diff --git a/core/llm/llms/OpenRouter.ts b/core/llm/llms/OpenRouter.ts
index b2772824583..0c389f7bd70 100644
--- a/core/llm/llms/OpenRouter.ts
+++ b/core/llm/llms/OpenRouter.ts
@@ -1,5 +1,7 @@
 import { ChatCompletionCreateParams } from "openai/resources/index";
 
+import { OPENROUTER_HEADERS } from "@continuedev/openai-adapters";
+
 import { LLMOptions } from "../../index.js";
 import { osModelsEditPrompt } from "../templates/edit.js";
 
@@ -18,6 +20,19 @@ class OpenRouter extends OpenAI {
     useLegacyCompletionsEndpoint: false,
   };
 
+  constructor(options: LLMOptions) {
+    super({
+      ...options,
+      requestOptions: {
+        ...options.requestOptions,
+        headers: {
+          ...OPENROUTER_HEADERS,
+          ...options.requestOptions?.headers,
+        },
+      },
+    });
+  }
+
   private isAnthropicModel(model?: string): boolean {
     if (!model) return false;
     const modelLower = model.toLowerCase();
diff --git a/extensions/vscode/src/VsCodeIde.ts b/extensions/vscode/src/VsCodeIde.ts
index 9e5853afa3b..c584d534c64 100644
--- a/extensions/vscode/src/VsCodeIde.ts
+++ b/extensions/vscode/src/VsCodeIde.ts
@@ -15,6 +15,7 @@ import {
 import { Repository } from "./otherExtensions/git";
 import { SecretStorage } from "./stubs/SecretStorage";
 import { VsCodeIdeUtils } from "./util/ideUtils";
+import { runCommandInTerminal } from "./util/runCommandInTerminal";
 import { getExtensionVersion, isExtensionPrerelease } from "./util/util";
 import { getExtensionUri, openEditorAndRevealRange } from "./util/vscode";
 import { VsCodeWebviewProtocol } from "./webviewProtocol";
@@ -337,22 +338,7 @@ class VsCodeIde implements IDE {
     command: string,
     options: TerminalOptions = { reuseTerminal: true },
   ): Promise<void> {
-    let terminal: vscode.Terminal | undefined;
-    if (vscode.window.terminals.length && options.reuseTerminal) {
-      if (options.terminalName) {
-        terminal = vscode.window.terminals.find(
-          (t) => t?.name === options.terminalName,
-        );
-      } else {
-        terminal = vscode.window.activeTerminal ?? vscode.window.terminals[0];
-      }
-    }
-
-    if (!terminal) {
-      terminal = vscode.window.createTerminal(options?.terminalName);
-    }
-    terminal.show();
-    terminal.sendText(command, false);
+    await runCommandInTerminal(command, options);
   }
 
