diff --git a/crates/agent_ui/src/acp/completion_provider.rs b/crates/agent_ui/src/acp/completion_provider.rs
index 2dac9fc563e41ea1985754ea80b6b31e2a7e3add..583d8070d98697f4620bf45a3284d88760ebf9e7 100644
--- a/crates/agent_ui/src/acp/completion_provider.rs
+++ b/crates/agent_ui/src/acp/completion_provider.rs
@@ -575,6 +575,7 @@ impl ContextPickerCompletionProvider {
             .unwrap_or_default();
         let workspace = workspace.read(cx);
         let project = workspace.project().read(cx);
+        let include_root_name = workspace.visible_worktrees(cx).count() > 1;
 
         if let Some(agent_panel) = workspace.panel::<AgentPanel>(cx)
             && let Some(thread) = agent_panel.read(cx).active_agent_thread(cx)
@@ -601,7 +602,11 @@ impl ContextPickerCompletionProvider {
                     project
                         .worktree_for_id(project_path.worktree_id, cx)
                         .map(|worktree| {
-                            let path_prefix = worktree.read(cx).root_name().into();
+                            let path_prefix = if include_root_name {
+                                worktree.read(cx).root_name().into()
+                            } else {
+                                RelPath::empty().into()
+                            };
                             Match::File(FileMatch {
                                 mat: fuzzy::PathMatch {
                                     score: 1.,
@@ -828,9 +833,21 @@ impl CompletionProvider for ContextPickerCompletionProvider {
                                         path: mat.path.clone(),
                                     };
 
+                                    // If path is empty, this means we're matching with the root directory itself
+                                    // so we use the path_prefix as the name
+                                    let path_prefix = if mat.path.is_empty() {
+                                        project
+                                            .read(cx)
+                                            .worktree_for_id(project_path.worktree_id, cx)
+                                            .map(|wt| wt.read(cx).root_name().into())
+                                            .unwrap_or_else(|| mat.path_prefix.clone())
+                                    } else {
+                                        mat.path_prefix.clone()
+                                    };
+
                                     Self::completion_for_path(
                                         project_path,
-                                        &mat.path_prefix,
+                                        &path_prefix,
                                         is_recent,
                                         mat.is_dir,
                                         source_range.clone(),
diff --git a/crates/agent_ui/src/acp/message_editor.rs b/crates/agent_ui/src/acp/message_editor.rs
index 08bdfa2b49690190e8cecf07016da3a65e28cec7..5fe591caca5b88b97351884593a8b1550d8a1d11 100644
--- a/crates/agent_ui/src/acp/message_editor.rs
+++ b/crates/agent_ui/src/acp/message_editor.rs
@@ -2165,10 +2165,10 @@ mod tests {
             assert_eq!(
                 current_completion_labels(editor),
                 &[
-                    format!("eight.txt dir{slash}b{slash}"),
-                    format!("seven.txt dir{slash}b{slash}"),
-                    format!("six.txt dir{slash}b{slash}"),
-                    format!("five.txt dir{slash}b{slash}"),
+                    format!("eight.txt b{slash}"),
+                    format!("seven.txt b{slash}"),
+                    format!("six.txt b{slash}"),
+                    format!("five.txt b{slash}"),
                 ]
             );
             editor.set_text("", window, cx);
@@ -2196,10 +2196,10 @@ mod tests {
             assert_eq!(
                 current_completion_labels(editor),
                 &[
-                    format!("eight.txt dir{slash}b{slash}"),
-                    format!("seven.txt dir{slash}b{slash}"),
-                    format!("six.txt dir{slash}b{slash}"),
-                    format!("five.txt dir{slash}b{slash}"),
+                    format!("eight.txt b{slash}"),
+                    format!("seven.txt b{slash}"),
+                    format!("six.txt b{slash}"),
+                    format!("five.txt b{slash}"),
                     "Files & Directories".into(),
                     "Symbols".into(),
                     "Threads".into(),
@@ -2232,7 +2232,7 @@ mod tests {
             assert!(editor.has_visible_completions_menu());
             assert_eq!(
                 current_completion_labels(editor),
-                vec![format!("one.txt dir{slash}a{slash}")]
+                vec![format!("one.txt a{slash}")]
             );
         });
 
