diff --git a/frontend/src/components/shared/markdown-editor/index.ts b/frontend/src/components/shared/markdown-editor/index.ts
index f0d84384..25605a84 100644
--- a/frontend/src/components/shared/markdown-editor/index.ts
+++ b/frontend/src/components/shared/markdown-editor/index.ts
@@ -1,4 +1,3 @@
-export type { MarkdownEditorHandle } from './markdown-editor';
 // Deliberately does NOT re-export the heavy MarkdownEditor value — that would statically pull the tiptap chunk
 // into any route importing a light util from here. Consume the mode-switching MarkdownEditorField instead (it
 // owns the lazy() boundary, so importing it is chunk-free until rich mode renders).
diff --git a/frontend/src/components/shared/markdown-editor/markdown-editor-field.test.tsx b/frontend/src/components/shared/markdown-editor/markdown-editor-field.test.tsx
new file mode 100644
index 00000000..47d733ce
--- /dev/null
+++ b/frontend/src/components/shared/markdown-editor/markdown-editor-field.test.tsx
@@ -0,0 +1,106 @@
+import { render, waitFor } from '@testing-library/react';
+import { createRef } from 'react';
+import { beforeAll, describe, expect, it, vi } from 'vitest';
+
+import { MarkdownEditorField, type MarkdownEditorFieldHandle } from './markdown-editor-field';
+import { setupEditorJsdom } from './markdown-editor-test-setup';
+import { nextVariableRange } from './markdown-editor-variable-syntax';
+
+beforeAll(setupEditorJsdom);
+
+describe('nextVariableRange', () => {
+    const ranges = [
+        { end: 5, start: 0 },
+        { end: 15, start: 10 },
+    ];
+
+    it('returns undefined when there are no occurrences', () => {
+        expect(nextVariableRange([], 0, 0)).toBeUndefined();
+    });
+
+    it('advances from the selected occurrence and wraps past the last', () => {
+        expect(nextVariableRange(ranges, 0, 5)).toEqual({ end: 15, start: 10 });
+        expect(nextVariableRange(ranges, 10, 15)).toEqual({ end: 5, start: 0 });
+    });
+
+    it('jumps to the first occurrence at/after the caret when none is selected', () => {
+        expect(nextVariableRange(ranges, 6, 6)).toEqual({ end: 15, start: 10 });
+        expect(nextVariableRange(ranges, 99, 99)).toEqual({ end: 5, start: 0 });
+    });
+});
+
+describe('MarkdownEditorField raw-mode handle', () => {
+    it('focuses, cycles occurrences, and inserts through the textarea', () => {
+        const onChange = vi.fn();
+        const ref = createRef<MarkdownEditorFieldHandle>();
+        const { container } = render(
+            <MarkdownEditorField
+                mode="raw"
+                onChange={onChange}
+                ref={ref}
+                value={'a {{.Foo}} b {{.Foo}} c'}
+            />,
+        );
+        const textarea = container.querySelector('textarea')!;
+
+        ref.current!.focus();
+        expect(document.activeElement).toBe(textarea);
+
+        expect(ref.current!.cycleToVariable('Nope')).toBe(false);
+        expect(ref.current!.cycleToVariable('Foo')).toBe(true);
+        expect(textarea.value.slice(textarea.selectionStart, textarea.selectionEnd)).toBe('{{.Foo}}');
+
+        textarea.setSelectionRange(0, 0);
+        ref.current!.insertAtCursor('{{.Bar}}');
+        expect(onChange).toHaveBeenCalledWith(expect.stringContaining('{{.Bar}}'));
+    });
+});
+
+describe('MarkdownEditorField rich-mode handle', () => {
+    it('lazy-mounts the editor and delegates handle methods to it', async () => {
+        const ref = createRef<MarkdownEditorFieldHandle>();
+        const { container } = render(
+            <MarkdownEditorField
+                mode="rich"
+                onChange={vi.fn()}
+                ref={ref}
+                value={'x {{.Foo}} y'}
+            />,
+        );
+        await waitFor(() => expect(container.querySelector('.ProseMirror')?.textContent).toContain('Foo'));
+
+        expect(ref.current?.cycleToVariable('Foo')).toBe(true);
+        expect(ref.current?.cycleToVariable('Nope')).toBe(false);
+    });
+});
+
+describe('MarkdownEditorField handle contract', () => {
+    it('exposes focus, cycleToVariable, and insertAtCursor in both modes', async () => {
+        const rawRef = createRef<MarkdownEditorFieldHandle>();
+        render(
+            <MarkdownEditorField
+                mode="raw"
+                onChange={vi.fn()}
+                ref={rawRef}
+                value=""
+            />,
+        );
+
+        const richRef = createRef<MarkdownEditorFieldHandle>();
+        const { container } = render(
+            <MarkdownEditorField
+                mode="rich"
+                onChange={vi.fn()}
+                ref={richRef}
+                value=""
+            />,
+        );
+        await waitFor(() => expect(container.querySelector('.ProseMirror')).not.toBeNull());
+
+        for (const current of [rawRef.current, richRef.current]) {
+            expect(typeof current?.focus).toBe('function');
+            expect(typeof current?.cycleToVariable).toBe('function');
+            expect(typeof current?.insertAtCursor).toBe('function');
+        }
+    });
+});
diff --git a/frontend/src/components/shared/markdown-editor/markdown-editor-field.tsx b/frontend/src/components/shared/markdown-editor/markdown-editor-field.tsx
index d1d212df..caf50f70 100644
--- a/frontend/src/components/shared/markdown-editor/markdown-editor-field.tsx
+++ b/frontend/src/components/shared/markdown-editor/markdown-editor-field.tsx
@@ -11,22 +11,25 @@ import { cn } from '@/lib/utils';
 import type { MarkdownEditorHandle } from './markdown-editor';
 import type { EditorViewMode } from './markdown-editor-view-mode';
 
