diff --git a/internal/services/template.go b/internal/services/template.go
index 8f114f0..f7bf2ec 100644
--- a/internal/services/template.go
+++ b/internal/services/template.go
@@ -1033,6 +1033,16 @@ func extractLinkDisplay(urlStr string) string {
 		strings.TrimSuffix(u.EscapedPath(), "/"),
 		func(r rune) bool { return r == '/' },
 	)
+	// Percent-escapes belong on the wire, not in display text — a reader should see
+	// "über", not "%C3%BCber". Decode after splitting, so an encoded %2F cannot
+	// invent a segment boundary, and before measuring, so the cap counts the
+	// characters that actually reach the pill.
+	for i, seg := range segments {
+		if decoded, decErr := url.PathUnescape(seg); decErr == nil {
+			segments[i] = decoded
+		}
+	}
+
 	for len(segments) > 0 {
 		candidate := host + "/" + strings.Join(segments, "/")
 		if utf8.RuneCountInString(candidate) <= linkDisplayCap {
diff --git a/internal/services/template_test.go b/internal/services/template_test.go
index a2902c9..5167424 100644
--- a/internal/services/template_test.go
+++ b/internal/services/template_test.go
@@ -1227,6 +1227,17 @@ func TestExtractLinkDisplay(t *testing.T) {
 
 		{"fragment dropped", "https://go.dev/ref/mod#go-mod-file-retract", "go.dev/ref/mod"},
 
+		// Percent-escapes are decoded for display; the reader sees the character,
+		// not its wire encoding.
+		{"unicode path decoded", "https://exämple.de/über", "exämple.de/über"},
+		{"escaped space decoded", "https://example.com/a%20b/c", "example.com/a b/c"},
+		// Decoding happens after the split, so an encoded slash cannot invent a
+		// segment boundary.
+		{"encoded slash stays in its segment", "https://example.com/a%2Fb", "example.com/a/b"},
+
+		{"port dropped", "https://example.com:8443/path", "example.com/path"},
+		{"empty path segments collapse", "https://example.com//double//slash", "example.com/double/slash"},
+
 		// Query deliberately not shown — it cannot fit the mobile pill, and the
 		// card title carries primary identity.
 		{"query dropped", "https://news.ycombinator.com/item?id=12345", "news.ycombinator.com/item"},
@@ -1250,9 +1261,9 @@ func TestExtractLinkDisplay(t *testing.T) {
 	}
 }
 
-// Whatever the helper emits must fit the pill's character budget on its own. The
-// CSS ellipsis is the safety net for pathological input; it should not be what
-// keeps ordinary links readable.
+// Anything the helper can shorten by dropping segments must fit the pill's budget
+// on its own. The CSS ellipsis is the safety net for input the helper cannot
+// shorten; it should not be what keeps ordinary links readable.
 func TestExtractLinkDisplay_StaysWithinPillBudget(t *testing.T) {
 	longs := []string{
 		"https://example.com/a/very/deep/path/that/keeps/going/and/going/forever",
@@ -1268,3 +1279,14 @@ func TestExtractLinkDisplay_StaysWithinPillBudget(t *testing.T) {
 			"segments are dropped whole, so no ellipsis should reach the template")
 	}
 }
+
+// A hostname longer than the budget is returned whole and left to the CSS
+// ellipsis. Truncating it here would emit something that is not a hostname, which
+// reads worse than a visibly clipped one — so this documents the one input class
+// where CSS is genuinely load-bearing.
+func TestExtractLinkDisplay_LongHostExceedsBudgetByDesign(t *testing.T) {
+	got := extractLinkDisplay("https://a.very.long.subdomain.chain.example.co.uk/x")
+	assert.Equal(t, "a.very.long.subdomain.chain.example.co.uk", got)
+	assert.Greater(t, utf8.RuneCountInString(got), linkDisplayCap,
+		"if this now fits, the cap changed and the CSS-fallback rationale needs revisiting")
+}