diff --git a/packages/app/e2e/sidebar-workspace.spec.ts b/packages/app/e2e/sidebar-workspace.spec.ts
index 69c86af84..793473f16 100644
--- a/packages/app/e2e/sidebar-workspace.spec.ts
+++ b/packages/app/e2e/sidebar-workspace.spec.ts
@@ -47,6 +47,51 @@ async function waitForSidebarWorkspace(page: import("@playwright/test").Page, wo
   return row;
 }
 
+async function openWorkspaceHoverCard(page: import("@playwright/test").Page, workspaceId: string) {
+  const row = await waitForSidebarWorkspace(page, workspaceId);
+  await row.hover();
+
+  const hoverCard = page.getByRole("menu", { name: "Workspace scripts" });
+  await expect(hoverCard).toBeVisible({ timeout: 30_000 });
+  return hoverCard;
+}
+
+interface PaseoOwnedWorktree {
+  projectName: string;
+  workspaceId: string;
+  worktreeSlug: string;
+}
+
+async function withPaseoOwnedWorktree(
+  run: (workspace: PaseoOwnedWorktree) => Promise<void>,
+): Promise<void> {
+  const project = await seedWorkspace({ repoPrefix: "sidebar-hover-owned-worktree-" });
+  const worktreeSlug = "hover-card-owned-worktree";
+
+  try {
+    const created = await project.client.createWorkspace({
+      source: {
+        kind: "worktree",
+        cwd: project.repoPath,
+        projectId: project.projectId,
+        worktreeSlug,
+      },
+    });
+    if (!created.workspace) {
+      throw new Error(created.error ?? "Failed to create Paseo-owned worktree");
+    }
+    expect(path.basename(created.workspace.workspaceDirectory)).toBe(worktreeSlug);
+
+    await run({
+      projectName: path.basename(project.repoPath),
+      workspaceId: created.workspace.id,
+      worktreeSlug,
+    });
+  } finally {
+    await project.cleanup();
+  }
+}
+
 test.describe("Sidebar workspace list", () => {
   test("project with GitHub remote shows its selected folder name in sidebar", async ({ page }) => {
     const workspace = await seedWorkspace({
@@ -146,17 +191,23 @@ test.describe("Sidebar workspace list", () => {
       await gotoAppShell(page);
       await waitForSidebarProject(page, path.basename(workspace.repoPath));
 
-      const row = await waitForSidebarWorkspace(page, workspace.workspaceId);
-      await row.hover();
-
-      const hoverCard = page.getByTestId("workspace-hover-card");
-      await expect(hoverCard).toBeVisible({ timeout: 30_000 });
+      const hoverCard = await openWorkspaceHoverCard(page, workspace.workspaceId);
       await expect(page.getByTestId("hover-card-workspace-host")).toHaveText("localhost");
       await expect(hoverCard).not.toContainText(/\b(Online|Connecting|Offline|Error|Idle)\b/);
     } finally {
       await workspace.cleanup();
     }
   });
+
+  test("Paseo-owned worktree hover card shows the worktree directory name", async ({ page }) => {
+    await withPaseoOwnedWorktree(async ({ projectName, workspaceId, worktreeSlug }) => {
+      await gotoAppShell(page);
+      await waitForSidebarProject(page, projectName);
+      await openWorkspaceHoverCard(page, workspaceId);
+
+      await expect(page.getByTestId("hover-card-workspace-cwd")).toHaveText(worktreeSlug);
+    });
+  });
 });
 
 test.describe("Mobile sidebar panelState transition", () => {
diff --git a/packages/app/src/components/sidebar/sidebar-projection.test.ts b/packages/app/src/components/sidebar/sidebar-projection.test.ts
index 9338d55a4..b5d15d245 100644
--- a/packages/app/src/components/sidebar/sidebar-projection.test.ts
+++ b/packages/app/src/components/sidebar/sidebar-projection.test.ts
@@ -19,6 +19,8 @@ function makeWorkspace(id: string, statusBucket: SidebarWorkspaceEntry["statusBu
   };
   const entry: SidebarWorkspaceEntry = {
     ...placement,
+    workspaceDirectory: "",
+    workspaceDirectoryLabel: "",
     title: null,
     currentBranch: null,