-// Static-importing MarkdownEditor would merge the tiptap chunk into every route that pulls a util from the
-// barrel; the lazy() boundary is what lets the barrel re-export this component eagerly.
+import { MARKDOWN_EDITOR_WRAPPER_CLASS } from './markdown-editor-styles';
+import { cycleTextareaToVariable, insertTextareaText } from './markdown-editor-textarea';
+
+// Static-importing MarkdownEditor would merge the tiptap chunk into every route that pulls a util from the barrel.
 const MarkdownEditor = lazy(() => import('./markdown-editor').then((module) => ({ default: module.MarkdownEditor })));
 
-// The imperative handle a consumer gets via `ref`. `focus()` is honored in BOTH modes (so RHF's
-// focus-on-validation-error reaches the field whether it renders a textarea or the rich editor). The
-// variable-panel methods exist only in rich mode — raw has no ProseMirror doc to cycle — so they are optional.
+/**
+ * Imperative handle exposed via `ref`. Every method works in BOTH modes — the raw textarea and the rich editor
+ * each implement them — so a consumer drives the field the same way whether it renders raw source or rich.
+ */
 export interface MarkdownEditorFieldHandle {
-    cycleToVariable?: (variable: string) => boolean;
+    /** Select the next occurrence of `variable` and scroll it into view; `false` when it isn't used. */
+    cycleToVariable: (variable: string) => boolean;
     focus: () => void;
-    insertAtCursor?: (text: string) => void;
+    /** Insert `text` at the caret, replacing any selection. */
+    insertAtCursor: (text: string) => void;
 }
 
 interface MarkdownEditorFieldProps extends Pick<AriaAttributes, 'aria-describedby' | 'aria-invalid'> {
-    // Sizes the field's outer box in both modes — the rich editor wrapper and the raw <textarea> take the
-    // same flex/min-height layout. The byte-exact font-mono / no-resize raw config is baked in, not overridable.
     className?: string;
     disabled?: boolean;
     id?: string;
@@ -58,13 +61,22 @@ export function MarkdownEditorField({
         ref,
         () =>
             mode === 'raw'
-                ? { focus: () => rawRef.current?.focus() }
+                ? {
+                      cycleToVariable: (variable) =>
+                          rawRef.current ? cycleTextareaToVariable(rawRef.current.textarea, variable) : false,
+                      focus: () => rawRef.current?.focus(),
+                      insertAtCursor: (text) => {
+                          if (rawRef.current) {
+                              insertTextareaText(rawRef.current.textarea, text, onChange);
+                          }
+                      },
+                  }
                 : {
                       cycleToVariable: (variable) => richRef.current?.cycleToVariable(variable) ?? false,
                       focus: () => richRef.current?.focus(),
                       insertAtCursor: (text) => richRef.current?.insertAtCursor(text),
                   },
-        [mode],
+        [mode, onChange],
     );
 