@@ -2511,7 +2511,7 @@ mod tests {
                 format!("Lorem [@one.txt]({url_one})  Ipsum [@eight.txt]({url_eight}) [@MySymbol]({}) @file x.png", symbol.to_uri())
             );
             assert!(editor.has_visible_completions_menu());
-            assert_eq!(current_completion_labels(editor), &[format!("x.png dir{slash}")]);
+            assert_eq!(current_completion_labels(editor), &["x.png "]);
         });
 
         editor.update_in(&mut cx, |editor, window, cx| {
@@ -2553,7 +2553,7 @@ mod tests {
                         format!("Lorem [@one.txt]({url_one})  Ipsum [@eight.txt]({url_eight}) [@MySymbol]({}) @file x.png", symbol.to_uri())
                     );
                     assert!(editor.has_visible_completions_menu());
-                    assert_eq!(current_completion_labels(editor), &[format!("x.png dir{slash}")]);
+                    assert_eq!(current_completion_labels(editor), &["x.png "]);
                 });
 
         editor.update_in(&mut cx, |editor, window, cx| {
diff --git a/crates/agent_ui/src/context_picker.rs b/crates/agent_ui/src/context_picker.rs
index caffb31521e397ca7cd6b1fa0c8f4ae73d5ab9ff..0a6e811673aa47339087e538003e87b1940d0039 100644
--- a/crates/agent_ui/src/context_picker.rs
+++ b/crates/agent_ui/src/context_picker.rs
@@ -662,6 +662,7 @@ pub(crate) fn recent_context_picker_entries(
     let mut recent = Vec::with_capacity(6);
     let workspace = workspace.read(cx);
     let project = workspace.project().read(cx);
+    let include_root_name = workspace.visible_worktrees(cx).count() > 1;
 
     recent.extend(
         workspace
@@ -675,9 +676,16 @@ pub(crate) fn recent_context_picker_entries(
             .filter_map(|(project_path, _)| {
                 project
                     .worktree_for_id(project_path.worktree_id, cx)
-                    .map(|worktree| RecentEntry::File {
-                        project_path,
-                        path_prefix: worktree.read(cx).root_name().into(),
+                    .map(|worktree| {
+                        let path_prefix = if include_root_name {
+                            worktree.read(cx).root_name().into()
+                        } else {
+                            RelPath::empty().into()
+                        };
+                        RecentEntry::File {
+                            project_path,
+                            path_prefix,
+                        }
                     })
             }),
     );
diff --git a/crates/agent_ui/src/context_picker/completion_provider.rs b/crates/agent_ui/src/context_picker/completion_provider.rs
index 56444141f12903db4868f9e154cccdb872b48514..3a3ea45c800e3031dc8939c1801ca989a220bf0c 100644
--- a/crates/agent_ui/src/context_picker/completion_provider.rs
+++ b/crates/agent_ui/src/context_picker/completion_provider.rs
@@ -655,13 +655,12 @@ impl ContextPickerCompletionProvider {
         let SymbolLocation::InProject(symbol_path) = &symbol.path else {
             return None;
         };
-        let path_prefix = workspace
+        let _path_prefix = workspace
             .read(cx)
             .project()
             .read(cx)
-            .worktree_for_id(symbol_path.worktree_id, cx)?
-            .read(cx)
-            .root_name();
+            .worktree_for_id(symbol_path.worktree_id, cx)?;
+        let path_prefix = RelPath::empty();
 
         let (file_name, directory) = super::file_context_picker::extract_file_name_and_directory(
             &symbol_path.path,
@@ -818,9 +817,21 @@ impl CompletionProvider for ContextPickerCompletionProvider {
                                 return None;
                             }
 
