diff --git a/src/main/persistence/tracking-repos/project-host-compatibility.test.ts b/src/main/persistence/tracking-repos/project-host-compatibility.test.ts
new file mode 100644
index 00000000000..540dc6955f7
--- /dev/null
+++ b/src/main/persistence/tracking-repos/project-host-compatibility.test.ts
@@ -0,0 +1,68 @@
+import { describe, expect, it } from 'vitest'
+import type { ProjectHostSetup } from '../../../shared/project-types'
+import type { Repo } from '../../../shared/repo-types'
+import { mergeProjectHostSetupCompatibilityState } from './project-host-compatibility'
+
+const PROJECT_ID = 'github:acme/orca'
+
+function repo(overrides: Partial<Repo> & Pick<Repo, 'id'>): Repo {
+  return {
+    path: `/src/${overrides.id}`,
+    displayName: 'orca',
+    addedAt: 1,
+    upstream: { owner: 'acme', repo: 'orca' },
+    ...overrides
+  } as Repo
+}
+
+function pendingSetup(overrides: Partial<ProjectHostSetup> = {}): ProjectHostSetup {
+  return {
+    id: `${PROJECT_ID}::ssh:devbox`,
+    projectId: PROJECT_ID,
+    hostId: 'ssh:devbox',
+    repoId: '',
+    path: '',
+    displayName: 'orca',
+    setupState: 'not-set-up',
+    setupMethod: 'pending',
+    createdAt: 1,
+    updatedAt: 1,
+    ...overrides
+  } as ProjectHostSetup
+}
+
+describe('mergeProjectHostSetupCompatibilityState', () => {
+  it('keeps a placeholder for a host with no repo yet', () => {
+    const merged = mergeProjectHostSetupCompatibilityState(
+      { projects: [], projectHostSetups: [pendingSetup()] },
+      [repo({ id: 'local-repo' })]
+    )
+
+    expect(merged.projectHostSetups.map((setup) => setup.hostId)).toEqual(['local', 'ssh:devbox'])
+  })
+
+  // Setting a location on a host that already had a placeholder projects a ready setup for
+  // the same project+host; the placeholder must not survive to shadow it.
+  it('drops a placeholder once a repo covers the same project and host', () => {
+    const merged = mergeProjectHostSetupCompatibilityState(
+      { projects: [], projectHostSetups: [pendingSetup()] },
+      [repo({ id: 'local-repo' }), repo({ id: 'devbox-repo', executionHostId: 'ssh:devbox' })]
+    )
+
+    expect(merged.projectHostSetups).toHaveLength(2)
+    expect(merged.projectHostSetups.every((setup) => setup.setupState === 'ready')).toBe(true)
+    expect(merged.projectHostSetups.map((setup) => setup.id)).toEqual(['local-repo', 'devbox-repo'])
+  })
+
+  it('keeps the placeholder when the repo covers a different host', () => {
+    const merged = mergeProjectHostSetupCompatibilityState(
+      { projects: [], projectHostSetups: [pendingSetup({ hostId: 'ssh:other' })] },
+      [repo({ id: 'devbox-repo', executionHostId: 'ssh:devbox' })]
+    )
+
+    expect(merged.projectHostSetups.map((setup) => setup.hostId)).toEqual([
+      'ssh:devbox',
+      'ssh:other'
+    ])
+  })
+})
diff --git a/src/main/persistence/tracking-repos/project-host-compatibility.ts b/src/main/persistence/tracking-repos/project-host-compatibility.ts
index 88e80ecdb93..0b51c758652 100644
--- a/src/main/persistence/tracking-repos/project-host-compatibility.ts
+++ b/src/main/persistence/tracking-repos/project-host-compatibility.ts
@@ -23,6 +23,10 @@ export function isRepoBackedProjectHostSetup(
   return repoId.length > 0 && (currentRepoIds.has(repoId) || setup.id === repoId)
 }
 
+function projectHostKey(setup: Pick<ProjectHostSetup, 'projectId' | 'hostId'>): string {
+  return `${setup.projectId}\u0000${setup.hostId}`
+}
+
 export function mergeProjectHostSetupCompatibilityState(
   state: Pick<PersistedState, 'projects' | 'projectHostSetups'>,
   repos: readonly Repo[]
@@ -35,6 +39,7 @@ export function mergeProjectHostSetupCompatibilityState(
   const currentRepoIds = new Set(repos.map((repo) => repo.id))
   const projectedProjectIds = new Set(projection.projects.map((project) => project.id))
   const projectedSetupIds = new Set(projection.setups.map((setup) => setup.id))
+  const projectedHosts = new Set(projection.setups.map(projectHostKey))
   // Why: legacy/repo-backed setup rows reuse the repo id; keep only independent rows so repo deletion leaves no ghosts.
   const independentSetups = (state.projectHostSetups ?? [])
     .filter((setup) => {
@@ -48,6 +53,10 @@ export function mergeProjectHostSetupCompatibilityState(
       const remappedProjectId = succession.remappedProjectIds.get(setup.projectId)
       return remappedProjectId ? { ...setup, projectId: remappedProjectId } : setup
     })
+    // Why: a project resolves to one setup per host. Once a repo projection covers that
+    // pair, a leftover placeholder is a ghost that shadows the ready row — it sorts first
+    // and reads back as "not set up". Runs after the remap so renamed rows are caught too.