     if (mode === 'raw') {
@@ -73,7 +85,8 @@ export function MarkdownEditorField({
                 aria-describedby={ariaDescribedby}
                 aria-invalid={ariaInvalid}
                 autoSize={false}
-                className={cn('resize-none font-mono text-sm', className)}
+                // Raw config is applied LAST so a consumer `className` can't override the byte-exact source styling.
+                className={cn(className, 'resize-none font-mono text-sm')}
                 disabled={disabled}
                 id={id}
                 onBlur={onBlur}
@@ -90,7 +103,15 @@ export function MarkdownEditorField({
             fallback={
                 <div
                     aria-busy="true"
-                    className={cn('flex items-center justify-center rounded-md border', className)}
+                    aria-describedby={ariaDescribedby}
+                    aria-invalid={ariaInvalid}
+                    className={cn(
+                        MARKDOWN_EDITOR_WRAPPER_CLASS,
+                        'items-center justify-center',
+                        disabled && 'pointer-events-none opacity-60',
+                        className,
+                    )}
+                    id={id}
                 >
                     <Loader2 className="text-muted-foreground size-5 animate-spin" />
                 </div>
diff --git a/frontend/src/components/shared/markdown-editor/markdown-editor-styles.ts b/frontend/src/components/shared/markdown-editor/markdown-editor-styles.ts
new file mode 100644
index 00000000..4fabe9cb
--- /dev/null
+++ b/frontend/src/components/shared/markdown-editor/markdown-editor-styles.ts
@@ -0,0 +1,4 @@
+// Shell classes for the editor box. Kept in this tiny leaf module (no tiptap import) so MarkdownEditorField's
+// lazy-load fallback can wear the same box as the mounted editor without pulling the tiptap chunk eagerly.
+export const MARKDOWN_EDITOR_WRAPPER_CLASS =
+    'border-input dark:bg-input/30 group/markdown-editor flex w-full flex-col overflow-hidden rounded-md border shadow-2xs outline-hidden transition-[color,box-shadow]';
diff --git a/frontend/src/components/shared/markdown-editor/markdown-editor-textarea.ts b/frontend/src/components/shared/markdown-editor/markdown-editor-textarea.ts
new file mode 100644
index 00000000..2e7d591d
--- /dev/null
+++ b/frontend/src/components/shared/markdown-editor/markdown-editor-textarea.ts
@@ -0,0 +1,77 @@
+import { findVariableUseRanges, nextVariableRange } from './markdown-editor-variable-syntax';
+
+/** Select the next occurrence of `variable` in the textarea and scroll it to the middle. Returns false if none. */
+export function cycleTextareaToVariable(textarea: HTMLTextAreaElement, variable: string): boolean {
+    const ranges = findVariableUseRanges(textarea.value, variable).map(({ index, length }) => ({
+        end: index + length,
+        start: index,
+    }));
+    const target = nextVariableRange(ranges, textarea.selectionStart, textarea.selectionEnd);
+
+    if (!target) {
+        return false;
+    }
+
+    textarea.focus();
+    textarea.setSelectionRange(target.start, target.end);
+    textarea.scrollTop = Math.max(0, caretOffsetTop(textarea, target.start) - textarea.clientHeight / 2);
+
+    return true;
+}
+
+/** Splice `text` over the textarea selection, emit through `onChange`, and restore the caret after the value round-trips. */
+export function insertTextareaText(
+    textarea: HTMLTextAreaElement,
+    text: string,
+    onChange: (value: string) => void,
+): void {
+    const start = Math.max(0, textarea.selectionStart);
+    const end = Math.max(0, textarea.selectionEnd);
+    const { value } = textarea;
+
+    onChange(value.slice(0, start) + text + value.slice(end));
+
+    // The controlled re-render clears the selection; restore the caret once React has flushed the new value.
+    setTimeout(() => {
+        textarea.focus({ preventScroll: true });
+        textarea.setSelectionRange(start + text.length, start + text.length);
+    }, 0);
+}
+
+// Pixel offset of `position` from the textarea content top, measured via a hidden mirror so soft-wrapped
+// lines count — a logical-line count undershoots the scroll badly for wrapped templates.
+function caretOffsetTop(textarea: HTMLTextAreaElement, position: number): number {
+    const cs = getComputedStyle(textarea);
+    const mirror = document.createElement('div');
+
+    mirror.style.fontFamily = cs.fontFamily;
+    mirror.style.fontSize = cs.fontSize;
+    mirror.style.fontWeight = cs.fontWeight;
+    mirror.style.fontStyle = cs.fontStyle;
+    mirror.style.lineHeight = cs.lineHeight;
+    mirror.style.letterSpacing = cs.letterSpacing;
+    mirror.style.wordSpacing = cs.wordSpacing;
+    mirror.style.paddingTop = cs.paddingTop;
+    mirror.style.paddingRight = cs.paddingRight;
+    mirror.style.paddingBottom = cs.paddingBottom;
+    mirror.style.paddingLeft = cs.paddingLeft;
+    mirror.style.width = `${textarea.clientWidth}px`;
+    mirror.style.boxSizing = 'border-box';
+    mirror.style.whiteSpace = 'pre-wrap';
+    mirror.style.overflowWrap = 'break-word';
+    mirror.style.position = 'absolute';
+    mirror.style.visibility = 'hidden';
+    mirror.style.top = '-9999px';
+    mirror.style.left = '-9999px';
+
+    mirror.textContent = textarea.value.slice(0, position);
+    const marker = document.createElement('span');
+    marker.textContent = textarea.value.charAt(position) || '.';
+    mirror.appendChild(marker);
+
+    document.body.appendChild(mirror);
+    const offset = marker.offsetTop;
+    mirror.remove();
+
+    return offset;
+}
diff --git a/frontend/src/components/shared/markdown-editor/markdown-editor-variable-syntax.ts b/frontend/src/components/shared/markdown-editor/markdown-editor-variable-syntax.ts
index d5236379..e07ce576 100644
--- a/frontend/src/components/shared/markdown-editor/markdown-editor-variable-syntax.ts
+++ b/frontend/src/components/shared/markdown-editor/markdown-editor-variable-syntax.ts
@@ -26,3 +26,23 @@ export const findVariableUseRanges = (value: string, variable: string): { index:
 
