diff --git a/.changeset/fix-chat-progress-indicator-reload.md b/.changeset/fix-chat-progress-indicator-reload.md
new file mode 100644
index 000000000..f899d31c7
--- /dev/null
+++ b/.changeset/fix-chat-progress-indicator-reload.md
@@ -0,0 +1,5 @@
+---
+"@runfusion/fusion": patch
+---
+
+Fix chat progress indicator on reload: show "Connecting…" indicator when dashboard reloads during active AI generation
diff --git a/packages/core/src/chat-types.ts b/packages/core/src/chat-types.ts
index fdb8fe099..e408b40a9 100644
--- a/packages/core/src/chat-types.ts
+++ b/packages/core/src/chat-types.ts
@@ -63,6 +63,8 @@ export type EnrichedChatSession = ChatSession & {
   lastMessagePreview?: string;
   /** Timestamp of the last message in the session */
   lastMessageAt?: string;
+  /** Whether a generation is currently in progress for this session */
+  isGenerating?: boolean;
 };
 
 /** A parsed @ mention of an agent in a chat message */
diff --git a/packages/dashboard/app/api/legacy.ts b/packages/dashboard/app/api/legacy.ts
index de8508cdb..c7d8ea7a7 100644
--- a/packages/dashboard/app/api/legacy.ts
+++ b/packages/dashboard/app/api/legacy.ts
@@ -39,7 +39,6 @@ import type {
   AgentRating,
   AgentRatingSummary,
   AgentRatingInput,
-  ChatSession,
   ChatMessage,
   EnrichedChatSession,
   Roadmap,
@@ -7673,7 +7672,7 @@ export interface ChatSessionListResponse {
 }
 
 export interface ChatSessionResponse {
-  session: ChatSession;
+  session: EnrichedChatSession;
 }
 
