diff --git a/packages/tui/CHANGELOG.md b/packages/tui/CHANGELOG.md
index 9880f38c..5b6c2687 100644
--- a/packages/tui/CHANGELOG.md
+++ b/packages/tui/CHANGELOG.md
@@ -2,6 +2,10 @@
 
 ## [Unreleased]
 
+### Fixed
+
+- Fixed autocomplete selection ignoring typed text: highlight now follows the first prefix match as the user types, and exact matches are always selected on Enter ([#1931](https://github.com/badlogic/pi-mono/pull/1931) by [@aliou](https://github.com/aliou))
+
 ## [0.57.0] - 2026-03-07
 
 ### Added
diff --git a/packages/tui/src/components/editor.ts b/packages/tui/src/components/editor.ts
index 6aea0bfe..e9248f2f 100644
--- a/packages/tui/src/components/editor.ts
+++ b/packages/tui/src/components/editor.ts
@@ -1828,6 +1828,35 @@ export class Editor implements Component, Focusable {
 	}
 
 	// Autocomplete methods
+	/**
+	 * Find the best autocomplete item index for the given prefix.
+	 * Returns -1 if no match is found.
+	 *
+	 * Match priority:
+	 * 1. Exact match (prefix === item.value) -> always selected
+	 * 2. Prefix match -> first item whose value starts with prefix
+	 * 3. No match -> -1 (keep default highlight)
+	 *
+	 * Matching is case-sensitive and checks item.value only.
+	 */
+	private getBestAutocompleteMatchIndex(items: Array<{ value: string; label: string }>, prefix: string): number {
+		if (!prefix) return -1;
+
+		let firstPrefixIndex = -1;
+
+		for (let i = 0; i < items.length; i++) {
+			const value = items[i]!.value;
+			if (value === prefix) {
+				return i; // Exact match always wins
+			}
+			if (firstPrefixIndex === -1 && value.startsWith(prefix)) {
+				firstPrefixIndex = i;
+			}
+		}
+
+		return firstPrefixIndex;
+	}
+
 	private tryTriggerAutocomplete(explicitTab: boolean = false): void {
 		if (!this.autocompleteProvider) return;
 
@@ -1851,6 +1880,13 @@ export class Editor implements Component, Focusable {
 		if (suggestions && suggestions.items.length > 0) {
 			this.autocompletePrefix = suggestions.prefix;
 			this.autocompleteList = new SelectList(suggestions.items, this.autocompleteMaxVisible, this.theme.selectList);
+
+			// If typed prefix exactly matches one of the suggestions, select that item
+			const bestMatchIndex = this.getBestAutocompleteMatchIndex(suggestions.items, suggestions.prefix);
+			if (bestMatchIndex >= 0) {
+				this.autocompleteList.setSelectedIndex(bestMatchIndex);
+			}
+
 			this.autocompleteState = "regular";
 		} else {
 			this.cancelAutocomplete();
@@ -1920,6 +1956,13 @@ https://github.com/EsotericSoftware/spine-runtimes/actions/runs/19536643416/job/
 