     return ranges;
 };
+
+export interface VariableRange {
+    end: number;
+    start: number;
+}
+
+// Shared by BOTH variable panels (rich ProseMirror + raw textarea) so their cycling can't drift: from the
+// currently-selected occurrence go to the next (wrapping); if the caret isn't on one, jump to the first
+// occurrence at/after it, else wrap to the first. `undefined` when there are none.
+export function nextVariableRange(
+    ranges: VariableRange[],
+    selectionStart: number,
+    selectionEnd: number,
+): undefined | VariableRange {
+    const current = ranges.findIndex((range) => range.start === selectionStart && range.end === selectionEnd);
+
+    return current >= 0
+        ? ranges[(current + 1) % ranges.length]
+        : (ranges.find((range) => range.start >= selectionStart) ?? ranges[0]);
+}
diff --git a/frontend/src/components/shared/markdown-editor/markdown-editor.tsx b/frontend/src/components/shared/markdown-editor/markdown-editor.tsx
index f03daeed..bad8ecc9 100644
--- a/frontend/src/components/shared/markdown-editor/markdown-editor.tsx
+++ b/frontend/src/components/shared/markdown-editor/markdown-editor.tsx
@@ -4,13 +4,16 @@ import type { AriaAttributes, Ref } from 'react';
 import { history } from '@tiptap/pm/history';
 import { EditorState, TextSelection } from '@tiptap/pm/state';
 import { EditorContent, useEditor } from '@tiptap/react';
+import { Loader2 } from 'lucide-react';
 import { useEffect, useImperativeHandle, useMemo, useRef, useState } from 'react';
 
 import { cn } from '@/lib/utils';
 