+                            // If path is empty, this means we're matching with the root directory itself
+                            // so we use the path_prefix as the name
+                            let path_prefix = if mat.path.is_empty() {
+                                project
+                                    .read(cx)
+                                    .worktree_for_id(project_path.worktree_id, cx)
+                                    .map(|wt| wt.read(cx).root_name().into())
+                                    .unwrap_or_else(|| mat.path_prefix.clone())
+                            } else {
+                                mat.path_prefix.clone()
+                            };
+
                             Some(Self::completion_for_path(
                                 project_path,
-                                &mat.path_prefix,
+                                &path_prefix,
                                 is_recent,
                                 mat.is_dir,
                                 excerpt_id,
@@ -1309,10 +1320,10 @@ mod tests {
             assert_eq!(
                 current_completion_labels(editor),
                 &[
-                    format!("seven.txt dir{slash}b{slash}"),
-                    format!("six.txt dir{slash}b{slash}"),
-                    format!("five.txt dir{slash}b{slash}"),
-                    format!("four.txt dir{slash}a{slash}"),
+                    format!("seven.txt b{slash}"),
+                    format!("six.txt b{slash}"),
+                    format!("five.txt b{slash}"),
+                    format!("four.txt a{slash}"),
                     "Files & Directories".into(),
                     "Symbols".into(),
                     "Fetch".into()
@@ -1344,7 +1355,7 @@ mod tests {
             assert!(editor.has_visible_completions_menu());
             assert_eq!(
                 current_completion_labels(editor),
-                vec![format!("one.txt dir{slash}a{slash}")]
+                vec![format!("one.txt a{slash}")]
             );
         });
 
@@ -1356,12 +1367,12 @@ mod tests {
         editor.update(&mut cx, |editor, cx| {
             assert_eq!(
                 editor.text(cx),
-                format!("Lorem [@one.txt](@file:dir{slash}a{slash}one.txt) ")
+                format!("Lorem [@one.txt](@file:a{slash}one.txt) ")
             );
             assert!(!editor.has_visible_completions_menu());
             assert_eq!(
                 fold_ranges(editor, cx),
-                vec![Point::new(0, 6)..Point::new(0, 37)]
+                vec![Point::new(0, 6)..Point::new(0, 33)]
             );
         });
 
@@ -1370,12 +1381,12 @@ mod tests {
         editor.update(&mut cx, |editor, cx| {
             assert_eq!(
                 editor.text(cx),
-                format!("Lorem [@one.txt](@file:dir{slash}a{slash}one.txt)  ")
+                format!("Lorem [@one.txt](@file:a{slash}one.txt)  ")
             );
             assert!(!editor.has_visible_completions_menu());
             assert_eq!(
                 fold_ranges(editor, cx),
-                vec![Point::new(0, 6)..Point::new(0, 37)]
+                vec![Point::new(0, 6)..Point::new(0, 33)]
             );
         });
 
@@ -1384,12 +1395,12 @@ mod tests {
         editor.update(&mut cx, |editor, cx| {
             assert_eq!(
                 editor.text(cx),
-                format!("Lorem [@one.txt](@file:dir{slash}a{slash}one.txt)  Ipsum "),
+                format!("Lorem [@one.txt](@file:a{slash}one.txt)  Ipsum "),
             );
             assert!(!editor.has_visible_completions_menu());
             assert_eq!(
                 fold_ranges(editor, cx),
-                vec![Point::new(0, 6)..Point::new(0, 37)]
+                vec![Point::new(0, 6)..Point::new(0, 33)]
             );
         });
 
@@ -1398,12 +1409,12 @@ mod tests {
         editor.update(&mut cx, |editor, cx| {
             assert_eq!(
                 editor.text(cx),
-                format!("Lorem [@one.txt](@file:dir{slash}a{slash}one.txt)  Ipsum @file "),
+                format!("Lorem [@one.txt](@file:a{slash}one.txt)  Ipsum @file "),
             );
             assert!(editor.has_visible_completions_menu());
             assert_eq!(
                 fold_ranges(editor, cx),
-                vec![Point::new(0, 6)..Point::new(0, 37)]
+                vec![Point::new(0, 6)..Point::new(0, 33)]
             );
         });
 