+    .filter((setup) => !projectedHosts.has(projectHostKey(setup)))
   const independentProjectIds = new Set(independentSetups.map((setup) => setup.projectId))
   const independentProjects = (state.projects ?? [])
     .filter(
diff --git a/src/renderer/src/components/NewWorkspaceComposerCard.set-location.test.tsx b/src/renderer/src/components/NewWorkspaceComposerCard.set-location.test.tsx
new file mode 100644
index 00000000000..92c7e889075
--- /dev/null
+++ b/src/renderer/src/components/NewWorkspaceComposerCard.set-location.test.tsx
@@ -0,0 +1,238 @@
+// @vitest-environment happy-dom
+
+import React, { act } from 'react'
+import { createRoot } from 'react-dom/client'
+import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest'
+import NewWorkspaceComposerCard from './NewWorkspaceComposerCard'
+import type { NewWorkspaceProjectOption } from '@/lib/new-workspace-project-options'
+import type { ProjectHostSetupOption } from '@/lib/project-host-setup-options'
+
+const storeMocks = vi.hoisted(() => ({
+  closeModal: vi.fn(),
+  openModal: vi.fn(),
+  openSettingsPage: vi.fn(),
+  openSettingsTarget: vi.fn()
+}))
+
+vi.mock('@/store', () => ({
+  useAppStore: Object.assign(
+    (selector: (state: unknown) => unknown) =>
+      selector({
+        closeModal: storeMocks.closeModal,
+        openModal: storeMocks.openModal,
+        openSettingsPage: storeMocks.openSettingsPage,
+        openSettingsTarget: storeMocks.openSettingsTarget,
+        setRuntimeEnvironmentStatus: vi.fn(),
+        setupProjectExistingFolder: vi.fn(),
+        setupProjectClone: vi.fn(),
+        activeModal: 'new-workspace-composer',
+        settings: { defaultTuiAgent: null, disabledTuiAgents: [] },
+        updateSettings: vi.fn(),
+        projects: [],
+        repos: []
+      }),
+    { getState: () => ({}) }
+  )
+}))
+
+vi.mock('@/components/contextual-tours/use-contextual-tour', () => ({
+  useContextualTour: vi.fn()
+}))
+
+vi.mock('@/components/ui/tooltip', () => ({
+  Tooltip: ({ children }: { children: React.ReactNode }) => <>{children}</>,
+  TooltipContent: ({ children }: { children: React.ReactNode }) => <>{children}</>,
+  TooltipTrigger: ({ children }: { children: React.ReactNode }) => <>{children}</>
+}))
+
+vi.mock('@/components/ui/tooltip', () => ({
+  Tooltip: ({ children }: { children: React.ReactNode }) => <>{children}</>,
+  TooltipContent: ({ children }: { children: React.ReactNode }) => <>{children}</>,
+  TooltipTrigger: ({ children }: { children: React.ReactNode }) => <>{children}</>
+}))
+
+vi.mock('@/components/agent/AgentCombobox', () => ({
+  default: () => <button type="button">Agent picker</button>
+}))
+
+vi.mock('@/components/sidebar/AddRemoteHostDialog', () => ({
+  AddRemoteHostDialog: () => null
+}))
+
+vi.mock('@/components/sparse/SparseCheckoutPresetSelect', () => ({
+  default: () => null
+}))
+
+vi.mock('@/components/new-workspace/SmartWorkspaceNameField', () => ({
+  default: () => <input aria-label="workspace name" />
+}))
+
+vi.mock('@/components/new-workspace/ProjectCombobox', () => ({
+  default: () => <div data-testid="project-combobox" />
+}))
+
+vi.mock('@/components/new-workspace/SetProjectLocationDialog', () => ({
+  SetProjectLocationDialog: ({
+    option,
+    projectName
+  }: {
+    option: { label: string } | null
+    projectName: string
+  }) =>
+    option ? (
+      <div
+        data-testid="set-project-location-dialog"
+        data-host={option.label}
+        data-project={projectName}
+      />
+    ) : null
+}))
+
+const projectOptions: NewWorkspaceProjectOption[] = [
+  {
+    kind: 'project-group',
+    id: 'project-group:platform',
+    projectGroupId: 'platform',
+    displayName: 'Platform',
+    badgeColor: 'var(--muted-foreground)',
+    detail: '/workspace/platform',
+    parentPath: '/workspace/platform',
+    connectionId: null
+  }
+]
+
+const hostOptions: ProjectHostSetupOption[] = [
+  {
+    kind: 'ready',
+    id: 'setup-local',
+    projectId: 'project-group:platform',
+    hostId: 'local',
+    repoId: 'repo-a',
+    label: 'Local Mac',
+    detail: 'Orca',
+    path: '/Users/alice/orca'
+  },
+  {
+    kind: 'needs-setup',
+    id: 'needs-setup:ssh:devbox',
+    projectId: 'project-group:platform',
+    hostId: 'ssh:devbox',
+    label: 'Devbox',
+    detail: 'Project location not set',
+    isAvailable: true,
+    attention: false,
+    canSetLocation: true
+  }
+]
+
+function renderCard(
+  overrides: Partial<React.ComponentProps<typeof NewWorkspaceComposerCard>> = {}
+): HTMLDivElement {
+  const container = document.createElement('div')
