diff --git a/docs/ssh-split-pane-inherit-cwd.md b/docs/ssh-split-pane-inherit-cwd.md
new file mode 100644
index 00000000000..926962a65b0
--- /dev/null
+++ b/docs/ssh-split-pane-inherit-cwd.md
@@ -0,0 +1,176 @@
+# Split-Pane CWD Inheritance (Cmd+D / Cmd+Shift+D)
+
+## Problem
+
+When the user presses **Cmd+D** or **Cmd+Shift+D** to split a terminal pane, the new pane spawns at the worktree root instead of the source pane's current working directory. Most visible on **SSH** workspaces, but true locally as well — local only appears to "work" when the user hasn't `cd`'d away from the worktree root.
+
+Reference point: Ghostty, iTerm2, kitty, Warp, and WezTerm all inherit the source pane's live CWD when splitting.
+
+## Current behavior (code-level trace)
+
+1. `src/renderer/src/components/terminal-pane/keyboard-handlers.ts:283` dispatches on `action.type === 'splitActivePane'`; the `manager.splitPane(pane.id, direction)` call is at `:296`.
+2. `src/renderer/src/lib/pane-manager/pane-manager.ts:93 splitPane()` creates the new pane and fires `onPaneCreated(newPane)`.
+3. `src/renderer/src/components/terminal-pane/use-terminal-pane-lifecycle.ts:349 onPaneCreated` → `connectPanePty(pane, manager, {...ptyDeps})`.
+4. `src/renderer/src/components/terminal-pane/pty-connection.ts:272` builds the transport with `cwd: deps.cwd`.
+5. `deps.cwd` is set once per tab at mount from the `TerminalPane` prop, always `worktree.path`.
+
+There is **no plumbing** anywhere in the renderer that (a) tracks the live CWD of a pane or (b) threads a per-split CWD override into `splitPane`.
+
+The renderer does not currently register any OSC-7 handler. Only the headless daemon emulator (`src/main/daemon/headless-emulator.ts`) parses OSC-7 — that path only feeds daemon snapshot metadata, never the renderer's pane state.
+
+## Prior art: Superset
+
+Superset (sibling project at `../../superset`) already implements renderer-side OSC-7 tracking:
+
+- `parseCwd.ts` — regex `ESC]7;file://[^/]*(/...)BEL|ST`, URI-decodes the path, returns the most recent match in a data chunk.
+- `useTerminalCwd.ts` — per-pane hook: seeds from `initialCwd`/`workspaceCwd`, calls `parseCwd` on every xterm data event, stores `{terminalCwd, cwdConfirmed}` with a 150ms debounce.
+
+Superset's split action accepts `options.initialCwd` but its Cmd+D wiring passes a **preset** CWD, not the source pane's tracked `terminalCwd`. We will close that loop.
+
+## Design
+
+### Overview
+
+Track each pane's live CWD in the renderer via OSC-7, fall back to a one-shot `pty.getCwd` query, and pass the resolved value as `cwd` when spawning the new split PTY.
+
+### 1. Track per-pane CWD via OSC-7
+
+Add an OSC-7 handler alongside the existing OSC-52 handler in `use-terminal-pane-lifecycle.ts` `onPaneCreated` (near line 369):
+
+```ts
+const osc7Disposable = pane.terminal.parser.registerOscHandler(7, (data) => {
+  const cwd = parseOsc7(data)
+  if (cwd) {
+    paneCwdRef.current.set(pane.id, cwd)
+  }
+  // Return true so xterm marks the sequence handled and does not fall
+  // through to any builtin behavior. Note: xterm's `registerOscHandler`
+  // contract is "first handler that returns true wins"; if a future
+  // consumer (e.g. a shared daemon emulator path) also registers on
+  // code 7, registration order decides who sees each sequence.
+  return true
+})
+```
+
+- New ref on `TerminalPane`: `paneCwdRef = useRef<Map<number, string>>(new Map())`.
+- Disposable tracked in an `osc7DisposablesRef` map parallel to `osc52DisposablesRef`, torn down in `onPaneClosed` (see `use-terminal-pane-lifecycle.ts:481-484` for the OSC-52 pattern). `onPaneClosed` must also `paneCwdRef.current.delete(paneId)` so the map doesn't accumulate dead entries across splits/closes.
+- **Why `registerOscHandler(7)` rather than scanning raw data:** xterm's OSC parser handles BEL/ST termination, sequence fragmentation across chunks, and nesting. A regex on raw data (as Superset does) misses sequences split across PTY read boundaries.
+- **Handler install must stay before PTY attach.** The current `onPaneCreated` body (`use-terminal-pane-lifecycle.ts:349-460`) installs OSC parser handlers synchronously *before* `connectPanePty`. That ordering is load-bearing: it guarantees the first byte of the PTY stream — which in the cold-restore path is replayed scrollback containing OSC-7 — reaches our handler. Add a `// Why:` comment so a future refactor does not move the install after attach.
+- **Replay + stale OSC-7.** Replayed scrollback can contain OSC-7 from an earlier `cd` that no longer reflects the live shell cwd. `paneCwdRef` does not distinguish replayed vs. live entries. Store `{cwd, confirmed: boolean}` and mark `confirmed = false` when `isPaneReplaying(...)` is true at handler fire time, `confirmed = true` otherwise. `resolveSplitCwd` prefers a `confirmed` entry and otherwise falls through to `pty.getCwd`, which reflects live shell state via `/proc` or `lsof`. **Why the flag is reliable during replay:** `replayIntoTerminal` (`replay-guard.ts:37-55`) increments the counter *before* `pane.terminal.write(data, cb)` and decrements it inside xterm's write-completion callback. xterm fires parser handlers synchronously as it consumes the buffer, so every OSC-7 parsed out of the replayed chunk sees a non-zero counter. Do **not** change `replay-guard.ts` to a pre-`write` decrement — the whole design depends on the decrement being post-parse.
+
+No debouncing needed — `Map.set` is cheap and the value is read only on demand at split time.
+
+### 2. Resolve CWD at split time
+
+Introduce a helper `resolveSplitCwd(sourcePaneId, sourcePtyId, fallbackCwd): Promise<string>`. Owned by `use-terminal-pane-lifecycle.ts` (co-located with `paneCwdRef`) and passed down to keyboard and context-menu handlers as a dep, symmetric with the existing `paneTransportsRef` wiring.
+
+1. If `paneCwdRef.current.get(sourcePaneId)` has `confirmed === true`, return its `cwd` **synchronously** (no await). OSC-7 from a live shell is authoritative and instant.
+2. Otherwise `await window.api.pty.getCwd(sourcePtyId)` with a ~200ms soft timeout enforced renderer-side via `Promise.race` — keeps the "fall through to fallback" semantics in one place rather than threading timeouts into the provider. Use the result if non-empty.
+3. Otherwise, if `paneCwdRef.current.get(sourcePaneId)` has `confirmed === false` (replayed OSC-7 only), return its `cwd` as a last-ditch guess before falling back.
+4. Otherwise return `fallbackCwd` (the existing worktree root).
+
+**Sync vs async in the keydown handler.** The current Cmd+D handler at `keyboard-handlers.ts:283` is synchronous and calls `e.preventDefault()` / `e.stopImmediatePropagation()` before `splitPane`. The new flow preserves sync ordering:
+
+- Compute `preventDefault` + pane snapshot synchronously.
+- Read `paneCwdRef` synchronously. If hit → call `splitPane` immediately (no `await`).
+- If miss → fire-and-forget an `async` IIFE that awaits `pty.getCwd` then calls `splitPane`. This is equivalent to today's async pane-creation lifecycle, which is already non-blocking.
+
+Double Cmd+D in the cache-miss window: the second keypress fires before the first fire-and-forget IIFE has called `splitPane`, so both async callbacks still see the original source pane as active, resolve the same `pty.getCwd`, and produce two splits off that source (not a chain). This differs from today's fully-sync behavior, which would have chained the second split off the just-created pane. Accepted tradeoff — the window is ~1 IPC round-trip (≤200 ms) and "both splits inherit the same cwd" is not wrong, just not chained. Cache-hit (common case: an active shell with OSC-7 already seen) is still sync and preserves chaining.
+
+### 3. Thread CWD through splitPane
+
+`PaneManager.splitPane(paneId, direction, opts?)` currently accepts `opts: { ratio?: number }` (`pane-manager.ts:93-97`). Extend to `{ ratio?: number; cwd?: string }`.
+
+Plumb the hint to `onPaneCreated` by widening its signature to `(pane, spawnHints?: { cwd?: string })`. The hint is forwarded synchronously inside `splitPane` and has no reason to outlive that call. The existing `pendingSplitScrollState` field on `ManagedPaneInternal` exists only because rAFs read it *later*; that is not the case here.
+
+**Typed API break — all call sites of `onPaneCreated` must update:**
+
+- `PaneManagerOptions.onPaneCreated` type declaration in `pane-manager.ts`.
+- The `createPane` invocation at `pane-manager.ts:89` passes `undefined` for `spawnHints` (new panes aren't splits).