 export interface ChatMessageListResponse {
diff --git a/packages/dashboard/app/hooks/__tests__/useChat.test.ts b/packages/dashboard/app/hooks/__tests__/useChat.test.ts
index e791f9462..351fc7ba2 100644
--- a/packages/dashboard/app/hooks/__tests__/useChat.test.ts
+++ b/packages/dashboard/app/hooks/__tests__/useChat.test.ts
@@ -1410,4 +1410,95 @@ describe("useChat", () => {
       });
     });
   });
+
+  describe("FN-3336: streaming state recovery on reload", () => {
+    it("sets isStreaming=true when selecting a session with isGenerating=true", async () => {
+      const session = { ...makeSession({ id: "session-001", agentId: "agent-001" }), isGenerating: true };
+      mockFetchChatSessions.mockResolvedValueOnce({ sessions: [session] });
+      mockFetchChatMessages.mockResolvedValue({ messages: [] });
+
+      const { result } = renderHook(() => useChat("proj-123"));
+
+      await waitFor(() => {
+        expect(result.current.sessions).toHaveLength(1);
+      });
+
+      act(() => {
+        result.current.selectSession("session-001");
+      });
+
+      await waitFor(() => {
+        expect(result.current.isStreaming).toBe(true);
+        expect(result.current.streamingText).toBe("");
+      });
+    });
+
+    it("does not set isStreaming when isGenerating is false", async () => {
+      const session = { ...makeSession({ id: "session-001", agentId: "agent-001" }), isGenerating: false };
+      mockFetchChatSessions.mockResolvedValueOnce({ sessions: [session] });
+      mockFetchChatMessages.mockResolvedValue({ messages: [] });
+
+      const { result } = renderHook(() => useChat("proj-123"));
+
+      await waitFor(() => {
+        expect(result.current.sessions).toHaveLength(1);
+      });
+
+      act(() => {
+        result.current.selectSession("session-001");
+      });
+
+      await waitFor(() => {
+        expect(result.current.isStreaming).toBe(false);
+      });
+    });
+
+    it("clears recovery streaming state when SSE delivers assistant message", async () => {
+      let subscribeHandler: Record<string, (event: MessageEvent) => void> = {};
+      mockSubscribeSse.mockImplementation((_url, options) => {
+        if (options?.events) {
+          subscribeHandler = options.events as typeof subscribeHandler;
+        }
+        return () => {};
+      });
+
+      const session = { ...makeSession({ id: "session-001", agentId: "agent-001" }), isGenerating: true };
+      mockFetchChatSessions.mockResolvedValueOnce({ sessions: [session] });
+      mockFetchChatMessages.mockResolvedValue({ messages: [] });
+
+      const { result } = renderHook(() => useChat("proj-123"));
+
+      await waitFor(() => {
+        expect(result.current.sessions).toHaveLength(1);
+      });
+
+      act(() => {
+        result.current.selectSession("session-001");
+      });
+
+      await waitFor(() => {
+        expect(result.current.isStreaming).toBe(true);
+      });
+
+      // Simulate SSE delivering the completed assistant message
+      const assistantMessage = makeMessage({
+        id: "msg-assistant-001",
+        sessionId: "session-001",
+        role: "assistant",
+        content: "Generated response",
+      });
+
+      act(() => {
+        subscribeHandler["chat:message:added"](
+          new MessageEvent("chat:message:added", { data: JSON.stringify(assistantMessage) }),
+        );
+      });
+
+      await waitFor(() => {
+        expect(result.current.isStreaming).toBe(false);
+        expect(result.current.streamingText).toBe("");
+        expect(result.current.messages.some((m) => m.id === "msg-assistant-001")).toBe(true);
+      });
+    });
+  });
 });
diff --git a/packages/dashboard/app/hooks/__tests__/useQuickChat.test.ts b/packages/dashboard/app/hooks/__tests__/useQuickChat.test.ts
index 5686e478a..c2e146dbf 100644
--- a/packages/dashboard/app/hooks/__tests__/useQuickChat.test.ts
+++ b/packages/dashboard/app/hooks/__tests__/useQuickChat.test.ts
@@ -7,6 +7,7 @@ import { FN_AGENT_ID, useQuickChat } from "../useQuickChat";
 vi.mock("../../api", () => ({
   fetchResumeChatSession: vi.fn(),
   fetchChatSessions: vi.fn(),
+  fetchChatSession: vi.fn(),
   createChatSession: vi.fn(),
   fetchChatMessages: vi.fn(),
   streamChatResponse: vi.fn(),
@@ -15,6 +16,7 @@ vi.mock("../../api", () => ({
 
