diff --git a/src/vs/base/common/sseParser.ts b/src/vs/base/common/sseParser.ts
index 3648918d971..0990e0247d9 100644
--- a/src/vs/base/common/sseParser.ts
+++ b/src/vs/base/common/sseParser.ts
@@ -55,6 +55,7 @@ export class SSEParser {
 	private lastEventIdBuffer?: string;
 	private reconnectionTime?: number;
 	private buffer: Uint8Array[] = [];
+	private endedOnCR = false;
 	private readonly onEventHandler: SSEEventHandler;
 	private readonly decoder: TextDecoder;
 	/**
@@ -84,8 +85,18 @@ export class SSEParser {
 	 * @param chunk The chunk to parse as a Uint8Array of UTF-8 encoded data.
 	 */
 	public feed(chunk: Uint8Array): void {
+		if (chunk.length === 0) {
+			return;
+		}
+
 		let offset = 0;
 
+		// If the data stream was bifurcated between a CR and LF, avoid processing the CR as an extra newline
+		if (this.endedOnCR && chunk[0] === Chr.LF) {
+			offset++;
+		}
+		this.endedOnCR = false;
+
 		// Process complete lines from the buffer
 		while (offset < chunk.length) {
 			const indexCR = chunk.indexOf(Chr.CR, offset);
@@ -103,12 +114,14 @@ export class SSEParser {
 			this.processLine(str);
 
 			this.buffer.length = 0;
-			offset = index + (chunk[offset] === Chr.CR && chunk[offset + 1] === Chr.LF ? 2 : 1);
+			offset = index + (chunk[index] === Chr.CR && chunk[index + 1] === Chr.LF ? 2 : 1);
 		}
 
 
 		if (offset < chunk.length) {
 			this.buffer.push(chunk.subarray(offset));
+		} else {
+			this.endedOnCR = chunk[chunk.length - 1] === Chr.CR;
 		}
 	}
 	/**
diff --git a/src/vs/base/test/common/sseParser.test.ts b/src/vs/base/test/common/sseParser.test.ts
index 8c84fefd5de..c87664b6fb1 100644
--- a/src/vs/base/test/common/sseParser.test.ts
+++ b/src/vs/base/test/common/sseParser.test.ts
@@ -42,6 +42,31 @@ suite('SSEParser', () => {
 		assert.strictEqual(receivedEvents[0].type, 'custom');
 		assert.strictEqual(receivedEvents[0].data, 'hello world');
 	});
+	test('handles events with explicit event type (CRLF)', () => {
+		parser.feed(toUint8Array('event: custom\r\ndata: hello world\r\n\r\n'));
+
+		assert.strictEqual(receivedEvents.length, 1);
+		assert.strictEqual(receivedEvents[0].type, 'custom');
+		assert.strictEqual(receivedEvents[0].data, 'hello world');
+	});
+	test('stream processing chunks', () => {
+		for (const lf of ['\n', '\r\n', '\r']) {
+			const message = toUint8Array(`event: custom${lf}data: hello world${lf}${lf}event: custom2${lf}data: hello world2${lf}${lf}`);
+			for (let chunkSize = 1; chunkSize < 5; chunkSize++) {
+				receivedEvents.length = 0;
+
+				for (let i = 0; i < message.length; i += chunkSize) {
+					const chunk = message.slice(i, i + chunkSize);
+					parser.feed(chunk);
+				}
+
+				assert.deepStrictEqual(receivedEvents, [
+					{ type: 'custom', data: 'hello world' },
+					{ type: 'custom2', data: 'hello world2' }
+				], `Failed for chunk size ${chunkSize} and line ending ${JSON.stringify(lf)}`);
+			}
+		}
+	});
 	test('handles events with ID', () => {
 		parser.feed(toUint8Array('event: custom\ndata: hello\nid: 123\n\n'));