diff --git a/apps/app/src/app/page.tsx b/apps/app/src/app/page.tsx
index e2260c86..14e200be 100644
--- a/apps/app/src/app/page.tsx
+++ b/apps/app/src/app/page.tsx
@@ -15,8 +15,9 @@ import { RunningAgentsView } from "@/components/views/running-agents-view";
 import { useAppStore } from "@/store/app-store";
 import { useSetupStore } from "@/store/setup-store";
 import { getElectronAPI, isElectron } from "@/lib/electron";
+import { FileBrowserProvider, useFileBrowser, setGlobalFileBrowser } from "@/contexts/file-browser-context";
 
-export default function Home() {
+function HomeContent() {
   const {
     currentView,
     setCurrentView,
@@ -27,6 +28,7 @@ export default function Home() {
   const { isFirstRun, setupComplete } = useSetupStore();
   const [isMounted, setIsMounted] = useState(false);
   const [streamerPanelOpen, setStreamerPanelOpen] = useState(false);
+  const { openFileBrowser } = useFileBrowser();
 
   // Hidden streamer panel - opens with "\" key
   const handleStreamerPanelShortcut = useCallback((event: KeyboardEvent) => {
@@ -79,6 +81,11 @@ export default function Home() {
     setIsMounted(true);
   }, []);
 
