diff --git a/crates/goose-cli/src/cli.rs b/crates/goose-cli/src/cli.rs
index bb9a0c12df..e7f0ef8584 100644
--- a/crates/goose-cli/src/cli.rs
+++ b/crates/goose-cli/src/cli.rs
@@ -35,14 +35,6 @@ use std::io::Read;
 use std::path::PathBuf;
 use tracing::warn;
 
-fn non_empty_string(s: &str) -> Result<String, String> {
-    if s.trim().is_empty() {
-        Err("Prompt cannot be empty".to_string())
-    } else {
-        Ok(s.to_string())
-    }
-}
-
 #[derive(Parser)]
 #[command(author, version, display_name = "", about, long_about = None)]
 struct Cli {
@@ -871,6 +863,14 @@ enum TermCommand {
         /// Shell type (bash, zsh, fish, powershell)
         #[arg(value_enum)]
         shell: Shell,
+
+        /// Enable command_not_found_handler (sends unknown commands to goose)
+        #[arg(
+            long = "with-command-not-found",
+            help = "Enable command_not_found_handler for automatic goose invocation",
+            long_help = "When enabled, any command not found will be automatically sent to goose for interpretation. Only supported for zsh and bash."
+        )]
+        with_command_not_found: bool,
     },
 
     /// Log a shell command (called by shell hook)
@@ -885,13 +885,14 @@ enum TermCommand {
         about = "Run a prompt in the terminal session",
         long_about = "Run a prompt in the terminal-integrated session.\n\n\
                       Examples:\n  \
-                        goose term run \"list files in this directory\"\n  \
-                        goose term run \"create a python script that prints hello world\""
+                        goose term run list files in this directory\n  \
+                        goose term run create a python script that prints hello world\n  \
+                        gt list files  # using alias"
     )]
     Run {
-        /// The prompt to send to goose
-        #[arg(value_parser = non_empty_string)]
-        prompt: String,
+        /// The prompt to send to goose (multiple words allowed without quotes)
+        #[arg(required = true, num_args = 1..)]
+        prompt: Vec<String>,
     },
 
     /// Print session info for prompt integration
@@ -1470,14 +1471,17 @@ pub async fn cli() -> anyhow::Result<()> {
         }
         Some(Command::Term { command }) => {
             match command {
-                TermCommand::Init { shell } => {
+                TermCommand::Init {
+                    shell,
+                    with_command_not_found,
+                } => {
                     let shell_str = match shell {
                         Shell::Bash => "bash",
                         Shell::Zsh => "zsh",
                         Shell::Fish => "fish",
                         Shell::Powershell => "powershell",
                     };
-                    handle_term_init(shell_str)?;
+                    handle_term_init(shell_str, with_command_not_found)?;
                 }
                 TermCommand::Log { command } => {
                     handle_term_log(command).await?;
diff --git a/crates/goose-cli/src/commands/term.rs b/crates/goose-cli/src/commands/term.rs
index 6f6e628ac9..ea3a13fbea 100644
--- a/crates/goose-cli/src/commands/term.rs
+++ b/crates/goose-cli/src/commands/term.rs
@@ -33,7 +33,7 @@ async fn ensure_terminal_session(
 }
 
 /// Handle `goose term init <shell>` - print shell initialization script
-pub fn handle_term_init(shell: &str) -> Result<()> {
+pub fn handle_term_init(shell: &str, with_command_not_found: bool) -> Result<()> {
     let terminal_id = Uuid::new_v4().to_string();
 
     // Get the path to the current goose binary
@@ -41,6 +41,34 @@ pub fn handle_term_init(shell: &str) -> Result<()> {
         .map(|p| p.to_string_lossy().into_owned())
         .unwrap_or_else(|_| "goose".to_string());
 
+    let command_not_found_handler = if with_command_not_found {
+        match shell.to_lowercase().as_str() {
+            "bash" => format!(
+                r#"
+
+# Command not found handler - sends unknown commands to goose
+command_not_found_handle() {{
+    echo "🪿 Command '$1' not found. Asking goose..."
+    '{goose_bin}' term run "$@"
+    return 0
+}}"#
+            ),
+            "zsh" => format!(
+                r#"
+
+# Command not found handler - sends unknown commands to goose
+command_not_found_handler() {{
+    echo "🪿 Command '$1' not found. Asking goose..."
+    '{goose_bin}' term run "$@"
+    return 0
+}}"#
+            ),
+            _ => String::new(),
+        }
+    } else {
+        String::new()
+    };
+
     let script = match shell.to_lowercase().as_str() {
         "bash" => {
             format!(
@@ -58,7 +86,7 @@ goose_preexec() {{
 if [[ -z "$goose_preexec_installed" ]]; then
     goose_preexec_installed=1
     trap 'goose_preexec "$BASH_COMMAND"' DEBUG
-fi"#
+fi{command_not_found_handler}"#
             )
         }
         "zsh" => {
@@ -81,7 +109,7 @@ add-zsh-hook preexec goose_preexec
 if [[ -z "$GOOSE_PROMPT_INSTALLED" ]]; then
     export GOOSE_PROMPT_INSTALLED=1
     PROMPT='%F{{cyan}}🪿%f '$PROMPT
-fi"#
+fi{command_not_found_handler}"#
             )
         }
         "fish" => {
@@ -140,7 +168,8 @@ pub async fn handle_term_log(command: String) -> Result<()> {
 }
 
 /// Handle `goose term run <prompt>` - run a prompt in the terminal session
-pub async fn handle_term_run(prompt: String) -> Result<()> {
+pub async fn handle_term_run(prompt: Vec<String>) -> Result<()> {
+    let prompt = prompt.join(" ");
     let terminal_id = std::env::var("GOOSE_TERMINAL_ID").map_err(|_| {
         anyhow!(
             "GOOSE_TERMINAL_ID not set.\n\n\