diff --git a/README.md b/README.md
index 680e823a..0acfc265 100644
--- a/README.md
+++ b/README.md
@@ -56,9 +56,39 @@ These commands:
 
 ### Publishing
 
-```bash
-npm run publish        # Publish all packages to npm
-```
+Complete release process:
+
+1. **Update CHANGELOG.md** (for coding-agent releases):
+   ```bash
+   # Add your changes to the [Unreleased] section in packages/coding-agent/CHANGELOG.md
+   ```
+
+2. **Bump version** (all packages):
+   ```bash
+   npm run version:patch    # For bug fixes
+   npm run version:minor    # For new features
+   npm run version:major    # For breaking changes
+   ```
+
+3. **Update CHANGELOG.md version** (for coding-agent):
+   ```bash
+   # Move the [Unreleased] section to the new version number with today's date
+   # e.g., ## [0.7.16] - 2025-11-17
+   ```
+
+4. **Commit and tag**:
+   ```bash
+   git add .
+   git commit -m "Release v0.7.16"
+   git tag v0.7.16
+   git push origin main
+   git push origin v0.7.16
+   ```
+
+5. **Publish to npm**:
+   ```bash
+   npm run publish        # Publish all packages to npm
+   ```
 
 ## License
 
diff --git a/package-lock.json b/package-lock.json
index f2ef5c05..b203572f 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -3193,7 +3193,7 @@
 		},
 		"packages/agent": {
 			"name": "@mariozechner/pi-agent",
-			"version": "0.7.15",
+			"version": "0.7.16",
 			"license": "MIT",
 			"dependencies": {
 				"@mariozechner/pi-ai": "^0.7.15",
@@ -3223,7 +3223,7 @@
 		},
 		"packages/ai": {
 			"name": "@mariozechner/pi-ai",
-			"version": "0.7.15",
+			"version": "0.7.16",
 			"license": "MIT",
 			"dependencies": {
 				"@anthropic-ai/sdk": "^0.61.0",
@@ -3270,7 +3270,7 @@
 		},
 		"packages/coding-agent": {
 			"name": "@mariozechner/pi-coding-agent",
-			"version": "0.7.15",
+			"version": "0.7.16",
 			"license": "MIT",
 			"dependencies": {
 				"@mariozechner/pi-agent": "^0.7.15",
@@ -3317,7 +3317,7 @@
 		},
 		"packages/pods": {
 			"name": "@mariozechner/pi",
-			"version": "0.7.15",
+			"version": "0.7.16",
 			"license": "MIT",
 			"dependencies": {
 				"@mariozechner/pi-agent": "^0.7.15",
@@ -3343,7 +3343,7 @@
 		},
 		"packages/proxy": {
 			"name": "@mariozechner/pi-proxy",
-			"version": "0.7.15",
+			"version": "0.7.16",
 			"dependencies": {
 				"@hono/node-server": "^1.14.0",
 				"hono": "^4.6.16"
@@ -3359,7 +3359,7 @@
 		},
 		"packages/tui": {
 			"name": "@mariozechner/pi-tui",
-			"version": "0.7.15",
+			"version": "0.7.16",
 			"license": "MIT",
 			"dependencies": {
 				"@types/mime-types": "^2.1.4",
@@ -3398,7 +3398,7 @@
 		},
 		"packages/web-ui": {
 			"name": "@mariozechner/pi-web-ui",
-			"version": "0.7.15",
+			"version": "0.7.16",
 			"license": "MIT",
 			"dependencies": {
 				"@lmstudio/sdk": "^1.5.0",
diff --git a/packages/agent/package.json b/packages/agent/package.json
index 8c310349..3a1e2fd3 100644
--- a/packages/agent/package.json
+++ b/packages/agent/package.json
@@ -1,6 +1,6 @@
 {
 	"name": "@mariozechner/pi-agent",
-	"version": "0.7.15",
+	"version": "0.7.16",
 	"description": "General-purpose agent with transport abstraction, state management, and attachment support",
 	"type": "module",
 	"main": "./dist/index.js",
@@ -18,8 +18,8 @@
 		"prepublishOnly": "npm run clean && npm run build"
 	},
 	"dependencies": {
-		"@mariozechner/pi-ai": "^0.7.15",
-		"@mariozechner/pi-tui": "^0.7.15"
+		"@mariozechner/pi-ai": "^0.7.16",
+		"@mariozechner/pi-tui": "^0.7.16"
 	},
 	"keywords": [
 		"ai",
diff --git a/packages/ai/package.json b/packages/ai/package.json
index 5a544e5a..cf232bb1 100644
--- a/packages/ai/package.json
+++ b/packages/ai/package.json
@@ -1,6 +1,6 @@
 {
 	"name": "@mariozechner/pi-ai",
-	"version": "0.7.15",
+	"version": "0.7.16",
 	"description": "Unified LLM API with automatic model discovery and provider configuration",
 	"type": "module",
 	"main": "./dist/index.js",
diff --git a/packages/coding-agent/CHANGELOG.md b/packages/coding-agent/CHANGELOG.md
index 02064f70..2209cd1b 100644
--- a/packages/coding-agent/CHANGELOG.md
+++ b/packages/coding-agent/CHANGELOG.md
@@ -2,6 +2,12 @@
 
