diff --git a/src/extension.mts b/src/extension.mts
index c5b89009..f6ef8532 100644
--- a/src/extension.mts
+++ b/src/extension.mts
@@ -66,6 +66,7 @@ export async function activate(context: ExtensionContext): Promise<void> {
 
   const settings = Settings.createInstance(
     context.workspaceState,
+    context.globalState,
     context.extension.packageJSON as PackageJSON
   );
   GithubApiCache.createInstance(context);
diff --git a/src/settings.mts b/src/settings.mts
index 5b656858..06eb2c56 100644
--- a/src/settings.mts
+++ b/src/settings.mts
@@ -1,4 +1,5 @@
-import type { Memento, WorkspaceConfiguration } from "vscode";
+import { homedir } from "os";
+import { type Memento, Uri, type WorkspaceConfiguration } from "vscode";
 import { workspace } from "vscode";
 
 /**
@@ -26,14 +27,26 @@ export interface PackageJSON {
   publisher: string;
 }
 
+export type GlobalStateType = Memento & {
+  setKeysForSync(keys: readonly string[]): void;
+};
+
+const LAST_PROJECT_ROOT_STATE_KEY = "lastProjectRoot";
+
 export default class Settings {
   private static instance?: Settings;
   private config: WorkspaceConfiguration;
   public context: Memento;
+  public globalState: GlobalStateType;
   private pkg: PackageJSON;
 
-  private constructor(context: Memento, packageJSON: PackageJSON) {
+  private constructor(
+    context: Memento,
+    globalState: GlobalStateType,
+    packageJSON: PackageJSON
+  ) {
     this.context = context;
+    this.globalState = globalState;
     this.pkg = packageJSON;
 
     this.config = workspace.getConfiguration(packageJSON.name);
@@ -41,9 +54,10 @@ export default class Settings {
 
   public static createInstance(
     context: Memento,
+    globalState: GlobalStateType,
     packageJSON: PackageJSON
   ): Settings {
-    Settings.instance = new Settings(context, packageJSON);
+    Settings.instance = new Settings(context, globalState, packageJSON);
 
     return Settings.instance;
   }
@@ -109,4 +123,20 @@ export default class Settings {
   public getExtensionId(): string {
     return [this.pkg.publisher, this.pkg.name].join(".");
   }
+
+  public async setLastProjectRoot(root: Uri): Promise<void> {
+    // saving fsPath not uri project as it would get corrupted and lose its
+    // fsPath property after loading
+    await this.globalState.update(LAST_PROJECT_ROOT_STATE_KEY, root.fsPath);
+  }
+
+  public getLastProjectRoot(): Uri {
+    const fsPath = this.globalState.get<string>(
+      LAST_PROJECT_ROOT_STATE_KEY,
+      // default to home directory as new project root
+      homedir()
+    );
+
+    return Uri.file(fsPath);
+  }
 }
diff --git a/src/webview/newProjectPanel.mts b/src/webview/newProjectPanel.mts
index 2f6c75d8..5dc7eca7 100644
--- a/src/webview/newProjectPanel.mts
+++ b/src/webview/newProjectPanel.mts
@@ -398,6 +398,9 @@ export class NewProjectPanel {
     this._extensionUri = extensionUri;
     this._settings = settings;
     this._isProjectImport = isProjectImport;
+    // set local property as it's an indicator for initial projectRoot update
+    // later during webview initialization
+    projectUri = projectUri ?? this._settings.getLastProjectRoot();
     this._projectRoot = projectUri;
     this._isCreateFromExampleOnly = createFromExample;
 
@@ -440,6 +443,7 @@ export class NewProjectPanel {
               if (newLoc && newLoc[0]) {
                 // overwrite preview folderUri
                 this._projectRoot = newLoc[0];
+                await this._settings.setLastProjectRoot(newLoc[0]);
 
                 // update webview
                 await this._panel.webview.postMessage({