diff --git a/bun.lock b/bun.lock
index 3fff9f83..b0842c0e 100644
--- a/bun.lock
+++ b/bun.lock
@@ -1,10 +1,12 @@
 {
   "lockfileVersion": 1,
+  "configVersion": 0,
   "workspaces": {
     "": {
       "name": "plannotator",
       "dependencies": {
         "@pierre/diffs": "^1.0.4",
+        "diff": "^8.0.3",
       },
       "devDependencies": {
         "happy-dom": "^20.5.0",
@@ -52,7 +54,7 @@
     },
     "apps/opencode-plugin": {
       "name": "@plannotator/opencode",
-      "version": "0.8.5",
+      "version": "0.9.2",
       "dependencies": {
         "@opencode-ai/plugin": "^1.1.10",
       },
@@ -65,7 +67,7 @@
     },
     "apps/pi-extension": {
       "name": "@plannotator/pi-extension",
-      "version": "0.8.5",
+      "version": "0.9.2",
       "peerDependencies": {
         "@mariozechner/pi-coding-agent": ">=0.53.0",
       },
@@ -132,7 +134,7 @@
     },
     "packages/server": {
       "name": "@plannotator/server",
-      "version": "0.8.5",
+      "version": "0.9.2",
       "peerDependencies": {
         "bun": ">=1.0.0",
       },
diff --git a/package.json b/package.json
index 692114e8..94b2b26c 100644
--- a/package.json
+++ b/package.json
@@ -29,7 +29,8 @@
     "test": "bun test"
   },
   "dependencies": {
-    "@pierre/diffs": "^1.0.4"
+    "@pierre/diffs": "^1.0.4",
+    "diff": "^8.0.3"
   },
   "devDependencies": {
     "happy-dom": "^20.5.0"
diff --git a/packages/review-editor/components/DiffViewer.tsx b/packages/review-editor/components/DiffViewer.tsx
index 03e70c2b..bb255ecc 100644
--- a/packages/review-editor/components/DiffViewer.tsx
+++ b/packages/review-editor/components/DiffViewer.tsx
@@ -1,6 +1,7 @@
 import React, { useState, useCallback, useMemo, useRef, useEffect } from 'react';
 import { PatchDiff } from '@pierre/diffs/react';
 import { CodeAnnotation, CodeAnnotationType, SelectedLineRange, DiffAnnotationMetadata } from '@plannotator/ui/types';
+import { useDismissOnOutsideAndEscape } from '@plannotator/ui/hooks/useDismissOnOutsideAndEscape';
 import { useTheme } from '@plannotator/ui/components/ThemeProvider';
 
 interface DiffViewerProps {
@@ -39,6 +40,7 @@ export const DiffViewer: React.FC<DiffViewerProps> = ({
 }) => {
   const { theme } = useTheme();
   const containerRef = useRef<HTMLDivElement>(null);
+  const toolbarRef = useRef<HTMLDivElement>(null);
   const [toolbarState, setToolbarState] = useState<ToolbarState | null>(null);
   const [commentText, setCommentText] = useState('');
   const [suggestedCode, setSuggestedCode] = useState('');
@@ -140,6 +142,12 @@ export const DiffViewer: React.FC<DiffViewerProps> = ({
     onLineSelection(null);
   }, [onLineSelection]);
 
+  useDismissOnOutsideAndEscape({
+    enabled: !!toolbarState,
+    ref: toolbarRef,
+    onDismiss: handleCancel,
+  });
+
   // Render annotation in diff - returns React element
   const renderAnnotation = useCallback((annotation: { side: string; lineNumber: number; metadata?: DiffAnnotationMetadata }) => {
     if (!annotation.metadata) return null;
@@ -294,6 +302,7 @@ export const DiffViewer: React.FC<DiffViewerProps> = ({
       {/* Annotation toolbar - single-step comment input */}
       {toolbarState && (
         <div
+          ref={toolbarRef}
           className="review-toolbar"
           style={{
             position: 'fixed',
diff --git a/packages/ui/components/AnnotationToolbar.tsx b/packages/ui/components/AnnotationToolbar.tsx
index ed7965e2..30ac7986 100644
--- a/packages/ui/components/AnnotationToolbar.tsx
+++ b/packages/ui/components/AnnotationToolbar.tsx
@@ -2,6 +2,7 @@ import React, { useState, useEffect, useRef } from "react";
 import { AnnotationType, type ImageAttachment } from "../types";
 import { createPortal } from "react-dom";
 import { AttachmentsButton } from "./AttachmentsButton";
+import { useDismissOnOutsideAndEscape } from "../hooks/useDismissOnOutsideAndEscape";
 
 type PositionMode = 'center-above' | 'top-right';
 
@@ -54,6 +55,7 @@ export const AnnotationToolbar: React.FC<AnnotationToolbarProps> = ({
   const [position, setPosition] = useState<{ top: number; left?: number; right?: number } | null>(null);
   const [copied, setCopied] = useState(false);
   const inputRef = useRef<HTMLTextAreaElement>(null);
+  const toolbarRef = useRef<HTMLDivElement>(null);
 
   const handleCopy = async () => {
     // Use provided copyText, or fall back to code element / element text
@@ -158,6 +160,12 @@ export const AnnotationToolbar: React.FC<AnnotationToolbarProps> = ({
     return () => window.removeEventListener("keydown", handleKeyDown);
   }, [step, onClose]);
 
+  useDismissOnOutsideAndEscape({
+    enabled: true,
+    ref: toolbarRef,
+    onDismiss: onClose,
+  });
+
   if (!position) return null;
 
   const handleTypeSelect = (type: AnnotationType) => {
@@ -191,6 +199,7 @@ export const AnnotationToolbar: React.FC<AnnotationToolbarProps> = ({
 
   return createPortal(
     <div
+      ref={toolbarRef}
       className="annotation-toolbar fixed z-[100] bg-popover border border-border rounded-lg shadow-2xl"
       style={style}
       onMouseDown={(e) => e.stopPropagation()}
diff --git a/packages/ui/hooks/useDismissOnOutsideAndEscape.ts b/packages/ui/hooks/useDismissOnOutsideAndEscape.ts
new file mode 100644
index 00000000..83ca9967
--- /dev/null
+++ b/packages/ui/hooks/useDismissOnOutsideAndEscape.ts
@@ -0,0 +1,38 @@
+import { useEffect } from "react";
+
+export function useDismissOnOutsideAndEscape({
+  enabled,
+  ref,
+  onDismiss,
+}: {
+  enabled: boolean;
+  ref: React.RefObject<HTMLElement>;
+  onDismiss: () => void;
+}) {
+  useEffect(() => {
+    if (!enabled) return;
+
+    const handlePointerDown = (event: PointerEvent) => {
+      const target = event.target as Node | null;
+      if (!target) return;
+      if (ref.current && ref.current.contains(target)) {
+        return;
+      }
+      onDismiss();
+    };
+
+    const handleKeyDown = (event: KeyboardEvent) => {
+      if (event.key === "Escape") {
+        onDismiss();
+      }
+    };
+
+    document.addEventListener("pointerdown", handlePointerDown, true);
+    window.addEventListener("keydown", handleKeyDown);
+
+    return () => {
+      document.removeEventListener("pointerdown", handlePointerDown, true);
+      window.removeEventListener("keydown", handleKeyDown);
+    };
+  }, [enabled, ref, onDismiss]);
+}