diff --git a/Cargo.lock b/Cargo.lock
index 568c01d59a..24a1f799ee 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -3211,6 +3211,7 @@ dependencies = [
  "umya-spreadsheet",
  "url",
  "utoipa",
+ "uuid",
  "webbrowser",
  "which 8.0.0",
  "xcap",
diff --git a/crates/goose-mcp/Cargo.toml b/crates/goose-mcp/Cargo.toml
index aa88ca9db4..0f15c0b9ca 100644
--- a/crates/goose-mcp/Cargo.toml
+++ b/crates/goose-mcp/Cargo.toml
@@ -73,6 +73,7 @@ libc = "0.2"
 mpatch = "=0.2.0"
 tokio-util = "0.7.16"
 clap = { version = "4", features = ["derive"] }
+uuid = { version = "1.19.0", features = ["v4"] }
 
 [dev-dependencies]
 sysinfo = "0.32.1"
diff --git a/crates/goose-mcp/src/develop/mod.rs b/crates/goose-mcp/src/develop/mod.rs
index cfd05c9811..66024a21c1 100644
--- a/crates/goose-mcp/src/develop/mod.rs
+++ b/crates/goose-mcp/src/develop/mod.rs
@@ -66,9 +66,17 @@ impl DevelopServer {
         let map_tool = Arc::new(MapTool::new());
         let image_tool = Arc::new(ImageTool::new());
 
+        // TODO: The cwd/os info at the end breaks prompt caching since it changes per-session.
+        // Consider moving dynamic context to a separate mechanism (e.g., resources or a
+        // dedicated context tool) so the static instructions can be cached.
+        let cwd = std::env::current_dir()
+            .map(|p| p.to_string_lossy().to_string())
+            .unwrap_or_else(|_| ".".to_string());
+        let os = std::env::consts::OS;
+
         let mut instructions = formatdoc! {r#"
             The develop extension provides tools for software development tasks.
-            
+
             Capabilities:
             - **Process**: Execute shell commands with `shell`. Working directory and 
               environment variables persist across calls. Long-running or large-output 
@@ -88,7 +96,13 @@ impl DevelopServer {
             is re-sent. It's often better to do something in one call rather than two or three,
             even if you read a bit more than strictly necessary. Reading extra context to save a
             round-trip is usually worth it.
-        "#};
+
+            operating system: {os}
+            current directory: {cwd}
+        "#,
+            os = os,
+            cwd = cwd,
+        };
 
         // Add shell warning if using fallback
         if let Some(warning) = manager.shell_warning() {
diff --git a/crates/goose-mcp/src/develop/process/manager.rs b/crates/goose-mcp/src/develop/process/manager.rs
index 984646826c..f9bdc63c6c 100644
--- a/crates/goose-mcp/src/develop/process/manager.rs
+++ b/crates/goose-mcp/src/develop/process/manager.rs
@@ -26,18 +26,19 @@ const PREVIEW_HEAD_LINES: usize = 20;
 /// Lines to show at tail of preview.
 const PREVIEW_TAIL_LINES: usize = 30;
 
-/// Marker delimiter used in wrapped commands.
-const ENV_MARKER: &str = "__GOOSE_ENV_MARKER__";
+/// Marker prefix used in wrapped commands (followed by UUID).
+const ENV_MARKER_PREFIX: &str = "__GOOSE_ENV_";
 
 /// Strip environment markers from raw output, returning just the command output.
+/// The marker format is __GOOSE_ENV_<uuid>__ so we find the first occurrence.
 fn strip_env_markers(raw: &str) -> String {
     // The format is: <command output>MARKER<cwd>MARKER<env>MARKER<exit_code>
     // We want just the command output (everything before the first marker)
-    raw.split(ENV_MARKER)
-        .next()
-        .unwrap_or(raw)
-        .trim_end()
-        .to_string()
+    if let Some(pos) = raw.find(ENV_MARKER_PREFIX) {
+        raw.get(..pos).unwrap_or(raw).trim_end().to_string()
+    } else {
+        raw.trim_end().to_string()
+    }
 }
 
 /// A managed process with its output buffer and metadata.
@@ -98,7 +99,7 @@ impl ProcessManager {
 
         // Build the wrapped command with env setup and capture
         let env_setup = env_state.setup_commands();
-        let (wrapped, _, delimiter) = EnvState::wrap_command(command);
+        let (wrapped, delimiter) = EnvState::wrap_command(command);
         let full_command = format!("{}{}", env_setup, wrapped);
 
         let cwd = env_state.cwd.clone();
@@ -164,7 +165,7 @@ impl ProcessManager {
 
                     let mut env_state = self.env_state.lock().unwrap();
                     let (actual_output, new_cwd, changed, unset, parsed_exit) =
-                        env_state.parse_wrapped_output(&raw_output, delimiter);
+                        env_state.parse_wrapped_output(&raw_output, &delimiter)?;
                     env_state.apply_changes(new_cwd, changed, unset);
                     drop(env_state);
 
