diff --git a/tools/server/server-tools.cpp b/tools/server/server-tools.cpp
index eacfbf0f7..d5e696434 100644
--- a/tools/server/server-tools.cpp
+++ b/tools/server/server-tools.cpp
@@ -74,6 +74,7 @@ json server_tool::to_json() const {
         {"permissions", json{
             {"write", permission_write}
         }},
+        {"uses_cwd", uses_cwd},
         {"definition", get_definition()},
     };
 }
@@ -763,6 +764,7 @@ struct server_tool_read_file : server_tool {
     server_tool_read_file() {
         name = "read_file";
         display_name = "Read file";
+        uses_cwd = true;
         permission_write = false;
     }
 
@@ -851,6 +853,7 @@ struct server_tool_file_glob_search : server_tool {
     server_tool_file_glob_search() {
         name = "file_glob_search";
         display_name = "File search";
+        uses_cwd = true;
         permission_write = false;
     }
 
@@ -965,6 +968,7 @@ struct server_tool_grep_search : server_tool {
     server_tool_grep_search() {
         name = "grep_search";
         display_name = "Grep search";
+        uses_cwd = true;
         permission_write = false;
     }
 
@@ -1117,6 +1121,7 @@ struct server_tool_exec_shell_command : server_tool {
     server_tool_exec_shell_command() {
         name = "exec_shell_command";
         display_name = "Execute shell command";
+        uses_cwd = true;
         permission_write = true;
         support_stream = true;
     }
@@ -1195,6 +1200,7 @@ struct server_tool_write_file : server_tool {
     server_tool_write_file() {
         name = "write_file";
         display_name = "Write file";
+        uses_cwd = true;
         permission_write = true;
     }
 
@@ -1237,6 +1243,7 @@ struct server_tool_edit_file : server_tool {
     server_tool_edit_file() {
         name = "edit_file";
         display_name = "Edit file";
+        uses_cwd = true;
         permission_write = true;
     }
 
@@ -1625,6 +1632,7 @@ struct server_tool_get_info : server_tool {
     server_tool_get_info() {
         name = "get_info";
         display_name = "Get Runtime Info";
+        uses_cwd = true;
         permission_write = false;
     }
 
diff --git a/tools/server/server-tools.h b/tools/server/server-tools.h
index 7f70e6767..ede303181 100644
--- a/tools/server/server-tools.h
+++ b/tools/server/server-tools.h
@@ -14,6 +14,7 @@ struct server_tool {
     std::string display_name;
     bool permission_write = false;
     bool support_stream = false; // if true, output can be streamed
+    bool uses_cwd = false;       // if true, the tool resolves paths and runs against the working directory
 
     virtual ~server_tool() = default;
     virtual json get_definition() const = 0;
diff --git a/tools/ui/src/lib/components/app/chat/ChatForm/ChatForm.svelte b/tools/ui/src/lib/components/app/chat/ChatForm/ChatForm.svelte
index 1df125708..2d70c302c 100644
--- a/tools/ui/src/lib/components/app/chat/ChatForm/ChatForm.svelte
+++ b/tools/ui/src/lib/components/app/chat/ChatForm/ChatForm.svelte
@@ -156,7 +156,7 @@
 		focusInput: refocusInput,
 		getShowModelSelector: () => showModelSelector,
 		hasPrompts: () => mcpStore.hasPromptsCapability(conversationsStore.getAllMcpServerOverrides()),
-		hasBuiltinTools: () => toolsStore.builtinTools.length > 0,
+		hasCwdTools: () => toolsStore.hasEnabledCwdTools,
 		getCwd: () => cwd,
 		getServerHome: () => toolsStore.serverHome ?? null,
 		openModelSelector: () => chatFormActionsRef?.openModelSelector(),
@@ -651,7 +651,7 @@
 
 	<ContextGaugePopup />
 
-	{#if toolsStore.builtinTools.length > 0}
+	{#if toolsStore.hasEnabledCwdTools}
 		<ChatFormWorkingDirectory
 			directory={cwd}
 			isOpen={pickers.isWorkingDirectoryPickerOpen}
diff --git a/tools/ui/src/lib/constants/chat-commands.ts b/tools/ui/src/lib/constants/chat-commands.ts
index bbe762c55..3cc09fe6d 100644
--- a/tools/ui/src/lib/constants/chat-commands.ts
+++ b/tools/ui/src/lib/constants/chat-commands.ts
@@ -8,7 +8,7 @@ interface ChatCommandsOptions {
 	/** Gates `/prompt`. */
 	hasPrompts: () => boolean;
 	/** Gates `/cwd`. */
-	hasBuiltinTools: () => boolean;
+	hasCwdTools: () => boolean;
 }
 