     statusBucket,
diff --git a/packages/app/src/components/workspace-hover-card.tsx b/packages/app/src/components/workspace-hover-card.tsx
index 37cd114fc..6d7e13ac9 100644
--- a/packages/app/src/components/workspace-hover-card.tsx
+++ b/packages/app/src/components/workspace-hover-card.tsx
@@ -34,7 +34,6 @@ import { useBottomSheetModalInternal } from "@gorhom/bottom-sheet";
 import type { SidebarWorkspaceEntry } from "@/hooks/use-sidebar-workspaces-list";
 import type { PrHint } from "@/git/use-pr-status-query";
 import { openExternalUrl } from "@/utils/open-external-url";
-import { shortenPath } from "@/utils/shorten-path";
 import { copyToClipboard } from "@/utils/copy-to-clipboard";
 import { PrBadge } from "@/components/sidebar-workspace-list";
 import { useHoverSafeZone } from "@/hooks/use-hover-safe-zone";
@@ -214,7 +213,6 @@ function WorkspaceHoverCardContent({
   contentRef: React.RefObject<View | null>;
 }): ReactElement | null {
   const { t } = useTranslation();
-  const cwdDisplay = shortenPath(workspace.workspaceDirectory);
   const bottomSheetInternal = useBottomSheetModalInternal(true);
   const [triggerRect, setTriggerRect] = useState<Rect | null>(null);
   const [contentSize, setContentSize] = useState<{ width: number; height: number } | null>(null);
@@ -297,11 +295,11 @@ function WorkspaceHoverCardContent({
               testID="hover-card-workspace-branch"
             />
           ) : null}
-          {cwdDisplay ? (
+          {workspace.workspaceDirectoryLabel ? (
             <CopyableInfoRow
               icon={ThemedFolder}
-              value={cwdDisplay}
-              copyValue={workspace.workspaceDirectory ?? ""}
+              value={workspace.workspaceDirectoryLabel}
+              copyValue={workspace.workspaceDirectory}
               copyLabel={t("workspace.hoverCard.copyPath")}
               testID="hover-card-workspace-cwd"
             />
diff --git a/packages/app/src/hooks/sidebar-status-view-model.test.ts b/packages/app/src/hooks/sidebar-status-view-model.test.ts
index c9e026da8..62dc7142a 100644
--- a/packages/app/src/hooks/sidebar-status-view-model.test.ts
+++ b/packages/app/src/hooks/sidebar-status-view-model.test.ts
@@ -17,7 +17,8 @@ function ws(
     projectViewKey: input.projectViewKey ?? "proj",
     projectName: input.projectName ?? "Project",
     projectRootPath: input.projectRootPath,
-    workspaceDirectory: input.workspaceDirectory,
+    workspaceDirectory: input.workspaceDirectory ?? "",
+    workspaceDirectoryLabel: input.workspaceDirectoryLabel ?? "",
     projectKind: input.projectKind ?? "git",
     workspaceKind: input.workspaceKind ?? "worktree",
     name: input.name ?? "main",
diff --git a/packages/app/src/hooks/sidebar-workspaces-view-model.test.ts b/packages/app/src/hooks/sidebar-workspaces-view-model.test.ts
index d108f9d86..332f90a7d 100644
--- a/packages/app/src/hooks/sidebar-workspaces-view-model.test.ts
+++ b/packages/app/src/hooks/sidebar-workspaces-view-model.test.ts
@@ -64,6 +64,27 @@ describe("createSidebarWorkspaceEntry forge threading", () => {
   });
 });
 
+describe("createSidebarWorkspaceEntry workspace directory label", () => {
+  it("uses the daemon-provided slug for a Paseo-owned worktree", () => {
+    const descriptor = workspaceWithForge(undefined, "https://github.com/acme/repo/pull/42");
+    descriptor.workspaceDirectory = "/worktrees/feature/packages/app";
+    descriptor.worktreeSlug = "feature";
+
+    const entry = createSidebarWorkspaceEntry({ serverId: "srv", workspace: descriptor });
+
+    expect(entry.workspaceDirectoryLabel).toBe("feature");
+  });
+
+  it("shortens the workspace path when the daemon omits a worktree slug", () => {
+    const descriptor = workspaceWithForge(undefined, "https://github.com/acme/repo/pull/42");
