diff --git a/crates/sidebar/src/sidebar.rs b/crates/sidebar/src/sidebar.rs
index c793b8a43aadcc6c8befed3a368ac2580693023a..ced8850cbb2df8b2d68b9967eb445f9490e66821 100644
--- a/crates/sidebar/src/sidebar.rs
+++ b/crates/sidebar/src/sidebar.rs
@@ -847,10 +847,6 @@ impl Sidebar {
 
                 // Merge live info into threads and update notification state
                 // in a single pass.
-                let is_active_workspace = active_workspace
-                    .as_ref()
-                    .is_some_and(|active| active == workspace);
-
                 for thread in &mut threads {
                     let session_id = &thread.session_info.session_id;
 
@@ -865,16 +861,23 @@ impl Sidebar {
                         thread.diff_stats = info.diff_stats;
                     }
 
+                    let is_thread_workspace_active = match &thread.workspace {
+                        ThreadEntryWorkspace::Open(thread_workspace) => active_workspace
+                            .as_ref()
+                            .is_some_and(|active| active == thread_workspace),
+                        ThreadEntryWorkspace::Closed(_) => false,
+                    };
+
                     if thread.is_background && thread.status == AgentThreadStatus::Completed {
                         notified_threads.insert(session_id.clone());
                     } else if thread.status == AgentThreadStatus::Completed
-                        && !is_active_workspace
+                        && !is_thread_workspace_active
                         && old_statuses.get(session_id) == Some(&AgentThreadStatus::Running)
                     {
                         notified_threads.insert(session_id.clone());
                     }
 
-                    if is_active_workspace && !thread.is_background {
+                    if is_thread_workspace_active && !thread.is_background {
                         notified_threads.remove(session_id);
                     }
                 }
@@ -5304,6 +5307,121 @@ mod tests {
         );
     }
 
+    #[gpui::test]
+    async fn test_absorbed_worktree_completion_triggers_notification(cx: &mut TestAppContext) {
+        agent_ui::test_support::init_test(cx);
+        cx.update(|cx| {
+            cx.update_flags(false, vec!["agent-v2".into()]);
+            ThreadStore::init_global(cx);
+            SidebarThreadMetadataStore::init_global(cx);
+            language_model::LanguageModelRegistry::test(cx);
+            prompt_store::init(cx);
+        });
+
+        let fs = FakeFs::new(cx.executor());
+
+        fs.insert_tree(
+            "/project",
+            serde_json::json!({
+                ".git": {
+                    "worktrees": {
+                        "feature-a": {
+                            "commondir": "../../",
+                            "HEAD": "ref: refs/heads/feature-a",
+                        },
+                    },
+                },
+                "src": {},
+            }),
+        )
+        .await;
+
+        fs.insert_tree(
+            "/wt-feature-a",
+            serde_json::json!({
+                ".git": "gitdir: /project/.git/worktrees/feature-a",
+                "src": {},
+            }),
+        )
+        .await;
+
+        fs.with_git_state(std::path::Path::new("/project/.git"), false, |state| {
+            state.worktrees.push(git::repository::Worktree {
+                path: std::path::PathBuf::from("/wt-feature-a"),
+                ref_name: "refs/heads/feature-a".into(),
+                sha: "aaa".into(),
+            });
+        })
+        .unwrap();
+
+        cx.update(|cx| <dyn fs::Fs>::set_global(fs.clone(), cx));
+
+        let main_project = project::Project::test(fs.clone(), ["/project".as_ref()], cx).await;
+        let worktree_project =
+            project::Project::test(fs.clone(), ["/wt-feature-a".as_ref()], cx).await;
+
+        main_project
+            .update(cx, |p, cx| p.git_scans_complete(cx))
+            .await;
+        worktree_project
+            .update(cx, |p, cx| p.git_scans_complete(cx))
+            .await;
+
+        let (multi_workspace, cx) = cx.add_window_view(|window, cx| {
+            MultiWorkspace::test_new(main_project.clone(), window, cx)
+        });
+
+        let worktree_workspace = multi_workspace.update_in(cx, |mw, window, cx| {
+            mw.test_add_workspace(worktree_project.clone(), window, cx)
+        });
+
+        let worktree_panel = add_agent_panel(&worktree_workspace, &worktree_project, cx);
+
+        multi_workspace.update_in(cx, |mw, window, cx| {
+            mw.activate_index(0, window, cx);
+        });
+
+        let sidebar = setup_sidebar(&multi_workspace, cx);
+
+        let connection = StubAgentConnection::new();
+        open_thread_with_connection(&worktree_panel, connection.clone(), cx);
+        send_message(&worktree_panel, cx);
+
+        let session_id = active_session_id(&worktree_panel, cx);
+        let wt_paths = PathList::new(&[std::path::PathBuf::from("/wt-feature-a")]);
+        save_test_thread_metadata(&session_id, wt_paths, cx).await;
+
+        cx.update(|_, cx| {
+            connection.send_update(
+                session_id.clone(),
+                acp::SessionUpdate::AgentMessageChunk(acp::ContentChunk::new("working...".into())),
+                cx,
+            );
+        });
+        cx.run_until_parked();
+
+        assert_eq!(
+            visible_entries_as_strings(&sidebar, cx),
+            vec![
+                "v [project]",
+                "  [+ New Thread]",
+                "  Hello {wt-feature-a} * (running)",
+            ]
+        );
+
+        connection.end_turn(session_id, acp::StopReason::EndTurn);
+        cx.run_until_parked();
+
+        assert_eq!(
+            visible_entries_as_strings(&sidebar, cx),
+            vec![
+                "v [project]",
+                "  [+ New Thread]",
+                "  Hello {wt-feature-a} * (!)",
+            ]
+        );
+    }
+
     #[gpui::test]
     async fn test_clicking_worktree_thread_opens_workspace_when_none_exists(
         cx: &mut TestAppContext,