 const mockFetchResumeChatSession = vi.mocked(apiModule.fetchResumeChatSession);
 const mockFetchChatSessions = vi.mocked(apiModule.fetchChatSessions);
+const mockFetchChatSession = vi.mocked(apiModule.fetchChatSession);
 const mockCreateChatSession = vi.mocked(apiModule.createChatSession);
 const mockFetchChatMessages = vi.mocked(apiModule.fetchChatMessages);
 const mockStreamChatResponse = vi.mocked(apiModule.streamChatResponse);
@@ -43,6 +45,9 @@ describe("useQuickChat", () => {
       session: makeSession({ id: "session-001", agentId: "agent-001" }),
     });
     mockFetchChatMessages.mockResolvedValue({ messages: [] });
+    mockFetchChatSession.mockResolvedValue({
+      session: { ...makeSession({ id: "session-001", agentId: "agent-001" }), isGenerating: false },
+    });
     mockStreamChatResponse.mockReturnValue({ close: vi.fn(), isConnected: () => true });
     mockCancelChatResponse.mockResolvedValue({ success: true });
   });
@@ -703,4 +708,80 @@ describe("useQuickChat", () => {
       expect(addToast).toHaveBeenCalledWith("Failed to get response", "error");
     });
   });
+
+  describe("FN-3336: streaming state recovery on reload", () => {
+    it("sets isStreaming=true when initializing a session with isGenerating=true", async () => {
+      const session = { ...makeSession({ id: "session-001", agentId: "agent-001" }), isGenerating: true };
+      mockFetchResumeChatSession.mockResolvedValue({ session });
+      mockFetchChatMessages.mockResolvedValue({ messages: [] });
+
+      const { result } = renderHook(() => useQuickChat("proj-123"));
+
+      await act(async () => {
+        await result.current.switchSession("agent-001");
+      });
+
+      await waitFor(() => {
+        expect(result.current.isStreaming).toBe(true);
+        expect(result.current.streamingText).toBe("");
+      });
+    });
+
+    it("does not set isStreaming when isGenerating is false", async () => {
+      const session = { ...makeSession({ id: "session-001", agentId: "agent-001" }), isGenerating: false };
+      mockFetchResumeChatSession.mockResolvedValue({ session });
+      mockFetchChatMessages.mockResolvedValue({ messages: [] });
+
+      const { result } = renderHook(() => useQuickChat("proj-123"));
+
+      await act(async () => {
+        await result.current.switchSession("agent-001");
+      });
+
+      await waitFor(() => {
+        expect(result.current.isStreaming).toBe(false);
+      });
+    });
+
+    it("clears recovery streaming state when polling detects generation complete", async () => {
+      vi.useFakeTimers({ shouldAdvanceTime: true });
+
+      const session = { ...makeSession({ id: "session-001", agentId: "agent-001" }), isGenerating: true };
+      mockFetchResumeChatSession.mockResolvedValue({ session });
+      mockFetchChatMessages.mockResolvedValue({ messages: [] });
+
+      // After first poll, server reports generation is done and has a new assistant message
+      mockFetchChatSession.mockResolvedValue({
+        session: { ...makeSession({ id: "session-001", agentId: "agent-001" }), isGenerating: false },
+      });
+      mockFetchChatMessages.mockResolvedValue({
+        messages: [
+          { id: "msg-1", sessionId: "session-001", role: "assistant", content: "Done", thinkingOutput: null, metadata: null, createdAt: new Date().toISOString() },
+        ],
+      });
+
+      const { result } = renderHook(() => useQuickChat("proj-123"));
+
+      await act(async () => {
+        await result.current.switchSession("agent-001");
+      });
+
+      await waitFor(() => {
+        expect(result.current.isStreaming).toBe(true);
+      });
+
+      // Advance time to trigger the polling interval (3s)
+      await act(async () => {
+        vi.advanceTimersByTime(3500);
+      });
+
+      await waitFor(() => {
+        expect(result.current.isStreaming).toBe(false);
+        expect(result.current.streamingText).toBe("");
+        expect(result.current.messages.some((m) => m.id === "msg-1")).toBe(true);
+      });
+
+      vi.useRealTimers();
+    });
+  });
 });
diff --git a/packages/dashboard/app/hooks/useChat.ts b/packages/dashboard/app/hooks/useChat.ts
index f249ad7b7..517d768af 100644
--- a/packages/dashboard/app/hooks/useChat.ts
+++ b/packages/dashboard/app/hooks/useChat.ts
@@ -27,6 +27,7 @@ export interface ChatSessionInfo {
   updatedAt: string;
   lastMessagePreview?: string;
   lastMessageAt?: string;
+  isGenerating?: boolean;
 }
 
 export interface ToolCallInfo {
@@ -321,6 +322,15 @@ export function useChat(projectId?: string): UseChatReturn {
         setMessages([]);
       }
 
+      // Recover streaming state if the server reports an active generation.
+      // After a reload/HMR, the server keeps generating but the UI loses
+      // all streaming state. Showing "Connecting…" immediately tells the
+      // user the AI is still working.
+      if (session?.isGenerating) {
+        setIsStreaming(true);
+        setStreamingText("");
+      }
+
       // Persist active session to localStorage
       if (id) {
         setScopedItem(ACTIVE_SESSION_STORAGE_KEY, id, projectId);
@@ -685,6 +695,26 @@ export function useChat(projectId?: string): UseChatReturn {
         return;
       }
 
