diff --git a/actions/setup/js/mcp_cli_bridge.cjs b/actions/setup/js/mcp_cli_bridge.cjs
index 2186b18eeb6..17fa51c16c6 100644
--- a/actions/setup/js/mcp_cli_bridge.cjs
+++ b/actions/setup/js/mcp_cli_bridge.cjs
@@ -778,6 +778,61 @@ function resolveSchemaPropertyKey(key, schemaProperties, normalizedSchemaKeyMap,
   return normalizedSchemaKeyMap.get(normalized) || key;
 }
 
+const CLI_UNESCAPED_TEXT_ARG_KEYS = new Set(["body", "draftbody"]);
+
+/**
+ * Unescape a conservative subset of JSON-style escape sequences in a CLI text argument.
+ *
+ * This is only applied to body-like text fields where authors commonly expect
+ * `\n` and similar escapes to become literal formatting characters, matching
+ * JSON stdin mode more closely without mutating unrelated string arguments
+ * such as file paths or regex patterns.
+ *
+ * Supported sequences:
+ *   `\n`      → newline
+ *   `\t`      → tab
+ *   `\r`      → carriage return
+ *   `\b`      → backspace
+ *   `\f`      → form feed
+ *   `\\`      → single backslash
+ *   `\uXXXX`  → Unicode code point
+ *   Any other `\X` is left unchanged (the backslash is preserved).
+ *
+ * @param {string} str - Raw CLI string argument
+ * @returns {string} String with supported escape sequences replaced by literal characters
+ */
+function unescapeCliStringArg(str) {
+  return str.replace(/\\(?:u([0-9a-fA-F]{4})|([\s\S]))/g, (match, hex, char) => {
+    if (hex) {
+      return String.fromCharCode(Number.parseInt(hex, 16));
+    }
+    switch (char) {
+      case "n":
+        return "\n";
+      case "t":
+        return "\t";
+      case "r":
+        return "\r";
+      case "b":
+        return "\b";
+      case "f":
+        return "\f";
+      case "\\":
+        return "\\";
+      default:
+        return match;
+    }
+  });
+}
+
+/**
+ * @param {string} key
+ * @returns {boolean}
+ */
+function shouldUnescapeCliTextArg(key) {
+  return CLI_UNESCAPED_TEXT_ARG_KEYS.has(normalizeSchemaKey(key));
+}
+
 /**
  * Parse and coerce a CLI argument value based on the MCP tool schema property type.
  *
@@ -857,6 +912,13 @@ function coerceToolArgValue(key, rawValue, schemaProperty, existingValue, allowN
     }
   }
 
+  // Only unescape body-like text fields. Shell argv is already decoded, so
+  // applying a second escape pass to arbitrary string fields would corrupt
+  // values like Windows paths and regex patterns.
+  if (types.includes("string") && shouldUnescapeCliTextArg(key)) {
+    return unescapeCliStringArg(rawValue);
+  }
+
   // When schema metadata is unavailable (e.g. empty tools cache), apply
   // conservative numeric coercion fallback for CLI ergonomics.
   if (allowNumericFallback && types.length === 0) {
@@ -1376,6 +1438,7 @@ if (require.main === module) {
 module.exports = {
   parseToolArgs,
   coerceToolArgValue,
+  unescapeCliStringArg,
   extractJSONRPCMessages,
   renderProgressMessages,
   formatResponse,
diff --git a/actions/setup/js/mcp_cli_bridge.test.cjs b/actions/setup/js/mcp_cli_bridge.test.cjs
index 1478efe4b6f..4d60721582c 100644
--- a/actions/setup/js/mcp_cli_bridge.test.cjs
+++ b/actions/setup/js/mcp_cli_bridge.test.cjs
@@ -3,7 +3,19 @@ import fs from "fs";
 import os from "os";
 import path from "path";
 
-import { ensureSafeOutputsTools, formatResponse, getToolCallTimeoutMs, hasStdinJsonPayload, parseToolArgs, readStdinSync, shouldShowToolHelpForEmptyArgs, showHelp, showToolHelp, writeStdoutAndFlush } from "./mcp_cli_bridge.cjs";
+import {
+  ensureSafeOutputsTools,
+  formatResponse,
+  getToolCallTimeoutMs,
+  hasStdinJsonPayload,
+  parseToolArgs,
+  readStdinSync,
+  shouldShowToolHelpForEmptyArgs,
+  showHelp,
+  showToolHelp,
+  unescapeCliStringArg,
+  writeStdoutAndFlush,
+} from "./mcp_cli_bridge.cjs";
 
 describe("mcp_cli_bridge.cjs", () => {
   let originalCore;
@@ -750,6 +762,98 @@ describe("mcp_cli_bridge.cjs", () => {
     });
   });
 