 			this.autocompletePrefix = suggestions.prefix;
 			this.autocompleteList = new SelectList(suggestions.items, this.autocompleteMaxVisible, this.theme.selectList);
+
+			// If typed prefix exactly matches one of the suggestions, select that item
+			const bestMatchIndex = this.getBestAutocompleteMatchIndex(suggestions.items, suggestions.prefix);
+			if (bestMatchIndex >= 0) {
+				this.autocompleteList.setSelectedIndex(bestMatchIndex);
+			}
+
 			this.autocompleteState = "force";
 		} else {
 			this.cancelAutocomplete();
@@ -1953,6 +1996,12 @@ https://github.com/EsotericSoftware/spine-runtimes/actions/runs/19536643416/job/
 			this.autocompletePrefix = suggestions.prefix;
 			// Always create new SelectList to ensure update
 			this.autocompleteList = new SelectList(suggestions.items, this.autocompleteMaxVisible, this.theme.selectList);
+
+			// If typed prefix exactly matches one of the suggestions, select that item
+			const bestMatchIndex = this.getBestAutocompleteMatchIndex(suggestions.items, suggestions.prefix);
+			if (bestMatchIndex >= 0) {
+				this.autocompleteList.setSelectedIndex(bestMatchIndex);
+			}
 		} else {
 			this.cancelAutocomplete();
 		}
diff --git a/packages/tui/test/editor.test.ts b/packages/tui/test/editor.test.ts
index 1d6e1261..e26349a8 100644
--- a/packages/tui/test/editor.test.ts
+++ b/packages/tui/test/editor.test.ts
@@ -1994,6 +1994,266 @@ describe("Editor component", () => {
 			assert.strictEqual(editor.getText(), "");
 			assert.strictEqual(editor.isShowingAutocomplete(), false);
 		});
+
+		it("applies exact typed slash-argument value on Enter even when first item is highlighted", () => {
+			const editor = new Editor(createTestTUI(), defaultEditorTheme);
+
+			// Mock provider for /argtest command with argument completions
+			const mockProvider: AutocompleteProvider = {
+				getSuggestions: (lines, _cursorLine, cursorCol) => {
+					const text = lines[0] || "";
+					const beforeCursor = text.slice(0, cursorCol);
+
+					// Check if we're in argument completion context: "/argtest <prefix>"
+					const argtestMatch = beforeCursor.match(/^\/argtest\s+(\S+)$/);
+					if (argtestMatch) {
+						const argumentText = argtestMatch[1]!;
+						const allArguments = [
+							{ value: "one", label: "one" },
+							{ value: "two", label: "two" },
+							{ value: "three", label: "three" },
+						];
+						// Return all arguments that start with the typed prefix
+						const filtered = allArguments.filter((arg) => arg.value.startsWith(argumentText));
+						if (filtered.length > 0) {
+							return { items: filtered, prefix: argumentText };
+						}
+					}
+					return null;
+				},
+				applyCompletion,
+			};
+
+			editor.setAutocompleteProvider(mockProvider);
+
+			// Type "/argtest two"
+			editor.handleInput("/");
+			editor.handleInput("a");
+			editor.handleInput("r");
+			editor.handleInput("g");
+			editor.handleInput("t");
+			editor.handleInput("e");
+			editor.handleInput("s");
+			editor.handleInput("t");
+			editor.handleInput(" ");
+			editor.handleInput("t");
+			editor.handleInput("w");
+			editor.handleInput("o");
+
+			assert.strictEqual(editor.getText(), "/argtest two");
+			assert.strictEqual(editor.isShowingAutocomplete(), true);
+
+			// Press Enter - should apply the exact typed value "two", not the first item
+			editor.handleInput("\r");
+
+			// The exact typed value "two" should be retained
+			assert.strictEqual(editor.getText(), "/argtest two");
+		});
+
+		it("selects first prefix match on Enter when typed arg is not exact match", () => {
+			const editor = new Editor(createTestTUI(), defaultEditorTheme);
+
+			// Mock provider for /argtest command with argument completions
+			const mockProvider: AutocompleteProvider = {
+				getSuggestions: (lines, _cursorLine, cursorCol) => {
+					const text = lines[0] || "";
+					const beforeCursor = text.slice(0, cursorCol);
+
+					// Check if we're in argument completion context
+					const argtestMatch = beforeCursor.match(/^\/argtest\s+(\S+)$/);
+					if (argtestMatch) {
+						const argumentText = argtestMatch[1]!;
+						const allArguments = [
+							{ value: "two", label: "two" }, // First item
+							{ value: "three", label: "three" }, // Second item
+							{ value: "twelve", label: "twelve" }, // Third item
+						];
+						// Return all items that start with the typed prefix
+						const filtered = allArguments.filter((arg) => arg.value.startsWith(argumentText));
+						if (filtered.length > 0) {
+							return { items: filtered, prefix: argumentText };
+						}
+					}
+					return null;
+				},
+				applyCompletion,
+			};
+
+			editor.setAutocompleteProvider(mockProvider);
+
+			// Type "/argtest t" - filtered to [two, three, twelve], prefix "t" matches "two" first
+			editor.handleInput("/");
+			editor.handleInput("a");
+			editor.handleInput("r");
+			editor.handleInput("g");
+			editor.handleInput("t");
+			editor.handleInput("e");
+			editor.handleInput("s");
+			editor.handleInput("t");
+			editor.handleInput(" ");
+			editor.handleInput("t");
+
+			assert.strictEqual(editor.isShowingAutocomplete(), true);
+
+			// Press Enter - "t" prefix matches "two" (first in list), so "two" is applied
+			editor.handleInput("\r");
+			assert.strictEqual(editor.getText(), "/argtest two");
+		});
+
