diff --git a/Tests/ContainerizationOSTests/TerminalRawModeTests.swift b/Tests/ContainerizationOSTests/TerminalRawModeTests.swift
new file mode 100644
index 000000000..7ad1f5ed3
--- /dev/null
+++ b/Tests/ContainerizationOSTests/TerminalRawModeTests.swift
@@ -0,0 +1,70 @@
+//===----------------------------------------------------------------------===//
+// Copyright © 2026 Apple Inc. and the Containerization project authors.
+//
+// Licensed under the Apache License, Version 2.0 (the "License");
+// you may not use this file except in compliance with the License.
+// You may obtain a copy of the License at
+//
+//   https://www.apache.org/licenses/LICENSE-2.0
+//
+// Unless required by applicable law or agreed to in writing, software
+// distributed under the License is distributed on an "AS IS" BASIS,
+// WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+// See the License for the specific language governing permissions and
+// limitations under the License.
+//===----------------------------------------------------------------------===//
+
+import Foundation
+import Testing
+
+@testable import ContainerizationOS
+
+#if canImport(Darwin)
+import Darwin
+#elseif canImport(Glibc)
+import Glibc
+#elseif canImport(Musl)
+import Musl
+#endif
+
+@Suite("Terminal raw mode tests")
+struct TerminalRawModeTests {
+    private func termiosAttributes(of descriptor: Int32) throws -> termios {
+        var attrs = termios()
+        try #require(tcgetattr(descriptor, &attrs) == 0, "tcgetattr failed, errno: \(errno)")
+        return attrs
+    }
+
+    private func has(_ flag: tcflag_t, in flags: tcflag_t) -> Bool {
+        flags & flag != 0
+    }
+
+    @Test("pty slave is in canonical mode before raw-mode setup")
+    func ptySlaveIsCanonicalBeforeSetup() throws {
+        let (parent, child) = try Terminal.create(initialSize: Terminal.Size(width: 120, height: 40))
+        defer {
+            try? parent.close()
+            try? child.close()
+        }
+
+        // A freshly allocated pty slave is canonical by default (ICANON set).
+        let attrs = try termiosAttributes(of: child.handle.fileDescriptor)
+        #expect(has(tcflag_t(ICANON), in: attrs.c_lflag))
+    }
+
+    @Test("setraw clears ICANON and preserves OPOST")
+    func setrawClearsCanonicalAndPreservesOutputPostProcessing() throws {
+        let (parent, child) = try Terminal.create(initialSize: Terminal.Size(width: 120, height: 40))
+        defer {
+            try? parent.close()
+            try? child.close()
+        }
+
+        try child.setraw()
+
+        let attrs = try termiosAttributes(of: child.handle.fileDescriptor)
+        #expect(!has(tcflag_t(ICANON), in: attrs.c_lflag), "setraw must clear canonical mode")
+        #expect(has(tcflag_t(OPOST), in: attrs.c_oflag), "setraw must preserve OPOST for output post-processing")
+        #expect(has(tcflag_t(ONLCR), in: attrs.c_oflag), "setraw must preserve ONLCR for CRLF output translation")
+    }
+}
diff --git a/vminitd/Sources/vmexec/Console.swift b/vminitd/Sources/vmexec/Console.swift
index b868049f5..95541af46 100644
--- a/vminitd/Sources/vmexec/Console.swift
+++ b/vminitd/Sources/vmexec/Console.swift
@@ -14,6 +14,7 @@
 // limitations under the License.
 //===----------------------------------------------------------------------===//
 
+import ContainerizationOS
 import FoundationEssentials
 import LCShim
 
@@ -55,6 +56,12 @@ class Console {
         }
         defer { _ = _close(slaveFD) }
 
+        // Put the pty slave into raw mode so the tty line discipline does not
+        // buffer or truncate large output writes (the container's stdout goes
+        // through this slave). `Terminal.setraw()` applies cfmakeraw and keeps
+        // OPOST, so newline translation to CRLF on output is preserved.
+        try Terminal(descriptor: slaveFD, setInitState: false).setraw()
+
         for fd: Int32 in 0...2 {
             guard dup3(slaveFD, fd, 0) != -1 else {
                 throw App.Errno(stage: "dup3")