diff --git a/extension/src/popup/components/setup-wizard.ts b/extension/src/popup/components/setup-wizard.ts
index 934412e..c571477 100644
--- a/extension/src/popup/components/setup-wizard.ts
+++ b/extension/src/popup/components/setup-wizard.ts
@@ -156,11 +156,26 @@ function attachStep1Listeners(): void {
 
     const reader = new FileReader();
     reader.onload = () => {
-      const result = reader.result as string;
-      // Remove the data:image/jpeg;base64, prefix.
-      const base64 = result.split(',')[1] ?? result;
-      wizardImageBase64 = base64;
-      setState({ error: null }); // Re-render to show "image loaded".
+      try {
+        const result = reader.result as string;
+        // Remove the data:image/jpeg;base64, prefix.
+        const base64 = result.split(',')[1] ?? result;
+        wizardImageBase64 = base64;
+        // Update UI without a full re-render to avoid resetting file input state.
+        const dropEl = document.getElementById('file-drop');
+        if (dropEl) {
+          dropEl.classList.add('has-file');
+          const p = dropEl.querySelector('p');
+          if (p) p.textContent = `image loaded (${(file.size / 1024).toFixed(0)} KB)`;
+        }
+        const nextBtn = document.getElementById('next-btn') as HTMLButtonElement;
+        if (nextBtn) nextBtn.disabled = false;
+      } catch (err) {
+        setState({ error: `Failed to read image: ${err}` });
+      }
+    };
+    reader.onerror = () => {
+      setState({ error: 'Failed to read image file' });
     };
     reader.readAsDataURL(file);
   });