diff --git a/crates/project_panel/src/project_panel.rs b/crates/project_panel/src/project_panel.rs
index d647676834e9847ac697f1b51fc61bc1b2425adf..55f440852ada15505831c78035d9362c91b4a204 100644
--- a/crates/project_panel/src/project_panel.rs
+++ b/crates/project_panel/src/project_panel.rs
@@ -4415,16 +4415,24 @@ impl ProjectPanel {
                 return;
             }
 
+            let workspace = self.workspace.clone();
             if folded_selection_info.is_empty() {
                 for (_, task) in move_tasks {
-                    task.detach_and_log_err(cx);
+                    let workspace = workspace.clone();
+                    cx.spawn_in(window, async move |_, mut cx| {
+                        task.await.notify_workspace_async_err(workspace, &mut cx);
+                    })
+                    .detach();
                 }
             } else {
-                cx.spawn_in(window, async move |project_panel, cx| {
+                cx.spawn_in(window, async move |project_panel, mut cx| {
                     // Await all move tasks and collect successful results
                     let mut move_results: Vec<(ProjectEntryId, Entry)> = Vec::new();
                     for (entry_id, task) in move_tasks {
-                        if let Some(CreatedEntry::Included(new_entry)) = task.await.log_err() {
+                        if let Some(CreatedEntry::Included(new_entry)) = task
+                            .await
+                            .notify_workspace_async_err(workspace.clone(), &mut cx)
+                        {
                             move_results.push((entry_id, new_entry));
                         }
                     }
diff --git a/crates/project_panel/src/project_panel_tests.rs b/crates/project_panel/src/project_panel_tests.rs
index af84a7f522a60abf2608bf1f3435b367d24f6bdc..64e96fee700aea8277fe1b69121abf71599c4d30 100644
--- a/crates/project_panel/src/project_panel_tests.rs
+++ b/crates/project_panel/src/project_panel_tests.rs
@@ -4412,6 +4412,90 @@ async fn test_drag_marked_entries_in_folded_directories(cx: &mut gpui::TestAppCo
     );
 }
 
+#[gpui::test]
+async fn test_dragging_same_named_files_preserves_one_source_on_conflict(
+    cx: &mut gpui::TestAppContext,
+) {
+    init_test(cx);
+
+    let fs = FakeFs::new(cx.executor());
+    fs.insert_tree(
+        "/root",
+        json!({
+            "dir_a": {
+                "shared.txt": "from a"
+            },
+            "dir_b": {
+                "shared.txt": "from b"
+            }
+        }),
+    )
+    .await;
+
+    let project = Project::test(fs.clone(), ["/root".as_ref()], cx).await;
+    let window = cx.add_window(|window, cx| MultiWorkspace::test_new(project.clone(), window, cx));
+    let workspace = window
+        .read_with(cx, |multi_workspace, _| multi_workspace.workspace().clone())
+        .unwrap();
+    let cx = &mut VisualTestContext::from_window(window.into(), cx);
+    let panel = workspace.update_in(cx, ProjectPanel::new);
+    cx.run_until_parked();
+
+    panel.update_in(cx, |panel, window, cx| {
+        let (root_entry_id, worktree_id, entry_a_id, entry_b_id) = {
+            let worktree = panel.project.read(cx).visible_worktrees(cx).next().unwrap();
+            let worktree = worktree.read(cx);
+            let root_entry_id = worktree.root_entry().unwrap().id;
+            let worktree_id = worktree.id();
+            let entry_a_id = worktree
+                .entry_for_path(rel_path("dir_a/shared.txt"))
+                .unwrap()
+                .id;
+            let entry_b_id = worktree
+                .entry_for_path(rel_path("dir_b/shared.txt"))
+                .unwrap()
+                .id;
+            (root_entry_id, worktree_id, entry_a_id, entry_b_id)
+        };
+
+        let drag = DraggedSelection {
+            active_selection: SelectedEntry {
+                worktree_id,
+                entry_id: entry_a_id,
+            },
+            marked_selections: Arc::new([
+                SelectedEntry {
+                    worktree_id,
+                    entry_id: entry_a_id,
+                },
+                SelectedEntry {
+                    worktree_id,
+                    entry_id: entry_b_id,
+                },
+            ]),
+        };
+
+        panel.drag_onto(&drag, root_entry_id, false, window, cx);
+    });
+    cx.executor().run_until_parked();
+
+    let files = fs.files();
+    assert!(files.contains(&PathBuf::from(path!("/root/shared.txt"))));
+
+    let remaining_sources = [
+        PathBuf::from(path!("/root/dir_a/shared.txt")),
+        PathBuf::from(path!("/root/dir_b/shared.txt")),
+    ]
+    .into_iter()
+    .filter(|path| files.contains(path))
+    .count();
+
+    assert_eq!(
+        remaining_sources, 1,
+        "one conflicting source file should remain in place"
+    );
+}
+
 #[gpui::test]
 async fn test_drag_entries_between_different_worktrees(cx: &mut gpui::TestAppContext) {
     init_test(cx);