 /**
@@ -32,7 +32,7 @@ export function getChatCommands(options: ChatCommandsOptions): ChatFormCommand[]
 			description: SET_WORKING_DIRECTORY_LABEL,
 			keywords: ['current working directory'],
 			action: ChatFormCommandAction.CWD,
-			disabled: !options.hasBuiltinTools()
+			disabled: !options.hasCwdTools()
 		},
 		{
 			name: 'model',
diff --git a/tools/ui/src/lib/hooks/use-chat-form-pickers.svelte.ts b/tools/ui/src/lib/hooks/use-chat-form-pickers.svelte.ts
index f3bc5f732..4860f16fb 100644
--- a/tools/ui/src/lib/hooks/use-chat-form-pickers.svelte.ts
+++ b/tools/ui/src/lib/hooks/use-chat-form-pickers.svelte.ts
@@ -24,7 +24,7 @@ export interface UseChatFormPickersOptions {
 	/** Gates `/prompt`. */
 	hasPrompts: () => boolean;
 	/** Gates `/cwd`. */
-	hasBuiltinTools: () => boolean;
+	hasCwdTools: () => boolean;
 	getCwd: () => string | null;
 	/** Mention search fallback scope. */
 	getServerHome: () => string | null;
@@ -63,7 +63,7 @@ export function useChatFormPickers(opts: UseChatFormPickersOptions) {
 		getChatCommands({
 			showModelSelector: opts.getShowModelSelector(),
 			hasPrompts: opts.hasPrompts,
-			hasBuiltinTools: opts.hasBuiltinTools
+			hasCwdTools: opts.hasCwdTools
 		})
 	);
 
diff --git a/tools/ui/src/lib/stores/tools.svelte.ts b/tools/ui/src/lib/stores/tools.svelte.ts
index 5136101e7..4114ef756 100644
--- a/tools/ui/src/lib/stores/tools.svelte.ts
+++ b/tools/ui/src/lib/stores/tools.svelte.ts
@@ -27,6 +27,9 @@ class ToolsStore {
 	private _loading = $state(false);
 	private _error = $state<string | null>(null);
 	private _disabledTools = $state(new SvelteSet<string>());
+	// builtin tools that resolve their paths against the working directory,
+	// as declared by the server in its `/tools` listing
+	private _cwdAwareTools = $state(new SvelteSet<string>());
 	private _toolsEndpointUnreachable = $state(false);
 	private _serverHome = $state<string | null | undefined>(undefined);
 
@@ -476,6 +479,21 @@ class ToolsStore {
 		return this.getEnabledToolsForLLM().length > 0;
 	}
 
+	/**
+	 * Check if a working directory is worth setting: at least one builtin tool
+	 * that reads it is both served and left enabled by the user.
+	 */
+	get hasEnabledCwdTools(): boolean {
+		return this._builtinTools.some((def) => {
+			const name = def.function.name;
+
+			return (
+				this._cwdAwareTools.has(name) &&
+				!this._disabledTools.has(this.toolKey(ToolSource.BUILTIN, name))
+			);
+		});
+	}
+
 	async fetchBuiltinTools(): Promise<void> {
 		if (this._loading) return;
 
@@ -486,6 +504,9 @@ class ToolsStore {
 		try {
 			const toolInfos = await ToolsService.list();
 			this._builtinTools = toolInfos.map((info) => info.definition);
+			this._cwdAwareTools = new SvelteSet(
+				toolInfos.filter((info) => info.uses_cwd).map((info) => info.tool)
+			);
 		} catch (err) {
 			const errorMessage = err instanceof Error ? err.message : String(err);
 			this._error = errorMessage;
diff --git a/tools/ui/src/lib/types/mcp.d.ts b/tools/ui/src/lib/types/mcp.d.ts
index b567c20c9..2b5937913 100644
--- a/tools/ui/src/lib/types/mcp.d.ts
+++ b/tools/ui/src/lib/types/mcp.d.ts
@@ -292,6 +292,7 @@ export interface ServerBuiltinToolInfo {
 	permissions: {
 		write: boolean;
 	};
+	uses_cwd: boolean;
 	definition: OpenAIToolDefinition;
 }
 
diff --git a/tools/ui/tests/client/components/ChatFormPickersHarness.svelte b/tools/ui/tests/client/components/ChatFormPickersHarness.svelte
index 76b2e9fe3..8e5e56c20 100644
--- a/tools/ui/tests/client/components/ChatFormPickersHarness.svelte
+++ b/tools/ui/tests/client/components/ChatFormPickersHarness.svelte
@@ -21,7 +21,7 @@
 		focusInput: () => {},
 		getShowModelSelector: () => true,
 		hasPrompts: () => true,
-		hasBuiltinTools: () => true,
+		hasCwdTools: () => true,
 		getCwd: () => null,
 		getServerHome: () => null,
 		openModelSelector: () => {