diff --git a/lib/addons/image-paste.test.ts b/lib/addons/image-paste.test.ts
new file mode 100644
index 0000000..b2710f6
--- /dev/null
+++ b/lib/addons/image-paste.test.ts
@@ -0,0 +1,181 @@
+/**
+ * Test suite for ImagePasteAddon
+ */
+
+import { afterEach, beforeEach, describe, expect, test } from 'bun:test';
+import { ImagePasteAddon } from './image-paste';
+
+// ============================================================================
+// Mock Terminal Implementation
+// ============================================================================
+
+class MockTerminal {
+  public element?: HTMLElement;
+  public cols = 80;
+  public rows = 24;
+}
+
+// ============================================================================
+// Test Suite
+// ============================================================================
+
+describe('ImagePasteAddon', () => {
+  let addon: ImagePasteAddon;
+  let terminal: MockTerminal;
+
+  beforeEach(() => {
+    addon = new ImagePasteAddon();
+    terminal = new MockTerminal();
+  });
+
+  afterEach(() => {
+    addon.dispose();
+  });
+
+  // ==========================================================================
+  // Activation & Disposal Tests
+  // ==========================================================================
+
+  test('activates successfully', () => {
+    expect(() => addon.activate(terminal as any)).not.toThrow();
+  });
+
+  test('activates with element and attaches paste listener', () => {
+    terminal.element = document.createElement('div');
+    expect(() => addon.activate(terminal as any)).not.toThrow();
+  });
+
+  test('disposes successfully', () => {
+    addon.activate(terminal as any);
+    expect(() => addon.dispose()).not.toThrow();
+  });
+
+  test('disposes with element cleans up listener', () => {
+    terminal.element = document.createElement('div');
+    addon.activate(terminal as any);
+    expect(() => addon.dispose()).not.toThrow();
+  });
+
+  test('can activate and dispose multiple times', () => {
+    addon.activate(terminal as any);
+    addon.dispose();
+    addon = new ImagePasteAddon();
+    addon.activate(terminal as any);
+    addon.dispose();
+  });
+
+  // ==========================================================================
+  // Event Tests
+  // ==========================================================================
+
+  test('onImagePaste is a subscribable event', () => {
+    const disposable = addon.onImagePaste(() => {});
+    expect(disposable).toBeDefined();
+    expect(typeof disposable.dispose).toBe('function');
+    disposable.dispose();
+  });
+
+  test('fires onImagePaste when image is pasted', (done) => {
+    terminal.element = document.createElement('div');
+    addon.activate(terminal as any);
+
+    addon.onImagePaste((data) => {
+      expect(data.name).toMatch(/^clipboard_\d+\.png$/);
+      expect(data.dataBase64).toBe('aW1hZ2VkYXRh');
+      done();
+    });
+
+    // Create a mock paste event with an image file
+    const mockFile = new File(['imagedata'], 'test.png', { type: 'image/png' });
+
+    // Mock FileReader to return synchronously for testing
+    const originalFileReader = globalThis.FileReader;
+    class MockFileReader {
+      onload: (() => void) | null = null;
+      result: string | null = null;
+
+      readAsDataURL(_file: File) {
+        this.result = 'data:image/png;base64,aW1hZ2VkYXRh';
+        if (this.onload) this.onload();
+      }
+    }
+    globalThis.FileReader = MockFileReader as any;
+
+    const dataTransfer = new DataTransfer();
+    dataTransfer.items.add(mockFile);
+
+    const pasteEvent = new ClipboardEvent('paste', {
+      clipboardData: dataTransfer,
+      bubbles: true,
+      cancelable: true,
+    });
+
+    terminal.element.dispatchEvent(pasteEvent);
+
+    // Restore
+    globalThis.FileReader = originalFileReader;
+  });
+
+  test('does not fire for non-image pastes', () => {
+    terminal.element = document.createElement('div');
+    addon.activate(terminal as any);
+
+    let fired = false;
+    addon.onImagePaste(() => {
+      fired = true;
+    });
+
+    // Paste event with only text
+    const dataTransfer = new DataTransfer();
+    dataTransfer.setData('text/plain', 'hello');
+
+    const pasteEvent = new ClipboardEvent('paste', {
+      clipboardData: dataTransfer,
+      bubbles: true,
+      cancelable: true,
+    });
+
+    terminal.element.dispatchEvent(pasteEvent);
+    expect(fired).toBe(false);
+  });
+
+  test('dispose removes paste listener', () => {
+    terminal.element = document.createElement('div');
+    addon.activate(terminal as any);
+
+    let fired = false;
+    addon.onImagePaste(() => {
+      fired = true;
+    });
+
+    addon.dispose();
+
+    // Dispatch after dispose - should not fire
+    const mockFile = new File(['imagedata'], 'test.png', { type: 'image/png' });
+    const dataTransfer = new DataTransfer();
+    dataTransfer.items.add(mockFile);
+
+    const pasteEvent = new ClipboardEvent('paste', {
+      clipboardData: dataTransfer,
+      bubbles: true,
+      cancelable: true,
+    });
+
+    terminal.element.dispatchEvent(pasteEvent);
+    expect(fired).toBe(false);
+  });
+
+  // ==========================================================================
+  // Integration Tests
+  // ==========================================================================
+
