diff --git a/apps/ui/src/components/views/terminal-view.tsx b/apps/ui/src/components/views/terminal-view.tsx
index db79ce0f..9f5569f5 100644
--- a/apps/ui/src/components/views/terminal-view.tsx
+++ b/apps/ui/src/components/views/terminal-view.tsx
@@ -240,7 +240,6 @@ export function TerminalView() {
   const [dragOverTabId, setDragOverTabId] = useState<string | null>(null);
   const lastCreateTimeRef = useRef<number>(0);
   const isCreatingRef = useRef<boolean>(false);
-  const prevProjectPathRef = useRef<string | null>(null);
   const restoringProjectPathRef = useRef<string | null>(null);
   const [newSessionIds, setNewSessionIds] = useState<Set<string>>(new Set());
   const [serverSessionInfo, setServerSessionInfo] = useState<{
@@ -524,11 +523,15 @@ export function TerminalView() {
   }, [terminalState.isUnlocked, fetchServerSettings]);
 
   // Handle project switching - save and restore terminal layouts
+  // Uses terminalState.lastActiveProjectPath (persisted in store) instead of a local ref
+  // This ensures terminals persist when navigating away from terminal route and back
   useEffect(() => {
     const currentPath = currentProject?.path || null;
-    const prevPath = prevProjectPathRef.current;
+    // Read lastActiveProjectPath directly from store to avoid dependency issues
+    const prevPath = useAppStore.getState().terminalState.lastActiveProjectPath;
 
-    // Skip if no change
+    // Skip if no change - this now correctly handles route changes within the same project
+    // because lastActiveProjectPath persists in the store across component unmount/remount
     if (currentPath === prevPath) {
       return;
     }
@@ -538,12 +541,13 @@ export function TerminalView() {
 
     // Save layout for previous project (if there was one and has terminals)
     // BUT don't save if we were mid-restore for that project (would save incomplete state)
-    if (prevPath && terminalState.tabs.length > 0 && restoringProjectPathRef.current !== prevPath) {
+    const currentTabs = useAppStore.getState().terminalState.tabs;
+    if (prevPath && currentTabs.length > 0 && restoringProjectPathRef.current !== prevPath) {
       saveTerminalLayout(prevPath);
     }
 
-    // Update the previous project ref
-    prevProjectPathRef.current = currentPath;
+    // Update the stored project path
+    useAppStore.getState().setTerminalLastActiveProjectPath(currentPath);
 
     // Helper to kill sessions and clear state
     const killAndClear = async () => {
diff --git a/apps/ui/src/store/app-store.ts b/apps/ui/src/store/app-store.ts
index c4d7e2ca..76c61475 100644
--- a/apps/ui/src/store/app-store.ts
+++ b/apps/ui/src/store/app-store.ts
@@ -344,6 +344,7 @@ export interface TerminalState {
   scrollbackLines: number; // Number of lines to keep in scrollback buffer
   lineHeight: number; // Line height multiplier for terminal text
   maxSessions: number; // Maximum concurrent terminal sessions (server setting)
+  lastActiveProjectPath: string | null; // Last project path to detect route changes vs project switches
 }
 
 // Persisted terminal layout - now includes sessionIds for reconnection
@@ -816,6 +817,7 @@ export interface AppActions {
   setTerminalScrollbackLines: (lines: number) => void;
   setTerminalLineHeight: (lineHeight: number) => void;
   setTerminalMaxSessions: (maxSessions: number) => void;
+  setTerminalLastActiveProjectPath: (projectPath: string | null) => void;
   addTerminalTab: (name?: string) => string;
   removeTerminalTab: (tabId: string) => void;
   setActiveTerminalTab: (tabId: string) => void;
@@ -951,6 +953,7 @@ const initialState: AppState = {
     scrollbackLines: 5000,
     lineHeight: 1.0,
     maxSessions: 100,
+    lastActiveProjectPath: null,
   },
   terminalLayoutByProject: {},
   specCreatingForProject: null,
@@ -2037,6 +2040,8 @@ export const useAppStore = create<AppState & AppActions>()(
             scrollbackLines: current.scrollbackLines,
             lineHeight: current.lineHeight,
             maxSessions: current.maxSessions,
+            // Preserve lastActiveProjectPath - it will be updated separately when needed
+            lastActiveProjectPath: current.lastActiveProjectPath,
           },
         });
       },
@@ -2121,6 +2126,13 @@ export const useAppStore = create<AppState & AppActions>()(
         });
       },
 
+      setTerminalLastActiveProjectPath: (projectPath) => {
+        const current = get().terminalState;
+        set({
+          terminalState: { ...current, lastActiveProjectPath: projectPath },
+        });
+      },
+
       addTerminalTab: (name) => {
         const current = get().terminalState;
         const newTabId = `tab-${Date.now()}`;
@@ -2669,6 +2681,7 @@ export const useAppStore = create<AppState & AppActions>()(
             activeTabId: state.terminalState?.activeTabId ?? null,
             activeSessionId: state.terminalState?.activeSessionId ?? null,
             maximizedSessionId: state.terminalState?.maximizedSessionId ?? null,
+            lastActiveProjectPath: state.terminalState?.lastActiveProjectPath ?? null,
             // Restore persisted settings
             defaultFontSize: persistedSettings.defaultFontSize ?? 14,
             defaultRunScript: persistedSettings.defaultRunScript ?? '',