diff --git a/src/terminal.test.ts b/src/terminal.test.ts
new file mode 100644
index 0000000..1bc5a7c
--- /dev/null
+++ b/src/terminal.test.ts
@@ -0,0 +1,100 @@
+import { describe, expect, test } from "bun:test";
+import { createTerminal, disposeTerminal, serializeAsHTML } from "./terminal";
+
+// Helper to write to terminal and wait for completion
+function writeSync(
+  term: ReturnType<typeof createTerminal>,
+  data: string,
+): Promise<void> {
+  return new Promise((resolve) => {
+    term.terminal.write(data, resolve);
+  });
+}
+
+describe("terminal", () => {
+  test("creates terminal with correct dimensions", () => {
+    const term = createTerminal(80, 24);
+    expect(term.terminal.cols).toBe(80);
+    expect(term.terminal.rows).toBe(24);
+    disposeTerminal(term);
+  });
+
+  test("writes data to terminal buffer", async () => {
+    const term = createTerminal(80, 24);
+    await writeSync(term, "Hello, world!");
+    const html = serializeAsHTML(term);
+    expect(html).toContain("Hello, world!");
+    disposeTerminal(term);
+  });
+
+  test("handles ANSI cursor movement", async () => {
+    const term = createTerminal(80, 24);
+    await writeSync(term, "AAA\x1b[3D"); // Write AAA, move cursor back 3
+    await writeSync(term, "BBB"); // Overwrite with BBB
+    const html = serializeAsHTML(term);
+    expect(html).toContain("BBB");
+    expect(html).not.toContain("AAA");
+    disposeTerminal(term);
+  });
+
+  test("handles carriage return correctly", async () => {
+    const term = createTerminal(80, 24);
+    await writeSync(term, "Old text\rNew"); // CR should move to col 0
+    const html = serializeAsHTML(term);
+    expect(html).toContain("New");
+    expect(html).not.toContain("Old");
+    disposeTerminal(term);
+  });
+
+  test("handles incomplete ANSI sequences across writes", async () => {
+    const term = createTerminal(80, 24);
+    await writeSync(term, "Hello\x1b["); // Incomplete CSI
+    await writeSync(term, "31mRed\x1b[0m"); // Complete it
+    const html = serializeAsHTML(term);
+    expect(html).toContain("Red");
+    // Check for red styling (color may vary in format)
+    expect(html).toMatch(/color|red|#[a-f0-9]{6}/i);
+    disposeTerminal(term);
+  });
+
+  test("handles screen clearing", async () => {
+    const term = createTerminal(80, 24);
+    await writeSync(term, "First line\n");
+    await writeSync(term, "Second line");
+    await writeSync(term, "\x1b[2J"); // Clear screen
+    await writeSync(term, "\x1b[H"); // Cursor home
+    await writeSync(term, "After clear");
+    const html = serializeAsHTML(term);
+    expect(html).toContain("After clear");
+    // "First line" should be in scrollback but not current screen
+    disposeTerminal(term);
+  });
+
+  test("handles cursor position command", async () => {
+    const term = createTerminal(80, 24);
+    await writeSync(term, "\x1b[5;10H"); // Move cursor to row 5, col 10
+    await writeSync(term, "Positioned");
+    const html = serializeAsHTML(term);
+    expect(html).toContain("Positioned");
+    // CSI H should not leak through as literal characters
+    expect(html).not.toMatch(/^[HJ]$/m);
+    disposeTerminal(term);
+  });
+
+  test("handles resize", () => {
+    const term = createTerminal(80, 24);
+    term.terminal.resize(120, 40);
+    expect(term.terminal.cols).toBe(120);
+    expect(term.terminal.rows).toBe(40);
+    disposeTerminal(term);
+  });
+
+  test("serialize returns valid HTML structure", async () => {
+    const term = createTerminal(80, 24);
+    await writeSync(term, "Test content");
+    const html = serializeAsHTML(term);
+    // Should be valid HTML (has span structure from xterm serialize addon)
+    expect(html).toMatch(/<span|<div|Test content/);
+    disposeTerminal(term);
+  });
+});