 ## [Unreleased]
 
+## [0.7.16] - 2025-11-17
+
+### Fixed
+
+- **Tool Error Display**: Fixed edit tool (and all other tools) not showing error state correctly in TUI. Failed tool executions now properly display with red background and show the error message. Previously, the `isError` flag from tool execution events was not being passed to the UI component, causing all tool results to show with green (success) background regardless of whether they succeeded or failed.
+
 ## [0.7.15] - 2025-11-17
 
 ### Fixed
diff --git a/packages/coding-agent/package.json b/packages/coding-agent/package.json
index c525b834..cd3139db 100644
--- a/packages/coding-agent/package.json
+++ b/packages/coding-agent/package.json
@@ -1,6 +1,6 @@
 {
 	"name": "@mariozechner/pi-coding-agent",
-	"version": "0.7.15",
+	"version": "0.7.16",
 	"description": "Coding agent CLI with read, bash, edit, write tools and session management",
 	"type": "module",
 	"bin": {
@@ -21,8 +21,8 @@
 		"prepublishOnly": "npm run clean && npm run build"
 	},
 	"dependencies": {
-		"@mariozechner/pi-agent": "^0.7.15",
-		"@mariozechner/pi-ai": "^0.7.15",
+		"@mariozechner/pi-agent": "^0.7.16",
+		"@mariozechner/pi-ai": "^0.7.16",
 		"chalk": "^5.5.0",
 		"diff": "^8.0.2",
 		"glob": "^11.0.3"
diff --git a/packages/coding-agent/src/tui/tool-execution.ts b/packages/coding-agent/src/tui/tool-execution.ts
index 232c9cdb..095b8ad9 100644
--- a/packages/coding-agent/src/tui/tool-execution.ts
+++ b/packages/coding-agent/src/tui/tool-execution.ts
@@ -251,20 +251,27 @@ export class ToolExecutionComponent extends Container {
 			const path = shortenPath(this.args?.file_path || this.args?.path || "");
 			text = chalk.bold("edit") + " " + (path ? chalk.cyan(path) : chalk.dim("..."));
 