+- The `splitPane` invocation at `pane-manager.ts:133` forwards `opts?.cwd` as `{ cwd: opts.cwd }` when set.
+
+In `use-terminal-pane-lifecycle.ts`:
+
+```ts
+onPaneCreated: (pane, spawnHints) => {
+  // ...existing handler install...
+  const panePtyBinding = connectPanePty(pane, manager, {
+    ...ptyDeps,
+    ...(spawnHints?.cwd ? { cwd: spawnHints.cwd } : {}),
+    restoredLeafId
+  })
+}
+```
+
+Spread order matters: `spawnHints.cwd` overrides the tab-level `ptyDeps.cwd`.
+
+**Callers of `splitPane` — which inherit, which don't.**
+
+| Call site | File:line | Passes `cwd`? | Why |
+|---|---|---|---|
+| Cmd+D / Cmd+Shift+D | `keyboard-handlers.ts:296` | **yes** | primary feature |
+| Context menu: Split Right / Split Down | `use-terminal-pane-context-menu.ts:114,121` | **yes** | same user intent as Cmd+D |
+
+Both Cmd+D and context-menu call sites receive a new dep `resolveSplitCwd: (paneId, ptyId, fallbackCwd) => Promise<string>` and replace `manager.splitPane(pane.id, dir)` with roughly:
+
+```ts
+const ptyId = paneTransportsRef.current.get(pane.id)?.getPtyId() ?? null
+const cached = paneCwdRef.current.get(pane.id)
+if (cached?.confirmed) {
+  manager.splitPane(pane.id, dir, { cwd: cached.cwd })
+  return
+}
+void (async () => {
+  const cwd = await resolveSplitCwd(pane.id, ptyId, fallbackCwd)
+  managerRef.current?.splitPane(pane.id, dir, { cwd })
+})()
+```
+
+The keydown handler still calls `e.preventDefault()` / `e.stopImmediatePropagation()` synchronously before dispatching the async resolution — matches existing async pane-creation lifecycle.
+| Worktree setup split | `use-terminal-pane-lifecycle.ts:693` | no | bootstrap command runs at worktree root by contract |
+| Issue-command split | `use-terminal-pane-lifecycle.ts:719` | no | per-repo automation; runs at worktree root by contract |
+| CLI-triggered split (`onCliSplitPane`) | `use-terminal-pane-lifecycle.ts:754,757` | no | CLI protocol today carries only `paneRuntimeId` + `direction`; no cwd field. Preserve today's behavior until the CLI protocol adds one. |
+| Layout restore | `layout-serialization.ts:299` | no | restored panes re-emit their own OSC-7 on first prompt |
+
+The setup/issue/CLI sites go through `splitPaneWithOneShotStartup`, which is a wrapper receiving a `() => manager.splitPane(...)` thunk. Widening the `splitPane` opts is backward-compatible; the wrapper is unaffected because the new `spawnHints` is a parameter of the `onPaneCreated` *callback*, not of `splitPane` itself.
+
+`pendingSpawnByPaneKey` (`pty-connection.ts:21`) keys by pane key; each new split gets a fresh pane id, so no collision between the inherited-cwd path and existing dedup.
+
+### 4. Preload / main bridge for `pty.getCwd`
+
+`SshPtyProvider.getCwd` already exists (`ssh-pty-provider.ts:132`) and delegates to the relay which calls `resolveProcessCwd(pid, initialCwd)` via `/proc/<pid>/cwd` or `lsof`. Changes needed:
+
+- **`LocalPtyProvider.getCwd` (`src/main/providers/local-pty-provider.ts:388`) currently `throw`s when the id is unknown and returns `''` otherwise.** Change: return `''` on unknown id (do not throw), and on a known id call `resolveProcessCwd(proc.pid, '')` where `proc = ptyProcesses.get(id)`. Pass `''` as the fallback — **not** the pane's initial cwd — because the renderer uses empty-string to mean "no result, try the next fallback layer"; returning the initial cwd would make the renderer think it had an answer and skip its own fallback chain. Do **not** throw on unknown id: the caller treats that case as non-exceptional.
+- **Code sharing for `resolveProcessCwd`.** The helper currently lives in `src/relay/pty-shell-utils.ts` and is bundled into the relay binary. The Electron main process and the relay have separate build graphs; having main import from `src/relay/` (or vice-versa) is not a pattern this repo uses. Rather than force a `src/shared/` split (and touch the relay build), keep the relay's copy in place and add a tiny duplicate in `src/main/providers/process-cwd.ts` for `LocalPtyProvider`. The function is ~30 lines and has no shared state; the cost of duplication is lower than the cost of reshaping two bundle graphs.
+- **IPC handler:** add `ipcMain.handle('pty:getCwd', (_e, {id}) => getProviderForPty(id).getCwd(id))` in `src/main/ipc/pty.ts`, and add `ipcMain.removeHandler('pty:getCwd')` to the removeHandler block at `pty.ts:325-331` (next to the existing `pty:hasChildProcesses` / `pty:getForegroundProcess` entries).
+- **Preload:** add `pty.getCwd(id: string): Promise<string>` in `src/preload/index.ts` alongside `hasChildProcesses`/`getForegroundProcess`, and mirror in `src/preload/api-types.ts`. Returns `''` when unknown.
+
+### 5. Edge cases
+
+- **Agent TUIs (Claude Code, Codex, cursor-agent).** No OSC-7 because no shell prompt. `paneCwdRef` stays empty; `pty.getCwd` via `/proc/<pid>/cwd` still resolves against the running agent process.
+- **Just-split panes (no OSC-7 yet).** A fresh pane before its first prompt has no entry. `pty.getCwd` fallback handles it. Double-Cmd+D inherits from the still-fresh shell's spawn CWD — correct.
+- **SSH reconnect / cold-restore.** OSC-7 entries are keyed by ephemeral `paneId`. Replayed OSC-7 in the scrollback re-feeds the handler via `terminal.write` (`replay-guard.ts:47`) and repopulates the map with `confirmed: false`. The first live OSC-7 after the first prompt upgrades it to `confirmed: true`. If the user hits Cmd+D before the first live prompt, `resolveSplitCwd` takes the `pty.getCwd` path (which queries `/proc/<pid>/cwd` on the live shell) and only falls back to the replayed entry if IPC yields nothing.
+- **Non-emitting shells.** Minimal `sh` without OSC-7 → `pty.getCwd` fallback carries it. Explicit reason to keep the two-layer strategy.
+- **Windows.** `/proc` is absent and `lsof` isn't native. On Windows, `LocalPtyProvider.getCwd` must return `''` (fall through to worktree root) and must **not** throw — after the §4 change, the existing `throw`-on-unknown-id is replaced with `''`, and the Windows branch simply returns `''` unconditionally. Not a regression over today's behavior. OSC-7 from PowerShell/pwsh still works because parsing is renderer-side and platform-agnostic.
+- **Expanded-pane mode.** `keyboard-handlers.ts:286` exits expanded mode before splitting. CWD lookup runs on the currently-active pane before that exit, which is the correct source.
+
+### 6. Tests
+
+- Unit: `parseOsc7` — BEL vs ST termination, percent-decoded spaces, empty host, Windows drive-letter URIs (`file:///C:/Users/...`). On Windows, `parseOsc7` must return a string that `node-pty` accepts as `cwd` on `spawn` (backslash- or forward-slash-separated, with drive letter, no leading `/`). Normalize inside `parseOsc7` via `path.win32.normalize` when `process.platform === 'win32'` and assert the test output equals what `spawn`'s `cwd` option tolerates — don't leave the choice implicit.
+- Unit: `resolveSplitCwd` priority — OSC-7 cache hit skips IPC; cache miss queries IPC; empty IPC result falls through to `deps.cwd`; IPC timeout falls through to `deps.cwd`.
+- Unit: `LocalPtyProvider.getCwd` returns `''` (not throws) for unknown ids.
+- Integration (`tests/e2e/terminal-panes.spec.ts`): `cd /tmp && emit OSC-7; Cmd+D → new pane pwd === /tmp`.
+- No SSH e2e suite exists in `tests/e2e/` today; skip.
+
+### 7. Rollout / compatibility
+
+- No migration or settings surface.
+- Safe default: if OSC-7 and `pty.getCwd` both fail, fall back to worktree root. Users never end up worse off.
+- Ships without a flag.
+
+## Out of scope
+
+- Persisting per-pane CWD across app restarts. Each session starts fresh; OSC-7 re-arrives on first prompt.
+- **New-tab-from-pane inheritance (Cmd+T).** Deliberately deferred — users will ask why Cmd+D inherits and Cmd+T does not, but new-tab also implies worktree choice and startup payload semantics that are not in scope here. Reuse `paneCwdRef` + `resolveSplitCwd` when the new-tab flow is revisited.
+- Using tracked CWD for status-bar display or any other non-split consumer. Separate features that can reuse `paneCwdRef` later.
+- CWD for context-menu entries that open external tools (file manager, editor). Those already have their own resolution paths.
diff --git a/orca-before-split.png b/orca-before-split.png
new file mode 100644
index 00000000000..fb23d337539
Binary files /dev/null and b/orca-before-split.png differ
diff --git a/src/main/daemon/daemon-server.ts b/src/main/daemon/daemon-server.ts
index b694c4cf562..28bf56c62ee 100644
--- a/src/main/daemon/daemon-server.ts
+++ b/src/main/daemon/daemon-server.ts
@@ -273,7 +273,7 @@ export class DaemonServer {
         return {}
 