@@ -512,7 +513,7 @@ mod tests {
                 // Get output - should NOT contain markers
                 let output = manager.output(&id.0, OutputQuery::default()).unwrap();
                 assert!(
-                    !output.contains(ENV_MARKER),
+                    !output.contains(ENV_MARKER_PREFIX),
                     "Output should not contain markers: {}",
                     output
                 );
@@ -528,7 +529,7 @@ mod tests {
             SpawnResult::Completed { output, .. } => {
                 // If it completed, output should still be clean
                 assert!(
-                    !output.contains(ENV_MARKER),
+                    !output.contains(ENV_MARKER_PREFIX),
                     "Output should not contain markers"
                 );
             }
@@ -537,10 +538,11 @@ mod tests {
 
     #[test]
     fn test_strip_env_markers() {
-        let raw = "hello world\n__GOOSE_ENV_MARKER__\n/tmp\n__GOOSE_ENV_MARKER__\nPATH=/bin\n__GOOSE_ENV_MARKER__\n0";
+        // Test with UUID-style marker
+        let raw = "hello world\n__GOOSE_ENV_abc123def456__\n/tmp\n__GOOSE_ENV_abc123def456__\nPATH=/bin\n__GOOSE_ENV_abc123def456__\n0";
         let clean = strip_env_markers(raw);
         assert_eq!(clean, "hello world");
-        assert!(!clean.contains("__GOOSE_ENV_MARKER__"));
+        assert!(!clean.contains("__GOOSE_ENV_"));
         assert!(!clean.contains("/tmp"));
         assert!(!clean.contains("PATH="));
     }
diff --git a/crates/goose-mcp/src/develop/process/shell.rs b/crates/goose-mcp/src/develop/process/shell.rs
index cacafbc822..5b8e9169c9 100644
--- a/crates/goose-mcp/src/develop/process/shell.rs
+++ b/crates/goose-mcp/src/develop/process/shell.rs
@@ -2,8 +2,47 @@
 
 use std::collections::{HashMap, HashSet};
 use std::env;
+use std::fmt;
 use std::path::PathBuf;
 
+use uuid::Uuid;
+
+/// Error type for shell output parsing failures.
+#[derive(Debug, Clone)]
+pub enum ParseError {
+    /// The delimiter appeared an unexpected number of times in the output.
+    /// This likely means the command output contained the delimiter pattern.
+    DelimiterMismatch { expected: usize, found: usize },
+}
+
+impl fmt::Display for ParseError {
+    fn fmt(&self, f: &mut fmt::Formatter<'_>) -> fmt::Result {
+        match self {
+            ParseError::DelimiterMismatch { expected, found } => {
+                write!(
+                    f,
+                    "Command output parsing failed: expected {} delimiter occurrences but found {}. \
+                    This is unexpected since the delimiter uses a UUID. \
+                    The command output may be corrupted.",
+                    expected, found
+                )
+            }
+        }
+    }
+}
+
+impl std::error::Error for ParseError {}
+
+/// Result of parsing wrapped shell output.
+/// Contains: (command_output, new_cwd, changed_env_vars, unset_env_vars, exit_code)
+pub type ParsedOutput = (
+    String,
+    Option<PathBuf>,
+    HashMap<String, String>,
+    HashSet<String>,
+    i32,
+);
+
 /// Environment variables to ignore when tracking changes.
 /// These change on every command or are internal shell state.
 const ENV_IGNORELIST: &[&str] = &[
@@ -100,9 +139,11 @@ impl EnvState {
     }
 
     /// Generate shell commands to capture environment before/after user command.
-    /// Returns (wrapper_prefix, wrapper_suffix, delimiter).
-    pub fn wrap_command(command: &str) -> (String, String, &'static str) {
-        let delimiter = "__GOOSE_ENV_MARKER__";
+    /// Returns (wrapped_command, delimiter).
+    ///
+    /// The delimiter is a UUID to avoid collisions with command output.
+    pub fn wrap_command(command: &str) -> (String, String) {
+        let delimiter = format!("__GOOSE_ENV_{}__", Uuid::new_v4().as_simple());
 
         let prefix = r#"__goose_env_before=$(env | sort)
 __goose_cwd_before=$(pwd)
@@ -122,7 +163,7 @@ echo $__goose_exit_code"#,
         );
 
         let wrapped = format!("{}{}{}", prefix, command, suffix);
-        (wrapped, String::new(), delimiter)
+        (wrapped, delimiter)
     }
 