+  // Initialize global file browser for HttpApiClient
+  useEffect(() => {
+    setGlobalFileBrowser(openFileBrowser);
+  }, [openFileBrowser]);
+
   // Check if this is first run and redirect to setup if needed
   useEffect(() => {
     console.log("[Setup Flow] Checking setup state:", {
@@ -236,3 +243,11 @@ export default function Home() {
     </main>
   );
 }
+
+export default function Home() {
+  return (
+    <FileBrowserProvider>
+      <HomeContent />
+    </FileBrowserProvider>
+  );
+}
diff --git a/apps/app/src/components/dialogs/file-browser-dialog.tsx b/apps/app/src/components/dialogs/file-browser-dialog.tsx
new file mode 100644
index 00000000..29c183f1
--- /dev/null
+++ b/apps/app/src/components/dialogs/file-browser-dialog.tsx
@@ -0,0 +1,231 @@
+"use client";
+
+import { useState, useEffect } from "react";
+import { FolderOpen, Folder, ChevronRight, Home, ArrowLeft, HardDrive } from "lucide-react";
+import {
+  Dialog,
+  DialogContent,
+  DialogDescription,
+  DialogFooter,
+  DialogHeader,
+  DialogTitle,
+} from "@/components/ui/dialog";
+import { Button } from "@/components/ui/button";
+
+interface DirectoryEntry {
+  name: string;
+  path: string;
+}
+
+interface BrowseResult {
+  success: boolean;
+  currentPath: string;
+  parentPath: string | null;
+  directories: DirectoryEntry[];
+  drives?: string[];
+  error?: string;
+}
+
+interface FileBrowserDialogProps {
+  open: boolean;
+  onOpenChange: (open: boolean) => void;
+  onSelect: (path: string) => void;
+  title?: string;
+  description?: string;
+}
+
+export function FileBrowserDialog({
+  open,
+  onOpenChange,
+  onSelect,
+  title = "Select Project Directory",
+  description = "Navigate to your project folder",
+}: FileBrowserDialogProps) {
+  const [currentPath, setCurrentPath] = useState<string>("");
+  const [parentPath, setParentPath] = useState<string | null>(null);
+  const [directories, setDirectories] = useState<DirectoryEntry[]>([]);
+  const [drives, setDrives] = useState<string[]>([]);
+  const [loading, setLoading] = useState(false);
+  const [error, setError] = useState("");
+
+  const browseDirectory = async (dirPath?: string) => {
+    setLoading(true);
+    setError("");
+
+    try {
+      // Get server URL from environment or default
+      const serverUrl = process.env.NEXT_PUBLIC_SERVER_URL || "http://localhost:3008";
+
+      const response = await fetch(`${serverUrl}/api/fs/browse`, {
+        method: "POST",
+        headers: { "Content-Type": "application/json" },
+        body: JSON.stringify({ dirPath }),
+      });
+
+      const result: BrowseResult = await response.json();
+
+      if (result.success) {
+        setCurrentPath(result.currentPath);
+        setParentPath(result.parentPath);
+        setDirectories(result.directories);
+        setDrives(result.drives || []);
+      } else {
+        setError(result.error || "Failed to browse directory");
+      }
+    } catch (err) {
+      setError(err instanceof Error ? err.message : "Failed to load directories");
+    } finally {
+      setLoading(false);
+    }
+  };
+
+  // Load home directory on mount
+  useEffect(() => {
+    if (open && !currentPath) {
+      browseDirectory();
+    }
+  }, [open]);
+
+  const handleSelectDirectory = (dir: DirectoryEntry) => {
+    browseDirectory(dir.path);
+  };
+
+  const handleGoToParent = () => {
+    if (parentPath) {
+      browseDirectory(parentPath);
+    }
+  };
+
+  const handleGoHome = () => {
+    browseDirectory();
+  };
+
+  const handleSelectDrive = (drivePath: string) => {
+    browseDirectory(drivePath);
+  };
+
+  const handleSelect = () => {
+    if (currentPath) {
+      onSelect(currentPath);
+      onOpenChange(false);
+    }
+  };
+
+  return (
+    <Dialog open={open} onOpenChange={onOpenChange}>
+      <DialogContent className="bg-popover border-border max-w-2xl max-h-[80vh]">
+        <DialogHeader>
+          <DialogTitle className="flex items-center gap-2">
+            <FolderOpen className="w-5 h-5 text-brand-500" />
+            {title}
+          </DialogTitle>
+          <DialogDescription className="text-muted-foreground">
+            {description}
+          </DialogDescription>
+        </DialogHeader>
+
+        <div className="flex flex-col gap-3 min-h-[400px]">
+          {/* Drives selector (Windows only) */}
+          {drives.length > 0 && (
+            <div className="flex flex-wrap gap-2 p-3 rounded-lg bg-sidebar-accent/10 border border-sidebar-border">
+              <div className="flex items-center gap-1 text-xs text-muted-foreground mr-2">
+                <HardDrive className="w-3 h-3" />
+                <span>Drives:</span>
+              </div>
+              {drives.map((drive) => (
+                <Button
+                  key={drive}
+                  variant={currentPath.startsWith(drive) ? "default" : "outline"}
+                  size="sm"
+                  onClick={() => handleSelectDrive(drive)}
+                  className="h-7 px-3 text-xs"
+                  disabled={loading}
+                >
+                  {drive.replace("\\", "")}
+                </Button>
+              ))}
+            </div>
+          )}
+
+          {/* Current path breadcrumb */}
+          <div className="flex items-center gap-2 p-3 rounded-lg bg-sidebar-accent/10 border border-sidebar-border">
+            <Button
+              variant="ghost"
+              size="sm"
+              onClick={handleGoHome}
+              className="h-7 px-2"