       case 'getCwd':
-        return { cwd: this.host.getCwd(request.payload.sessionId) }
+        return { cwd: await this.host.getCwd(request.payload.sessionId) }
 
       case 'clearScrollback':
         this.host.clearScrollback(request.payload.sessionId)
diff --git a/src/main/daemon/terminal-host.ts b/src/main/daemon/terminal-host.ts
index bded2ef29db..c344855b238 100644
--- a/src/main/daemon/terminal-host.ts
+++ b/src/main/daemon/terminal-host.ts
@@ -155,8 +155,20 @@ export class TerminalHost {
     session?.detachClient(token)
   }
 
-  getCwd(sessionId: string): string | null {
-    return this.getAliveSession(sessionId).getCwd()
+  async getCwd(sessionId: string): Promise<string | null> {
+    const session = this.getAliveSession(sessionId)
+    const tracked = session.getCwd()
+    if (tracked) {
+      return tracked
+    }
+    // Why: the emulator's cwd is null until the shell emits OSC 7. Orca's
+    // bash/zsh rcfiles ship with OSC 133 markers but not OSC 7, so the
+    // tracked value stays null through the entire session for most users.
+    // Fall back to the live process cwd via /proc/<pid>/cwd (Linux) or
+    // lsof (macOS). Matches the LocalPtyProvider.getCwd fallback.
+    const { resolveProcessCwd } = await import('../providers/process-cwd')
+    const resolved = await resolveProcessCwd(session.pid, '')
+    return resolved || null
   }
 
   clearScrollback(sessionId: string): void {
diff --git a/src/main/ipc/pty.ts b/src/main/ipc/pty.ts
index 0945d9d72b1..3a473661d17 100644
--- a/src/main/ipc/pty.ts
+++ b/src/main/ipc/pty.ts
@@ -334,6 +334,7 @@ export function registerPtyHandlers(
   ipcMain.removeHandler('pty:listSessions')
   ipcMain.removeHandler('pty:hasChildProcesses')
   ipcMain.removeHandler('pty:getForegroundProcess')
+  ipcMain.removeHandler('pty:getCwd')
   ipcMain.removeAllListeners('pty:write')
   ipcMain.removeAllListeners('pty:ackColdRestore')
 
