diff --git a/src/claude_code_sdk/_internal/transport/subprocess_cli.py b/src/claude_code_sdk/_internal/transport/subprocess_cli.py
index f63732a..9187517 100644
--- a/src/claude_code_sdk/_internal/transport/subprocess_cli.py
+++ b/src/claude_code_sdk/_internal/transport/subprocess_cli.py
@@ -18,6 +18,113 @@ from ...types import ClaudeCodeOptions
 from . import Transport
 
 
+class JSONStreamParser:
+    """Handles parsing of potentially incomplete JSON streams."""
+
+    def __init__(self):
+        self._buffer = ""
+
+    def add_data(self, data: str) -> list[dict[str, Any]]:
+        """Add new data to buffer and return any complete JSON objects."""
+        self._buffer += data
+        return self._extract_complete_objects()
+
+    def _extract_complete_objects(self) -> list[dict[str, Any]]:
+        """Extract all complete JSON objects from the buffer."""
+        objects = []
+
+        # Handle newline-separated JSON objects
+        lines = self._buffer.split('\n')
+
+        # Keep the last line in buffer
+        self._buffer = lines[-1] if lines else ""
+
+        # Process all complete lines
+        for line in lines[:-1]:
+            line = line.strip()
+            if not line:
+                continue
+
+            if parsed_obj := self._try_parse_single_line(line):
+                objects.append(parsed_obj)
+
+        # Try to parse remaining buffer for complete objects
+        while self._buffer:
+            parsed_obj, remaining = self._try_parse_partial_buffer()
+            if parsed_obj:
+                objects.append(parsed_obj)
+                self._buffer = remaining
+            else:
+                break
+
+        return objects
+
+    def _try_parse_single_line(self, line: str) -> dict[str, Any] | None:
+        """Try to parse a single line as JSON."""
+        try:
+            return json.loads(line)
+        except json.JSONDecodeError:
+            # If single line fails, add to buffer for partial parsing
+            self._buffer = line + "\n" + self._buffer
+            return None
+
+    def _try_parse_partial_buffer(self) -> tuple[dict[str, Any] | None, str]:
+        """Try to extract complete JSON object from partial buffer."""
+        buffer = self._buffer.strip()
+        if not buffer:
+            return None, ""
+
+        # Quick attempt at full parse
+        try:
+            return json.loads(buffer), ""
+        except json.JSONDecodeError:
+            pass
+
+        # Try to find complete JSON object by tracking braces
+        complete_object = self._find_complete_json_object(buffer)
+        if complete_object:
+            try:
+                parsed = json.loads(complete_object)
+                remaining = buffer[len(complete_object):].strip()
+                return parsed, remaining
+            except json.JSONDecodeError:
+                pass
+
+        return None, buffer
+
+    def _find_complete_json_object(self, text: str) -> str | None:
+        """Find the first complete JSON object in text using brace counting."""
+        if not text.startswith('{'):
+            return None
+
+        brace_count = 0
+        in_string = False
+        escape_next = False
+
+        for i, char in enumerate(text):
+            if escape_next:
+                escape_next = False
+                continue
+
+            if char == '\\':
+                escape_next = True
+                continue
+
+            if char == '"' and not escape_next:
+                in_string = not in_string
+                continue
+
+            if not in_string:
+                if char == '{':
+                    brace_count += 1
+                elif char == '}':
+                    brace_count -= 1
+                    if brace_count == 0:
+                        return text[:i + 1]
+
+        return None
+
+
 class SubprocessCLITransport(Transport):
     """Subprocess transport using Claude Code CLI."""
 
@@ -169,6 +276,7 @@ class SubprocessCLITransport(Transport):
             raise CLIConnectionError("Not connected")
 
         stderr_lines = []
+        json_parser = JSONStreamParser()
 
         async def read_stderr() -> None:
             """Read stderr in background."""
@@ -188,17 +296,19 @@ class SubprocessCLITransport(Transport):
                     if not line_str:
                         continue
 
+                    # Parse potentially incomplete JSON stream
                     try:
-                        data = json.loads(line_str)
-                        try:
-                            yield data
-                        except GeneratorExit:
-                            # Handle generator cleanup gracefully
-                            return
-                    except json.JSONDecodeError as e:
+                        complete_objects = json_parser.add_data(line_str)
+                        for json_obj in complete_objects:
+                            yield json_obj
+                    except Exception as e:
+                        # If parsing fails completely, try simple fallback
                         if line_str.startswith("{") or line_str.startswith("["):
-                            raise SDKJSONDecodeError(line_str, e) from e
-                        continue
+                            try:
+                                data = json.loads(line_str)
+                                yield data
+                            except json.JSONDecodeError as json_err:
+                                raise SDKJSONDecodeError(line_str, json_err) from json_err
 
             except anyio.ClosedResourceError:
                 pass