 import { createMarkdownExtensions } from './markdown-editor-extensions';
+import { MARKDOWN_EDITOR_WRAPPER_CLASS as WRAPPER_CLASS } from './markdown-editor-styles';
 import { MarkdownEditorToolbar } from './markdown-editor-toolbar';
 import { findVariableOccurrences } from './markdown-editor-variable-highlight';
+import { nextVariableRange } from './markdown-editor-variable-syntax';
 
 export interface MarkdownEditorHandle {
     cycleToVariable: (variable: string) => boolean;
@@ -66,9 +69,6 @@ export const resetUndoHistory = (editor: Editor): void => {
     view.dispatch(view.state.tr.setMeta('addToHistory', false));
 };
 
-const WRAPPER_CLASS =
-    'border-input dark:bg-input/30 group/markdown-editor flex w-full flex-col overflow-hidden rounded-md border shadow-2xs outline-hidden transition-[color,box-shadow]';
-
 function MarkdownEditor({
     'aria-describedby': ariaDescribedby,
     'aria-invalid': ariaInvalid,
@@ -140,18 +140,12 @@ function MarkdownEditor({
                 }
 
                 const { state, view } = editor;
-                const hits = findVariableOccurrences(state.doc, variable);
-
-                if (hits.length === 0) {
-                    return false;
-                }
-
+                const hits = findVariableOccurrences(state.doc, variable).map(({ from, to }) => ({
+                    end: to,
+                    start: from,
+                }));
                 const { from, to } = state.selection;
-                const currentIndex = hits.findIndex((hit) => hit.from === from && hit.to === to);
-                const target =
-                    currentIndex >= 0
-                        ? hits[(currentIndex + 1) % hits.length]
-                        : (hits.find((hit) => hit.from >= from) ?? hits[0]);
+                const target = nextVariableRange(hits, from, to);
 
                 if (!target) {
                     return false;
@@ -160,7 +154,7 @@ function MarkdownEditor({
                 // Focus first: ProseMirror won't scrollIntoView an unfocused editor (first post-load click would no-op).
                 view.focus();
                 view.dispatch(
-                    state.tr.setSelection(TextSelection.create(state.doc, target.from, target.to)).scrollIntoView(),
+                    state.tr.setSelection(TextSelection.create(state.doc, target.start, target.end)).scrollIntoView(),
                 );
 
                 return true;
@@ -258,9 +252,16 @@ function MarkdownEditor({
         return (
             <div
                 aria-busy="true"
-                className={cn(WRAPPER_CLASS, disabled && 'pointer-events-none opacity-60', className)}
+                className={cn(
+                    WRAPPER_CLASS,
+                    'items-center justify-center',
+                    disabled && 'pointer-events-none opacity-60',
+                    className,
+                )}
                 data-slot="markdown-editor"
-            />
+            >
+                <Loader2 className="text-muted-foreground size-5 animate-spin" />
+            </div>
         );
     }
 
diff --git a/frontend/src/pages/settings/settings-prompt.tsx b/frontend/src/pages/settings/settings-prompt.tsx
index 135c21e1..128ac014 100644
--- a/frontend/src/pages/settings/settings-prompt.tsx
+++ b/frontend/src/pages/settings/settings-prompt.tsx
@@ -40,7 +40,6 @@ import type {
 import {
     type EditorViewMode,
     EditorViewModeToggle,
-    findVariableUseRanges,
     MarkdownEditorField,
     type MarkdownEditorFieldHandle,
     VARIABLE_RE,
@@ -203,6 +202,39 @@ const diffStyles = {
     },
 } satisfies ComponentProps<typeof ReactDiffViewer>['styles'];
 
