diff --git a/Cargo.lock b/Cargo.lock
index ee107643f18804d7abd1c6b0ed4aa52b1636756f..5de83278f2f081ef606f46d68ad4542912ddcd58 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -5015,6 +5015,7 @@ dependencies = [
  "settings",
  "smol",
  "text",
+ "util",
  "workspace",
 ]
 
diff --git a/crates/recent_projects/Cargo.toml b/crates/recent_projects/Cargo.toml
index e8d851fa083ab85ef6a05f53c3a5eb07ab8e4667..c056b6885250822be9e877226cdf89c0db2ed5e3 100644
--- a/crates/recent_projects/Cargo.toml
+++ b/crates/recent_projects/Cargo.toml
@@ -21,3 +21,4 @@ workspace = { path = "../workspace" }
 ordered-float = "2.1.1"
 postage = { workspace = true }
 smol = "1.2"
+util = { path = "../util"}
diff --git a/crates/recent_projects/src/highlighted_workspace_location.rs b/crates/recent_projects/src/highlighted_workspace_location.rs
index 8e75b291a0748627ce47c570c607eb2d2163358d..a71a7dd2d7de2fad414f44957995879d243d4cb3 100644
--- a/crates/recent_projects/src/highlighted_workspace_location.rs
+++ b/crates/recent_projects/src/highlighted_workspace_location.rs
@@ -61,6 +61,7 @@ impl HighlightedWorkspaceLocation {
             .paths()
             .iter()
             .map(|path| {
+                let path = util::paths::compact(&path);
                 let highlighted_text = Self::highlights_for_path(
                     path.as_ref(),
                     &string_match.positions,
diff --git a/crates/util/Cargo.toml b/crates/util/Cargo.toml
index b13b8af956c0f174c1897a920d47555bde119543..8a77cc358ca3b1497ad44f70b8dd3da080c9e413 100644
--- a/crates/util/Cargo.toml
+++ b/crates/util/Cargo.toml
@@ -6,7 +6,7 @@ publish = false
 
 [lib]
 path = "src/util.rs"
-doctest = false
+doctest = true
 
 [features]
 test-support = ["tempdir", "git2"]
diff --git a/crates/util/src/paths.rs b/crates/util/src/paths.rs
index 63c3c6d884a4e91fdeaff3766adc97a99072ec24..3fccb0c896e405ec80303fef1a5027ecc7c3c57f 100644
--- a/crates/util/src/paths.rs
+++ b/crates/util/src/paths.rs
@@ -1,4 +1,4 @@
-use std::path::PathBuf;
+use std::path::{Path, PathBuf};
 
 lazy_static::lazy_static! {
     pub static ref HOME: PathBuf = dirs::home_dir().expect("failed to determine home directory");
@@ -23,3 +23,49 @@ pub mod legacy {
         pub static ref KEYMAP: PathBuf = CONFIG_DIR.join("keymap.json");
     }
 }
+
+/// Compacts a given file path by replacing the user's home directory
+/// prefix with a tilde (`~`).
+///
+/// # Arguments
+///
+/// * `path` - A reference to a `Path` representing the file path to compact.
+///
+/// # Examples
+///
+/// ```
+/// use std::path::{Path, PathBuf};
+/// use util::paths::compact;
+/// let path: PathBuf = [
+///     util::paths::HOME.to_string_lossy().to_string(),
+///     "some_file.txt".to_string(),
+///  ]
+///  .iter()
+///  .collect();
+/// if cfg!(target_os = "linux") || cfg!(target_os = "macos") {
+///     assert_eq!(compact(&path).to_str(), Some("~/some_file.txt"));
+/// } else {
+///     assert_eq!(compact(&path).to_str(), path.to_str());
+/// }
+/// ```
+///
+/// # Returns
+///
+/// * A `PathBuf` containing the compacted file path. If the input path
+///   does not have the user's home directory prefix, or if we are not on
+///   Linux or macOS, the original path is returned unchanged.
+pub fn compact(path: &Path) -> PathBuf {
+    if cfg!(target_os = "linux") || cfg!(target_os = "macos") {
+        match path.strip_prefix(HOME.as_path()) {
+            Ok(relative_path) => {
+                let mut shortened_path = PathBuf::new();
+                shortened_path.push("~");
+                shortened_path.push(relative_path);
+                shortened_path
+            }
+            Err(_) => path.to_path_buf(),
+        }
+    } else {
+        path.to_path_buf()
+    }
+}
diff --git a/crates/util/src/test/marked_text.rs b/crates/util/src/test/marked_text.rs
index c2aaca383158db66833db52be667d95997bee9b6..dc91e7b5b6bd63565ec85842a111ec4e75be2f87 100644
--- a/crates/util/src/test/marked_text.rs
+++ b/crates/util/src/test/marked_text.rs
@@ -87,21 +87,21 @@ pub fn marked_text_ranges_by(
 /// 1. To mark a range of text, surround it with the `«` and `»` angle brackets,
 ///    which can be typed on a US keyboard with the `alt-|` and `alt-shift-|` keys.
 ///
-///    ```
+///    ```text
 ///    foo «selected text» bar
 ///    ```
 ///
 /// 2. To mark a single position in the text, use the `ˇ` caron,
 ///    which can be typed on a US keyboard with the `alt-shift-t` key.
 ///
-///    ```
+///    ```text
 ///    the cursors are hereˇ and hereˇ.
 ///    ```
 ///
 /// 3. To mark a range whose direction is meaningful (like a selection),
 ///    put a caron character beside one of its bounds, on the inside:
 ///
-///    ```
+///    ```text
 ///    one «ˇreversed» selection and one «forwardˇ» selection
 ///    ```
 pub fn marked_text_ranges(