diff --git a/src/components/Sidebar.jsx b/src/components/Sidebar.jsx
index 8c19771..598b093 100755
--- a/src/components/Sidebar.jsx
+++ b/src/components/Sidebar.jsx
@@ -61,6 +61,7 @@ function Sidebar({
   const [additionalSessions, setAdditionalSessions] = useState({});
   const [initialSessionsLoaded, setInitialSessionsLoaded] = useState(new Set());
   const [currentTime, setCurrentTime] = useState(new Date());
+  const [projectSortOrder, setProjectSortOrder] = useState('name');
   const [isRefreshing, setIsRefreshing] = useState(false);
   const [editingSession, setEditingSession] = useState(null);
   const [editingSessionName, setEditingSessionName] = useState('');
@@ -114,6 +115,45 @@ function Sidebar({
     }
   }, [projects, isLoading]);
 
+  // Load project sort order from settings
+  useEffect(() => {
+    const loadSortOrder = () => {
+      try {
+        const savedSettings = localStorage.getItem('claude-tools-settings');
+        if (savedSettings) {
+          const settings = JSON.parse(savedSettings);
+          setProjectSortOrder(settings.projectSortOrder || 'name');
+        }
+      } catch (error) {
+        console.error('Error loading sort order:', error);
+      }
+    };
+
+    // Load initially
+    loadSortOrder();
+
+    // Listen for storage changes
+    const handleStorageChange = (e) => {
+      if (e.key === 'claude-tools-settings') {
+        loadSortOrder();
+      }
+    };
+
+    window.addEventListener('storage', handleStorageChange);
+    
+    // Also check periodically when component is focused (for same-tab changes)
+    const checkInterval = setInterval(() => {
+      if (document.hasFocus()) {
+        loadSortOrder();
+      }
+    }, 1000);
+    
+    return () => {
+      window.removeEventListener('storage', handleStorageChange);
+      clearInterval(checkInterval);
+    };
+  }, []);
+
   const toggleProject = (projectName) => {
     const newExpanded = new Set(expandedProjects);
     if (newExpanded.has(projectName)) {
@@ -291,6 +331,33 @@ function Sidebar({
     return [...initialSessions, ...additional];
   };
 
+  // Helper function to get the last activity date for a project
+  const getProjectLastActivity = (project) => {
+    const allSessions = getAllSessions(project);
+    if (allSessions.length === 0) {
+      return new Date(0); // Return epoch date for projects with no sessions
+    }
+    
+    // Find the most recent session activity
+    const mostRecentDate = allSessions.reduce((latest, session) => {
+      const sessionDate = new Date(session.lastActivity);
+      return sessionDate > latest ? sessionDate : latest;
+    }, new Date(0));
+    
+    return mostRecentDate;
+  };
+
+  // Sort projects based on selected order
+  const sortedProjects = [...projects].sort((a, b) => {
+    if (projectSortOrder === 'date') {
+      // Sort by most recent activity (descending)
+      return getProjectLastActivity(b) - getProjectLastActivity(a);
+    } else {
+      // Sort by name (ascending)
+      return a.name.localeCompare(b.name);
+    }
+  });
+
   return (
     <div className="h-full flex flex-col bg-card md:select-none">
       {/* Header */}
@@ -499,7 +566,7 @@ function Sidebar({
               </p>
             </div>
           ) : (
-            projects.map((project) => {
+            sortedProjects.map((project) => {
               const isExpanded = expandedProjects.has(project.name);
               const isSelected = selectedProject?.name === project.name;
               
diff --git a/src/components/ToolsSettings.jsx b/src/components/ToolsSettings.jsx
index da4aae2..7e5295a 100755
--- a/src/components/ToolsSettings.jsx
+++ b/src/components/ToolsSettings.jsx
@@ -3,7 +3,7 @@ import { Button } from './ui/button';
 import { Input } from './ui/input';
 import { ScrollArea } from './ui/scroll-area';
 import { Badge } from './ui/badge';
-import { X, Plus, Settings, Shield, AlertTriangle, Moon, Sun } from 'lucide-react';
+import { X, Plus, Settings, Shield, AlertTriangle, Moon, Sun, FolderOpen, SortAsc } from 'lucide-react';
 import { useTheme } from '../contexts/ThemeContext';
 
 function ToolsSettings({ isOpen, onClose }) {
@@ -15,6 +15,7 @@ function ToolsSettings({ isOpen, onClose }) {
   const [skipPermissions, setSkipPermissions] = useState(false);
   const [isSaving, setIsSaving] = useState(false);
   const [saveStatus, setSaveStatus] = useState(null);
+  const [projectSortOrder, setProjectSortOrder] = useState('name');
 
