diff --git a/api/routes.py b/api/routes.py
index b6105dfd..767ed1a9 100644
--- a/api/routes.py
+++ b/api/routes.py
@@ -2148,9 +2148,14 @@ def _handle_file_raw(handler, parsed):
     handler.send_header("Content-Type", mime)
     handler.send_header("Content-Length", str(len(raw_bytes)))
     handler.send_header("Cache-Control", "no-store")
-    # Security: force download for dangerous MIME types to prevent XSS
+    # Security: force download for dangerous MIME types to prevent XSS.
+    # Exception: ?inline=1 permits text/html to be served inline for the
+    # sandboxed workspace HTML preview iframe (sandbox="allow-scripts" with no
+    # allow-same-origin, so the iframe cannot access parent cookies/storage).
+    inline_preview = qs.get("inline", [""])[0] == "1"
     dangerous_types = {"text/html", "application/xhtml+xml", "image/svg+xml"}
-    if force_download or mime in dangerous_types:
+    html_inline_ok = inline_preview and mime == "text/html"
+    if force_download or (mime in dangerous_types and not html_inline_ok):
         handler.send_header(
             "Content-Disposition",
             _content_disposition_value("attachment", target.name),
diff --git a/static/workspace.js b/static/workspace.js
index 9931900e..4c726d55 100644
--- a/static/workspace.js
+++ b/static/workspace.js
@@ -234,7 +234,7 @@ async function openFile(path){
     // or reading other origin data. If a stricter mode is needed, remove
     // allow-scripts (or add sandbox="") to disable all JS execution.
     showPreview('html');
-    const url=`api/file/raw?session_id=${encodeURIComponent(S.session.session_id)}&path=${encodeURIComponent(path)}`;
+    const url=`api/file/raw?session_id=${encodeURIComponent(S.session.session_id)}&path=${encodeURIComponent(path)}&inline=1`;
     const iframe=$('previewHtmlIframe');
     if(iframe){
       iframe.src=''; // clear first to avoid stale content
diff --git a/tests/test_779_html_preview.py b/tests/test_779_html_preview.py
new file mode 100644
index 00000000..3ba9921c
--- /dev/null
+++ b/tests/test_779_html_preview.py
@@ -0,0 +1,62 @@
+"""Tests for inline HTML preview in workspace panel (issue #779)."""
+import pytest
+
+
+def _get_routes_content():
+    return open("api/routes.py", encoding="utf-8").read()
+
+
+def _get_workspace_js():
+    return open("static/workspace.js", encoding="utf-8").read()
+
+
+def _get_index_html():
+    return open("static/index.html", encoding="utf-8").read()
+
+
+def test_inline_preview_param_in_file_raw():
+    """?inline=1 must bypass Content-Disposition: attachment for text/html."""
+    content = _get_routes_content()
+    assert "inline_preview" in content, (
+        "_handle_file_raw must read the inline query parameter"
+    )
+    assert "html_inline_ok" in content, (
+        "_handle_file_raw must allow HTML inline when inline_preview=True"
+    )
+
+
+def test_iframe_uses_inline_param():
+    """workspace.js must pass &inline=1 when setting the preview iframe src."""
+    content = _get_workspace_js()
+    assert "inline=1" in content, (
+        "workspace.js must pass ?inline=1 to api/file/raw for the HTML preview iframe"
+    )
+
+
+def test_html_preview_iframe_exists_in_html():
+    """The previewHtmlIframe element must be present in index.html."""
+    content = _get_index_html()
+    assert "previewHtmlIframe" in content, (
+        "index.html must contain the previewHtmlIframe element"
+    )
+
+
+def test_html_exts_defined_in_workspace_js():
+    """HTML_EXTS set must include .html and .htm."""
+    content = _get_workspace_js()
+    assert "HTML_EXTS" in content, "workspace.js must define HTML_EXTS"
+    assert "'.html'" in content or '".html"' in content, "HTML_EXTS must include .html"
+    assert "'.htm'" in content or '".htm"' in content, "HTML_EXTS must include .htm"
+
+
+def test_sandbox_allows_scripts_only():
+    """iframe sandbox must not include allow-same-origin (XSS risk)."""
+    content = _get_index_html()
+    # Find the sandbox attribute value
+    import re
+    sandboxes = re.findall(r'sandbox="([^"]*)"', content)
+    preview_sandboxes = [s for s in sandboxes if "allow" in s]
+    for sb in preview_sandboxes:
+        assert "allow-same-origin" not in sb, (
+            "HTML preview iframe must not have allow-same-origin (would expose parent cookies)"
+        )