@@ -1416,14 +1427,14 @@ mod tests {
         editor.update(&mut cx, |editor, cx| {
             assert_eq!(
                 editor.text(cx),
-                format!("Lorem [@one.txt](@file:dir{slash}a{slash}one.txt)  Ipsum [@seven.txt](@file:dir{slash}b{slash}seven.txt) ")
+                format!("Lorem [@one.txt](@file:a{slash}one.txt)  Ipsum [@seven.txt](@file:b{slash}seven.txt) ")
             );
             assert!(!editor.has_visible_completions_menu());
             assert_eq!(
                 fold_ranges(editor, cx),
                 vec![
-                    Point::new(0, 6)..Point::new(0, 37),
-                    Point::new(0, 45)..Point::new(0, 80)
+                    Point::new(0, 6)..Point::new(0, 33),
+                    Point::new(0, 41)..Point::new(0, 72)
                 ]
             );
         });
@@ -1433,14 +1444,14 @@ mod tests {
         editor.update(&mut cx, |editor, cx| {
             assert_eq!(
                 editor.text(cx),
-                format!("Lorem [@one.txt](@file:dir{slash}a{slash}one.txt)  Ipsum [@seven.txt](@file:dir{slash}b{slash}seven.txt) \n@")
+                format!("Lorem [@one.txt](@file:a{slash}one.txt)  Ipsum [@seven.txt](@file:b{slash}seven.txt) \n@")
             );
             assert!(editor.has_visible_completions_menu());
             assert_eq!(
                 fold_ranges(editor, cx),
                 vec![
-                    Point::new(0, 6)..Point::new(0, 37),
-                    Point::new(0, 45)..Point::new(0, 80)
+                    Point::new(0, 6)..Point::new(0, 33),
+                    Point::new(0, 41)..Point::new(0, 72)
                 ]
             );
         });
@@ -1454,20 +1465,203 @@ mod tests {
         editor.update(&mut cx, |editor, cx| {
             assert_eq!(
                 editor.text(cx),
-                format!("Lorem [@one.txt](@file:dir{slash}a{slash}one.txt)  Ipsum [@seven.txt](@file:dir{slash}b{slash}seven.txt) \n[@six.txt](@file:dir{slash}b{slash}six.txt) ")
+                format!("Lorem [@one.txt](@file:a{slash}one.txt)  Ipsum [@seven.txt](@file:b{slash}seven.txt) \n[@six.txt](@file:b{slash}six.txt) ")
             );
             assert!(!editor.has_visible_completions_menu());
             assert_eq!(
                 fold_ranges(editor, cx),
                 vec![
-                    Point::new(0, 6)..Point::new(0, 37),
-                    Point::new(0, 45)..Point::new(0, 80),
-                    Point::new(1, 0)..Point::new(1, 31)
+                    Point::new(0, 6)..Point::new(0, 33),
+                    Point::new(0, 41)..Point::new(0, 72),
+                    Point::new(1, 0)..Point::new(1, 27)
                 ]
             );
         });
     }
 