+      // Recovery mode: isStreaming is true but there's no active stream (streamRef is null).
+      // This happens after a page reload/HMR when the server is still generating.
+      // When the assistant message arrives via SSE, add it and clear the recovery state.
+      if (
+        activeSessionRef.current?.id === message.sessionId &&
+        isStreamingRef.current &&
+        !streamRef.current &&
+        message.role === "assistant"
+      ) {
+        setMessages((prev) => {
+          if (prev.some((m) => m.id === message.id)) return prev;
+          return [...prev, message];
+        });
+        setStreamingText("");
+        setStreamingThinking("");
+        setStreamingToolCalls([]);
+        setIsStreaming(false);
+        return;
+      }
+
       // Only add if this is the active session AND we're not streaming
       // (during streaming, messages are managed locally to avoid duplicates)
       // Use ref to get the current value (state may not be updated yet when handler runs)
diff --git a/packages/dashboard/app/hooks/useQuickChat.ts b/packages/dashboard/app/hooks/useQuickChat.ts
index 50ae17c69..03ac36090 100644
--- a/packages/dashboard/app/hooks/useQuickChat.ts
+++ b/packages/dashboard/app/hooks/useQuickChat.ts
@@ -3,6 +3,7 @@ import type { ChatMessage, ChatSession } from "@fusion/core";
 import {
   fetchResumeChatSession,
   fetchChatSessions,
+  fetchChatSession,
   createChatSession,
   fetchChatMessages,
   streamChatResponse,
@@ -173,6 +174,8 @@ export function useQuickChat(
   const cancelledByUserRef = useRef(false);
   const cancelStreamingFlushesRef = useRef<(() => void) | null>(null);
   const pendingMessageRef = useRef("");
+  const isStreamingRef = useRef(isStreaming);
+  isStreamingRef.current = isStreaming;
   const sendCompletionRef = useRef<{ resolve: () => void; reject: (error?: unknown) => void } | null>(null);
 
   // Track the current selected chat target for session management
@@ -234,6 +237,14 @@ export function useQuickChat(
         if (existingSession) {
           setActiveSession(existingSession);
           currentSessionKeyRef.current = sessionKey;
+
+          // Recover streaming state if server is still generating for this session.
+          // After a reload/HMR, the server keeps generating but the UI loses
+          // all streaming state. Show the "Connecting…" indicator immediately.
+          if (existingSession.isGenerating) {
+            setIsStreaming(true);
+            setStreamingText("");
+          }
         } else {
           const newSession = await createSessionForTarget(target);
           setActiveSession(newSession);
@@ -273,6 +284,41 @@ export function useQuickChat(
     }
   }, [activeSession, loadMessages]);
 