+    descriptor.workspaceDirectory = "/home/alice/external/feature";
+
+    const entry = createSidebarWorkspaceEntry({ serverId: "srv", workspace: descriptor });
+
+    expect(entry.workspaceDirectoryLabel).toBe("~/external/feature");
+  });
+});
+
 interface OrderedItem {
   key: string;
 }
diff --git a/packages/app/src/hooks/sidebar-workspaces-view-model.ts b/packages/app/src/hooks/sidebar-workspaces-view-model.ts
index 330822799..5c73b0356 100644
--- a/packages/app/src/hooks/sidebar-workspaces-view-model.ts
+++ b/packages/app/src/hooks/sidebar-workspaces-view-model.ts
@@ -8,6 +8,7 @@ import type {
   WorkspaceStructureProject,
 } from "@/projects/workspace-structure";
 import { projectDisplayNameFromProjectId } from "@/utils/project-display-name";
+import { shortenPath } from "@/utils/shorten-path";
 import type { WorkspaceAgentActivity } from "@/utils/workspace-agent-activity";
 import { resolveWorkspaceMapKeyByIdentity } from "@/utils/workspace-identity";
 
@@ -34,6 +35,8 @@ export interface SidebarStatusWorkspacePlacement extends SidebarWorkspacePlaceme
 }
 
 export interface SidebarWorkspaceEntry extends SidebarStatusWorkspacePlacement {
+  workspaceDirectory: string;
+  workspaceDirectoryLabel: string;
   // Raw user-set title (null when the name is derived from branch/directory).
   // Prefills the rename input and signals whether a reset is available.
   title: string | null;
@@ -155,6 +158,8 @@ export function createSidebarWorkspaceEntry(input: {
     projectName: projectNameForWorkspace(input.workspace),
     projectRootPath: input.workspace.projectRootPath,
     workspaceDirectory: input.workspace.workspaceDirectory,
+    workspaceDirectoryLabel:
+      input.workspace.worktreeSlug ?? shortenPath(input.workspace.workspaceDirectory),
     projectKind: input.workspace.projectKind,
     workspaceKind: input.workspace.workspaceKind,
     name: input.workspace.name,
diff --git a/packages/app/src/hooks/use-sidebar-shortcut-model.test.tsx b/packages/app/src/hooks/use-sidebar-shortcut-model.test.tsx
index c54fa0cd2..ebb0c5e81 100644
--- a/packages/app/src/hooks/use-sidebar-shortcut-model.test.tsx
+++ b/packages/app/src/hooks/use-sidebar-shortcut-model.test.tsx
@@ -21,6 +21,7 @@ function workspace(projectKey: string, workspaceId: string): SidebarWorkspaceEnt
     projectName: projectKey,
     projectRootPath: `/repo/${projectKey}`,
     workspaceDirectory: `/repo/${projectKey}/${workspaceId}`,
+    workspaceDirectoryLabel: `/repo/${projectKey}/${workspaceId}`,
     projectKind: "git",
     workspaceKind: "worktree",
     name: workspaceId,
diff --git a/packages/app/src/runtime/replica-cache/index.test.ts b/packages/app/src/runtime/replica-cache/index.test.ts
index bf3344de0..cf8f9978d 100644
--- a/packages/app/src/runtime/replica-cache/index.test.ts
+++ b/packages/app/src/runtime/replica-cache/index.test.ts
@@ -94,7 +94,16 @@ function seedSession(): void {
   store.setAgents(SERVER_ID, new Map([["agent-1", agent("agent-1")]]));
   store.setWorkspaces(
     SERVER_ID,
-    new Map([["workspace-1", normalizeWorkspaceDescriptor(workspace())]]),
+    new Map([
+      [
+        "workspace-1",
+        normalizeWorkspaceDescriptor({
+          ...workspace(),
+          workspaceKind: "worktree",
+          worktreeSlug: "owned-worktree",
+        }),
+      ],
+    ]),
   );
   store.setProjects(SERVER_ID, [
     normalizeProjectDescriptor({
@@ -172,6 +181,7 @@ describe("ReplicaCache", () => {
     expect(Array.from(session?.projects.keys() ?? [])).toEqual(["project-1"]);
     expect(session?.agents.get("agent-1")?.updatedAt).toBeInstanceOf(Date);
     expect(session?.workspaces.get("workspace-1")?.statusEnteredAt).toBeInstanceOf(Date);
