diff --git a/crates/agent_ui/src/agent_configuration.rs b/crates/agent_ui/src/agent_configuration.rs
index 8619b085c00268d6d157dee37411ff36ba4d5680..24f019c605d1b167e62a6e68dfc1f3ed07c73f1c 100644
--- a/crates/agent_ui/src/agent_configuration.rs
+++ b/crates/agent_ui/src/agent_configuration.rs
@@ -975,7 +975,7 @@ impl AgentConfiguration {
                 let icon = if let Some(icon_path) = agent_server_store.agent_icon(&name) {
                     AgentIcon::Path(icon_path)
                 } else {
-                    AgentIcon::Name(IconName::Ai)
+                    AgentIcon::Name(IconName::Sparkle)
                 };
                 let display_name = agent_server_store
                     .agent_display_name(&name)
@@ -1137,6 +1137,7 @@ impl AgentConfiguration {
     ) -> impl IntoElement {
         let id = id.into();
         let display_name = display_name.into();
+
         let icon = match icon {
             AgentIcon::Name(icon_name) => Icon::new(icon_name)
                 .size(IconSize::Small)
diff --git a/crates/agent_ui/src/agent_panel.rs b/crates/agent_ui/src/agent_panel.rs
index 2f6a722b471a189eafbc7aadbddb927476e4b3b9..97c7aecb8e34563db0adfa6bdbeda31140fd6cdd 100644
--- a/crates/agent_ui/src/agent_panel.rs
+++ b/crates/agent_ui/src/agent_panel.rs
@@ -259,7 +259,7 @@ impl AgentType {
             Self::Gemini => Some(IconName::AiGemini),
             Self::ClaudeCode => Some(IconName::AiClaude),
             Self::Codex => Some(IconName::AiOpenAi),
-            Self::Custom { .. } => Some(IconName::Terminal),
+            Self::Custom { .. } => Some(IconName::Sparkle),
         }
     }
 }
@@ -1851,14 +1851,17 @@ impl AgentPanel {
         let agent_server_store = self.project.read(cx).agent_server_store().clone();
         let focus_handle = self.focus_handle(cx);
 
-        // Get custom icon path for selected agent before building menu (to avoid borrow issues)
-        let selected_agent_custom_icon =
+        let (selected_agent_custom_icon, selected_agent_label) =
             if let AgentType::Custom { name, .. } = &self.selected_agent {
-                agent_server_store
-                    .read(cx)
-                    .agent_icon(&ExternalAgentServerName(name.clone()))
+                let store = agent_server_store.read(cx);
+                let icon = store.agent_icon(&ExternalAgentServerName(name.clone()));
+
+                let label = store
+                    .agent_display_name(&ExternalAgentServerName(name.clone()))
+                    .unwrap_or_else(|| self.selected_agent.label());
+                (icon, label)
             } else {
-                None
+                (None, self.selected_agent.label())
             };
 
         let active_thread = match &self.active_view {
@@ -2090,7 +2093,7 @@ impl AgentPanel {
                                     if let Some(icon_path) = icon_path {
                                         entry = entry.custom_icon_svg(icon_path);
                                     } else {
-                                        entry = entry.icon(IconName::Terminal);
+                                        entry = entry.icon(IconName::Sparkle);
                                     }
                                     entry = entry
                                         .when(
@@ -2154,8 +2157,6 @@ impl AgentPanel {
                 }
             });
 
-        let selected_agent_label = self.selected_agent.label();
-
         let is_thread_loading = self
             .active_thread_view()
             .map(|thread| thread.read(cx).is_loading())