+              disabled={loading}
+            >
+              <Home className="w-4 h-4" />
+            </Button>
+            {parentPath && (
+              <Button
+                variant="ghost"
+                size="sm"
+                onClick={handleGoToParent}
+                className="h-7 px-2"
+                disabled={loading}
+              >
+                <ArrowLeft className="w-4 h-4" />
+              </Button>
+            )}
+            <div className="flex-1 font-mono text-sm truncate text-muted-foreground">
+              {currentPath || "Loading..."}
+            </div>
+          </div>
+
+          {/* Directory list */}
+          <div className="flex-1 overflow-y-auto border border-sidebar-border rounded-lg">
+            {loading && (
+              <div className="flex items-center justify-center h-full p-8">
+                <div className="text-sm text-muted-foreground">Loading directories...</div>
+              </div>
+            )}
+
+            {error && (
+              <div className="flex items-center justify-center h-full p-8">
+                <div className="text-sm text-destructive">{error}</div>
+              </div>
+            )}
+
+            {!loading && !error && directories.length === 0 && (
+              <div className="flex items-center justify-center h-full p-8">
+                <div className="text-sm text-muted-foreground">No subdirectories found</div>
+              </div>
+            )}
+
+            {!loading && !error && directories.length > 0 && (
+              <div className="divide-y divide-sidebar-border">
+                {directories.map((dir) => (
+                  <button
+                    key={dir.path}
+                    onClick={() => handleSelectDirectory(dir)}
+                    className="w-full flex items-center gap-3 p-3 hover:bg-sidebar-accent/10 transition-colors text-left group"
+                  >
+                    <Folder className="w-5 h-5 text-brand-500 shrink-0" />
+                    <span className="flex-1 truncate text-sm">{dir.name}</span>
+                    <ChevronRight className="w-4 h-4 text-muted-foreground opacity-0 group-hover:opacity-100 transition-opacity shrink-0" />
+                  </button>
+                ))}
+              </div>
+            )}
+          </div>
+
+          <div className="text-xs text-muted-foreground">
+            Click on a folder to navigate. Select the current folder or navigate to a subfolder.
+          </div>
+        </div>
+
+        <DialogFooter className="gap-2 sm:gap-0">
+          <Button variant="ghost" onClick={() => onOpenChange(false)}>
+            Cancel
+          </Button>
+          <Button onClick={handleSelect} disabled={!currentPath || loading}>
+            <FolderOpen className="w-4 h-4 mr-2" />
+            Select Current Folder
+          </Button>
+        </DialogFooter>
+      </DialogContent>
+    </Dialog>
+  );
+}
diff --git a/apps/app/src/contexts/file-browser-context.tsx b/apps/app/src/contexts/file-browser-context.tsx
new file mode 100644
index 00000000..f54fb27f
--- /dev/null
+++ b/apps/app/src/contexts/file-browser-context.tsx
@@ -0,0 +1,68 @@
+"use client";
+
+import { createContext, useContext, useState, useCallback, type ReactNode } from "react";
+import { FileBrowserDialog } from "@/components/dialogs/file-browser-dialog";
+
+interface FileBrowserContextValue {
+  openFileBrowser: () => Promise<string | null>;
+}
+
+const FileBrowserContext = createContext<FileBrowserContextValue | null>(null);
+
+export function FileBrowserProvider({ children }: { children: ReactNode }) {
+  const [isOpen, setIsOpen] = useState(false);
+  const [resolver, setResolver] = useState<((value: string | null) => void) | null>(null);
+
+  const openFileBrowser = useCallback((): Promise<string | null> => {
+    return new Promise((resolve) => {
+      setIsOpen(true);
+      setResolver(() => resolve);
+    });
+  }, []);
+
+  const handleSelect = useCallback((path: string) => {
+    if (resolver) {
+      resolver(path);
+      setResolver(null);
+    }
+    setIsOpen(false);
+  }, [resolver]);
+
+  const handleOpenChange = useCallback((open: boolean) => {
+    if (!open && resolver) {
+      resolver(null);
+      setResolver(null);
+    }
+    setIsOpen(open);
+  }, [resolver]);
+
+  return (
+    <FileBrowserContext.Provider value={{ openFileBrowser }}>
+      {children}
+      <FileBrowserDialog
+        open={isOpen}
+        onOpenChange={handleOpenChange}
+        onSelect={handleSelect}
+      />
+    </FileBrowserContext.Provider>
+  );
+}
+
+export function useFileBrowser() {
+  const context = useContext(FileBrowserContext);
+  if (!context) {
+    throw new Error("useFileBrowser must be used within FileBrowserProvider");
+  }
+  return context;
+}
+
+// Global reference for non-React code (like HttpApiClient)
+let globalFileBrowserFn: (() => Promise<string | null>) | null = null;
+
+export function setGlobalFileBrowser(fn: () => Promise<string | null>) {
+  globalFileBrowserFn = fn;
+}
+
+export function getGlobalFileBrowser() {
+  return globalFileBrowserFn;
+}
diff --git a/apps/app/src/lib/http-api-client.ts b/apps/app/src/lib/http-api-client.ts
index 1437d152..76313ee1 100644
--- a/apps/app/src/lib/http-api-client.ts
+++ b/apps/app/src/lib/http-api-client.ts
@@ -31,6 +31,7 @@ import type {
   ModelDefinition,
   ProviderStatus,
 } from "@/types/electron";
+import { getGlobalFileBrowser } from "@/contexts/file-browser-context";
 