+    #[gpui::test]
+    async fn test_context_completion_provider_multiple_worktrees(cx: &mut TestAppContext) {
+        init_test(cx);
+
+        let app_state = cx.update(AppState::test);
+
+        cx.update(|cx| {
+            language::init(cx);
+            editor::init(cx);
+            workspace::init(app_state.clone(), cx);
+            Project::init_settings(cx);
+        });
+
+        app_state
+            .fs
+            .as_fake()
+            .insert_tree(
+                path!("/project1"),
+                json!({
+                    "a": {
+                        "one.txt": "",
+                        "two.txt": "",
+                    }
+                }),
+            )
+            .await;
+
+        app_state
+            .fs
+            .as_fake()
+            .insert_tree(
+                path!("/project2"),
+                json!({
+                    "b": {
+                        "three.txt": "",
+                        "four.txt": "",
+                    }
+                }),
+            )
+            .await;
+
+        let project = Project::test(
+            app_state.fs.clone(),
+            [path!("/project1").as_ref(), path!("/project2").as_ref()],
+            cx,
+        )
+        .await;
+        let window = cx.add_window(|window, cx| Workspace::test_new(project.clone(), window, cx));
+        let workspace = window.root(cx).unwrap();
+
+        let worktrees = project.update(cx, |project, cx| {
+            let worktrees = project.worktrees(cx).collect::<Vec<_>>();
+            assert_eq!(worktrees.len(), 2);
+            worktrees
+        });
+
+        let mut cx = VisualTestContext::from_window(*window.deref(), cx);
+        let slash = PathStyle::local().separator();
+
+        for (worktree_idx, paths) in [
+            vec![rel_path("a/one.txt"), rel_path("a/two.txt")],
+            vec![rel_path("b/three.txt"), rel_path("b/four.txt")],
+        ]
+        .iter()
+        .enumerate()
+        {
+            let worktree_id = worktrees[worktree_idx].read_with(&cx, |wt, _| wt.id());
+            for path in paths {
+                workspace
+                    .update_in(&mut cx, |workspace, window, cx| {
+                        workspace.open_path(
+                            ProjectPath {
+                                worktree_id,
+                                path: (*path).into(),
+                            },
+                            None,
+                            false,
+                            window,
+                            cx,
+                        )
+                    })
+                    .await
+                    .unwrap();
+            }
+        }
+
+        let editor = workspace.update_in(&mut cx, |workspace, window, cx| {
+            let editor = cx.new(|cx| {
+                Editor::new(
+                    editor::EditorMode::full(),
+                    multi_buffer::MultiBuffer::build_simple("", cx),
+                    None,
+                    window,
+                    cx,
+                )
+            });
+            workspace.active_pane().update(cx, |pane, cx| {
+                pane.add_item(
+                    Box::new(cx.new(|_| AtMentionEditor(editor.clone()))),
+                    true,
+                    true,
+                    None,
+                    window,
+                    cx,
+                );
+            });
+            editor
+        });
+
+        let context_store = cx.new(|_| ContextStore::new(project.downgrade()));
+
+        let editor_entity = editor.downgrade();
+        editor.update_in(&mut cx, |editor, window, cx| {
+            window.focus(&editor.focus_handle(cx));
+            editor.set_completion_provider(Some(Rc::new(ContextPickerCompletionProvider::new(
+                workspace.downgrade(),
+                context_store.downgrade(),
+                None,
+                None,
+                editor_entity,
+                None,
+            ))));
+        });
+
+        cx.simulate_input("@");
+
+        // With multiple worktrees, we should see the project name as prefix
+        editor.update(&mut cx, |editor, cx| {
+            assert_eq!(editor.text(cx), "@");
+            assert!(editor.has_visible_completions_menu());
+            let labels = current_completion_labels(editor);
+
+            assert!(
+                labels.contains(&format!("four.txt project2{slash}b{slash}")),
+                "Expected 'four.txt project2{slash}b{slash}' in labels: {:?}",
+                labels
+            );
+            assert!(
+                labels.contains(&format!("three.txt project2{slash}b{slash}")),
+                "Expected 'three.txt project2{slash}b{slash}' in labels: {:?}",
+                labels
+            );
+        });
+
+        editor.update_in(&mut cx, |editor, window, cx| {
+            editor.context_menu_next(&editor::actions::ContextMenuNext, window, cx);
+            editor.context_menu_next(&editor::actions::ContextMenuNext, window, cx);
+            editor.context_menu_next(&editor::actions::ContextMenuNext, window, cx);
+            editor.context_menu_next(&editor::actions::ContextMenuNext, window, cx);
+            editor.confirm_completion(&editor::actions::ConfirmCompletion::default(), window, cx);
+        });
+
+        cx.run_until_parked();
+
+        editor.update(&mut cx, |editor, cx| {
+            assert_eq!(editor.text(cx), "@file ");
+            assert!(editor.has_visible_completions_menu());
+        });
+
+        cx.simulate_input("one");
+
+        editor.update(&mut cx, |editor, cx| {
+            assert_eq!(editor.text(cx), "@file one");
+            assert!(editor.has_visible_completions_menu());
+            assert_eq!(
+                current_completion_labels(editor),
+                vec![format!("one.txt project1{slash}a{slash}")]
+            );
+        });
+
+        editor.update_in(&mut cx, |editor, window, cx| {
+            editor.confirm_completion(&editor::actions::ConfirmCompletion::default(), window, cx);
+        });
+
+        editor.update(&mut cx, |editor, cx| {
+            assert_eq!(
+                editor.text(cx),
+                format!("[@one.txt](@file:project1{slash}a{slash}one.txt) ")
+            );
+            assert!(!editor.has_visible_completions_menu());
+        });
+    }
+
     fn fold_ranges(editor: &Editor, cx: &mut App) -> Vec<Range<Point>> {
         let snapshot = editor.buffer().read(cx).snapshot(cx);
         editor.display_map.update(cx, |display_map, cx| {
diff --git a/crates/agent_ui/src/context_picker/file_context_picker.rs b/crates/agent_ui/src/context_picker/file_context_picker.rs
index 8d1e5cb46dfba7bc89770356334fb08a7bf7a0c5..ded24caa922d27d8821e46e5c58b5ed22ab754ff 100644
--- a/crates/agent_ui/src/context_picker/file_context_picker.rs
+++ b/crates/agent_ui/src/context_picker/file_context_picker.rs
@@ -197,34 +197,50 @@ pub(crate) fn search_files(
     if query.is_empty() {
         let workspace = workspace.read(cx);
         let project = workspace.project().read(cx);
+        let visible_worktrees = workspace.visible_worktrees(cx).collect::<Vec<_>>();
+        let include_root_name = visible_worktrees.len() > 1;
+
         let recent_matches = workspace
             .recent_navigation_history(Some(10), cx)
             .into_iter()
-            .filter_map(|(project_path, _)| {
-                let worktree = project.worktree_for_id(project_path.worktree_id, cx)?;
-                Some(FileMatch {
+            .map(|(project_path, _)| {
+                let path_prefix = if include_root_name {
+                    project
+                        .worktree_for_id(project_path.worktree_id, cx)
+                        .map(|wt| wt.read(cx).root_name().into())
+                        .unwrap_or_else(|| RelPath::empty().into())
+                } else {
+                    RelPath::empty().into()
+                };
+
+                FileMatch {
                     mat: PathMatch {
                         score: 0.,
                         positions: Vec::new(),
                         worktree_id: project_path.worktree_id.to_usize(),
                         path: project_path.path,
-                        path_prefix: worktree.read(cx).root_name().into(),
+                        path_prefix,
                         distance_to_relative_ancestor: 0,
                         is_dir: false,
                     },
                     is_recent: true,
-                })
+                }
             });
 