-			// Show diff if available
-			if (this.result?.details?.diff) {
-				// Parse the diff string and apply colors
-				const diffLines = this.result.details.diff.split("\n");
-				const coloredLines = diffLines.map((line: string) => {
-					if (line.startsWith("+")) {
-						return chalk.green(line);
-					} else if (line.startsWith("-")) {
-						return chalk.red(line);
-					} else {
-						return chalk.dim(line);
+			if (this.result) {
+				// Show error message if it's an error
+				if (this.result.isError) {
+					const errorText = this.getTextOutput();
+					if (errorText) {
+						text += "\n\n" + chalk.red(errorText);
 					}
-				});
-				text += "\n\n" + coloredLines.join("\n");
+				} else if (this.result.details?.diff) {
+					// Show diff if available
+					const diffLines = this.result.details.diff.split("\n");
+					const coloredLines = diffLines.map((line: string) => {
+						if (line.startsWith("+")) {
+							return chalk.green(line);
+						} else if (line.startsWith("-")) {
+							return chalk.red(line);
+						} else {
+							return chalk.dim(line);
+						}
+					});
+					text += "\n\n" + coloredLines.join("\n");
+				}
 			}
 		} else {
 			// Generic tool
diff --git a/packages/coding-agent/src/tui/tui-renderer.ts b/packages/coding-agent/src/tui/tui-renderer.ts
index cfb220f6..6925cb55 100644
--- a/packages/coding-agent/src/tui/tui-renderer.ts
+++ b/packages/coding-agent/src/tui/tui-renderer.ts
@@ -376,7 +376,20 @@ export class TuiRenderer {
 				// Update the existing tool component with the result
 				const component = this.pendingTools.get(event.toolCallId);
 				if (component) {
-					component.updateResult(event.result);
+					// Convert result to the format expected by updateResult
+					const resultData =
+						typeof event.result === "string"
+							? {
+									content: [{ type: "text" as const, text: event.result }],
+									details: undefined,
+									isError: event.isError,
+								}
+							: {
+									content: event.result.content,
+									details: event.result.details,
+									isError: event.isError,
+								};
+					component.updateResult(resultData);
 					this.pendingTools.delete(event.toolCallId);
 					this.ui.requestRender();
 				}
diff --git a/packages/pods/package.json b/packages/pods/package.json
index b6c2eb48..df32f5f1 100644
--- a/packages/pods/package.json
+++ b/packages/pods/package.json
@@ -1,6 +1,6 @@
 {
 	"name": "@mariozechner/pi",
-	"version": "0.7.15",
+	"version": "0.7.16",
 	"description": "CLI tool for managing vLLM deployments on GPU pods",
 	"type": "module",
 	"bin": {
@@ -34,7 +34,7 @@
 		"node": ">=20.0.0"
 	},
 	"dependencies": {
-		"@mariozechner/pi-agent": "^0.7.15",
+		"@mariozechner/pi-agent": "^0.7.16",
 		"chalk": "^5.5.0"
 	},
 	"devDependencies": {}
diff --git a/packages/proxy/package.json b/packages/proxy/package.json
index 22cb3cbb..ac8a5ea7 100644
--- a/packages/proxy/package.json
+++ b/packages/proxy/package.json
@@ -1,6 +1,6 @@
 {
 	"name": "@mariozechner/pi-proxy",
-	"version": "0.7.15",
+	"version": "0.7.16",
 	"type": "module",
 	"description": "CORS and authentication proxy for pi-ai",
 	"main": "dist/index.js",
diff --git a/packages/tui/package.json b/packages/tui/package.json
index ccb584fd..425cec42 100644
--- a/packages/tui/package.json
+++ b/packages/tui/package.json
@@ -1,6 +1,6 @@
 {
 	"name": "@mariozechner/pi-tui",
-	"version": "0.7.15",
+	"version": "0.7.16",
 	"description": "Terminal User Interface library with differential rendering for efficient text-based applications",
 	"type": "module",
 	"main": "dist/index.js",
diff --git a/packages/web-ui/package.json b/packages/web-ui/package.json
index 2aaf32d8..6e1facf2 100644
--- a/packages/web-ui/package.json
+++ b/packages/web-ui/package.json
@@ -1,6 +1,6 @@
 {
 	"name": "@mariozechner/pi-web-ui",
-	"version": "0.7.15",
+	"version": "0.7.16",
 	"description": "Reusable web UI components for AI chat interfaces powered by @mariozechner/pi-ai",
 	"type": "module",
 	"main": "dist/index.js",
@@ -18,8 +18,8 @@
 	},
 	"dependencies": {
 		"@lmstudio/sdk": "^1.5.0",
-		"@mariozechner/pi-ai": "^0.7.15",
-		"@mariozechner/pi-tui": "^0.7.15",
+		"@mariozechner/pi-ai": "^0.7.16",
+		"@mariozechner/pi-tui": "^0.7.16",
 		"docx-preview": "^0.3.7",
 		"jszip": "^3.10.1",
 		"lucide": "^0.544.0",