   // Common tool patterns
   const commonTools = [
@@ -51,11 +52,13 @@ function ToolsSettings({ isOpen, onClose }) {
         setAllowedTools(settings.allowedTools || []);
         setDisallowedTools(settings.disallowedTools || []);
         setSkipPermissions(settings.skipPermissions || false);
+        setProjectSortOrder(settings.projectSortOrder || 'name');
       } else {
         // Set defaults
         setAllowedTools([]);
         setDisallowedTools([]);
         setSkipPermissions(false);
+        setProjectSortOrder('name');
       }
     } catch (error) {
       console.error('Error loading tool settings:', error);
@@ -63,6 +66,7 @@ function ToolsSettings({ isOpen, onClose }) {
       setAllowedTools([]);
       setDisallowedTools([]);
       setSkipPermissions(false);
+      setProjectSortOrder('name');
     }
   };
 
@@ -75,6 +79,7 @@ function ToolsSettings({ isOpen, onClose }) {
         allowedTools,
         disallowedTools,
         skipPermissions,
+        projectSortOrder,
         lastUpdated: new Date().toISOString()
       };
       
@@ -212,6 +217,56 @@ function ToolsSettings({ isOpen, onClose }) {
               </div>
             </div>
 
+            {/* Project Sorting */}
+            <div className="space-y-4">
+              <div className="flex items-center gap-3">
+                <FolderOpen className="w-5 h-5 text-purple-500" />
+                <h3 className="text-lg font-medium text-foreground">
+                  Project Sorting
+                </h3>
+              </div>
+              <div className="bg-purple-50 dark:bg-purple-900/20 border border-purple-200 dark:border-purple-800 rounded-lg p-4">
+                <div className="space-y-3">
+                  <div className="text-sm text-muted-foreground mb-3">
+                    Choose how projects are sorted in the sidebar
+                  </div>
+                  <div className="flex gap-2">
+                    <button
+                      onClick={() => setProjectSortOrder('name')}
+                      className={`flex-1 px-4 py-2 rounded-lg border transition-colors ${
+                        projectSortOrder === 'name'
+                          ? 'bg-purple-600 text-white border-purple-600'
+                          : 'bg-white dark:bg-gray-800 text-gray-700 dark:text-gray-300 border-gray-300 dark:border-gray-600 hover:bg-gray-50 dark:hover:bg-gray-700'
+                      }`}
+                    >
+                      <div className="flex items-center justify-center gap-2">
+                        <SortAsc className="w-4 h-4" />
+                        <span>Sort by Name</span>
+                      </div>
+                    </button>
+                    <button
+                      onClick={() => setProjectSortOrder('date')}
+                      className={`flex-1 px-4 py-2 rounded-lg border transition-colors ${
+                        projectSortOrder === 'date'
+                          ? 'bg-purple-600 text-white border-purple-600'
+                          : 'bg-white dark:bg-gray-800 text-gray-700 dark:text-gray-300 border-gray-300 dark:border-gray-600 hover:bg-gray-50 dark:hover:bg-gray-700'
+                      }`}
+                    >
+                      <div className="flex items-center justify-center gap-2">
+                        <SortAsc className="w-4 h-4 rotate-180" />
+                        <span>Sort by Date</span>
+                      </div>
+                    </button>
+                  </div>
+                  <div className="text-xs text-purple-700 dark:text-purple-300 mt-2">
+                    {projectSortOrder === 'name' 
+                      ? 'Projects are sorted alphabetically by name'
+                      : 'Projects are sorted by most recent session activity'}
+                  </div>
+                </div>
+              </div>
+            </div>
+
             {/* Allowed Tools */}
             <div className="space-y-4">
               <div className="flex items-center gap-3">