diff --git a/crates/pi-builtins/src/xargs.rs b/crates/pi-builtins/src/xargs.rs
index ebd9c8d06..976dc7cba 100644
--- a/crates/pi-builtins/src/xargs.rs
+++ b/crates/pi-builtins/src/xargs.rs
@@ -741,7 +741,7 @@ fn process_input(
 		return Ok(result);
 	}
 
-	if !options.no_run_if_empty || have_pending_command {
+	if have_pending_command || (!options.no_run_if_empty && builder_options.replace.is_none()) {
 		result.combine(current_builder.execute(host)?);
 	}
 
@@ -1468,6 +1468,12 @@ mod tests {
 		assert_eq!(out, "\n");
 	}
 
+	#[test]
+	fn replace_mode_skips_empty_input_without_r() {
+		let result = run_simple(&["-I", "{}", "echo", "{}"], "");
+		assert_eq!(result, (0, String::new(), String::new()));
+	}
+
 	#[test]
 	fn verbose_echoes_command_line_to_stderr() {
 		let (code, out, err) = run_simple(&["-t", "echo", "a"], "b\n");
diff --git a/packages/natives/CHANGELOG.md b/packages/natives/CHANGELOG.md
index ed29a1901..f171b5206 100644
--- a/packages/natives/CHANGELOG.md
+++ b/packages/natives/CHANGELOG.md
@@ -2,6 +2,10 @@
 
 ## [Unreleased]
 
+### Fixed
+
+- Fixed the native `xargs` builtin panicking in `-I`/`-i` replace mode when stdin is empty; it now exits successfully without running the command, matching GNU behavior ([#8595](https://github.com/can1357/oh-my-pi/issues/8595)).
+
 ## [17.3.4] - 2026-08-14
 
 ### Added