+  document.body.appendChild(container)
+  const root = createRoot(container)
+  act(() => {
+    root.render(
+      <NewWorkspaceComposerCard
+        quickAgent={null}
+        onQuickAgentChange={() => {}}
+        eligibleRepos={[]}
+        repoId="repo-a"
+        projectOptions={projectOptions}
+        selectedProjectId="project-group:platform"
+        selectedRepoIsGit
+        onRepoChange={() => {}}
+        onProjectChange={() => {}}
+        primaryActionLabel="Create workspace"
+        name=""
+        onNameValueChange={() => {}}
+        onSmartGitHubItemSelect={() => {}}
+        onSmartGitLabItemSelect={() => {}}
+        onSmartBranchSelect={() => {}}
+        onSmartLinearIssueSelect={() => {}}
+        smartNameSelection={null}
+        onClearSmartNameSelection={() => {}}
+        canReuseSelectedBranch={false}
+        reuseSelectedBranch={false}
+        onReuseSelectedBranchChange={() => {}}
+        forkPushWarning={null}
+        detectedAgentIds={null}
+        onOpenAgentSettings={() => {}}
+        advancedOpen={false}
+        onToggleAdvanced={() => {}}
+        createDisabled={false}
+        projectError={null}
+        creating={false}
+        onCreate={() => {}}
+        note=""
+        onNoteChange={() => {}}
+        setupConfig={null}
+        requiresExplicitSetupChoice={false}
+        setupDecision={null}
+        onSetupDecisionChange={() => {}}
+        setupAgentStartupPolicy="start-immediately"
+        onSetupAgentStartupPolicyChange={() => {}}
+        shouldWaitForSetupCheck={false}
+        resolvedSetupDecision={null}
+        createError={null}
+        selectedRepoConnectionId={null}
+        selectedRepoSshStatus={null}
+        selectedRepoRequiresConnection={false}
+        selectedRepoConnectInProgress={false}
+        onConnectSelectedRepo={async () => {}}
+        canUseSparseCheckout={false}
+        sparsePresets={[]}
+        sparseSelectedPresetId={null}
+        onSparseSelectPreset={() => {}}
+        branchNameOverride={undefined}
+        onBranchNameOverrideChange={() => {}}
+        branchesEnabled={false}
+        setupControlsEnabled={false}
+        sparseControlsEnabled={false}
+        projectHostSetupOptions={hostOptions}
+        selectedProjectHostSetupId="setup-local"
+        {...overrides}
+      />
+    )
+  })
+  return container
+}
+
+describe('NewWorkspaceComposerCard set location', () => {
+  let container: HTMLDivElement | null = null
+
+  beforeEach(() => {
+    storeMocks.closeModal.mockReset()
+    storeMocks.openModal.mockReset()
+    storeMocks.openSettingsPage.mockReset()
+  })
+
+  afterEach(() => {
+    container?.remove()
+    container = null
+  })
+
+  it('opens set-location over the composer without leaving the create dialog', () => {
+    const nestedOpenChanges: boolean[] = []
+    container = renderCard({
+      onNestedDialogOpenChange: (open) => nestedOpenChanges.push(open)
+    })
+
+    act(() => {
+      container?.querySelector<HTMLElement>('div[data-run-target-combobox-root="true"]')?.click()
+    })
+    const setLocation = [...document.body.querySelectorAll<HTMLButtonElement>('button')].find(
+      (button) => button.textContent?.includes('Set project location')
+    )
+    expect(setLocation).toBeTruthy()
+    act(() => setLocation?.click())
+
+    const dialog = document.body.querySelector('[data-testid="set-project-location-dialog"]')
+    expect(dialog?.getAttribute('data-host')).toBe('Devbox')
+    expect(dialog?.getAttribute('data-project')).toBe('Platform')
+    expect(nestedOpenChanges).toEqual([true])
+    expect(storeMocks.closeModal).not.toHaveBeenCalled()
+    expect(storeMocks.openModal).not.toHaveBeenCalled()
+    expect(storeMocks.openSettingsPage).not.toHaveBeenCalled()
+  })
+})
diff --git a/src/renderer/src/components/NewWorkspaceComposerCard.test.tsx b/src/renderer/src/components/NewWorkspaceComposerCard.test.tsx
index 33fc740980b..9775cd06dae 100644
--- a/src/renderer/src/components/NewWorkspaceComposerCard.test.tsx
+++ b/src/renderer/src/components/NewWorkspaceComposerCard.test.tsx
@@ -31,7 +31,9 @@ vi.mock('@/store', () => ({
         setRuntimeEnvironmentStatus: storeMocks.setRuntimeEnvironmentStatus,
         activeModal: 'none',
         settings: { defaultTuiAgent: null, disabledTuiAgents: [] },
-        updateSettings: vi.fn()
+        updateSettings: vi.fn(),
+        projects: [],
+        repos: []
       }),
     {
       getState: () => ({
@@ -62,6 +64,10 @@ vi.mock('@/components/sidebar/AddRemoteHostDialog', () => ({
