diff --git a/packages/bolt/app/components/editor/codemirror/CodeMirrorEditor.tsx b/packages/bolt/app/components/editor/codemirror/CodeMirrorEditor.tsx
index 0d3b68a..8e9f3a3 100644
--- a/packages/bolt/app/components/editor/codemirror/CodeMirrorEditor.tsx
+++ b/packages/bolt/app/components/editor/codemirror/CodeMirrorEditor.tsx
@@ -4,14 +4,17 @@ import { bracketMatching, foldGutter, indentOnInput, indentUnit } from '@codemir
 import { searchKeymap } from '@codemirror/search';
 import { Compartment, EditorSelection, EditorState, StateEffect, StateField, type Extension } from '@codemirror/state';
 import {
-  EditorView,
   drawSelection,
   dropCursor,
+  EditorView,
   highlightActiveLine,
   highlightActiveLineGutter,
   keymap,
   lineNumbers,
   scrollPastEnd,
+  showTooltip,
+  tooltips,
+  type Tooltip,
 } from '@codemirror/view';
 import { memo, useEffect, useRef, useState, type MutableRefObject } from 'react';
 import type { Theme } from '~/types/theme';
@@ -73,6 +76,28 @@ interface Props {
 
 type EditorStates = Map<string, EditorState>;
 
+const readOnlyTooltipStateEffect = StateEffect.define<boolean>();
+
+const editableTooltipField = StateField.define<readonly Tooltip[]>({
+  create: () => [],
+  update(_tooltips, transaction) {
+    if (!transaction.state.readOnly) {
+      return [];
+    }
+
+    for (const effect of transaction.effects) {
+      if (effect.is(readOnlyTooltipStateEffect) && effect.value) {
+        return getReadOnlyTooltip(transaction.state);
+      }
+    }
+
+    return [];
+  },
+  provide: (field) => {
+    return showTooltip.computeN([field], (state) => state.field(field));
+  },
+});
+
 const editableStateEffect = StateEffect.define<boolean>();
 
 const editableStateField = StateField.define<boolean>({
@@ -261,6 +286,17 @@ function newEditorState(
 
           onScrollRef.current?.({ left: view.scrollDOM.scrollLeft, top: view.scrollDOM.scrollTop });
         }, debounceScroll),
+        keydown: (event, view) => {
+          if (view.state.readOnly) {
+            view.dispatch({
+              effects: [readOnlyTooltipStateEffect.of(event.key !== 'Escape')],
+            });
+
+            return true;
+          }
+
+          return false;
+        },
       }),
       getTheme(theme, settings),
       history(),
@@ -283,6 +319,20 @@ function newEditorState(
       autocompletion({
         closeOnBlur: false,
       }),
+      tooltips({
+        position: 'absolute',
+        parent: document.body,
+        tooltipSpace: (view) => {
+          const rect = view.dom.getBoundingClientRect();
+
+          return {
+            top: rect.top - 50,
+            left: rect.left,
+            bottom: rect.bottom,
+            right: rect.right + 10,
+          };
+        },
+      }),
       closeBrackets(),
       lineNumbers(),
       scrollPastEnd(),
@@ -291,9 +341,9 @@ function newEditorState(
       bracketMatching(),
       EditorState.tabSize.of(settings?.tabSize ?? 2),
       indentOnInput(),
+      editableTooltipField,
       editableStateField,
       EditorState.readOnly.from(editableStateField, (editable) => !editable),
-      EditorView.editable.from(editableStateField, (editable) => editable),
       highlightActiveLineGutter(),
       highlightActiveLine(),
       foldGutter({
@@ -383,3 +433,29 @@ function setEditorDocument(
     });
   });
 }
+
+function getReadOnlyTooltip(state: EditorState) {
+  if (!state.readOnly) {
+    return [];
+  }
+
+  return state.selection.ranges
+    .filter((range) => {
+      return range.empty;
+    })
+    .map((range) => {
+      return {
+        pos: range.head,
+        above: true,
+        strictSide: true,
+        arrow: true,
+        create: () => {
+          const divElement = document.createElement('div');
+          divElement.className = 'cm-readonly-tooltip';
+          divElement.textContent = 'Cannot edit file while AI response is being generated';
+
+          return { dom: divElement };
+        },
+      };
+    });
+}
diff --git a/packages/bolt/app/components/editor/codemirror/cm-theme.ts b/packages/bolt/app/components/editor/codemirror/cm-theme.ts
index fcd6d05..6f3f363 100644
--- a/packages/bolt/app/components/editor/codemirror/cm-theme.ts
+++ b/packages/bolt/app/components/editor/codemirror/cm-theme.ts
@@ -168,6 +168,18 @@ function getEditorTheme(settings: EditorSettings) {
     '.cm-searchMatch': {
       backgroundColor: 'var(--cm-searchMatch-backgroundColor)',
     },
+    '.cm-tooltip.cm-readonly-tooltip': {
+      padding: '4px',
+      whiteSpace: 'nowrap',
+      backgroundColor: 'var(--bolt-elements-bg-depth-2)',
+      borderColor: 'var(--bolt-elements-borderColorActive)',
+      '& .cm-tooltip-arrow:before': {
+        borderTopColor: 'var(--bolt-elements-borderColorActive)',
+      },
+      '& .cm-tooltip-arrow:after': {
+        borderTopColor: 'transparent',
+      },
+    },
   });
 }
 