@@ -819,6 +820,20 @@ export function registerPtyHandlers(
       return getProviderForPty(args.id).getForegroundProcess(args.id)
     }
   )
+
+  // Why: renderer needs the live shell cwd when the user presses Cmd+D so
+  // the new split pane inherits the source pane's cwd instead of the
+  // worktree root. Routed through getProviderForPty so local and SSH PTYs
+  // use the same code path. Providers return '' when the id is unknown or
+  // the platform cannot resolve a cwd (Windows); the renderer treats ''
+  // as "fall through to the next fallback layer".
+  ipcMain.handle('pty:getCwd', async (_event, args: { id: string }): Promise<string> => {
+    try {
+      return await getProviderForPty(args.id).getCwd(args.id)
+    } catch {
+      return ''
+    }
+  })
 }
 
 /**
diff --git a/src/main/providers/local-pty-provider.ts b/src/main/providers/local-pty-provider.ts
index 0ccd6c1e489..8ce635fdfe7 100644
--- a/src/main/providers/local-pty-provider.ts
+++ b/src/main/providers/local-pty-provider.ts
@@ -386,11 +386,19 @@ export class LocalPtyProvider implements IPtyProvider {
   }
 
   async getCwd(id: string): Promise<string> {
-    if (!ptyProcesses.has(id)) {
-      throw new Error(`PTY ${id} not found`)
+    const proc = ptyProcesses.get(id)
+    // Why: return '' (not throw) on unknown id — the renderer treats empty
+    // as "no result, try the next fallback layer". Throwing would surface a
+    // noisy rejection for a non-exceptional case (PTY just exited, pane
+    // still has its old id).
+    if (!proc) {
+      return ''
     }
-    // node-pty doesn't expose cwd; would need /proc on Linux or lsof on macOS
-    return ''
+    // Why: pass '' (not an initialCwd) as fallback so an unresolved cwd
+    // stays empty. Handing back a fabricated initialCwd would lie to the
+    // renderer and short-circuit its own fallback chain.
+    const { resolveProcessCwd } = await import('./process-cwd')
+    return resolveProcessCwd(proc.pid, '')
   }
   async getInitialCwd(_id: string): Promise<string> {
     return ''
diff --git a/src/main/providers/process-cwd.ts b/src/main/providers/process-cwd.ts
new file mode 100644
index 00000000000..b1b0c9f41a2
--- /dev/null
+++ b/src/main/providers/process-cwd.ts
@@ -0,0 +1,48 @@
+import { execFile as execFileCb } from 'child_process'
+import { existsSync } from 'fs'
+import { promisify } from 'util'
+
+const execFile = promisify(execFileCb)
+
+/**
+ * Resolve the current working directory of a local process by pid.
+ *
+ * Why duplicated from `src/relay/pty-shell-utils.ts`: the relay and Electron
+ * main process have separate build graphs, and cross-importing across them
+ * is not a pattern used in this repo. The function is short and pure, and
+ * the duplication is cheaper than reshaping both bundle graphs.
+ *
+ * Tries `/proc/<pid>/cwd` on Linux, falls back to `lsof -d cwd` on macOS.
+ * Returns `fallbackCwd` when neither works (including Windows, where
+ * `/proc` is absent and `lsof` is not native).
+ */
+export async function resolveProcessCwd(pid: number, fallbackCwd: string): Promise<string> {
+  const procCwd = `/proc/${pid}/cwd`
+  if (existsSync(procCwd)) {
+    try {
+      const { readlinkSync } = await import('fs')
+      return readlinkSync(procCwd)
+    } catch {
+      /* fall through */
+    }
+  }
+
+  try {
+    const { stdout } = await execFile('lsof', ['-p', String(pid), '-d', 'cwd', '-Fn'], {
+      encoding: 'utf-8',
+      timeout: 3000
+    })
+    for (const line of stdout.split('\n')) {
+      if (line.startsWith('n') && line.includes('/')) {
+        const candidate = line.slice(1)
+        if (existsSync(candidate)) {
+          return candidate
+        }
+      }
+    }
+  } catch {
+    /* fall through */
+  }
+
+  return fallbackCwd
+}
diff --git a/src/preload/api-types.ts b/src/preload/api-types.ts
index fb0e79a771d..b6ccff97b76 100644
--- a/src/preload/api-types.ts
+++ b/src/preload/api-types.ts
@@ -390,6 +390,7 @@ export type PreloadApi = {
     ackColdRestore: (id: string) => void
     hasChildProcesses: (id: string) => Promise<boolean>
     getForegroundProcess: (id: string) => Promise<string | null>
+    getCwd: (id: string) => Promise<string>
     listSessions: () => Promise<{ id: string; cwd: string; title: string }[]>
     onData: (callback: (data: { id: string; data: string }) => void) => () => void
     onReplay: (callback: (data: { id: string; data: string }) => void) => () => void
diff --git a/src/preload/index.ts b/src/preload/index.ts
index b249f4fe984..f211369fb06 100644
--- a/src/preload/index.ts
+++ b/src/preload/index.ts
@@ -339,6 +339,10 @@ const api = {
     getForegroundProcess: (id: string): Promise<string | null> =>
       ipcRenderer.invoke('pty:getForegroundProcess', { id }),
 