 
 // Server URL - configurable via environment variable
@@ -201,9 +202,17 @@ export class HttpApiClient implements ElectronAPI {
     return { success: true };
   }
 
-  // File picker - uses prompt for path input
+  // File picker - uses server-side file browser dialog
   async openDirectory(): Promise<DialogResult> {
-    const path = prompt("Enter project directory path:");
+    const fileBrowser = getGlobalFileBrowser();
+
+    if (!fileBrowser) {
+      console.error("File browser not initialized");
+      return { canceled: true, filePaths: [] };
+    }
+
+    const path = await fileBrowser();
+
     if (!path) {
       return { canceled: true, filePaths: [] };
     }
@@ -219,13 +228,21 @@ export class HttpApiClient implements ElectronAPI {
       return { canceled: false, filePaths: [result.path] };
     }
 
-    alert(result.error || "Invalid path");
+    console.error("Invalid directory:", result.error);
     return { canceled: true, filePaths: [] };
   }
 
   async openFile(options?: object): Promise<DialogResult> {
-    // Prompt for file path
-    const path = prompt("Enter file path:");
+    const fileBrowser = getGlobalFileBrowser();
+
+    if (!fileBrowser) {
+      console.error("File browser not initialized");
+      return { canceled: true, filePaths: [] };
+    }
+
+    // For now, use the same directory browser (could be enhanced for file selection)
+    const path = await fileBrowser();
+
     if (!path) {
       return { canceled: true, filePaths: [] };
     }
@@ -239,7 +256,7 @@ export class HttpApiClient implements ElectronAPI {
       return { canceled: false, filePaths: [path] };
     }
 
-    alert("File does not exist");
+    console.error("File not found");
     return { canceled: true, filePaths: [] };
   }
 
diff --git a/apps/server/src/routes/fs.ts b/apps/server/src/routes/fs.ts
index 6258fce7..64d0d796 100644
--- a/apps/server/src/routes/fs.ts
+++ b/apps/server/src/routes/fs.ts
@@ -6,6 +6,7 @@
 import { Router, type Request, type Response } from "express";
 import fs from "fs/promises";
 import path from "path";
+import os from "os";
 import { validatePath, addAllowedPath, isPathAllowed } from "../lib/security.js";
 import type { EventEmitter } from "../lib/events.js";
 
@@ -263,6 +264,82 @@ export function createFsRoutes(_events: EventEmitter): Router {
     }
   });
 
+  // Browse directories - for file browser UI
+  router.post("/browse", async (req: Request, res: Response) => {
+    try {
+      const { dirPath } = req.body as { dirPath?: string };
+
+      // Default to home directory if no path provided
+      const targetPath = dirPath ? path.resolve(dirPath) : os.homedir();
+
+      // Detect available drives on Windows
+      const detectDrives = async (): Promise<string[]> => {
+        if (os.platform() !== "win32") {
+          return [];
+        }
+
+        const drives: string[] = [];
+        const letters = "ABCDEFGHIJKLMNOPQRSTUVWXYZ";
+
+        for (const letter of letters) {
+          const drivePath = `${letter}:\\`;
+          try {
+            await fs.access(drivePath);
+            drives.push(drivePath);
+          } catch {
+            // Drive doesn't exist, skip it
+          }
+        }
+
+        return drives;
+      };
+
+      try {
+        const stats = await fs.stat(targetPath);
+
+        if (!stats.isDirectory()) {
+          res.status(400).json({ success: false, error: "Path is not a directory" });
+          return;
+        }
+
+        // Read directory contents
+        const entries = await fs.readdir(targetPath, { withFileTypes: true });
+
+        // Filter for directories only and add parent directory option
+        const directories = entries
+          .filter((entry) => entry.isDirectory() && !entry.name.startsWith("."))
+          .map((entry) => ({
+            name: entry.name,
+            path: path.join(targetPath, entry.name),
+          }))
+          .sort((a, b) => a.name.localeCompare(b.name));
+
+        // Get parent directory
+        const parentPath = path.dirname(targetPath);
+        const hasParent = parentPath !== targetPath;
+
+        // Get available drives
+        const drives = await detectDrives();
+
+        res.json({
+          success: true,
+          currentPath: targetPath,
+          parentPath: hasParent ? parentPath : null,
+          directories,
+          drives,
+        });
+      } catch (error) {
+        res.status(400).json({
+          success: false,
+          error: error instanceof Error ? error.message : "Failed to read directory",
+        });
+      }
+    } catch (error) {
+      const message = error instanceof Error ? error.message : "Unknown error";
+      res.status(500).json({ success: false, error: message });
+    }
+  });
+
   // Serve image files
   router.get("/image", async (req: Request, res: Response) => {
     try {