diff --git a/packages/bolt/app/components/workbench/EditorPanel.tsx b/packages/bolt/app/components/workbench/EditorPanel.tsx
index 3cc0b40..847d198 100644
--- a/packages/bolt/app/components/workbench/EditorPanel.tsx
+++ b/packages/bolt/app/components/workbench/EditorPanel.tsx
@@ -144,7 +144,7 @@ export const EditorPanel = memo(
                 {activeFile && (
                   <div className="flex items-center flex-1 text-sm">
                     <div className="i-ph:file-duotone mr-2" />
-                    {activeFile} {isStreaming && <span className="text-xs ml-1 font-semibold">(read-only)</span>}
+                    {activeFile}
                     {activeFileUnsaved && (
                       <div className="flex gap-1 ml-auto -mr-1.5">
                         <PanelHeaderButton onClick={onFileSave}>
diff --git a/packages/bolt/app/components/workbench/Workbench.client.tsx b/packages/bolt/app/components/workbench/Workbench.client.tsx
index 9a973c3..391deaf 100644
--- a/packages/bolt/app/components/workbench/Workbench.client.tsx
+++ b/packages/bolt/app/components/workbench/Workbench.client.tsx
@@ -1,7 +1,7 @@
 import { useStore } from '@nanostores/react';
 import { motion, type HTMLMotionProps, type Variants } from 'framer-motion';
 import { computed } from 'nanostores';
-import { memo, useCallback, useEffect, useState } from 'react';
+import { memo, useCallback, useEffect } from 'react';
 import { toast } from 'react-toastify';
 import {
   type OnChangeCallback as OnEditorChange,
@@ -10,7 +10,7 @@ import {
 import { IconButton } from '~/components/ui/IconButton';
 import { PanelHeaderButton } from '~/components/ui/PanelHeaderButton';
 import { Slider, type SliderOptions } from '~/components/ui/Slider';
-import { workbenchStore } from '~/lib/stores/workbench';
+import { workbenchStore, type WorkbenchViewType } from '~/lib/stores/workbench';
 import { cubicEasingFn } from '~/utils/easings';
 import { renderLogger } from '~/utils/logger';
 import { EditorPanel } from './EditorPanel';
@@ -21,11 +21,9 @@ interface WorkspaceProps {
   isStreaming?: boolean;
 }
 
-type ViewType = 'code' | 'preview';
-
 const viewTransition = { ease: cubicEasingFn };
 
