diff --git a/crates/assistant2/src/context_picker/file_context_picker.rs b/crates/assistant2/src/context_picker/file_context_picker.rs
index be34283826e1f..9ab5decefaba2 100644
--- a/crates/assistant2/src/context_picker/file_context_picker.rs
+++ b/crates/assistant2/src/context_picker/file_context_picker.rs
@@ -1,6 +1,6 @@
 use std::fmt::Write as _;
 use std::ops::RangeInclusive;
-use std::path::{Path, PathBuf};
+use std::path::Path;
 use std::sync::atomic::AtomicBool;
 use std::sync::Arc;
 
@@ -79,44 +79,37 @@ impl FileContextPickerDelegate {
         if query.is_empty() {
             let workspace = workspace.read(cx);
             let project = workspace.project().read(cx);
-            let entries = workspace.recent_navigation_history(Some(10), cx);
-
-            let entries = entries
+            let recent_matches = workspace
+                .recent_navigation_history(Some(10), cx)
                 .into_iter()
-                .map(|entries| entries.0)
-                .chain(project.worktrees(cx).flat_map(|worktree| {
-                    let worktree = worktree.read(cx);
-                    let id = worktree.id();
-                    worktree
-                        .child_entries(Path::new(""))
-                        .filter(|entry| entry.kind.is_file())
-                        .map(move |entry| project::ProjectPath {
-                            worktree_id: id,
-                            path: entry.path.clone(),
-                        })
-                }))
-                .collect::<Vec<_>>();
-
-            let path_prefix: Arc<str> = Arc::default();
-            Task::ready(
-                entries
-                    .into_iter()
-                    .filter_map(|entry| {
-                        let worktree = project.worktree_for_id(entry.worktree_id, cx)?;
-                        let mut full_path = PathBuf::from(worktree.read(cx).root_name());
-                        full_path.push(&entry.path);
-                        Some(PathMatch {
-                            score: 0.,
-                            positions: Vec::new(),
-                            worktree_id: entry.worktree_id.to_usize(),
-                            path: full_path.into(),
-                            path_prefix: path_prefix.clone(),
-                            distance_to_relative_ancestor: 0,
-                            is_dir: false,
-                        })
+                .filter_map(|(project_path, _)| {
+                    let worktree = project.worktree_for_id(project_path.worktree_id, cx)?;
+                    Some(PathMatch {
+                        score: 0.,
+                        positions: Vec::new(),
+                        worktree_id: project_path.worktree_id.to_usize(),
+                        path: project_path.path,
+                        path_prefix: worktree.read(cx).root_name().into(),
+                        distance_to_relative_ancestor: 0,
+                        is_dir: false,
                     })
-                    .collect(),
-            )
+                });
+
+            let file_matches = project.worktrees(cx).flat_map(|worktree| {
+                let worktree = worktree.read(cx);
+                let path_prefix: Arc<str> = worktree.root_name().into();
+                worktree.files(true, 0).map(move |entry| PathMatch {
+                    score: 0.,
+                    positions: Vec::new(),
+                    worktree_id: worktree.id().to_usize(),
+                    path: entry.path.clone(),
+                    path_prefix: path_prefix.clone(),
+                    distance_to_relative_ancestor: 0,
+                    is_dir: false,
+                })
+            });
+
+            Task::ready(recent_matches.chain(file_matches).collect())
         } else {
             let worktrees = workspace.read(cx).visible_worktrees(cx).collect::<Vec<_>>();
             let candidate_sets = worktrees
@@ -253,16 +246,30 @@ impl PickerDelegate for FileContextPickerDelegate {
         _cx: &mut ViewContext<Picker<Self>>,
     ) -> Option<Self::ListItem> {
         let path_match = &self.matches[ix];
-        let file_name = path_match
-            .path
-            .file_name()
-            .unwrap_or_default()
-            .to_string_lossy()
-            .to_string();
-        let directory = path_match
-            .path
-            .parent()
-            .map(|directory| format!("{}/", directory.to_string_lossy()));
+
+        let (file_name, directory) = if path_match.path.as_ref() == Path::new("") {
+            (SharedString::from(path_match.path_prefix.clone()), None)
+        } else {
+            let file_name = path_match
+                .path
+                .file_name()
+                .unwrap_or_default()
+                .to_string_lossy()
+                .to_string()
+                .into();
+
+            let mut directory = format!("{}/", path_match.path_prefix);
+            if let Some(parent) = path_match
+                .path
+                .parent()
+                .filter(|parent| parent != &Path::new(""))
+            {
+                directory.push_str(&parent.to_string_lossy());
+                directory.push('/');
+            }
+
+            (file_name, Some(directory))
+        };
 
         Some(
             ListItem::new(ix).inset(true).toggle_state(selected).child(