+  // Poll for generation completion during recovery mode.
+  // Recovery mode: isStreaming=true but streamRef.current is null (no local stream).
+  // This happens after a reload/HMR when the server is still generating.
+  // Poll every 3s until the server reports isGenerating=false, then reload messages
+  // and clear streaming state.
+  useEffect(() => {
+    if (!isStreaming || streamRef.current || !activeSession) return;
+
+    const interval = setInterval(async () => {
+      // Re-check conditions inside the callback (state may have changed)
+      if (!isStreamingRef.current || streamRef.current || !activeSession) {
+        clearInterval(interval);
+        return;
+      }
+
+      try {
+        const data = await fetchChatSession(activeSession.id, projectId);
+        if (!data.session.isGenerating) {
+          clearInterval(interval);
+          // Reload messages to pick up the completed assistant message
+          const msgData = await fetchChatMessages(activeSession.id, { limit: 50 }, projectId);
+          setMessages(msgData.messages.map(mapChatMessageToInfo));
+          setStreamingText("");
+          setStreamingThinking("");
+          setStreamingToolCalls([]);
+          setIsStreaming(false);
+        }
+      } catch {
+        // Silently fail - will retry on next interval
+      }
+    }, 3000);
+
+    return () => clearInterval(interval);
+  }, [isStreaming, activeSession, projectId]);
+
   // Reload messages from server (for same-session revisit)
   const reloadMessages = useCallback(async () => {
     if (!activeSession) return;
diff --git a/packages/dashboard/src/__tests__/chat-manager.test.ts b/packages/dashboard/src/__tests__/chat-manager.test.ts
index fb58eb0c3..23edf828f 100644
--- a/packages/dashboard/src/__tests__/chat-manager.test.ts
+++ b/packages/dashboard/src/__tests__/chat-manager.test.ts
@@ -1256,3 +1256,132 @@ describe("ChatManager diagnostics", () => {
     });
   });
 });
+
+describe("ChatManager.isGenerating", () => {
+  beforeEach(() => {
+    vi.clearAllMocks();
+    __resetChatState();
+    mockChatStore.getSession.mockReturnValue({
+      id: "chat-001",
+      agentId: "agent-1",
+      status: "active",
+      createdAt: new Date().toISOString(),
+      updatedAt: new Date().toISOString(),
+    });
+    mockChatStore.addMessage.mockReturnValue({
+      id: "msg-1",
+      sessionId: "chat-001",
+      role: "user",
+      content: "Hello",
+      createdAt: new Date().toISOString(),
+    });
+    mockSummarizeTitle.mockResolvedValue("Test Title");
+  });
+
+  it("returns false when no generation is active", () => {
+    const chatManager = createChatManager();
+    expect(chatManager.isGenerating("chat-001")).toBe(false);
+  });
+
+  it("returns true during an active generation", async () => {
+    let resolvePrompt: () => void;
+    const promptPromise = new Promise<void>((resolve) => {
+      resolvePrompt = resolve;
+    });
+
+    __setCreateFnAgent(async () => {
+      await promptPromise;
+      return {
+        session: {
+          prompt: vi.fn().mockResolvedValue(undefined),
+          dispose: vi.fn(),
+          state: { messages: [{ role: "assistant", content: "Done" }] },
+        },
+      };
+    });
+
+    const chatManager = createChatManager();
+
+    // Start the generation (don't await it — it blocks until resolvePrompt is called)
+    const sendPromise = chatManager.sendMessage("chat-001", "Hello");
+
+    // The generation should be active now
+    expect(chatManager.isGenerating("chat-001")).toBe(true);
+    expect(chatManager.isGenerating("chat-999")).toBe(false); // different session
+
+    // Complete the generation
+    resolvePrompt!();
+    await sendPromise;
+
+    // Generation should be cleared
+    expect(chatManager.isGenerating("chat-001")).toBe(false);
+  });
+});
+
+describe("ChatManager.getGeneratingSessionIds", () => {
+  beforeEach(() => {
+    vi.clearAllMocks();
+    __resetChatState();
+    mockSummarizeTitle.mockResolvedValue("Test Title");
+  });
+
+  it("returns empty array when no generations are active", () => {
+    const chatManager = createChatManager();
+    expect(chatManager.getGeneratingSessionIds()).toEqual([]);
+  });
+
+  it("returns all session IDs with active generations", async () => {
+    let resolvePrompt1: () => void;
+    let resolvePrompt2: () => void;
+    const promptPromise1 = new Promise<void>((resolve) => { resolvePrompt1 = resolve; });
+    const promptPromise2 = new Promise<void>((resolve) => { resolvePrompt2 = resolve; });
+
+    let callCount = 0;
+    __setCreateFnAgent(async () => {
+      callCount++;
+      const promise = callCount === 1 ? promptPromise1 : promptPromise2;
+      await promise;
+      return {
+        session: {
+          prompt: vi.fn().mockResolvedValue(undefined),
+          dispose: vi.fn(),
+          state: { messages: [{ role: "assistant", content: "Done" }] },
+        },
+      };
+    });
+
+    mockChatStore.getSession.mockImplementation((id: string) => ({
+      id,
+      agentId: "agent-1",
+      status: "active",
+      createdAt: new Date().toISOString(),
+      updatedAt: new Date().toISOString(),
+    }));
+    mockChatStore.addMessage.mockReturnValue({
+      id: "msg-1",
+      sessionId: "chat-001",
+      role: "user",
+      content: "Hello",
+      createdAt: new Date().toISOString(),
+    });
+
+    const chatManager = createChatManager();
+
+    // Start two generations
+    const send1 = chatManager.sendMessage("chat-001", "Hello");
+    const send2 = chatManager.sendMessage("chat-002", "World");
+
+    // Both should show as generating
+    const ids = chatManager.getGeneratingSessionIds();
+    expect(ids).toContain("chat-001");
+    expect(ids).toContain("chat-002");
+    expect(ids).toHaveLength(2);
+
+    // Complete both
+    resolvePrompt1!();
+    resolvePrompt2!();
+    await Promise.all([send1, send2]);
+
+    expect(chatManager.getGeneratingSessionIds()).toEqual([]);
+  });
+});
diff --git a/packages/dashboard/src/chat.ts b/packages/dashboard/src/chat.ts
index 22c78ab90..9107daf2f 100644
--- a/packages/dashboard/src/chat.ts
+++ b/packages/dashboard/src/chat.ts
@@ -922,6 +922,21 @@ export class ChatManager {
 