+  test('full workflow: activate → subscribe → dispose', () => {
+    terminal.element = document.createElement('div');
+    addon.activate(terminal as any);
+
+    const disposable = addon.onImagePaste(() => {});
+    disposable.dispose();
+
+    addon.dispose();
+  });
+});
diff --git a/lib/addons/image-paste.ts b/lib/addons/image-paste.ts
new file mode 100644
index 0000000..132761e
--- /dev/null
+++ b/lib/addons/image-paste.ts
@@ -0,0 +1,107 @@
+/**
+ * ImagePasteAddon - Handle image paste events
+ *
+ * Listens for paste events containing image data and emits them as
+ * base64-encoded payloads. This is a ghostty-web extension addon,
+ * not part of the xterm.js core API.
+ *
+ * Usage:
+ * ```typescript
+ * const imagePasteAddon = new ImagePasteAddon();
+ * term.loadAddon(imagePasteAddon);
+ *
+ * imagePasteAddon.onImagePaste((data) => {
+ *   console.log(data.name);       // e.g. "clipboard_1234567890.png"
+ *   console.log(data.dataBase64); // base64-encoded image data
+ * });
+ * ```
+ */
+
+import type { IDisposable, IEvent, ITerminalAddon, ITerminalCore } from '../interfaces';
+import { EventEmitter } from '../event-emitter';
+
+// ============================================================================
+// Types
+// ============================================================================
+
+export interface IImagePasteData {
+  name: string;
+  dataBase64: string;
+}
+
+// ============================================================================
+// ImagePasteAddon Class
+// ============================================================================
+
+export class ImagePasteAddon implements ITerminalAddon {
+  private _terminal?: ITerminalCore;
+  private _pasteListener: ((e: ClipboardEvent) => void) | null = null;
+  private _emitter = new EventEmitter<IImagePasteData>();
+
+  /**
+   * Event fired when an image is pasted from the clipboard.
+   */
+  public readonly onImagePaste: IEvent<IImagePasteData> = this._emitter.event;
+
+  /**
+   * Activate the addon (called by Terminal.loadAddon)
+   */
+  public activate(terminal: ITerminalCore): void {
+    this._terminal = terminal;
+
+    const element = terminal.element;
+    if (element) {
+      this._attachListener(element);
+    }
+  }
+
+  /**
+   * Dispose the addon and clean up resources
+   */
+  public dispose(): void {
+    this._detachListener();
+    this._emitter.dispose();
+    this._terminal = undefined;
+  }
+
+  private _attachListener(element: HTMLElement): void {
+    this._pasteListener = (event: ClipboardEvent) => {
+      const clipboardData = event.clipboardData;
+      if (!clipboardData?.items) return;
+
+      for (const item of Array.from(clipboardData.items)) {
+        if (item.kind === 'file' && item.type.startsWith('image/')) {
+          const file = item.getAsFile();
+          if (file) {
+            event.preventDefault();
+            event.stopPropagation();
+
+            const reader = new FileReader();
+            reader.onload = () => {
+              const result = reader.result as string;
+              const base64 = result.split(',')[1];
+              if (base64) {
+                const ext = file.type.split('/')[1] || 'png';
+                this._emitter.fire({
+                  name: `clipboard_${Date.now()}.${ext}`,
+                  dataBase64: base64,
+                });
+              }
+            };
+            reader.readAsDataURL(file);
+            return;
+          }
+        }
+      }
+    };
+
+    element.addEventListener('paste', this._pasteListener);
+  }
+
+  private _detachListener(): void {
+    if (this._pasteListener && this._terminal?.element) {
+      this._terminal.element.removeEventListener('paste', this._pasteListener);
+    }
+    this._pasteListener = null;
+  }
+}
diff --git a/lib/index.ts b/lib/index.ts
index b46e05b..50e7aab 100644
--- a/lib/index.ts
+++ b/lib/index.ts
@@ -93,6 +93,8 @@ export type { SelectionCoordinates } from './selection-manager';
 // Addons
 export { FitAddon } from './addons/fit';
 export type { ITerminalDimensions } from './addons/fit';
+export { ImagePasteAddon } from './addons/image-paste';
+export type { IImagePasteData } from './addons/image-paste';
 
 // Link providers
 export { OSC8LinkProvider } from './providers/osc8-link-provider';
diff --git a/lib/input-handler.ts b/lib/input-handler.ts
index 83d6f3f..83ee10f 100644
--- a/lib/input-handler.ts
+++ b/lib/input-handler.ts
@@ -562,24 +562,23 @@ export class InputHandler {
   private handlePaste(event: ClipboardEvent): void {
     if (this.isDisposed) return;
 
-    // Prevent default paste behavior
-    event.preventDefault();
-    event.stopPropagation();
-
     // Get clipboard data
     const clipboardData = event.clipboardData;
     if (!clipboardData) {
-      console.warn('No clipboard data available');
       return;
     }
 
-    // Get text from clipboard
+    // Get text from clipboard — if there's no text (e.g. image-only paste),
+    // let the event continue bubbling so addons like ImagePasteAddon can handle it.
     const text = clipboardData.getData('text/plain');
     if (!text) {
-      console.warn('No text in clipboard');
       return;
     }
 
+    // We have text to handle — claim the event
+    event.preventDefault();
+    event.stopPropagation();
+
     if (this.shouldIgnorePasteEvent(text, 'paste')) {
       return;
     }