+		it("highlights unique prefix match as user types (before full exact match)", () => {
+			const editor = new Editor(createTestTUI(), defaultEditorTheme);
+
+			// Mock provider that returns all items unfiltered (like real extensions do)
+			const mockProvider: AutocompleteProvider = {
+				getSuggestions: (lines, _cursorLine, cursorCol) => {
+					const text = lines[0] || "";
+					const beforeCursor = text.slice(0, cursorCol);
+
+					const argtestMatch = beforeCursor.match(/^\/argtest\s+(\S+)$/);
+					if (argtestMatch) {
+						const argumentText = argtestMatch[1]!;
+						// Return all items - provider does not filter
+						const allArguments = [
+							{ value: "one", label: "one" },
+							{ value: "two", label: "two" },
+							{ value: "three", label: "three" },
+						];
+						return { items: allArguments, prefix: argumentText };
+					}
+					return null;
+				},
+				applyCompletion,
+			};
+
+			editor.setAutocompleteProvider(mockProvider);
+
+			// Type "/argtest tw" - "tw" is a prefix of only "two"
+			editor.handleInput("/");
+			editor.handleInput("a");
+			editor.handleInput("r");
+			editor.handleInput("g");
+			editor.handleInput("t");
+			editor.handleInput("e");
+			editor.handleInput("s");
+			editor.handleInput("t");
+			editor.handleInput(" ");
+			editor.handleInput("t");
+			editor.handleInput("w");
+
+			assert.strictEqual(editor.getText(), "/argtest tw");
+			assert.strictEqual(editor.isShowingAutocomplete(), true);
+
+			// Press Enter - "tw" uniquely matches "two", so "two" should be applied
+			editor.handleInput("\r");
+			assert.strictEqual(editor.getText(), "/argtest two");
+		});
+
+		it("selects first prefix match when multiple items match", () => {
+			const editor = new Editor(createTestTUI(), defaultEditorTheme);
+
+			// Mock provider that returns all items unfiltered
+			const mockProvider: AutocompleteProvider = {
+				getSuggestions: (lines, _cursorLine, cursorCol) => {
+					const text = lines[0] || "";
+					const beforeCursor = text.slice(0, cursorCol);
+
+					const argtestMatch = beforeCursor.match(/^\/argtest\s+(\S+)$/);
+					if (argtestMatch) {
+						const argumentText = argtestMatch[1]!;
+						const allArguments = [
+							{ value: "one", label: "one" },
+							{ value: "two", label: "two" },
+							{ value: "three", label: "three" },
+						];
+						return { items: allArguments, prefix: argumentText };
+					}
+					return null;
+				},
+				applyCompletion,
+			};
+
+			editor.setAutocompleteProvider(mockProvider);
+
+			// Type "/argtest t" - "t" is a prefix of both "two" and "three"
+			editor.handleInput("/");
+			editor.handleInput("a");
+			editor.handleInput("r");
+			editor.handleInput("g");
+			editor.handleInput("t");
+			editor.handleInput("e");
+			editor.handleInput("s");
+			editor.handleInput("t");
+			editor.handleInput(" ");
+			editor.handleInput("t");
+
+			assert.strictEqual(editor.isShowingAutocomplete(), true);
+
+			// Press Enter - "t" matches "two" first, so "two" is selected
+			editor.handleInput("\r");
+			assert.strictEqual(editor.getText(), "/argtest two");
+		});
+
+		it("works for built-in-style command argument completion path (model-like)", () => {
+			const editor = new Editor(createTestTUI(), defaultEditorTheme);
+
+			// Mock provider for /model command with model completions
+			const mockProvider: AutocompleteProvider = {
+				getSuggestions: (lines, _cursorLine, cursorCol) => {
+					const text = lines[0] || "";
+					const beforeCursor = text.slice(0, cursorCol);
+
+					// Check if we're in /model argument completion context
+					// Use [^ ]+ to match any non-space characters (including hyphens)
+					const modelMatch = beforeCursor.match(/^\/model\s+(\S+)$/);
+					if (modelMatch) {
+						const modelText = modelMatch[1]!;
+						const allModels = [
+							{ value: "gpt-4o", label: "gpt-4o" },
+							{ value: "gpt-4o-mini", label: "gpt-4o-mini" },
+							{ value: "claude-sonnet", label: "claude-sonnet" },
+						];
+						// Return all models that start with the typed prefix
+						const filtered = allModels.filter((m) => m.value.startsWith(modelText));
+						if (filtered.length > 0) {
+							return { items: filtered, prefix: modelText };
+						}
+					}
+					return null;
+				},
+				applyCompletion,
+			};
+
+			editor.setAutocompleteProvider(mockProvider);
+
+			// Type "/model gpt-4o-mini" - exact match for second item in list
+			editor.handleInput("/");
+			editor.handleInput("m");
+			editor.handleInput("o");
+			editor.handleInput("d");
+			editor.handleInput("e");
+			editor.handleInput("l");
+			editor.handleInput(" ");
+			editor.handleInput("g");
+			editor.handleInput("p");
+			editor.handleInput("t");
+			editor.handleInput("-");
+			editor.handleInput("4");
+			editor.handleInput("o");
+			editor.handleInput("-");
+			editor.handleInput("m");
+			editor.handleInput("i");
+			editor.handleInput("n");
+			editor.handleInput("i");
+
+			assert.strictEqual(editor.getText(), "/model gpt-4o-mini");
+			assert.strictEqual(editor.isShowingAutocomplete(), true);
+
+			// Press Enter - should retain exact typed value, not apply first highlighted item
+			editor.handleInput("\r");
+
+			// The exact typed value should be retained
+			assert.strictEqual(editor.getText(), "/model gpt-4o-mini");
+		});
 	});
 
 	describe("Character jump (Ctrl+])", () => {