diff --git a/server/projects.js b/server/projects.js
index 3f96eeb..3c53e6a 100755
--- a/server/projects.js
+++ b/server/projects.js
@@ -21,9 +21,9 @@ async function saveProjectConfig(config) {
 }
 
 // Generate better display name from path
-async function generateDisplayName(projectName) {
-  // Convert "-home-user-projects-myapp" to a readable format
-  let projectPath = projectName.replace(/-/g, '/');
+async function generateDisplayName(projectName, actualProjectDir = null) {
+  // Use actual project directory if provided, otherwise decode from project name
+  let projectPath = actualProjectDir || projectName.replace(/-/g, '/');
   
   // Try to read package.json from the project path
   try {
@@ -54,6 +54,91 @@ async function generateDisplayName(projectName) {
   return projectPath;
 }
 
+// Extract the actual project directory from JSONL sessions
+async function extractProjectDirectory(projectName) {
+  const projectDir = path.join(process.env.HOME, '.claude', 'projects', projectName);
+  const cwdCounts = new Map();
+  let latestTimestamp = 0;
+  let latestCwd = null;
+  
+  try {
+    const files = await fs.readdir(projectDir);
+    const jsonlFiles = files.filter(file => file.endsWith('.jsonl'));
+    
+    if (jsonlFiles.length === 0) {
+      // Fall back to decoded project name if no sessions
+      return projectName.replace(/-/g, '/');
+    }
+    
+    // Process all JSONL files to collect cwd values
+    for (const file of jsonlFiles) {
+      const jsonlFile = path.join(projectDir, file);
+      const fileStream = require('fs').createReadStream(jsonlFile);
+      const rl = readline.createInterface({
+        input: fileStream,
+        crlfDelay: Infinity
+      });
+      
+      for await (const line of rl) {
+        if (line.trim()) {
+          try {
+            const entry = JSON.parse(line);
+            
+            if (entry.cwd) {
+              // Count occurrences of each cwd
+              cwdCounts.set(entry.cwd, (cwdCounts.get(entry.cwd) || 0) + 1);
+              
+              // Track the most recent cwd
+              const timestamp = new Date(entry.timestamp || 0).getTime();
+              if (timestamp > latestTimestamp) {
+                latestTimestamp = timestamp;
+                latestCwd = entry.cwd;
+              }
+            }
+          } catch (parseError) {
+            // Skip malformed lines
+          }
+        }
+      }
+    }
+    
+    // Determine the best cwd to use
+    if (cwdCounts.size === 0) {
+      // No cwd found, fall back to decoded project name
+      return projectName.replace(/-/g, '/');
+    }
+    
+    if (cwdCounts.size === 1) {
+      // Only one cwd, use it
+      return Array.from(cwdCounts.keys())[0];
+    }
+    
+    // Multiple cwd values - prefer the most recent one if it has reasonable usage
+    const mostRecentCount = cwdCounts.get(latestCwd) || 0;
+    const maxCount = Math.max(...cwdCounts.values());
+    
+    // Use most recent if it has at least 25% of the max count
+    if (mostRecentCount >= maxCount * 0.25) {
+      return latestCwd;
+    }
+    
+    // Otherwise use the most frequently used cwd
+    for (const [cwd, count] of cwdCounts.entries()) {
+      if (count === maxCount) {
+        return cwd;
+      }
+    }
+    
+    // Fallback (shouldn't reach here)
+    return latestCwd || projectName.replace(/-/g, '/');
+    
+  } catch (error) {
+    console.error(`Error extracting project directory for ${projectName}:`, error);
+    // Fall back to decoded project name
+    return projectName.replace(/-/g, '/');
+  }
+}
+
 async function getProjects() {
   const claudeDir = path.join(process.env.HOME, '.claude', 'projects');
   const config = await loadProjectConfig();
@@ -69,14 +154,17 @@ async function getProjects() {
         existingProjects.add(entry.name);
         const projectPath = path.join(claudeDir, entry.name);
         
+        // Extract actual project directory from JSONL sessions
+        const actualProjectDir = await extractProjectDirectory(entry.name);
+        
         // Get display name from config or generate one
         const customName = config[entry.name]?.displayName;
-        const autoDisplayName = await generateDisplayName(entry.name);
-        const fullPath = entry.name.replace(/-/g, '/');
+        const autoDisplayName = await generateDisplayName(entry.name, actualProjectDir);
+        const fullPath = actualProjectDir;
         
         const project = {
           name: entry.name,
-          path: projectPath,
+          path: actualProjectDir,
           displayName: customName || autoDisplayName,
           fullPath: fullPath,
           isCustomName: !!customName,
@@ -105,17 +193,27 @@ async function getProjects() {
   // Add manually configured projects that don't exist as folders yet
   for (const [projectName, projectConfig] of Object.entries(config)) {
     if (!existingProjects.has(projectName) && projectConfig.manuallyAdded) {
-      const fullPath = projectName.replace(/-/g, '/');
+      // Use the original path if available, otherwise extract from potential sessions
+      let actualProjectDir = projectConfig.originalPath;
       
-      const project = {
-        name: projectName,
-        path: null, // No physical path yet
-        displayName: projectConfig.displayName || await generateDisplayName(projectName),
-        fullPath: fullPath,
-        isCustomName: !!projectConfig.displayName,
-        isManuallyAdded: true,
-        sessions: []
-      };
+      if (!actualProjectDir) {
+        try {
+          actualProjectDir = await extractProjectDirectory(projectName);
+        } catch (error) {
+          // Fall back to decoded project name
+          actualProjectDir = projectName.replace(/-/g, '/');
+        }
+      }
+      
+              const project = {
+          name: projectName,
+          path: actualProjectDir,
+          displayName: projectConfig.displayName || await generateDisplayName(projectName, actualProjectDir),
+          fullPath: actualProjectDir,
+          isCustomName: !!projectConfig.displayName,
+          isManuallyAdded: true,
+          sessions: []
+        };
       
       projects.push(project);
     }
@@ -463,9 +561,9 @@ async function addProjectManually(projectPath, displayName = null) {
   
   return {
     name: projectName,
-    path: null,
+    path: absolutePath,
     fullPath: absolutePath,
-    displayName: displayName || await generateDisplayName(projectName),
+    displayName: displayName || await generateDisplayName(projectName, absolutePath),
     isManuallyAdded: true,
     sessions: []
   };
@@ -483,5 +581,6 @@ module.exports = {
   deleteProject,
   addProjectManually,
   loadProjectConfig,
-  saveProjectConfig
+  saveProjectConfig,
+  extractProjectDirectory
 };
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