+    /** Resolve the live cwd of a PTY via `/proc` (Linux) or `lsof` (macOS).
+     *  Returns `''` when the id is unknown or the platform cannot resolve one. */
+    getCwd: (id: string): Promise<string> => ipcRenderer.invoke('pty:getCwd', { id }),
+
     onData: (callback: (data: { id: string; data: string }) => void): (() => void) => {
       const listener = (_event: Electron.IpcRendererEvent, data: { id: string; data: string }) =>
         callback(data)
diff --git a/src/renderer/src/components/terminal-pane/TerminalPane.tsx b/src/renderer/src/components/terminal-pane/TerminalPane.tsx
index dae5693a50e..afd9b461e67 100644
--- a/src/renderer/src/components/terminal-pane/TerminalPane.tsx
+++ b/src/renderer/src/components/terminal-pane/TerminalPane.tsx
@@ -63,6 +63,11 @@ export default function TerminalPane({
     new Map()
   )
   const paneTransportsRef = useRef<Map<number, PtyTransport>>(new Map())
+  // Why: per-pane live cwd tracked via OSC 7 for split-pane cwd inheritance.
+  // See docs/ssh-split-pane-inherit-cwd.md. The OSC 7 handler is installed
+  // in use-terminal-pane-lifecycle; keyboard and context-menu split actions
+  // read this map at dispatch time to pass cwd into splitPane.
+  const paneCwdRef = useRef<Map<number, { cwd: string; confirmed: boolean }>>(new Map())
   const paneMode2031Ref = useRef<Map<number, boolean>>(new Map())
   const paneLastThemeModeRef = useRef<Map<number, 'dark' | 'light'>>(new Map())
   const panePtyBindingsRef = useRef<Map<number, IDisposable>>(new Map())
@@ -373,6 +378,7 @@ export default function TerminalPane({
     expandedStyleSnapshotRef,
     paneFontSizesRef,
     paneTransportsRef,
+    paneCwdRef,
     paneMode2031Ref,
     paneLastThemeModeRef,
     panePtyBindingsRef,
@@ -513,6 +519,8 @@ export default function TerminalPane({
     isActive,
     managerRef,
     paneTransportsRef,
+    paneCwdRef,
+    fallbackCwd: cwd ?? '',
     expandedPaneIdRef,
     setExpandedPane,
     restoreExpandedLayout,
@@ -865,6 +873,9 @@ export default function TerminalPane({
 
   const contextMenu = useTerminalPaneContextMenu({
     managerRef,
+    paneTransportsRef,
+    paneCwdRef,
+    fallbackCwd: cwd ?? '',
     toggleExpandPane,
     onRequestClosePane: handleRequestClosePane,
     onSetTitle: handleStartRename,
diff --git a/src/renderer/src/components/terminal-pane/keyboard-handlers.ts b/src/renderer/src/components/terminal-pane/keyboard-handlers.ts
index 46bd21574c1..fe603575796 100644
--- a/src/renderer/src/components/terminal-pane/keyboard-handlers.ts
+++ b/src/renderer/src/components/terminal-pane/keyboard-handlers.ts
@@ -3,6 +3,7 @@ import type { PaneManager } from '@/lib/pane-manager/pane-manager'
 import type { PtyTransport } from './pty-transport'
 import { resolveTerminalShortcutAction } from './terminal-shortcut-policy'
 import type { MacOptionAsAlt } from './terminal-shortcut-policy'
+import { resolveSplitCwd, type PaneCwdMap } from './resolve-split-cwd'
 
 function isEditableTarget(target: EventTarget | null): boolean {
   if (!(target instanceof HTMLElement)) {
@@ -66,6 +67,9 @@ type KeyboardHandlersDeps = {
   isActive: boolean
   managerRef: React.RefObject<PaneManager | null>
   paneTransportsRef: React.RefObject<Map<number, PtyTransport>>
+  paneCwdRef: React.RefObject<PaneCwdMap>
+  /** Worktree-root cwd used when OSC 7 and pty.getCwd both fail. */
+  fallbackCwd: string
   expandedPaneIdRef: React.RefObject<number | null>
   setExpandedPane: (paneId: number | null) => void
   restoreExpandedLayout: () => void
@@ -83,6 +87,8 @@ export function useTerminalKeyboardShortcuts({
   isActive,
   managerRef,
   paneTransportsRef,
+  paneCwdRef,
+  fallbackCwd,
   expandedPaneIdRef,
   setExpandedPane,
   restoreExpandedLayout,
@@ -293,7 +299,27 @@ export function useTerminalKeyboardShortcuts({
         if (!pane) {
           return
         }
-        manager.splitPane(pane.id, action.direction)
+        // Split-pane CWD inheritance (docs/ssh-split-pane-inherit-cwd.md):
+        // if we have a confirmed live OSC 7 for the source pane, split
+        // synchronously to preserve chaining on rapid Cmd+D. Otherwise fall
+        // back to an async resolve that queries pty.getCwd.
+        const cached = paneCwdRef.current.get(pane.id)
+        if (cached?.confirmed && cached.cwd) {
+          manager.splitPane(pane.id, action.direction, { cwd: cached.cwd })
+          return
+        }
+        const ptyId = paneTransportsRef.current.get(pane.id)?.getPtyId() ?? null
+        const paneIdAtDispatch = pane.id
+        const directionAtDispatch = action.direction
+        void (async () => {
+          const cwd = await resolveSplitCwd({
+            paneCwdMap: paneCwdRef.current,
+            sourcePaneId: paneIdAtDispatch,
+            sourcePtyId: ptyId,
+            fallbackCwd
+          })
+          managerRef.current?.splitPane(paneIdAtDispatch, directionAtDispatch, { cwd })
+        })()
       }
     }
 