     return true;
   }
+
+  /**
+   * Check whether a generation is currently in progress for the given session.
+   */
+  isGenerating(sessionId: string): boolean {
+    return this.activeGenerations.has(sessionId);
+  }
+
+  /**
+   * Return all session IDs that currently have an active generation.
+   * Useful for batch-enriching session lists without N+1 lookups.
+   */
+  getGeneratingSessionIds(): string[] {
+    return [...this.activeGenerations.keys()];
+  }
 }
 
 // ── Test Helpers ────────────────────────────────────────────────────────────
diff --git a/packages/dashboard/src/routes/register-chat-routes.ts b/packages/dashboard/src/routes/register-chat-routes.ts
index dc4cd9d7e..c5b66a7b1 100644
--- a/packages/dashboard/src/routes/register-chat-routes.ts
+++ b/packages/dashboard/src/routes/register-chat-routes.ts
@@ -120,16 +120,21 @@ export function registerChatRoutes(ctx: ApiRoutesContext, deps: ChatRouteDeps):
         const sessionIds = sessions.map((s) => s.id);
         const lastMessages = chatStore.getLastMessageForSessions(sessionIds);
 
+        // Batch-gather generating session IDs to avoid N+1 calls
+        const generatingIds = options?.chatManager?.getGeneratingSessionIds?.() ?? [];
+        const generatingSet = new Set(generatingIds);
+
         for (const session of sessions) {
           const lastMessage = lastMessages.get(session.id);
+          const enriched: EnrichedChatSession = session;
           if (lastMessage) {
             // Truncate content to 100 chars for preview
             const content = lastMessage.content || "";
-            const enriched: EnrichedChatSession = session;
             enriched.lastMessagePreview =
               content.length > 100 ? content.slice(0, 100) + "…" : content;
             enriched.lastMessageAt = lastMessage.createdAt;
           }
+          enriched.isGenerating = generatingSet.has(session.id);
         }
       }
 
@@ -239,7 +244,10 @@ export function registerChatRoutes(ctx: ApiRoutesContext, deps: ChatRouteDeps):
         throw notFound(`Chat session ${sessionId} not found`);
       }
 
-      res.json({ session });
+      const enriched: EnrichedChatSession = session;
+      enriched.isGenerating = options?.chatManager?.isGenerating?.(sessionId) ?? false;
+
+      res.json({ session: enriched });
     } catch (err: unknown) {
       if (err instanceof ApiError) {
         throw err;