   async saveFile(fileUri: string): Promise<void> {
diff --git a/extensions/vscode/src/util/runCommandInTerminal.ts b/extensions/vscode/src/util/runCommandInTerminal.ts
new file mode 100644
index 00000000000..79499dc0edc
--- /dev/null
+++ b/extensions/vscode/src/util/runCommandInTerminal.ts
@@ -0,0 +1,118 @@
+import type { TerminalOptions } from "core";
+import * as vscode from "vscode";
+
+const REMOTE_TERMINAL_TIMEOUT_MS = 5000;
+
+const terminalCacheByName = new Map<string, vscode.Terminal>();
+
+function getReusableTerminal(
+  options: TerminalOptions,
+): vscode.Terminal | undefined {
+  if (!vscode.window.terminals.length || !options.reuseTerminal) {
+    return undefined;
+  }
+
+  if (options.terminalName) {
+    const cachedTerminal = terminalCacheByName.get(options.terminalName);
+    if (cachedTerminal && vscode.window.terminals.includes(cachedTerminal)) {
+      return cachedTerminal;
+    }
+
+    terminalCacheByName.delete(options.terminalName);
+    return vscode.window.terminals.find(
+      (terminal) => terminal?.name === options.terminalName,
+    );
+  }
+
+  return vscode.window.activeTerminal ?? vscode.window.terminals[0];
+}
+
+async function createTerminal(
+  options: TerminalOptions,
+): Promise<vscode.Terminal> {
+  if (!vscode.env.remoteName) {
+    return vscode.window.createTerminal(options.terminalName);
+  }
+
+  const existingTerminals = new Set(vscode.window.terminals);
+
+  return await new Promise<vscode.Terminal>((resolve, reject) => {
+    let settled = false;
+    let timeoutHandle: ReturnType<typeof setTimeout> | undefined;
+
+    const cleanup = () => {
+      terminalListener.dispose();
+      if (timeoutHandle) {
+        clearTimeout(timeoutHandle);
+      }
+    };
+
+    const resolveIfNewTerminalExists = () => {
+      const newTerminal = vscode.window.terminals.find(
+        (terminal) => !existingTerminals.has(terminal),
+      );
+      if (!newTerminal) {
+        return false;
+      }
+
+      settled = true;
+      cleanup();
+      resolve(newTerminal);
+      return true;
+    };
+
+    const terminalListener = vscode.window.onDidOpenTerminal((terminal) => {
+      if (settled || existingTerminals.has(terminal)) {
+        return;
+      }
+
+      settled = true;
+      cleanup();
+      resolve(terminal);
+    });
+
+    timeoutHandle = setTimeout(() => {
+      if (settled) {
+        return;
+      }
+
+      settled = true;
+      cleanup();
+      reject(new Error("Timed out waiting for remote terminal to open"));
+    }, REMOTE_TERMINAL_TIMEOUT_MS);
+
+    if (resolveIfNewTerminalExists()) {
+      return;
+    }
+
+    void vscode.commands.executeCommand("workbench.action.terminal.new").then(
+      () => {
+        resolveIfNewTerminalExists();
+      },
+      (error: unknown) => {
+        if (settled) {
+          return;
+        }
+
+        settled = true;
+        cleanup();
+        reject(error);
+      },
+    );
+  });
+}
+
+export async function runCommandInTerminal(
+  command: string,
+  options: TerminalOptions = { reuseTerminal: true },
+): Promise<void> {
+  const terminal =
+    getReusableTerminal(options) ?? (await createTerminal(options));
+
+  if (options.terminalName) {
+    terminalCacheByName.set(options.terminalName, terminal);
+  }
+
+  terminal.show();
+  terminal.sendText(command, true);
+}
diff --git a/extensions/vscode/src/util/runCommandInTerminal.vitest.ts b/extensions/vscode/src/util/runCommandInTerminal.vitest.ts
new file mode 100644
index 00000000000..b2848965984
--- /dev/null
+++ b/extensions/vscode/src/util/runCommandInTerminal.vitest.ts
@@ -0,0 +1,159 @@
+import { beforeEach, describe, expect, it, vi } from "vitest";
+
+type MockTerminal = {
+  name: string;
+  show: ReturnType<typeof vi.fn>;
+  sendText: ReturnType<typeof vi.fn>;
+};
+
+const terminalListeners = new Set<(terminal: MockTerminal) => void>();
+const terminals: MockTerminal[] = [];
+
+const windowMock = {
+  terminals,
+  activeTerminal: undefined as MockTerminal | undefined,
+  createTerminal: vi.fn<(name?: string) => MockTerminal>(),
+  onDidOpenTerminal: vi.fn((listener: (terminal: MockTerminal) => void) => {
+    terminalListeners.add(listener);
+    return {
+      dispose: vi.fn(() => terminalListeners.delete(listener)),
+    };
+  }),
+};
+
+const commandsMock = {
+  executeCommand: vi.fn<(command: string) => Promise<void>>(),
+};
+
+const envMock = {
+  remoteName: undefined as string | undefined,
+};
+
+vi.mock("vscode", () => ({
+  window: windowMock,
+  commands: commandsMock,
+  env: envMock,
+}));
+
+function createTerminal(name: string): MockTerminal {
+  return {
+    name,
+    show: vi.fn(),
+    sendText: vi.fn(),
+  };
+}
+
+describe("runCommandInTerminal", () => {
+  beforeEach(() => {
+    vi.resetModules();
+    vi.clearAllMocks();
+
+    terminals.length = 0;
+    terminalListeners.clear();