     mode ? <div data-testid="add-remote-host-dialog" data-mode={mode} /> : null
 }))
 
+vi.mock('@/components/new-workspace/SetProjectLocationDialog', () => ({
+  SetProjectLocationDialog: () => null
+}))
+
 vi.mock('@/components/sparse/SparseCheckoutPresetSelect', () => ({
   default: () => <div data-testid="sparse-select" />
 }))
@@ -155,7 +161,8 @@ const devboxNeedsSetupHostOption: ProjectHostSetupOption = {
   label: 'Devbox',
   detail: 'Project location not set',
   isAvailable: true,
-  attention: false
+  attention: false,
+  canSetLocation: true
 }
 
 const disconnectedDevboxNeedsSetupHostOption: ProjectHostSetupOption = {
@@ -167,6 +174,7 @@ const disconnectedDevboxNeedsSetupHostOption: ProjectHostSetupOption = {
   detail: 'Connect this host to set up projects',
   isAvailable: false,
   attention: false,
+  canSetLocation: false,
   connectAction: { kind: 'ssh', targetId: 'devbox' }
 }
 
@@ -179,6 +187,7 @@ const disconnectedBastionNeedsSetupHostOption: ProjectHostSetupOption = {
   detail: 'Connect this host to set up projects',
   isAvailable: false,
   attention: false,
+  canSetLocation: false,
   connectAction: { kind: 'ssh', targetId: 'bastion' }
 }
 
@@ -601,7 +610,8 @@ describe('NewWorkspaceComposerCard folder task source mode', () => {
     openRunTargetPicker(current.container)
 
     const devboxItem = findRunTargetItem('Devbox')
-    expect(devboxItem?.textContent).toContain('Project location not set')
+    expect(devboxItem?.textContent).not.toContain('Project location not set')
+    expect(devboxItem?.textContent).toContain('Set project location')
     // Not-connected rows stay highlightable (never `disabled`) so they hover like
     // the other rows; they're quieted visually instead.
     expect(devboxItem?.hasAttribute('data-disabled')).toBe(false)
diff --git a/src/renderer/src/components/NewWorkspaceComposerCard.tsx b/src/renderer/src/components/NewWorkspaceComposerCard.tsx
index 4606a625c07..29b7760d055 100644
--- a/src/renderer/src/components/NewWorkspaceComposerCard.tsx
+++ b/src/renderer/src/components/NewWorkspaceComposerCard.tsx
@@ -48,6 +48,7 @@ import SmartWorkspaceNameField, {
 import type { SmartNameMode } from '@/components/new-workspace/smart-workspace-source-results'
 import ProjectCombobox from '@/components/new-workspace/ProjectCombobox'
 import RunTargetCombobox from '@/components/new-workspace/RunTargetCombobox'
+import { SetProjectLocationDialog } from '@/components/new-workspace/SetProjectLocationDialog'
 import {
   AddRemoteHostDialog,
   type AddRemoteHostMode
@@ -162,6 +163,8 @@ type NewWorkspaceComposerCardProps = {
   sparseControlsEnabled?: boolean
   /** When set, "Add project" opens a host-provided flow instead of swapping the store's active modal. */
   onAddProjectOverride?: () => void
+  /** Fires as the nested Set-project-location dialog opens and closes, so the host can stand down its Escape/submit handling. */
+  onNestedDialogOpenChange?: (open: boolean) => void
 }
 
 const SSH_STATUS_LABELS: Partial<Record<SshConnectionStatus, string>> = {
@@ -371,7 +374,8 @@ export default function NewWorkspaceComposerCard({
   sparseSelectedPresetId,
   onSparseSelectPreset,
   sparseControlsEnabled = true,
-  onAddProjectOverride
+  onAddProjectOverride,
+  onNestedDialogOpenChange
 }: NewWorkspaceComposerCardProps): React.JSX.Element {
   // Why: subscribe (form uses translate() directly) so an open create dialog repaints when the UI language changes.
   useTranslation()
@@ -499,6 +503,38 @@ export default function NewWorkspaceComposerCard({
   const handleAddRemoteServer = React.useCallback((): void => {
     setAddRemoteHostMode('server')
   }, [])
+  const [setLocationOption, setSetLocationOption] =
+    React.useState<NeedsSetupProjectHostOption | null>(null)
+  const handleSetLocation = React.useCallback(
+    (option: NeedsSetupProjectHostOption): void => {
+      setSetLocationOption(option)
+      onNestedDialogOpenChange?.(true)
+    },
+    [onNestedDialogOpenChange]
+  )
+  const handleSetLocationClose = React.useCallback((): void => {
+    setSetLocationOption(null)
+    onNestedDialogOpenChange?.(false)
+  }, [onNestedDialogOpenChange])
+  const handleSetLocationReady = React.useCallback(
+    (setupId: string): void => {
+      handleSetLocationClose()
+      onProjectHostSetupChange?.(setupId)
+    },
+    [handleSetLocationClose, onProjectHostSetupChange]
+  )
+  const projects = useAppStore((state) => state.projects)
+  const repos = useAppStore((state) => state.repos)
+  // Prefill "Clone from URL" with the project's own remote so the common case is one click.