     /// Parse the output from a wrapped command, extracting:
@@ -130,28 +171,30 @@ echo $__goose_exit_code"#,
     /// - New cwd
     /// - Environment changes
     /// - Exit code
+    ///
+    /// Returns Err if the delimiter appears an unexpected number of times (should be exactly 3).
     pub fn parse_wrapped_output(
         &self,
         raw_output: &str,
         delimiter: &str,
-    ) -> (
-        String,
-        Option<PathBuf>,
-        HashMap<String, String>,
-        HashSet<String>,
-        i32,
-    ) {
+    ) -> Result<ParsedOutput, ParseError> {
+        let delimiter_count = raw_output.matches(delimiter).count();
+
+        if delimiter_count != 3 {
+            return Err(ParseError::DelimiterMismatch {
+                expected: 3,
+                found: delimiter_count,
+            });
+        }
+
         let parts: Vec<&str> = raw_output.split(delimiter).collect();
 
-        if parts.len() < 4 {
-            // Parsing failed, return raw output with no state changes
-            return (
-                raw_output.to_string(),
-                None,
-                HashMap::new(),
-                HashSet::new(),
-                1,
-            );
+        // With exactly 3 delimiters, we should have exactly 4 parts
+        if parts.len() != 4 {
+            return Err(ParseError::DelimiterMismatch {
+                expected: 3,
+                found: delimiter_count,
+            });
         }
 
         let command_output = parts[0].trim_end().to_string();
@@ -205,7 +248,7 @@ echo $__goose_exit_code"#,
             }
         }
 
-        (command_output, new_cwd_path, changed, unset, exit_code)
+        Ok((command_output, new_cwd_path, changed, unset, exit_code))
     }
 
     /// Apply changes from a command execution.
@@ -294,4 +337,81 @@ mod tests {
         let setup = state.setup_commands();
         assert!(setup.contains("export QUOTED='it'\\''s a test'"));
     }
+
+    #[test]
+    fn test_wrap_command_generates_uuid_delimiter() {
+        let (wrapped1, delim1) = EnvState::wrap_command("echo hello");
+        let (_wrapped2, delim2) = EnvState::wrap_command("echo hello");
+
+        // Each call should generate a unique delimiter
+        assert_ne!(delim1, delim2);
+
+        // Delimiter should have the expected format
+        assert!(delim1.starts_with("__GOOSE_ENV_"));
+        assert!(delim1.ends_with("__"));
+
+        // Wrapped command should contain the delimiter
+        assert!(wrapped1.contains(&delim1));
+    }
+
+    #[test]
+    fn test_parse_wrapped_output_success() {
+        let state = EnvState::new();
+        let delimiter = "__GOOSE_ENV_test123__";
+        let raw_output = format!(
+            "hello world\n{}\n/tmp\n{}\nFOO=bar\n{}\n0",
+            delimiter, delimiter, delimiter
+        );
+
+        let result = state.parse_wrapped_output(&raw_output, delimiter);
+        assert!(result.is_ok());
+
+        let (output, new_cwd, _changed, _unset, exit_code) = result.unwrap();
+        assert_eq!(output, "hello world");
+        assert_eq!(new_cwd, Some(PathBuf::from("/tmp")));
+        assert_eq!(exit_code, 0);
+    }
+
+    #[test]
+    fn test_parse_wrapped_output_delimiter_mismatch() {
+        let state = EnvState::new();
+        let delimiter = "__GOOSE_ENV_test123__";
+
+        // Output with only 2 delimiters (missing one)
+        let raw_output = format!("hello world\n{}\n/tmp\n{}\n0", delimiter, delimiter);
+
+        let result = state.parse_wrapped_output(&raw_output, delimiter);
+        assert!(result.is_err());
+
+        match result {
+            Err(ParseError::DelimiterMismatch { expected, found }) => {
+                assert_eq!(expected, 3);
+                assert_eq!(found, 2);
+            }
+            Ok(_) => panic!("Expected delimiter mismatch error"),
+        }
+    }
+
+    #[test]
+    fn test_parse_wrapped_output_extra_delimiter_in_output() {
+        let state = EnvState::new();
+        let delimiter = "__GOOSE_ENV_test123__";
+
+        // Output where the command itself printed the delimiter (4 total)
+        let raw_output = format!(
+            "hello {} world\n{}\n/tmp\n{}\nFOO=bar\n{}\n0",
+            delimiter, delimiter, delimiter, delimiter
+        );
+
+        let result = state.parse_wrapped_output(&raw_output, delimiter);
+        assert!(result.is_err());
+
+        match result {
+            Err(ParseError::DelimiterMismatch { expected, found }) => {
+                assert_eq!(expected, 3);
+                assert_eq!(found, 4);
+            }
+            Ok(_) => panic!("Expected delimiter mismatch error"),
+        }
+    }
 }