-        let file_matches = project.worktrees(cx).flat_map(|worktree| {
+        let file_matches = visible_worktrees.into_iter().flat_map(|worktree| {
             let worktree = worktree.read(cx);
+            let path_prefix: Arc<RelPath> = if include_root_name {
+                worktree.root_name().into()
+            } else {
+                RelPath::empty().into()
+            };
             worktree.entries(false, 0).map(move |entry| FileMatch {
                 mat: PathMatch {
                     score: 0.,
                     positions: Vec::new(),
                     worktree_id: worktree.id().to_usize(),
                     path: entry.path.clone(),
-                    path_prefix: worktree.root_name().into(),
+                    path_prefix: path_prefix.clone(),
                     distance_to_relative_ancestor: 0,
                     is_dir: entry.is_dir(),
                 },
@@ -235,6 +251,7 @@ pub(crate) fn search_files(
         Task::ready(recent_matches.chain(file_matches).collect())
     } else {
         let worktrees = workspace.read(cx).visible_worktrees(cx).collect::<Vec<_>>();
+        let include_root_name = worktrees.len() > 1;
         let candidate_sets = worktrees
             .into_iter()
             .map(|worktree| {
@@ -243,7 +260,7 @@ pub(crate) fn search_files(
                 PathMatchCandidateSet {
                     snapshot: worktree.snapshot(),
                     include_ignored: worktree.root_entry().is_some_and(|entry| entry.is_ignored),
-                    include_root_name: true,
+                    include_root_name,
                     candidates: project::Candidates::Entries,
                 }
             })
@@ -276,6 +293,12 @@ pub fn extract_file_name_and_directory(
     path_prefix: &RelPath,
     path_style: PathStyle,
 ) -> (SharedString, Option<SharedString>) {
+    // If path is empty, this means we're matching with the root directory itself
+    // so we use the path_prefix as the name
+    if path.is_empty() && !path_prefix.is_empty() {
+        return (path_prefix.display(path_style).to_string().into(), None);
+    }
+
     let full_path = path_prefix.join(path);
     let file_name = full_path.file_name().unwrap_or_default();
     let display_path = full_path.display(path_style);