diff --git a/server/change_dir_test.go b/server/change_dir_test.go
index 15647ae5149002b5b96f4b448b337f1cc5ca0e77..bee54acf5e542019df03bae584e552dcdb3acb80 100644
--- a/server/change_dir_test.go
+++ b/server/change_dir_test.go
@@ -1,6 +1,7 @@
 package server
 
 import (
+	"bufio"
 	"context"
 	"encoding/json"
 	"log/slog"
@@ -163,3 +164,130 @@ func truncate(s string, maxLen int) string {
 	}
 	return s[:maxLen] + "..."
 }
+
+// TestChangeDirBroadcastsCwdUpdate tests that change_dir broadcasts the updated cwd
+// to SSE subscribers so the UI gets the change immediately.
+func TestChangeDirBroadcastsCwdUpdate(t *testing.T) {
+	// Create a temp directory structure
+	tmpDir := t.TempDir()
+	subDir := filepath.Join(tmpDir, "subdir")
+	if err := os.Mkdir(subDir, 0o755); err != nil {
+		t.Fatal(err)
+	}
+
+	database, cleanup := setupTestDB(t)
+	defer cleanup()
+
+	predictableService := loop.NewPredictableService()
+	llmManager := &testLLMManager{service: predictableService}
+	logger := slog.Default()
+
+	// Create server with working directory set to tmpDir
+	toolSetConfig := claudetool.ToolSetConfig{
+		WorkingDir: tmpDir,
+	}
+	server := NewServer(database, llmManager, toolSetConfig, logger, true, "", "predictable", "", nil)
+
+	// Create test server
+	ts := httptest.NewServer(http.HandlerFunc(func(w http.ResponseWriter, r *http.Request) {
+		if strings.HasPrefix(r.URL.Path, "/api/conversation/") {
+			parts := strings.Split(r.URL.Path, "/")
+			if len(parts) >= 4 {
+				conversationID := parts[3]
+				if len(parts) >= 5 {
+					switch parts[4] {
+					case "chat":
+						server.handleChatConversation(w, r, conversationID)
+						return
+					case "stream":
+						server.handleStreamConversation(w, r, conversationID)
+						return
+					}
+				}
+			}
+		}
+		http.NotFound(w, r)
+	}))
+	defer ts.Close()
+
+	// Create conversation with initial cwd
+	conversation, err := database.CreateConversation(context.Background(), nil, true, &tmpDir, nil)
+	if err != nil {
+		t.Fatalf("failed to create conversation: %v", err)
+	}
+	conversationID := conversation.ConversationID
+
+	// Verify initial cwd
+	if conversation.Cwd == nil || *conversation.Cwd != tmpDir {
+		t.Fatalf("expected initial cwd %q, got %v", tmpDir, conversation.Cwd)
+	}
+
+	// Connect to SSE stream
+	ctx, cancel := context.WithTimeout(context.Background(), 10*time.Second)
+	defer cancel()
+
+	req, _ := http.NewRequestWithContext(ctx, "GET", ts.URL+"/api/conversation/"+conversationID+"/stream", nil)
+	req.Header.Set("Accept", "text/event-stream")
+
+	resp, err := http.DefaultClient.Do(req)
+	if err != nil {
+		t.Fatalf("failed to connect to SSE: %v", err)
+	}
+	defer resp.Body.Close()
+
+	// Channel to receive SSE events
+	events := make(chan StreamResponse, 10)
+	go func() {
+		scanner := bufio.NewScanner(resp.Body)
+		for scanner.Scan() {
+			line := scanner.Text()
+			if strings.HasPrefix(line, "data: ") {
+				data := strings.TrimPrefix(line, "data: ")
+				var sr StreamResponse
+				if err := json.Unmarshal([]byte(data), &sr); err == nil {
+					events <- sr
+				}
+			}
+		}
+	}()
+
+	// Wait for initial SSE event
+	select {
+	case <-events:
+		// Got initial event
+	case <-time.After(2 * time.Second):
+		t.Fatal("timeout waiting for initial SSE event")
+	}
+
+	// Send change_dir command
+	changeDirReq := ChatRequest{
+		Message: "change_dir: " + subDir,
+		Model:   "predictable",
+	}
+	changeDirBody, _ := json.Marshal(changeDirReq)
+
+	chatReq, _ := http.NewRequest("POST", ts.URL+"/api/conversation/"+conversationID+"/chat", strings.NewReader(string(changeDirBody)))
+	chatReq.Header.Set("Content-Type", "application/json")
+	chatResp, err := http.DefaultClient.Do(chatReq)
+	if err != nil {
+		t.Fatalf("failed to send chat: %v", err)
+	}
+	chatResp.Body.Close()
+
+	// Wait for SSE event with updated cwd
+	deadline := time.Now().Add(5 * time.Second)
+	for time.Now().Before(deadline) {
+		select {
+		case event := <-events:
+			// Check if this event has the updated cwd
+			if event.Conversation.Cwd != nil && *event.Conversation.Cwd == subDir {
+				// Success! The UI would receive this update
+				return
+			}
+		case <-time.After(100 * time.Millisecond):
+			// Continue waiting
+		}
+	}
+
+	t.Error("did not receive SSE event with updated cwd")
+}
diff --git a/server/convo.go b/server/convo.go
index ec17267956d3fe8bbe5dd9e96bfc4ff2dff72160..0207f2f845739e7383209478b8924c0c9daa375a 100644
--- a/server/convo.go
+++ b/server/convo.go
@@ -396,7 +396,28 @@ func (cm *ConversationManager) ensureLoop(service llm.Service, modelID string) e
 		// Persist working directory change to database
 		if err := db.UpdateConversationCwd(context.Background(), conversationID, newDir); err != nil {
 			logger.Error("failed to persist working directory change", "error", err, "newDir", newDir)
+			return
 		}
+
+		// Update local cwd
+		cm.mu.Lock()
+		cm.cwd = newDir
+		cm.mu.Unlock()
+
+		// Broadcast conversation update to subscribers so UI gets the new cwd
+		var conv generated.Conversation
+		err := db.Queries(context.Background(), func(q *generated.Queries) error {
+			var err error
+			conv, err = q.GetConversation(context.Background(), conversationID)
+			return err
+		})
+		if err != nil {
+			logger.Error("failed to get conversation for cwd broadcast", "error", err)
+			return
+		}
+		cm.subpub.Broadcast(StreamResponse{
+			Conversation: conv,
+		})
 	}
 
 	// Create a context with the conversation ID for LLM request recording/prefix dedup