+    expect(session?.workspaces.get("workspace-1")?.worktreeSlug).toBe("owned-worktree");
     expect(session?.agentStreamTail.get("agent-1")).toEqual([message("message-1", "Cached")]);
     expect(session?.agentAuthoritativeHistoryApplied.get("agent-1")).toBe(true);
     expect(session?.agentTimelineCursor.get("agent-1")).toEqual({
diff --git a/packages/app/src/runtime/replica-cache/index.ts b/packages/app/src/runtime/replica-cache/index.ts
index 5158e7d01..4b4a25439 100644
--- a/packages/app/src/runtime/replica-cache/index.ts
+++ b/packages/app/src/runtime/replica-cache/index.ts
@@ -199,6 +199,7 @@ function serializeWorkspace(workspace: WorkspaceDescriptor): WorkspaceDescriptor
     projectCustomIconRevision: workspace.projectCustomIconRevision ?? null,
     projectRootPath: workspace.projectRootPath,
     workspaceDirectory: workspace.workspaceDirectory,
+    worktreeSlug: workspace.worktreeSlug,
     projectKind: workspace.projectKind,
     workspaceKind: workspace.workspaceKind,
     name: workspace.name,
diff --git a/packages/app/src/stores/session-store.ts b/packages/app/src/stores/session-store.ts
index 5df9b9cc9..5c9deefd1 100644
--- a/packages/app/src/stores/session-store.ts
+++ b/packages/app/src/stores/session-store.ts
@@ -132,6 +132,7 @@ export interface WorkspaceDescriptor {
   projectCustomIconRevision?: string | null;
   projectRootPath: string;
   workspaceDirectory: string;
+  worktreeSlug?: WorkspaceDescriptorPayload["worktreeSlug"];
   projectKind: WorkspaceDescriptorPayload["projectKind"];
   workspaceKind: WorkspaceDescriptorPayload["workspaceKind"];
   name: string;
@@ -167,6 +168,7 @@ export function normalizeWorkspaceDescriptor(
     // consumer can read workspace.workspaceDirectory directly. Empty means "no
     // usable directory" (older daemons may omit it; the wire field is optional).
     workspaceDirectory: normalizeWorkspacePath(payload.workspaceDirectory) ?? "",
+    worktreeSlug: payload.worktreeSlug,
     projectKind: payload.projectKind,
     workspaceKind: payload.workspaceKind,
     name: payload.name,
diff --git a/packages/app/src/utils/sidebar-project-row-model.test.ts b/packages/app/src/utils/sidebar-project-row-model.test.ts
index 6101963f7..fdd917355 100644
--- a/packages/app/src/utils/sidebar-project-row-model.test.ts
+++ b/packages/app/src/utils/sidebar-project-row-model.test.ts
@@ -18,6 +18,7 @@ function workspace(overrides: Partial<SidebarWorkspaceEntry> = {}): SidebarWorks
     projectViewKey: "project-1",
     projectName: "paseo",
     workspaceDirectory: "/repo",
+    workspaceDirectoryLabel: "/repo",
     projectKind: "git",
     workspaceKind: "checkout",
     name: "paseo",
diff --git a/packages/app/src/utils/sidebar-shortcuts.test.ts b/packages/app/src/utils/sidebar-shortcuts.test.ts
index 196705c2b..6b008e3dc 100644
--- a/packages/app/src/utils/sidebar-shortcuts.test.ts
+++ b/packages/app/src/utils/sidebar-shortcuts.test.ts
@@ -27,6 +27,7 @@ function workspace(input: {
     projectViewKey: input.projectKey ?? "project-default",
     projectName: input.projectKey ?? "Project",
     workspaceDirectory: input.workspaceDirectory,
+    workspaceDirectoryLabel: input.workspaceDirectory,
     projectKind: "git",
     workspaceKind: "checkout",
     name: input.name,
diff --git a/packages/protocol/src/messages.ts b/packages/protocol/src/messages.ts
index 24ee12e56..378cd5576 100644
--- a/packages/protocol/src/messages.ts
+++ b/packages/protocol/src/messages.ts
@@ -3155,6 +3155,9 @@ export const WorkspaceDescriptorPayloadSchema = z
     projectCustomIconRevision: z.string().nullable().optional(),
     projectRootPath: z.string(),
     workspaceDirectory: z.string().optional(),
+    // COMPAT(worktreeSlug): added in v0.2.6, remove optional after 2027-01-31.