@@ -309,6 +335,8 @@ export function useTerminalKeyboardShortcuts({
     isActive,
     managerRef,
     paneTransportsRef,
+    paneCwdRef,
+    fallbackCwd,
     expandedPaneIdRef,
     setExpandedPane,
     restoreExpandedLayout,
diff --git a/src/renderer/src/components/terminal-pane/parse-osc7.test.ts b/src/renderer/src/components/terminal-pane/parse-osc7.test.ts
new file mode 100644
index 00000000000..0a2f3f8260c
--- /dev/null
+++ b/src/renderer/src/components/terminal-pane/parse-osc7.test.ts
@@ -0,0 +1,33 @@
+import { describe, it, expect } from 'vitest'
+import { parseOsc7 } from './parse-osc7'
+
+describe('parseOsc7', () => {
+  it('extracts a plain POSIX path', () => {
+    expect(parseOsc7('file://host/home/jin/repo')).toBe('/home/jin/repo')
+  })
+
+  it('accepts an empty host', () => {
+    expect(parseOsc7('file:///home/jin')).toBe('/home/jin')
+  })
+
+  it('percent-decodes spaces and unicode', () => {
+    expect(parseOsc7('file:///home/jin/my%20code')).toBe('/home/jin/my code')
+  })
+
+  it('strips the leading slash before a Windows drive letter', () => {
+    expect(parseOsc7('file:///C:/Users/jin/repo')).toBe('C:/Users/jin/repo')
+  })
+
+  it('returns null for non-file URIs', () => {
+    expect(parseOsc7('http://example.com/')).toBeNull()
+  })
+
+  it('returns null for unterminated/malformed input', () => {
+    expect(parseOsc7('not a uri')).toBeNull()
+    expect(parseOsc7('file://host')).toBeNull()
+  })
+
+  it('returns null for invalid percent-encoding', () => {
+    expect(parseOsc7('file:///bad%ZZ')).toBeNull()
+  })
+})
diff --git a/src/renderer/src/components/terminal-pane/parse-osc7.ts b/src/renderer/src/components/terminal-pane/parse-osc7.ts
new file mode 100644
index 00000000000..c50ca0d6023
--- /dev/null
+++ b/src/renderer/src/components/terminal-pane/parse-osc7.ts
@@ -0,0 +1,40 @@
+// OSC 7 — "report current working directory". Shells (bash/zsh, plus the
+// typical PROMPT_COMMAND / precmd one-liner) emit
+//
+//     \x1b]7;file://<host>/<percent-encoded-path>\x07   (or ST terminator)
+//
+// on every prompt so terminal emulators can track the live cwd. xterm's
+// parser strips the leading `\x1b]7;` and trailing BEL/ST before handing us
+// the payload, so `data` here is just the `file://...` URI.
+
+const OSC7_URI = /^file:\/\/[^/]*(\/.*)$/
+
+/**
+ * Parse an OSC 7 payload and return the decoded path, or null if the payload
+ * is not a file URI we recognize. Returns the path a `cwd` option of
+ * `child_process.spawn` / `node-pty` would accept on the current platform.
+ */
+export function parseOsc7(data: string): string | null {
+  const match = OSC7_URI.exec(data)
+  if (!match) {
+    return null
+  }
+  let path: string
+  try {
+    path = decodeURIComponent(match[1])
+  } catch {
+    return null
+  }
+  if (!path) {
+    return null
+  }
+  // Why: on Windows the URI looks like file:///C:/Users/... — match[1] is
+  // `/C:/Users/...`, which `spawn`'s cwd option does not accept. Strip the
+  // leading slash before the drive letter so we hand back `C:/Users/...`.
+  // Renderer runs with sandbox + contextIsolation so process.platform is
+  // unavailable; detect Windows paths by shape instead.
+  if (/^\/[A-Za-z]:/.test(path)) {
+    path = path.slice(1)
+  }
+  return path
+}
diff --git a/src/renderer/src/components/terminal-pane/resolve-split-cwd.test.ts b/src/renderer/src/components/terminal-pane/resolve-split-cwd.test.ts
new file mode 100644
index 00000000000..9f4f5114b0d
--- /dev/null
+++ b/src/renderer/src/components/terminal-pane/resolve-split-cwd.test.ts
@@ -0,0 +1,90 @@
+import { describe, it, expect, vi, beforeEach, afterEach } from 'vitest'
+import { resolveSplitCwd, type PaneCwdMap } from './resolve-split-cwd'
+
+function installGetCwd(fn: (id: string) => Promise<string>): void {
+  // eslint-disable-next-line @typescript-eslint/no-explicit-any -- test-only shim for window.api.pty.getCwd
+  ;(globalThis as any).window = { api: { pty: { getCwd: fn } } }
+}
+
+describe('resolveSplitCwd', () => {
+  beforeEach(() => {
+    vi.useFakeTimers()
+  })
+  afterEach(() => {
+    vi.useRealTimers()
+  })
+
+  it('returns the confirmed OSC 7 entry without calling IPC', async () => {
+    const getCwd = vi.fn()
+    installGetCwd(getCwd as unknown as (id: string) => Promise<string>)
+    const paneCwdMap: PaneCwdMap = new Map([[1, { cwd: '/live/here', confirmed: true }]])
+    const result = await resolveSplitCwd({
+      paneCwdMap,
+      sourcePaneId: 1,
+      sourcePtyId: 'pty-1',
+      fallbackCwd: '/worktree'
+    })
+    expect(result).toBe('/live/here')
+    expect(getCwd).not.toHaveBeenCalled()
+  })
+
+  it('queries IPC when no confirmed entry exists', async () => {
+    installGetCwd(async () => '/tmp/ipc')
+    const paneCwdMap: PaneCwdMap = new Map()
+    const result = await resolveSplitCwd({
+      paneCwdMap,
+      sourcePaneId: 1,
+      sourcePtyId: 'pty-1',
+      fallbackCwd: '/worktree'
+    })
+    expect(result).toBe('/tmp/ipc')
+  })
+
+  it('falls through to the unconfirmed cached entry when IPC returns empty', async () => {
+    installGetCwd(async () => '')
+    const paneCwdMap: PaneCwdMap = new Map([[1, { cwd: '/replayed', confirmed: false }]])
+    const result = await resolveSplitCwd({
+      paneCwdMap,
+      sourcePaneId: 1,
+      sourcePtyId: 'pty-1',
+      fallbackCwd: '/worktree'
+    })
+    expect(result).toBe('/replayed')
+  })
+
+  it('falls back to worktree root when OSC 7 and IPC both miss', async () => {
+    installGetCwd(async () => '')
+    const result = await resolveSplitCwd({
+      paneCwdMap: new Map(),
+      sourcePaneId: 1,
+      sourcePtyId: 'pty-1',
+      fallbackCwd: '/worktree'
+    })
+    expect(result).toBe('/worktree')
+  })
+
+  it('times out and falls back when IPC hangs', async () => {
+    installGetCwd(() => new Promise<string>(() => {}))
+    const promise = resolveSplitCwd({
+      paneCwdMap: new Map(),
+      sourcePaneId: 1,
+      sourcePtyId: 'pty-1',
+      fallbackCwd: '/worktree'
+    })
+    await vi.advanceTimersByTimeAsync(250)
+    expect(await promise).toBe('/worktree')
+  })
+
+  it('skips IPC entirely when there is no source PTY id', async () => {
+    const getCwd = vi.fn()
+    installGetCwd(getCwd as unknown as (id: string) => Promise<string>)
+    const result = await resolveSplitCwd({
+      paneCwdMap: new Map(),
+      sourcePaneId: 1,
+      sourcePtyId: null,
+      fallbackCwd: '/worktree'
+    })
+    expect(result).toBe('/worktree')
+    expect(getCwd).not.toHaveBeenCalled()
+  })
+})
diff --git a/src/renderer/src/components/terminal-pane/resolve-split-cwd.ts b/src/renderer/src/components/terminal-pane/resolve-split-cwd.ts
new file mode 100644
index 00000000000..79ca9d25238
--- /dev/null
+++ b/src/renderer/src/components/terminal-pane/resolve-split-cwd.ts
@@ -0,0 +1,49 @@
+// Why: resolving the "where should the new split start?" question is a
+// two-layer strategy — OSC 7 from the live shell (fast, authoritative) with a
+// `/proc`-or-lsof-backed IPC fallback for shells that never emit OSC 7 (agent
+// TUIs, minimal sh). Both layers can legitimately come back empty, so the
+// helper always finishes by returning the caller's worktree-root fallback.
+
+export type PaneCwdEntry = { cwd: string; confirmed: boolean }
+
+export type PaneCwdMap = Map<number, PaneCwdEntry>
+
+const GET_CWD_TIMEOUT_MS = 200
+
+export async function resolveSplitCwd(args: {
+  paneCwdMap: PaneCwdMap
+  sourcePaneId: number
+  sourcePtyId: string | null
+  fallbackCwd: string
+}): Promise<string> {
+  const { paneCwdMap, sourcePaneId, sourcePtyId, fallbackCwd } = args
+
+  // 1) Live OSC 7 wins — no IPC round-trip needed.
+  const cached = paneCwdMap.get(sourcePaneId)
+  if (cached?.confirmed && cached.cwd) {
+    return cached.cwd
+  }
+
+  // 2) Ask the PTY provider (/proc or lsof). Enforce a soft timeout
+  //    renderer-side so a slow SSH relay can't stall the split.
+  if (sourcePtyId) {
+    try {
+      const ipcCwd = await Promise.race<string | null>([
+        window.api.pty.getCwd(sourcePtyId).catch(() => null),
+        new Promise<null>((resolve) => setTimeout(() => resolve(null), GET_CWD_TIMEOUT_MS))
+      ])
+      if (ipcCwd) {
+        return ipcCwd
+      }
+    } catch {
+      /* fall through */
+    }
+  }
+
+  // 3) Last-ditch: replayed OSC 7 that we couldn't confirm as live.
+  if (cached?.cwd) {
+    return cached.cwd
+  }
+
+  return fallbackCwd
+}
diff --git a/src/renderer/src/components/terminal-pane/use-terminal-pane-context-menu.ts b/src/renderer/src/components/terminal-pane/use-terminal-pane-context-menu.ts
index c5dbc1befa0..4de61567f16 100644
--- a/src/renderer/src/components/terminal-pane/use-terminal-pane-context-menu.ts
+++ b/src/renderer/src/components/terminal-pane/use-terminal-pane-context-menu.ts
@@ -1,10 +1,15 @@
 import { useEffect, useRef, useState } from 'react'
 import type { ManagedPane, PaneManager } from '@/lib/pane-manager/pane-manager'
+import type { PtyTransport } from './pty-transport'
+import { resolveSplitCwd, type PaneCwdMap } from './resolve-split-cwd'
 