+interface DiffContentProps {
+    control: Control<HumanFormData> | Control<SystemFormData>;
+    oldValue: string;
+    styles: ComponentProps<typeof ReactDiffViewer>['styles'];
+}
+
+interface VariablesPanelContainerProps {
+    control: Control<HumanFormData> | Control<SystemFormData>;
+    onVariableClick: (variable: string) => void;
+    variables: string[];
+}
+
+interface VariablesProps {
+    currentTemplate: string;
+    onVariableClick: (variable: string) => void;
+    variables: string[];
+}
+
+// Don't hoist this useWatch to the parent — it would re-subscribe the whole page per keystroke.
+function DiffContent({ control, oldValue, styles }: DiffContentProps) {
+    const newValue = useWatch({ control, name: 'template' });
+
+    return (
+        <ReactDiffViewer
+            newValue={newValue}
+            oldValue={oldValue}
+            splitView
+            styles={styles}
+            useDarkTheme
+        />
+    );
+}
+
 function FormMarkdownItem<T extends FieldValues>({
     control,
     disabled,
@@ -239,77 +271,6 @@ function FormMarkdownItem<T extends FieldValues>({
     );
 }
 
-// Pixel offset of `position` from the textarea content top, measured via a hidden mirror so
-// soft-wrapped lines count — a logical-line count undershoots the scroll badly for wrapped templates.
-const caretOffsetTop = (textarea: HTMLTextAreaElement, position: number): number => {
-    const cs = getComputedStyle(textarea);
-    const mirror = document.createElement('div');
-
-    mirror.style.fontFamily = cs.fontFamily;
-    mirror.style.fontSize = cs.fontSize;
-    mirror.style.fontWeight = cs.fontWeight;
-    mirror.style.fontStyle = cs.fontStyle;
-    mirror.style.lineHeight = cs.lineHeight;
-    mirror.style.letterSpacing = cs.letterSpacing;
-    mirror.style.wordSpacing = cs.wordSpacing;
-    mirror.style.paddingTop = cs.paddingTop;
-    mirror.style.paddingRight = cs.paddingRight;
-    mirror.style.paddingBottom = cs.paddingBottom;
-    mirror.style.paddingLeft = cs.paddingLeft;
-    mirror.style.width = `${textarea.clientWidth}px`;
-    mirror.style.boxSizing = 'border-box';
-    mirror.style.whiteSpace = 'pre-wrap';
-    mirror.style.overflowWrap = 'break-word';
-    mirror.style.position = 'absolute';
-    mirror.style.visibility = 'hidden';
-    mirror.style.top = '-9999px';
-    mirror.style.left = '-9999px';
-
-    mirror.textContent = textarea.value.slice(0, position);
-    const marker = document.createElement('span');
-    marker.textContent = textarea.value.charAt(position) || '.';
-    mirror.appendChild(marker);
-
-    document.body.appendChild(mirror);
-    const offset = marker.offsetTop;
-    mirror.remove();
-
-    return offset;
-};
-
-interface DiffContentProps {
-    control: Control<HumanFormData> | Control<SystemFormData>;
-    oldValue: string;
-    styles: ComponentProps<typeof ReactDiffViewer>['styles'];
-}
-
-interface VariablesPanelContainerProps {
-    control: Control<HumanFormData> | Control<SystemFormData>;
-    onVariableClick: (variable: string) => void;
-    variables: string[];
-}
-
-interface VariablesProps {
-    currentTemplate: string;
-    onVariableClick: (variable: string) => void;
-    variables: string[];
-}
-
-// Don't hoist this useWatch to the parent — it would re-subscribe the whole page per keystroke.
-function DiffContent({ control, oldValue, styles }: DiffContentProps) {
-    const newValue = useWatch({ control, name: 'template' });
-
-    return (
-        <ReactDiffViewer
-            newValue={newValue}
-            oldValue={oldValue}
-            splitView
-            styles={styles}
-            useDarkTheme
-        />
-    );
-}
-
 function SettingsPrompt() {
     const { promptId } = useParams<{ promptId: string }>();
     const { isDesktop } = useBreakpoint();
@@ -335,60 +296,14 @@ function SettingsPrompt() {
 
     const isLoading = isCreateLoading || isUpdateLoading || isDeleteLoading || isValidateLoading;
 