+    windowMock.activeTerminal = undefined;
+    envMock.remoteName = undefined;
+
+    windowMock.createTerminal.mockImplementation((name?: string) => {
+      const terminal = createTerminal(
+        name ?? "Terminal " + (terminals.length + 1),
+      );
+      terminals.push(terminal);
+      return terminal;
+    });
+
+    commandsMock.executeCommand.mockResolvedValue();
+  });
+
+  it("reuses the active terminal and sends an executing command", async () => {
+    const terminal = createTerminal("Active");
+    terminals.push(terminal);
+    windowMock.activeTerminal = terminal;
+
+    const { runCommandInTerminal } = await import("./runCommandInTerminal");
+
+    await runCommandInTerminal("echo hello");
+
+    expect(windowMock.createTerminal).not.toHaveBeenCalled();
+    expect(commandsMock.executeCommand).not.toHaveBeenCalled();
+    expect(terminal.show).toHaveBeenCalledOnce();
+    expect(terminal.sendText).toHaveBeenCalledWith("echo hello", true);
+  });
+
+  it("creates a named local terminal when no reusable terminal exists", async () => {
+    const { runCommandInTerminal } = await import("./runCommandInTerminal");
+
+    await runCommandInTerminal("npm test", {
+      reuseTerminal: true,
+      terminalName: "Start Ollama",
+    });
+
+    expect(windowMock.createTerminal).toHaveBeenCalledWith("Start Ollama");
+    expect(commandsMock.executeCommand).not.toHaveBeenCalled();
+
+    const createdTerminal = terminals[0];
+    expect(createdTerminal.show).toHaveBeenCalledOnce();
+    expect(createdTerminal.sendText).toHaveBeenCalledWith("npm test", true);
+  });
+
+  it("creates remote terminals through the remote-aware VS Code command", async () => {
+    envMock.remoteName = "ssh-remote";
+    commandsMock.executeCommand.mockImplementation(async (command: string) => {
+      expect(command).toBe("workbench.action.terminal.new");
+      const terminal = createTerminal("Remote Shell");
+      terminals.push(terminal);
+      for (const listener of terminalListeners) {
+        listener(terminal);
+      }
+    });
+
+    const { runCommandInTerminal } = await import("./runCommandInTerminal");
+
+    await runCommandInTerminal("pwd", { reuseTerminal: true });
+
+    expect(windowMock.createTerminal).not.toHaveBeenCalled();
+    expect(commandsMock.executeCommand).toHaveBeenCalledWith(
+      "workbench.action.terminal.new",
+    );
+
+    const createdTerminal = terminals[0];
+    expect(createdTerminal.show).toHaveBeenCalledOnce();
+    expect(createdTerminal.sendText).toHaveBeenCalledWith("pwd", true);
+  });
+
+  it("reuses cached remote terminals for named commands", async () => {
+    envMock.remoteName = "dev-container";
+
+    let createdCount = 0;
+    commandsMock.executeCommand.mockImplementation(async () => {
+      createdCount += 1;
+      const terminal = createTerminal("Remote " + createdCount);
+      terminals.push(terminal);
+      for (const listener of terminalListeners) {
+        listener(terminal);
+      }
+    });
+
+    const { runCommandInTerminal } = await import("./runCommandInTerminal");
+
+    await runCommandInTerminal("ollama serve", {
+      reuseTerminal: true,
+      terminalName: "Start Ollama",
+    });
+    await runCommandInTerminal("ollama serve", {
+      reuseTerminal: true,
+      terminalName: "Start Ollama",
+    });
+
+    expect(commandsMock.executeCommand).toHaveBeenCalledTimes(1);
+    expect(terminals[0].sendText).toHaveBeenNthCalledWith(
+      1,
+      "ollama serve",
+      true,
+    );
+    expect(terminals[0].sendText).toHaveBeenNthCalledWith(
+      2,
+      "ollama serve",
+      true,
+    );
+  });
+});
diff --git a/packages/openai-adapters/src/apis/OpenRouter.ts b/packages/openai-adapters/src/apis/OpenRouter.ts
index 7c45fddeed6..542699d20c3 100644
--- a/packages/openai-adapters/src/apis/OpenRouter.ts
+++ b/packages/openai-adapters/src/apis/OpenRouter.ts
@@ -10,9 +10,10 @@ export interface OpenRouterConfig extends OpenAIConfig {
 
 // TODO: Extract detailed error info from OpenRouter's error.metadata.raw to surface better messages
 
-const OPENROUTER_HEADERS: Record<string, string> = {
+export const OPENROUTER_HEADERS: Record<string, string> = {
   "HTTP-Referer": "https://www.continue.dev/",
-  "X-Title": "Continue",
+  "X-OpenRouter-Title": "Continue",
+  "X-OpenRouter-Categories": "ide-extension",
 };
 
 export class OpenRouterApi extends OpenAIApi {
diff --git a/packages/openai-adapters/src/index.ts b/packages/openai-adapters/src/index.ts
index 467c7a71ae9..c9eb4da00fa 100644
--- a/packages/openai-adapters/src/index.ts
+++ b/packages/openai-adapters/src/index.ts
@@ -243,4 +243,5 @@ export {
 } from "./apis/AnthropicUtils.js";
 
 export { isResponsesModel } from "./apis/openaiResponses.js";
+export { OPENROUTER_HEADERS } from "./apis/OpenRouter.js";
 export { extractBase64FromDataUrl, parseDataUrl } from "./util/url.js";