 const CLOSE_ALL_CONTEXT_MENUS_EVENT = 'orca-close-all-context-menus'
 
 type UseTerminalPaneContextMenuDeps = {
   managerRef: React.RefObject<PaneManager | null>
+  paneTransportsRef: React.RefObject<Map<number, PtyTransport>>
+  paneCwdRef: React.RefObject<PaneCwdMap>
+  fallbackCwd: string
   toggleExpandPane: (paneId: number) => void
   onRequestClosePane: (paneId: number) => void
   onSetTitle: (paneId: number) => void
@@ -31,6 +36,9 @@ type TerminalMenuState = {
 
 export function useTerminalPaneContextMenu({
   managerRef,
+  paneTransportsRef,
+  paneCwdRef,
+  fallbackCwd,
   toggleExpandPane,
   onRequestClosePane,
   onSetTitle,
@@ -108,19 +116,34 @@ export function useTerminalPaneContextMenu({
     pane.terminal.focus()
   }
 
-  const onSplitRight = (): void => {
+  // Split-pane CWD inheritance (docs/ssh-split-pane-inherit-cwd.md):
+  // mirror the Cmd+D path — sync split on confirmed OSC 7 cache hit,
+  // otherwise fall back to async resolveSplitCwd.
+  const splitWithInheritedCwd = (direction: 'vertical' | 'horizontal'): void => {
     const pane = resolveMenuPane()
-    if (pane) {
-      managerRef.current?.splitPane(pane.id, 'vertical')
+    if (!pane) {
+      return
     }
+    const cached = paneCwdRef.current.get(pane.id)
+    if (cached?.confirmed && cached.cwd) {
+      managerRef.current?.splitPane(pane.id, direction, { cwd: cached.cwd })
+      return
+    }
+    const ptyId = paneTransportsRef.current.get(pane.id)?.getPtyId() ?? null
+    const paneId = pane.id
+    void (async () => {
+      const cwd = await resolveSplitCwd({
+        paneCwdMap: paneCwdRef.current,
+        sourcePaneId: paneId,
+        sourcePtyId: ptyId,
+        fallbackCwd
+      })
+      managerRef.current?.splitPane(paneId, direction, { cwd })
+    })()
   }
 
-  const onSplitDown = (): void => {
-    const pane = resolveMenuPane()
-    if (pane) {
-      managerRef.current?.splitPane(pane.id, 'horizontal')
-    }
-  }
+  const onSplitRight = (): void => splitWithInheritedCwd('vertical')
+  const onSplitDown = (): void => splitWithInheritedCwd('horizontal')
 
   const onClosePane = (): void => {
     const pane = resolveMenuPane()
diff --git a/src/renderer/src/components/terminal-pane/use-terminal-pane-lifecycle.ts b/src/renderer/src/components/terminal-pane/use-terminal-pane-lifecycle.ts
index a06646ac3ab..5136ef26248 100644
--- a/src/renderer/src/components/terminal-pane/use-terminal-pane-lifecycle.ts
+++ b/src/renderer/src/components/terminal-pane/use-terminal-pane-lifecycle.ts
@@ -29,6 +29,8 @@ import {
   mode2031SequenceFor
 } from './terminal-appearance'
 import { parseOsc52 } from './osc52-clipboard'
+import { parseOsc7 } from './parse-osc7'
+import type { PaneCwdMap } from './resolve-split-cwd'
 import { installMouseHideWhileTyping } from './mouse-hide-while-typing'
 import type { EffectiveMacOptionAsAlt } from '@/lib/keyboard-layout/detect-option-as-alt'
 import { resolveEffectiveTerminalAppearance } from '@/lib/terminal-theme'
@@ -78,6 +80,10 @@ type UseTerminalPaneLifecycleDeps = {
   >
   paneFontSizesRef: React.RefObject<Map<number, number>>
   paneTransportsRef: React.RefObject<Map<number, PtyTransport>>
+  /** Shared map of per-pane live cwd, populated by the OSC 7 handler
+   *  installed in onPaneCreated. Exposed to TerminalPane so keyboard and
+   *  context-menu split handlers can read it synchronously for cache hits. */
+  paneCwdRef: React.RefObject<PaneCwdMap>
   paneMode2031Ref: React.RefObject<Map<number, boolean>>
   paneLastThemeModeRef: React.RefObject<Map<number, 'dark' | 'light'>>
   panePtyBindingsRef: React.RefObject<Map<number, IDisposable>>
@@ -165,6 +171,7 @@ export function useTerminalPaneLifecycle({
   expandedStyleSnapshotRef,
   paneFontSizesRef,
   paneTransportsRef,
+  paneCwdRef,
   paneMode2031Ref,
   paneLastThemeModeRef,
   panePtyBindingsRef,
@@ -205,6 +212,7 @@ export function useTerminalPaneLifecycle({
   const selectionDisposablesRef = useRef(new Map<number, IDisposable>())
   const mode2031DisposablesRef = useRef(new Map<number, IDisposable[]>())
   const osc52DisposablesRef = useRef(new Map<number, IDisposable>())
+  const osc7DisposablesRef = useRef(new Map<number, IDisposable>())
   const mouseHideDisposablesRef = useRef(new Map<number, IDisposable>())
 