-    const handleVariableClick = useCallback(
-        (variable: string, field: { onChange: (value: string) => void; value: string }, formId: string) => {
-            if (viewMode === 'rich') {
-                if (!editorRef.current?.cycleToVariable?.(variable)) {
-                    editorRef.current?.insertAtCursor?.(`{{.${variable}}}`);
-                }
-
-                return;
-            }
-
-            const textarea = document.querySelector(`#${formId} textarea`) as HTMLTextAreaElement;
-
-            if (textarea) {
-                const currentValue = field.value || '';
-                const variablePattern = `{{.${variable}}}`;
-                const matches = findVariableUseRanges(currentValue, variable);
-
-                if (matches.length > 0) {
-                    const { selectionEnd, selectionStart } = textarea;
-                    const currentIndex = matches.findIndex(
-                        (match) => match.index === selectionStart && match.index + match.length === selectionEnd,
-                    );
-                    const target =
-                        currentIndex >= 0
-                            ? matches[(currentIndex + 1) % matches.length]
-                            : (matches.find((match) => match.index >= selectionStart) ?? matches[0]);
-
-                    if (target) {
-                        const matchStart = target.index;
-                        textarea.focus();
-                        textarea.setSelectionRange(matchStart, matchStart + target.length);
-                        textarea.scrollTop = Math.max(
-                            0,
-                            caretOffsetTop(textarea, matchStart) - textarea.clientHeight / 2,
-                        );
-                    }
-                } else {
-                    const start = textarea.selectionStart;
-                    const end = textarea.selectionEnd;
-                    const newValue =
-                        currentValue.slice(0, Math.max(0, start)) +
-                        variablePattern +
-                        currentValue.slice(Math.max(0, end));
-                    field.onChange(newValue);
-
-                    setTimeout(() => {
-                        textarea.focus({ preventScroll: true });
-                        textarea.setSelectionRange(start + variablePattern.length, start + variablePattern.length);
-                    }, 0);
-                }
-            }
-        },
-        [viewMode],
-    );
+    // The field's handle cycles/inserts in both raw and rich modes, so clicking a variable is mode-agnostic:
+    // jump to its next use, or insert `{{.Name}}` at the caret if it isn't used yet. `editorRef` points at the
+    // active tab's field (Radix unmounts the inactive tab), so this drives whichever prompt is on screen.
+    const handleVariableClick = useCallback((variable: string) => {
+        if (!editorRef.current?.cycleToVariable(variable)) {
+            editorRef.current?.insertAtCursor(`{{.${variable}}}`);
+        }
+    }, []);
 
     const handleReset = () => {
         setResetDialogOpen(true);
@@ -553,43 +468,19 @@ function SettingsPrompt() {
         }
 
         let variables: string[] = [];
-        let formId = '';
 
         if (activeTab === 'system') {
             variables =
                 promptInfo.type === 'agent'
                     ? (promptInfo.data as AgentPrompt | AgentPrompts)?.system?.variables || []
                     : (promptInfo.data as DefaultPrompt)?.variables || [];
-            formId = 'system-prompt-form';
         } else if (activeTab === 'human' && promptInfo.type === 'agent' && promptInfo.hasHuman) {
             variables = (promptInfo.data as AgentPrompts)?.human?.variables || [];
-            formId = 'human-prompt-form';
         }
 
-        return { formId, variables };
+        return { variables };
     }, [promptInfo, activeTab]);
 
-    const handleVariableClickCallback = useCallback(
-        (variable: string) => {
-            if (!variablesData) {
-                return;
-            }
-
-            const field =
-                activeTab === 'system'
-                    ? {
-                          onChange: (value: string) => systemForm.setValue('template', value, { shouldDirty: true }),
-                          value: systemForm.getValues('template'),
-                      }
-                    : {
-                          onChange: (value: string) => humanForm.setValue('template', value, { shouldDirty: true }),
-                          value: humanForm.getValues('template'),
-                      };
-            handleVariableClick(variable, field, variablesData.formId);
-        },
-        [activeTab, variablesData, systemForm, humanForm, handleVariableClick],
-    );
-
     // Re-sync both tabs to the server prompt. A Save refetches settingsPrompts → promptInfo gets a new
     // identity → this fires; keepDirtyValues (on both form configs) preserves the OTHER tab's unsaved edits,
     // which an unguarded reset would silently wipe.
@@ -940,7 +831,7 @@ function SettingsPrompt() {
     const variablesPanel = variablesData ? (
         <VariablesPanelContainer
             control={activeControl}
-            onVariableClick={handleVariableClickCallback}
+            onVariableClick={handleVariableClick}
             variables={variablesData.variables}
         />
     ) : null;