layout/SidebarLayout.tsx
@@ -1,6 +1,6 @@
 import { Menu } from 'lucide-react'
 import type { FC } from 'react'
-import { useCallback, useEffect, useRef, useState } from 'react'
+import { useCallback, useEffect, useState } from 'react'
 import { Outlet, useLocation } from 'react-router'
 import { AppSidebar } from '@/components/sidebar/AppSidebar'
 import { Button } from '@/components/ui/button'
@@ -11,15 +11,26 @@ import { SETTINGS_PAGE_VIEWED_EVENT } from '@/lib/constants/analyticsEvents'
 import { track } from '@/lib/metrics/track'
 import { RpcClientProvider } from '@/lib/rpc/RpcClientProvider'
 
-const COLLAPSE_DELAY = 150
+const SIDEBAR_STORAGE_KEY = 'browseros-sidebar-expanded'
 
 export const SidebarLayout: FC = () => {
   const location = useLocation()
   const isMobile = useIsMobile()
-  const [sidebarOpen, setSidebarOpen] = useState(false)
+  const [sidebarOpen, setSidebarOpen] = useState(() => {
+    // Default to collapsed (false) on first load
+    const stored = localStorage.getItem(SIDEBAR_STORAGE_KEY)
+    return stored === 'true'
+  })
   const [mobileOpen, setMobileOpen] = useState(false)
   const [shortcutsDialogOpen, setShortcutsDialogOpen] = useState(false)
-  const collapseTimeoutRef = useRef<ReturnType<typeof setTimeout> | null>(null)
+
+  const toggleSidebar = useCallback(() => {
+    setSidebarOpen((prev) => {
+      const newValue = !prev
+      localStorage.setItem(SIDEBAR_STORAGE_KEY, String(newValue))
+      return newValue
+    })
+  }, [])
 
   const openShortcuts = useCallback(() => {
     setShortcutsDialogOpen(true)
@@ -33,28 +44,6 @@ export const SidebarLayout: FC = () => {
     setMobileOpen(false)
   }, [])
 
-  useEffect(() => {
-    return () => {
-      if (collapseTimeoutRef.current) {
-        clearTimeout(collapseTimeoutRef.current)
-      }
-    }
-  }, [])
-
-  const handleMouseEnter = useCallback(() => {
-    if (collapseTimeoutRef.current) {
-      clearTimeout(collapseTimeoutRef.current)
-      collapseTimeoutRef.current = null
-    }
-    setSidebarOpen(true)
-  }, [])
-
-  const handleMouseLeave = useCallback(() => {
-    collapseTimeoutRef.current = setTimeout(() => {
-      setSidebarOpen(false)
-    }, COLLAPSE_DELAY)
-  }, [])
-
   if (isMobile) {
     return (
       <RpcClientProvider>
@@ -91,19 +80,16 @@ export const SidebarLayout: FC = () => {
 
   return (
     <RpcClientProvider>
-      <div className="relative min-h-screen bg-background">
-        {/* Sidebar - fixed overlay */}
-        {/* biome-ignore lint/a11y/noStaticElementInteractions: hover interactions needed */}
-        <div
-          className="fixed inset-y-0 left-0 z-40"
-          onMouseEnter={handleMouseEnter}
-          onMouseLeave={handleMouseLeave}
-        >
-          <AppSidebar expanded={sidebarOpen} onOpenShortcuts={openShortcuts} />
-        </div>
+      <div className="flex min-h-screen bg-background">
+        {/* Sidebar - push mode */}
+        <AppSidebar
+          expanded={sidebarOpen}
+          onToggle={toggleSidebar}
+          onOpenShortcuts={openShortcuts}
+        />
 
-        {/* Main content - full width, centered */}
-        <main className="min-h-screen overflow-y-auto">
+        {/* Main content - adjusts based on sidebar width */}
+        <main className="relative min-h-screen flex-1 overflow-y-auto">
           <div className="mx-auto max-w-4xl px-4 py-8 sm:px-6 lg:px-8">
             <Outlet />
           </div>