   const applyAppearance = (manager: PaneManager): void => {
@@ -349,7 +357,10 @@ export function useTerminalPaneLifecycle({
     const urlOpenLinkHint = getTerminalUrlOpenHint()
 
     const manager = new PaneManager(container, {
-      onPaneCreated: (pane) => {
+      // Why: `spawnHints` carries the resolved cwd from Cmd+D / context-menu
+      // Split actions so the new PTY inherits the source pane's live cwd.
+      // Split-pane CWD inheritance — see docs/ssh-split-pane-inherit-cwd.md.
+      onPaneCreated: (pane, spawnHints) => {
         // Install mode 2031 parser handlers before PTY attach so the child's
         // initial CSI ?2031h (sent at startup) is captured.
         const mode2031Disposables = installMode2031Handlers({
@@ -387,6 +398,32 @@ export function useTerminalPaneLifecycle({
         })
         osc52DisposablesRef.current.set(pane.id, osc52Disposable)
 
+        // OSC 7 — shell-reported current working directory. Drives split-pane
+        // cwd inheritance (Cmd+D / Cmd+Shift+D / context-menu Split). Handler
+        // install MUST remain before connectPanePty: the cold-restore path
+        // replays recorded PTY output into the terminal synchronously from the
+        // first PTY read, so a handler registered later would miss the first
+        // OSC 7 in replayed scrollback.
+        //
+        // Why the replay flag is reliable here: replayIntoTerminal increments
+        // a per-pane counter BEFORE xterm.write and decrements it in xterm's
+        // write-completion callback (replay-guard.ts). xterm parses OSC
+        // synchronously as it consumes the buffer, so every OSC 7 emitted
+        // during replay is seen with the counter non-zero.
+        //
+        // Return true so xterm marks the sequence handled. If a future
+        // consumer registers on code 7, registration order decides who sees
+        // each sequence.
+        const osc7Disposable = pane.terminal.parser.registerOscHandler(7, (data) => {
+          const cwd = parseOsc7(data)
+          if (cwd) {
+            const confirmed = !isPaneReplaying(replayingPanesRef, pane.id)
+            paneCwdRef.current.set(pane.id, { cwd, confirmed })
+          }
+          return true
+        })
+        osc7DisposablesRef.current.set(pane.id, osc7Disposable)
+
         const linkProviderDisposable = pane.terminal.registerLinkProvider(
           createFilePathLinkProvider(pane.id, linkDeps, pane.linkTooltip, fileOpenLinkHint)
         )
@@ -442,6 +479,10 @@ export function useTerminalPaneLifecycle({
         restoredPaneCreateIndex += 1
         const panePtyBinding = connectPanePty(pane, manager, {
           ...ptyDeps,
+          // Why: spread order matters — spawnHints.cwd (inherited from the
+          // source pane) must override the tab-level ptyDeps.cwd (worktree
+          // root) so Cmd+D splits boot in the live cwd.
+          ...(spawnHints?.cwd ? { cwd: spawnHints.cwd } : {}),
           restoredLeafId
         })
         // Why: connectPanePty receives a spread copy of ptyDeps, so the
@@ -486,6 +527,14 @@ export function useTerminalPaneLifecycle({
           osc52Disposable.dispose()
           osc52DisposablesRef.current.delete(paneId)
         }
+        const osc7Disposable = osc7DisposablesRef.current.get(paneId)
+        if (osc7Disposable) {
+          osc7Disposable.dispose()
+          osc7DisposablesRef.current.delete(paneId)
+        }
+        // Why: drop the tracked cwd so the map doesn't accumulate dead
+        // entries across splits/closes over long sessions.
+        paneCwdRef.current.delete(paneId)
         const mouseHideDisposable = mouseHideDisposablesRef.current.get(paneId)
         if (mouseHideDisposable) {
           mouseHideDisposable.dispose()
diff --git a/src/renderer/src/lib/pane-manager/pane-manager-types.ts b/src/renderer/src/lib/pane-manager/pane-manager-types.ts
index 39b00efd82b..84ce99705ff 100644
--- a/src/renderer/src/lib/pane-manager/pane-manager-types.ts
+++ b/src/renderer/src/lib/pane-manager/pane-manager-types.ts
@@ -12,8 +12,16 @@ import type { SerializeAddon } from '@xterm/addon-serialize'
 // Public interfaces
 // ---------------------------------------------------------------------------
 
+/** Hints forwarded from splitPane() into onPaneCreated for a single split.
+ *  Currently only carries the resolved cwd for the new pane's PTY spawn.
+ *  Kept as a separate parameter (rather than extending ManagedPane) so the
+ *  hint is scoped to pane creation and does not live on the pane afterwards. */
+export type PaneSpawnHints = {
+  cwd?: string
+}
+
 export type PaneManagerOptions = {
-  onPaneCreated?: (pane: ManagedPane) => void | Promise<void>
+  onPaneCreated?: (pane: ManagedPane, spawnHints?: PaneSpawnHints) => void | Promise<void>
   onPaneClosed?: (paneId: number) => void
   onActivePaneChange?: (pane: ManagedPane) => void
   onLayoutChanged?: () => void
diff --git a/src/renderer/src/lib/pane-manager/pane-manager.ts b/src/renderer/src/lib/pane-manager/pane-manager.ts
index 7f358ec976a..bf70c770f1e 100644
--- a/src/renderer/src/lib/pane-manager/pane-manager.ts
+++ b/src/renderer/src/lib/pane-manager/pane-manager.ts
@@ -93,7 +93,7 @@ export class PaneManager {
   splitPane(
     paneId: number,
     direction: 'vertical' | 'horizontal',
-    opts?: { ratio?: number }
+    opts?: { ratio?: number; cwd?: string }
   ): ManagedPane | null {
     const existing = this.panes.get(paneId)
     if (!existing) {
@@ -130,7 +130,14 @@ export class PaneManager {
     this.applyDividerStylesWrapped()
     newPane.terminal?.focus()
     updateMultiPaneState(this.getDragCallbacks())
-    void this.options.onPaneCreated?.(toPublicPane(newPane))
+    // Why: forward the caller's spawn hint so onPaneCreated → connectPanePty
+    // can boot the new PTY in the source pane's live cwd instead of the
+    // worktree root. The hint is synchronous-only: splitPane returns after
+    // onPaneCreated runs, so there is no reason for it to outlive this call.
+    void this.options.onPaneCreated?.(
+      toPublicPane(newPane),
+      opts?.cwd ? { cwd: opts.cwd } : undefined
+    )
     this.options.onLayoutChanged?.()
 
     scheduleSplitScrollRestore(