+  const defaultCloneUrl = React.useMemo(() => {
+    const sourceRepoIds =
+      projects.find((candidate) => candidate.id === selectedProjectId)?.sourceRepoIds ?? []
+    return (
+      sourceRepoIds
+        .map((sourceId) => repos.find((repo) => repo.id === sourceId)?.gitRemoteIdentity?.remoteUrl)
+        .find((url): url is string => Boolean(url)) ?? ''
+    )
+  }, [projects, repos, selectedProjectId])
   const handleConnectRunTargetHost = React.useCallback(
     async (option: NeedsSetupProjectHostOption): Promise<void> => {
       const action = option.connectAction
@@ -704,6 +740,7 @@ export default function NewWorkspaceComposerCard({
                 onAddSshHost={handleAddSshHost}
                 onAddRemoteServer={handleAddRemoteServer}
                 onConnectHost={handleConnectRunTargetHost}
+                onSetLocation={handleSetLocation}
               />
               {ephemeralVmRecipeError ? (
                 <p className="whitespace-pre-line text-[11px] text-destructive">
@@ -1231,6 +1268,14 @@ export default function NewWorkspaceComposerCard({
           the in-progress workspace form is preserved; on success the new host flows back into
           the run-target picker via the store. */}
       <AddRemoteHostDialog mode={addRemoteHostMode} onOpenChange={setAddRemoteHostMode} />
+      <SetProjectLocationDialog
+        option={setLocationOption}
+        projectName={selectedProjectName}
+        projectKind={selectedRepoIsGit ? 'git' : 'folder'}
+        defaultCloneUrl={defaultCloneUrl}
+        onClose={handleSetLocationClose}
+        onReady={handleSetLocationReady}
+      />
     </div>
   )
 }
diff --git a/src/renderer/src/components/NewWorkspaceComposerModal.tsx b/src/renderer/src/components/NewWorkspaceComposerModal.tsx
index 77b9cf64e52..2309ef54b50 100644
--- a/src/renderer/src/components/NewWorkspaceComposerModal.tsx
+++ b/src/renderer/src/components/NewWorkspaceComposerModal.tsx
@@ -197,6 +197,7 @@ function QuickTabBody({
   // outcomes still navigate away and tear the whole modal down.)
   const [addProjectOpen, setAddProjectOpen] = useState(false)
   const [addProjectMounted, setAddProjectMounted] = useState(false)
+  const [setLocationOpen, setSetLocationOpen] = useState(false)
   const handleOpenAddProject = useCallback((): void => {
     setAddProjectMounted(true)
     setAddProjectOpen(true)
@@ -238,10 +239,10 @@ function QuickTabBody({
       : translate('auto.components.NewWorkspaceComposerModal.createWorkspace', 'Create workspace')
 
   // Cmd/Ctrl+Enter submits, Esc first blurs the focused input (like the full page).
-  const nestedDialogOpen = agentSettingsOpen || addProjectOpen
+  const nestedDialogOpen = agentSettingsOpen || addProjectOpen || setLocationOpen
   useEffect(() => {
     if (!active || nestedDialogOpen) {
-      // Why: while a nested dialog (Add Project / Agents) is layered on top,
+      // Why: while a nested dialog (Add Project / Agents / Set location) is layered on top,
       // this capture-phase handler must not steal its Escape (which should
       // close only the nested dialog) or fire composer submit underneath it.
       return
@@ -324,6 +325,7 @@ function QuickTabBody({
         onOpenAgentSettings={() => setAgentSettingsOpen(true)}
         onCreate={() => void handleCreate()}
         onAddProjectOverride={handleOpenAddProject}
+        onNestedDialogOpenChange={setSetLocationOpen}
       />
       <AgentSettingsDialog open={agentSettingsOpen} onOpenChange={setAgentSettingsOpen} />
       {addProjectMounted ? (
diff --git a/src/renderer/src/components/new-workspace/RunTargetCombobox.tsx b/src/renderer/src/components/new-workspace/RunTargetCombobox.tsx
index 4b3d0a07ea9..4ca978baa07 100644
--- a/src/renderer/src/components/new-workspace/RunTargetCombobox.tsx
+++ b/src/renderer/src/components/new-workspace/RunTargetCombobox.tsx
@@ -12,7 +12,8 @@ import {
   ConnectHostButton,
   HostRowIcon,
   NeedsSetupHostIcon,
-  RunTargetRow
+  RunTargetRow,
+  SetLocationButton
 } from './RunTargetComboboxRow'
 import {
   buildRunTargetRows,
@@ -34,6 +35,7 @@ type RunTargetComboboxProps = {
   onAddRemoteServer?: () => void
   onAddSshHost?: () => void
   onConnectHost?: (option: NeedsSetupProjectHostOption) => Promise<void> | void
+  onSetLocation?: (option: NeedsSetupProjectHostOption) => void
 }
 
 const ROOT_ATTRIBUTE = 'data-run-target-combobox-root'
@@ -56,7 +58,8 @@ export default function RunTargetCombobox({
   onRecipeChange,
   onAddRemoteServer,
   onAddSshHost,
-  onConnectHost
+  onConnectHost,
+  onSetLocation
 }: RunTargetComboboxProps): React.JSX.Element {
   const [submenu, setSubmenu] = useState<'recipes' | 'add-host' | null>(null)
   // Track in-flight connects per host so one stalling connect never blocks the others.