+    // Present only for Paseo-owned worktrees; this is the basename of their root directory.
+    worktreeSlug: z.string().optional(),
     projectKind: z.enum(["git", "non_git", "directory"]),
     // COMPAT(workspaces): keep legacy directory workspace kind parseable.
     workspaceKind: z.enum(["directory", "local_checkout", "checkout", "worktree"]),
diff --git a/packages/protocol/src/messages.workspaces.test.ts b/packages/protocol/src/messages.workspaces.test.ts
index 72146149f..03a0bd432 100644
--- a/packages/protocol/src/messages.workspaces.test.ts
+++ b/packages/protocol/src/messages.workspaces.test.ts
@@ -499,6 +499,26 @@ describe("workspace message schemas", () => {
       throw new Error("Expected workspace_update upsert payload");
     }
     expect(parsed.payload.workspace.workspaceDirectory).toBe("/repo");
+    expect(parsed.payload.workspace.worktreeSlug).toBeUndefined();
+  });
+
+  test("preserves a Paseo-owned worktree slug", () => {
+    const parsed = WorkspaceDescriptorPayloadSchema.parse({
+      id: "owned-worktree",
+      projectId: "project",
+      projectDisplayName: "repo",
+      projectRootPath: "/repo",
+      workspaceDirectory: "/paseo/worktrees/project/feature/packages/app",
+      worktreeSlug: "feature",
+      projectKind: "git",
+      workspaceKind: "worktree",
+      name: "feature",
+      status: "done",
+      activityAt: null,
+      scripts: [],
+    });
+
+    expect(parsed.worktreeSlug).toBe("feature");
   });
 
   test("defaults omitted workspace archiving state and preserves present timestamps", () => {
diff --git a/packages/server/src/server/session.ts b/packages/server/src/server/session.ts
index 24c2c9861..a73bb6616 100644
--- a/packages/server/src/server/session.ts
+++ b/packages/server/src/server/session.ts
@@ -1,7 +1,7 @@
 import equal from "fast-deep-equal";
 import { v4 as uuidv4 } from "uuid";
 import { lstat, mkdir, mkdtemp, rename, rm, stat } from "node:fs/promises";
-import { resolve, sep } from "path";
+import { basename, resolve, sep } from "path";
 import { homedir } from "node:os";
 import { CLIENT_CAPS, type ClientCapability } from "@getpaseo/protocol/client-capabilities";
 import {
@@ -4276,6 +4276,11 @@ export class Session {
       diffStat = snapshot.git.diffStat;
     }
 
+    const worktreeSlug =
+      workspace.isPaseoOwnedWorktree && workspace.worktreeRoot
+        ? basename(workspace.worktreeRoot)
+        : undefined;
+
     return {
       id: workspace.workspaceId,
       projectId: workspace.projectId,
@@ -4286,6 +4291,7 @@ export class Session {
       projectCustomIconRevision: resolvedProjectRecord?.customIconRevision ?? null,
       projectRootPath: resolvedProjectRecord?.rootPath ?? workspace.cwd,
       workspaceDirectory: workspace.cwd,
+      worktreeSlug,
       projectKind: (resolvedProjectRecord?.kind ?? "directory") === "git" ? "git" : "non_git",
       workspaceKind: workspace.kind,
       name: resolveWorkspaceDisplayName(workspace),
@@ -4373,6 +4379,7 @@ export class Session {
       projectCustomIconRevision: projectRecord?.customIconRevision ?? null,
       projectRootPath: projectRecord?.rootPath ?? result.repoRoot,
       workspaceDirectory: result.workspace.cwd,
+      worktreeSlug: basename(result.worktree.worktreePath),
       projectKind: projectRecord?.kind ?? "git",
       workspaceKind: result.workspace.kind,
       name: resolveWorkspaceName({