diff --git a/crates/command_palette/src/command_palette.rs b/crates/command_palette/src/command_palette.rs
index 90ed7d0d3518aa4f6d49bb4cc18cbf3c275ce7c5..4a80740c3765f25ee878a60fa061c17e3a795b5f 100644
--- a/crates/command_palette/src/command_palette.rs
+++ b/crates/command_palette/src/command_palette.rs
@@ -43,24 +43,28 @@ pub struct CommandPalette {
     picker: Entity<Picker<CommandPaletteDelegate>>,
 }
 
-/// Removes subsequent whitespace characters and double colons from the query.
+/// Removes subsequent whitespace characters and double colons from the query, and converts
+/// underscores to spaces.
 ///
 /// This improves the likelihood of a match by either humanized name or keymap-style name.
+/// Underscores are converted to spaces because `humanize_action_name` converts them to spaces
+/// when building the search candidates (e.g. `terminal_panel::Toggle` -> `terminal panel: toggle`).
 pub fn normalize_action_query(input: &str) -> String {
     let mut result = String::with_capacity(input.len());
     let mut last_char = None;
 
     for char in input.trim().chars() {
-        match (last_char, char) {
+        let normalized_char = if char == '_' { ' ' } else { char };
+        match (last_char, normalized_char) {
             (Some(':'), ':') => continue,
-            (Some(last_char), char) if last_char.is_whitespace() && char.is_whitespace() => {
+            (Some(last_char), c) if last_char.is_whitespace() && c.is_whitespace() => {
                 continue;
             }
             _ => {
-                last_char = Some(char);
+                last_char = Some(normalized_char);
             }
         }
-        result.push(char);
+        result.push(normalized_char);
     }
 
     result
@@ -775,6 +779,14 @@ mod tests {
             normalize_action_query("editor: :GoToDefinition"),
             "editor: :GoToDefinition"
         );
+        assert_eq!(
+            normalize_action_query("terminal_panel::Toggle"),
+            "terminal panel:Toggle"
+        );
+        assert_eq!(
+            normalize_action_query("project_panel::ToggleFocus"),
+            "project panel:ToggleFocus"
+        );
     }
 
     #[gpui::test]