@@ -134,6 +137,19 @@ export default function RunTargetCombobox({
     [connectingHostIds, onConnectHost]
   )
 
+  // Why: reached from the row body, its inline button, and Enter — keep one path
+  // so all three close the picker before handing off to the nested dialog.
+  const setLocation = useCallback(
+    (option: NeedsSetupProjectHostOption): void => {
+      if (!option.canSetLocation || !onSetLocation) {
+        return
+      }
+      close()
+      onSetLocation(option)
+    },
+    [close, onSetLocation]
+  )
+
   /** Commits a row, or opens its submenu when the row is a submenu row. */
   const activate = useCallback(
     (key: string | null): void => {
@@ -146,12 +162,13 @@ export default function RunTargetCombobox({
         return
       }
       if (row.kind === 'needs-setup') {
-        // Not ready: selecting is a no-op, the Connect action is the way forward.
+        // Not ready: setting the location is the only way forward from the row itself.
+        setLocation(row.option)
         return
       }
       setSubmenu(row.kind === 'recipes' ? 'recipes' : 'add-host')
     },
-    [rows, selectHost]
+    [rows, selectHost, setLocation]
   )
 
   const handleKeyDown = useCallback(
@@ -291,6 +308,7 @@ export default function RunTargetCombobox({
               if (row.kind === 'needs-setup') {
                 const connecting = connectingHostIds.has(row.option.hostId)
                 const hasConnect = Boolean(row.option.connectAction && onConnectHost)
+                const hasSetLocation = Boolean(row.option.canSetLocation && onSetLocation)
                 return (
                   <RunTargetRow
                     key={row.key}
@@ -302,10 +320,9 @@ export default function RunTargetCombobox({
                       />
                     }
                     label={row.option.label}
-                    // Why: a Connect button on the row already says the host
-                    // isn't connected, so its detail line only repeats that.
-                    // Rows without the action still need theirs to explain why.
-                    detail={hasConnect ? '' : row.option.detail}
+                    // Why: Connect / Set project location already say the next
+                    // step, so the detail line would only repeat that.
+                    detail={hasConnect || hasSetLocation ? '' : row.option.detail}
                     armed={isArmed}
                     current={false}
                     dimmed
@@ -314,13 +331,18 @@ export default function RunTargetCombobox({
                       arm(row.key)
                       setSubmenu(null)
                     }}
-                    onCommit={() => {}}
+                    onCommit={() => setLocation(row.option)}
                     trailing={
-                      row.option.connectAction && onConnectHost ? (
+                      hasConnect ? (
                         <ConnectHostButton
                           connecting={connecting}
                           onConnect={() => void connectHost(row.option)}
                         />
+                      ) : hasSetLocation ? (
+                        <SetLocationButton
+                          hostLabel={row.option.label}
+                          onSetLocation={() => setLocation(row.option)}
+                        />
                       ) : undefined
                     }
                   />
diff --git a/src/renderer/src/components/new-workspace/RunTargetComboboxRow.tsx b/src/renderer/src/components/new-workspace/RunTargetComboboxRow.tsx
index fb5fa811f07..4d7cb3df50f 100644
--- a/src/renderer/src/components/new-workspace/RunTargetComboboxRow.tsx
+++ b/src/renderer/src/components/new-workspace/RunTargetComboboxRow.tsx
@@ -1,6 +1,7 @@
 import React from 'react'
 import { AlertTriangle, ChevronRight, LoaderCircle, Monitor, Server } from 'lucide-react'
 import { Button } from '@/components/ui/button'
+import { Tooltip, TooltipContent, TooltipTrigger } from '@/components/ui/tooltip'
 import { cn } from '@/lib/utils'
 import { LOCAL_EXECUTION_HOST_ID, type ExecutionHostId } from '../../../../shared/execution-host'
 import { ProjectOptionDetail } from './ProjectComboboxRow'
@@ -173,3 +174,52 @@ export function ConnectHostButton({
     </Button>
   )
 }
+
+/** Inline Set project location action on a host that still needs a project path. */
+export function SetLocationButton({
+  hostLabel,
+  onSetLocation
+}: {
+  hostLabel: string
+  onSetLocation: () => void
