diff --git a/.github/evidence/pr-1599-before-after.png b/.github/evidence/pr-1599-before-after.png
new file mode 100644
index 000000000..47b9f0903
Binary files /dev/null and b/.github/evidence/pr-1599-before-after.png differ
diff --git a/apps/code/src/renderer/features/sessions/components/session-update/FileMentionChip.tsx b/apps/code/src/renderer/features/sessions/components/session-update/FileMentionChip.tsx
index 8d29842fe..3457c2129 100644
--- a/apps/code/src/renderer/features/sessions/components/session-update/FileMentionChip.tsx
+++ b/apps/code/src/renderer/features/sessions/components/session-update/FileMentionChip.tsx
@@ -76,10 +76,16 @@ export const FileMentionChip = memo(function FileMentionChip({
 
   const isClickable = !!taskId;
 
+  const relativePath = toRelativePath(filePath, repoPath ?? null);
+  const directory =
+    relativePath && relativePath !== filename
+      ? relativePath.replace(`/${filename}`, "")
+      : null;
+
   return (
     <Flex
       align="center"
-      gap="1"
+      gap="0"
       asChild
       onClick={isClickable ? handleClick : undefined}
       onContextMenu={handleContextMenu}
@@ -87,7 +93,17 @@ export const FileMentionChip = memo(function FileMentionChip({
     >
       <Text size="1">
         <FileIcon filename={filename} size={12} />
-        <span className="font-mono">{filename}</span>
+        <span className="font-mono">
+          {directory ? (
+            <span className="inline-flex">
+              {directory}
+              <span className="text-gray-9">/</span>
+              {filename}
+            </span>
+          ) : (
+            filename
+          )}
+        </span>
       </Text>
     </Flex>
   );