-const sliderOptions: SliderOptions<ViewType> = {
+const sliderOptions: SliderOptions<WorkbenchViewType> = {
   left: {
     value: 'code',
     text: 'Code',
@@ -62,8 +60,11 @@ export const Workbench = memo(({ chatStarted, isStreaming }: WorkspaceProps) =>
   const currentDocument = useStore(workbenchStore.currentDocument);
   const unsavedFiles = useStore(workbenchStore.unsavedFiles);
   const files = useStore(workbenchStore.files);
+  const selectedView = useStore(workbenchStore.currentView);
 
-  const [selectedView, setSelectedView] = useState<ViewType>(hasPreview ? 'preview' : 'code');
+  const setSelectedView = (view: WorkbenchViewType) => {
+    workbenchStore.currentView.set(view);
+  };
 
   useEffect(() => {
     if (hasPreview) {
diff --git a/packages/bolt/app/lib/stores/workbench.ts b/packages/bolt/app/lib/stores/workbench.ts
index 0fd72fb..4040de1 100644
--- a/packages/bolt/app/lib/stores/workbench.ts
+++ b/packages/bolt/app/lib/stores/workbench.ts
@@ -21,6 +21,8 @@ export type ArtifactUpdateState = Pick<ArtifactState, 'title' | 'closed'>;
 
 type Artifacts = MapStore<Record<string, ArtifactState>>;
 
+export type WorkbenchViewType = 'code' | 'preview';
+
 export class WorkbenchStore {
   #previewsStore = new PreviewsStore(webcontainer);
   #filesStore = new FilesStore(webcontainer);
@@ -30,6 +32,7 @@ export class WorkbenchStore {
   artifacts: Artifacts = import.meta.hot?.data.artifacts ?? map({});
 
   showWorkbench: WritableAtom<boolean> = import.meta.hot?.data.showWorkbench ?? atom(false);
+  currentView: WritableAtom<WorkbenchViewType> = import.meta.hot?.data.currentView ?? atom('code');
   unsavedFiles: WritableAtom<Set<string>> = import.meta.hot?.data.unsavedFiles ?? atom(new Set<string>());
   modifiedFiles = new Set<string>();
   artifactIdList: string[] = [];
@@ -39,6 +42,7 @@ export class WorkbenchStore {
       import.meta.hot.data.artifacts = this.artifacts;
       import.meta.hot.data.unsavedFiles = this.unsavedFiles;
       import.meta.hot.data.showWorkbench = this.showWorkbench;
+      import.meta.hot.data.currentView = this.currentView;
     }
   }
 
diff --git a/packages/bolt/app/lib/webcontainer/auth.client.ts b/packages/bolt/app/lib/webcontainer/auth.client.ts
new file mode 100644
index 0000000..e5f33d9
--- /dev/null
+++ b/packages/bolt/app/lib/webcontainer/auth.client.ts
@@ -0,0 +1,6 @@
+/**
+ * This client-only module that contains everything related to auth and is used
+ * to avoid importing `@webcontainer/api` in the server bundle.
+ */
+
+export { auth, type AuthAPI } from '@webcontainer/api';
diff --git a/packages/bolt/app/routes/login.tsx b/packages/bolt/app/routes/login.tsx
index 2e27a0c..591a171 100644
--- a/packages/bolt/app/routes/login.tsx
+++ b/packages/bolt/app/routes/login.tsx
@@ -6,12 +6,12 @@ import {
   type LoaderFunctionArgs,
 } from '@remix-run/cloudflare';
 import { useFetcher, useLoaderData } from '@remix-run/react';
-import { auth, type AuthAPI } from '@webcontainer/api';
 import { useEffect, useState } from 'react';
 import { LoadingDots } from '~/components/ui/LoadingDots';
 import { createUserSession, isAuthenticated, validateAccessToken } from '~/lib/.server/sessions';
 import { CLIENT_ID, CLIENT_ORIGIN } from '~/lib/constants';
 import { request as doRequest } from '~/lib/fetch';
+import { auth, type AuthAPI } from '~/lib/webcontainer/auth.client';
 import { logger } from '~/utils/logger';
 
 export async function loader({ request, context }: LoaderFunctionArgs) {