+}): React.JSX.Element {
+  const label = translate(
+    'auto.components.NewWorkspaceComposerCard.setLocation',
+    'Set project location'
+  )
+  return (
+    <Tooltip>
+      <TooltipTrigger asChild>
+        <Button
+          type="button"
+          variant="outline"
+          size="xs"
+          className="ml-auto shrink-0 self-center"
+          aria-label={translate(
+            'auto.components.NewWorkspaceComposerCard.setLocationOnHost',
+            'Set project location on {{host}}',
+            { host: hostLabel }
+          )}
+          onMouseDown={(event) => {
+            event.preventDefault()
+            event.stopPropagation()
+          }}
+          onClick={(event) => {
+            event.preventDefault()
+            event.stopPropagation()
+            onSetLocation()
+          }}
+        >
+          {label}
+        </Button>
+      </TooltipTrigger>
+      <TooltipContent side="top" sideOffset={6}>
+        {translate(
+          'auto.components.NewWorkspaceComposerCard.setLocationTooltip',
+          'Choose a folder or clone this project onto {{host}}.',
+          { host: hostLabel }
+        )}
+      </TooltipContent>
+    </Tooltip>
+  )
+}
diff --git a/src/renderer/src/components/new-workspace/SetProjectLocationDialog.test.tsx b/src/renderer/src/components/new-workspace/SetProjectLocationDialog.test.tsx
new file mode 100644
index 00000000000..086d6599869
--- /dev/null
+++ b/src/renderer/src/components/new-workspace/SetProjectLocationDialog.test.tsx
@@ -0,0 +1,177 @@
+// @vitest-environment happy-dom
+
+import { act, cleanup, render, screen } from '@testing-library/react'
+import userEvent from '@testing-library/user-event'
+import type { ComponentProps } from 'react'
+import { afterEach, beforeEach, describe, expect, it, vi } from 'vitest'
+import type { NeedsSetupProjectHostOption } from '@/lib/project-host-setup-options'
+
+const storeMocks = vi.hoisted(() => ({
+  setupProjectExistingFolder: vi.fn(),
+  setupProjectClone: vi.fn()
+}))
+
+vi.mock('@/store', () => ({
+  useAppStore: (selector: (state: unknown) => unknown) => selector(storeMocks)
+}))
+
+vi.mock('@/components/sidebar/RemoteFileBrowser', () => ({
+  RemoteFileBrowser: ({
+    targetId,
+    onSelect,
+    onCancel
+  }: {
+    targetId?: string
+    onSelect: (path: string) => void
+    onCancel: () => void
+  }) => (
+    <div data-testid="remote-file-browser" data-target={targetId ?? ''}>
+      <button type="button" onClick={() => onSelect('/remote/orca')}>
+        Select remote folder
+      </button>
+      <button type="button" onClick={onCancel}>
+        Cancel browse
+      </button>
+    </div>
+  )
+}))
+
+import { SetProjectLocationDialog } from './SetProjectLocationDialog'
+
+const option: NeedsSetupProjectHostOption = {
+  kind: 'needs-setup',
+  id: 'needs-setup:ssh:openclaw',
+  projectId: 'project-orca',
+  hostId: 'ssh:openclaw',
+  label: 'openclaw',
+  detail: 'Project location not set',
+  isAvailable: true,
+  attention: false,
+  canSetLocation: true
+}
+
+function renderDialog(
+  overrides: Partial<ComponentProps<typeof SetProjectLocationDialog>> = {}
+): ReturnType<typeof userEvent.setup> {
+  const user = userEvent.setup()
+  render(
+    <SetProjectLocationDialog
+      option={option}
+      projectName="orca"
+      projectKind="git"
+      defaultCloneUrl="git@github.com:stablyai/orca.git"
+      onClose={vi.fn()}
+      onReady={vi.fn()}
+      {...overrides}
+    />
+  )
+  return user
+}
+
+beforeEach(() => {
+  storeMocks.setupProjectExistingFolder.mockReset()
+  storeMocks.setupProjectClone.mockReset()
+  storeMocks.setupProjectExistingFolder.mockResolvedValue({
+    setup: { id: 'setup-openclaw' }
+  })
+  storeMocks.setupProjectClone.mockResolvedValue({
+    setup: { id: 'setup-openclaw-clone' }
+  })
+})
+
+afterEach(() => {
+  cleanup()
+})
+
+describe('SetProjectLocationDialog', () => {
+  it('keeps the parent caller in charge of close and saves an existing folder', async () => {
+    const onClose = vi.fn()
+    const onReady = vi.fn()
+    const user = renderDialog({ onClose, onReady })
+
+    expect(screen.getByTestId('set-project-location-dialog')).toBeTruthy()
+    expect(screen.getByText('Set project location')).toBeTruthy()
+    expect(screen.getByText('Choose where orca lives on openclaw.')).toBeTruthy()
+
+    await user.click(screen.getByRole('button', { name: /Browse folder/ }))
+    await user.click(screen.getByRole('button', { name: 'Browse host filesystem' }))
