diff --git a/macos/GhosttyUITests/GhosttyCommandPaletteTests.swift b/macos/GhosttyUITests/GhosttyCommandPaletteTests.swift
new file mode 100644
index 000000000..428682b4f
--- /dev/null
+++ b/macos/GhosttyUITests/GhosttyCommandPaletteTests.swift
@@ -0,0 +1,81 @@
+//
+//  GhosttyCommandPaletteTests.swift
+//  Ghostty
+//
+//  Created by Lukas on 19.03.2026.
+//
+
+import XCTest
+
+final class GhosttyCommandPaletteTests: GhosttyCustomConfigCase {
+    override static var runsForEachTargetApplicationUIConfiguration: Bool { false }
+    @MainActor func testDismissingCommandPalette() async throws {
+        let app = try ghosttyApplication()
+        app.activate()
+
+        XCTAssertTrue(app.windows.firstMatch.waitForExistence(timeout: 5), "New window should appear")
+
+        app.menuItems["Command Palette"].firstMatch.click()
+
+        let clearScreenButton = app.buttons
+            .containing(NSPredicate(format: "label CONTAINS[c] 'Clear Screen'"))
+            .firstMatch
+
+        XCTAssertTrue(clearScreenButton.waitForExistence(timeout: 5), "Command Palette should appear")
+
+        clearScreenButton.coordinate(withNormalizedOffset: .zero)
+            .withOffset(.init(dx: -30, dy: 0))
+            .click()
+
+        XCTAssertTrue(clearScreenButton.waitForNonExistence(timeout: 5), "Command Palette should disappear after clicking outside")
+
+        app.typeKey("p", modifierFlags: [.command, .shift])
+
+        XCTAssertTrue(clearScreenButton.waitForExistence(timeout: 5), "Command Palette should appear")
+
+        app.typeKey(.escape, modifierFlags: [])
+
+        XCTAssertTrue(clearScreenButton.waitForNonExistence(timeout: 5), "Command Palette should disappear after typing escape")
+
+        app.typeKey("p", modifierFlags: [.command, .shift])
+
+        XCTAssertTrue(clearScreenButton.waitForExistence(timeout: 5), "Command Palette should appear")
+
+        app.typeKey(.enter, modifierFlags: [])
+
+        XCTAssertTrue(clearScreenButton.waitForNonExistence(timeout: 5), "Command Palette should disappear after submitting query")
+
+        app.typeKey("p", modifierFlags: [.command, .shift])
+
+        XCTAssertTrue(clearScreenButton.waitForExistence(timeout: 5), "Command Palette should appear")
+
+        app.typeText("Clear Screen")
+        app.typeKey(.enter, modifierFlags: [])
+
+        XCTAssertTrue(clearScreenButton.waitForNonExistence(timeout: 5), "Command Palette should disappear after selecting a command by keyboard")
+
+        app.typeKey("p", modifierFlags: [.command, .shift])
+        app.typeKey(.delete, modifierFlags: [])
+
+        XCTAssertTrue(clearScreenButton.waitForExistence(timeout: 5), "Command Palette should appear")
+        clearScreenButton.click()
+
+        XCTAssertTrue(clearScreenButton.waitForNonExistence(timeout: 5), "Command Palette should disappear after selecting a command by mouse")
+    }
+
+    @MainActor func testSelectCommandWithMouse() async throws {
+        let app = try ghosttyApplication()
+        app.activate()
+
+        XCTAssertTrue(app.windows.firstMatch.waitForExistence(timeout: 5), "New window should appear")
+
+        app.menuItems["Command Palette"].firstMatch.click()
+
+        app.buttons
+            .containing(NSPredicate(format: "label CONTAINS[c] 'Close All Windows'"))
+            .firstMatch.click()
+
+        XCTAssertTrue(app.windows.firstMatch.waitForNonExistence(timeout: 2), "All windows should be closed")
+    }
+}
+
diff --git a/macos/GhosttyUITests/GhosttyMouseStateTests.swift b/macos/GhosttyUITests/GhosttyMouseStateTests.swift
new file mode 100644
index 000000000..9bb270b8e
--- /dev/null
+++ b/macos/GhosttyUITests/GhosttyMouseStateTests.swift
@@ -0,0 +1,53 @@
+//
+//  GhosttyMouseStateTests.swift
+//  Ghostty
+//
+//  Created by Lukas on 19.03.2026.
+//
+
+import XCTest
+
+final class GhosttyMouseStateTests: GhosttyCustomConfigCase {
+    override static var runsForEachTargetApplicationUIConfiguration: Bool { false }
+
+    // https://github.com/ghostty-org/ghostty/pull/11276
+    @MainActor func testSelectionFocusChange() async throws {
+        let app = XCUIApplication()
+        app.activate()
+        // Write dummy text to a temp file, cat it into the terminal, then clean up
+        let lines = (1...200).map { "Line \($0): The quick brown fox jumps over the lazy dog. Lorem ipsum dolor sit amet, consectetur adipiscing elit." }
+        let text = lines.joined(separator: "\n") + "\n"
+        let tmpFile = NSTemporaryDirectory() + "ghostty_test_dummy.txt"
+        try text.write(toFile: tmpFile, atomically: true, encoding: .utf8)
+        defer { try? FileManager.default.removeItem(atPath: tmpFile) }
+
+        app.typeText("cat \(tmpFile)\r")
+        app.menuItems["Command Palette"].firstMatch.click()
+
+        let finder = XCUIApplication(bundleIdentifier: "com.apple.finder")
+        finder.activate()
+
+        app.activate()
+
+        app.buttons
+            .containing(NSPredicate(format: "label CONTAINS[c] 'Clear Screen'"))
+            .firstMatch
+            .click()
+        let surface = app.groups["Terminal pane"]
+        surface
+            .coordinate(withNormalizedOffset: .zero)
+            .withOffset(.init(dx: 20, dy: 10))
+            .click()
+
+        surface
+            .coordinate(withNormalizedOffset: .zero)
+            .withOffset(.init(dx: 20, dy: surface.frame.height * 0.5))
+            .hover()
+
+        NSPasteboard.general.clearContents()
+        app.typeKey("c", modifierFlags: .command)
+
+        XCTAssertEqual(NSPasteboard.general.string(forType: .string), nil, "Moving mouse shouldn't select any texts")
+    }
+}
+
diff --git a/macos/Sources/Ghostty/Surface View/SurfaceView_AppKit.swift b/macos/Sources/Ghostty/Surface View/SurfaceView_AppKit.swift
index 3129acfba..2289a3bdd 100644
--- a/macos/Sources/Ghostty/Surface View/SurfaceView_AppKit.swift	
+++ b/macos/Sources/Ghostty/Surface View/SurfaceView_AppKit.swift	
@@ -652,6 +652,14 @@ extension Ghostty {
         }
 
         private func localEventLeftMouseDown(_ event: NSEvent) -> NSEvent? {
+            let isCommandPaletteVisible = (event.window?.windowController as? BaseTerminalController)?
+                .commandPaletteIsShowing == true
+            guard !isCommandPaletteVisible else {
+                // We don't want to process events that
+                // are supposed to be handled by CommandPaletteView
+                return event
+            }
+
             // We only want to process events that are on this window.
             guard let window,
                   event.window != nil,