+  describe("unescapeCliStringArg", () => {
+    it("converts \\n to an actual newline", () => {
+      expect(unescapeCliStringArg("Hello\\nWorld")).toBe("Hello\nWorld");
+    });
+
+    it("converts \\t to a tab character", () => {
+      expect(unescapeCliStringArg("col1\\tcol2")).toBe("col1\tcol2");
+    });
+
+    it("converts \\r to a carriage return", () => {
+      expect(unescapeCliStringArg("line1\\rline2")).toBe("line1\rline2");
+    });
+
+    it("converts \\b to a backspace character", () => {
+      expect(unescapeCliStringArg("abc\\bdef")).toBe("abc\bdef");
+    });
+
+    it("converts \\f to a form-feed character", () => {
+      expect(unescapeCliStringArg("page1\\fpage2")).toBe("page1\fpage2");
+    });
+
+    it("converts \\\\ to a single backslash", () => {
+      expect(unescapeCliStringArg("path\\\\to\\\\file")).toBe("path\\to\\file");
+    });
+
+    it("converts \\uXXXX escapes to their Unicode code points", () => {
+      expect(unescapeCliStringArg("quote:\\u2019")).toBe("quote:’");
+    });
+
+    it("converts \\\\n to a literal backslash followed by n (not a newline)", () => {
+      // \\n in the CLI arg should become \n (backslash + n), not a newline
+      expect(unescapeCliStringArg("Hello\\\\nWorld")).toBe("Hello\\nWorld");
+    });
+
+    it("leaves unknown escape sequences unchanged", () => {
+      expect(unescapeCliStringArg("value\\xunknown")).toBe("value\\xunknown");
+    });
+
+    it("handles multiple escape sequences in the same string", () => {
+      expect(unescapeCliStringArg("line1\\nline2\\nline3")).toBe("line1\nline2\nline3");
+    });
+
+    it("returns a plain string unchanged when no escape sequences are present", () => {
+      expect(unescapeCliStringArg("no escapes here")).toBe("no escapes here");
+    });
+  });
+
+  describe("parseToolArgs — body-like string escape unescaping", () => {
+    it("unescapes \\n in body CLI flag arguments", () => {
+      const schemaProperties = { body: { type: "string" } };
+      const { args } = parseToolArgs(["--body", "Hello\\nWorld"], schemaProperties);
+      expect(args).toEqual({ body: "Hello\nWorld" });
+    });
+
+    it("unescapes \\n in body --key=value arguments", () => {
+      const schemaProperties = { body: { type: "string" } };
+      const { args } = parseToolArgs(["--body=Hello\\nWorld"], schemaProperties);
+      expect(args).toEqual({ body: "Hello\nWorld" });
+    });
+
+    it("unescapes \\n for nullable draft body fields", () => {
+      const schemaProperties = { draft_body: { type: ["string", "null"] } };
+      const { args } = parseToolArgs(["--draft-body", "line1\\nline2"], schemaProperties);
+      expect(args).toEqual({ draft_body: "line1\nline2" });
+    });
+
+    it("does not unescape generic string fields like paths", () => {
+      const schemaProperties = { path: { type: "string" } };
+      const { args } = parseToolArgs(["--path", "C:\\temp\\new_file"], schemaProperties);
+      expect(args).toEqual({ path: "C:\\temp\\new_file" });
+    });
+
+    it("does not unescape \\n when schema type is integer", () => {
+      // A value with \n for an integer field should not be unescaped (it would fail coercion anyway)
+      const schemaProperties = { count: { type: "integer" } };
+      const { args } = parseToolArgs(["--count", "5\\n"], schemaProperties);
+      // "5\n" is not a valid integer, falls through to rawValue
+      expect(args).toEqual({ count: "5\\n" });
+    });
+
+    it("produces actual newlines in body fields matching JSON stdin mode behaviour", () => {
+      // Verify that --body "title\n\nbody" (CLI flags) gives the same result as
+      // JSON stdin with {"body":"title\n\nbody"}
+      const schemaProperties = { body: { type: ["string", "null"] } };
+
+      const { args: cliArgs } = parseToolArgs(["--body", "title\\n\\nbody"], schemaProperties);
+      const { args: jsonArgs } = parseToolArgs(["."], schemaProperties, '{"body":"title\\n\\nbody"}');
+
+      expect(cliArgs).toEqual(jsonArgs);
+    });
+  });
+
   describe("writeStdoutAndFlush", () => {
     it("resolves immediately when stdout.write returns true (no backpressure)", async () => {
       // The beforeEach mock captures chunks and returns true (no backpressure).