+    await user.click(screen.getByRole('button', { name: 'Select remote folder' }))
+    await user.click(screen.getByRole('button', { name: 'Set location' }))
+
+    expect(storeMocks.setupProjectExistingFolder).toHaveBeenCalledWith({
+      projectId: 'project-orca',
+      hostId: 'ssh:openclaw',
+      path: '/remote/orca',
+      kind: 'git',
+      displayName: 'orca'
+    })
+    expect(onReady).toHaveBeenCalledWith('setup-openclaw')
+    expect(onClose).not.toHaveBeenCalled()
+  })
+
+  it('clones onto the selected host', async () => {
+    const onReady = vi.fn()
+    const user = renderDialog({ onReady })
+
+    await user.click(screen.getByRole('button', { name: /Clone from URL/ }))
+    await user.click(screen.getByRole('button', { name: 'Browse host filesystem' }))
+    await user.click(screen.getByRole('button', { name: 'Select remote folder' }))
+    await user.click(screen.getByRole('button', { name: 'Clone' }))
+
+    expect(storeMocks.setupProjectClone).toHaveBeenCalledWith({
+      projectId: 'project-orca',
+      hostId: 'ssh:openclaw',
+      url: 'git@github.com:stablyai/orca.git',
+      destination: '/remote/orca',
+      displayName: 'orca'
+    })
+    expect(onReady).toHaveBeenCalledWith('setup-openclaw-clone')
+  })
+
+  it('hides clone for folder projects', () => {
+    renderDialog({ projectKind: 'folder' })
+    expect(screen.queryByRole('button', { name: /Clone from URL/ })).toBeNull()
+  })
+
+  it('does not render when no host is selected', () => {
+    render(
+      <SetProjectLocationDialog
+        option={null}
+        projectName="orca"
+        projectKind="git"
+        defaultCloneUrl=""
+        onClose={vi.fn()}
+        onReady={vi.fn()}
+      />
+    )
+    expect(screen.queryByTestId('set-project-location-dialog')).toBeNull()
+  })
+
+  it('backs out of the host browser on Escape instead of discarding the form', async () => {
+    const onClose = vi.fn()
+    const user = renderDialog({ onClose })
+
+    await user.click(screen.getByRole('button', { name: /Browse folder/ }))
+    await user.click(screen.getByRole('button', { name: 'Browse host filesystem' }))
+    expect(screen.getByTestId('remote-file-browser')).toBeTruthy()
+
+    await user.keyboard('{Escape}')
+
+    expect(onClose).not.toHaveBeenCalled()
+    expect(screen.queryByTestId('remote-file-browser')).toBeNull()
+    expect(screen.getByRole('button', { name: 'Set location' })).toBeTruthy()
+
+    // A second Escape, now back on the form, dismisses the dialog as usual.
+    await user.keyboard('{Escape}')
+    expect(onClose).toHaveBeenCalled()
+  })
+
+  it('notifies the parent when dismissed', async () => {
+    const onClose = vi.fn()
+    renderDialog({ onClose })
+    await act(async () => {
+      document.querySelector<HTMLButtonElement>('[data-slot="dialog-close"]')?.click()
+    })
+    expect(onClose).toHaveBeenCalled()
+  })
+})
diff --git a/src/renderer/src/components/new-workspace/SetProjectLocationDialog.tsx b/src/renderer/src/components/new-workspace/SetProjectLocationDialog.tsx
new file mode 100644
index 00000000000..2362c0ba43b
--- /dev/null
+++ b/src/renderer/src/components/new-workspace/SetProjectLocationDialog.tsx
@@ -0,0 +1,278 @@
+import { useEffect, useRef, useState, type RefObject } from 'react'
+import { Download, FolderOpen } from 'lucide-react'
+import {
+  Dialog,
+  DialogContent,
+  DialogDescription,
+  DialogHeader,
+  DialogTitle
+} from '@/components/ui/dialog'
+import { translate } from '@/i18n/i18n'
+import { useAppStore } from '@/store'
+import { CreateProjectParentBrowser } from '@/components/sidebar/CreateProjectLocationField'
+import type { NeedsSetupProjectHostOption } from '@/lib/project-host-setup-options'
+import { parseExecutionHostId } from '../../../../shared/execution-host'
+import type { RepoKind } from '../../../../shared/repo-types'
+import { pickLocalProjectLocationFolder } from './pick-local-project-folder'
+import { CloneForm, ExistingFolderForm, LocationActionButton } from './SetProjectLocationForms'
+
+type DialogView = 'choose' | 'existing' | 'clone' | 'browse'
+type BrowseField = 'existing' | 'clone'
+
+type SetProjectLocationDialogProps = {
+  option: NeedsSetupProjectHostOption | null
+  projectName: string
+  projectKind: RepoKind
+  defaultCloneUrl: string
+  onClose: () => void
+  onReady: (setupId: string) => void
+}
+
+export function SetProjectLocationDialog({
+  option,
+  projectName,
+  projectKind,
+  defaultCloneUrl,
+  onClose,
+  onReady
+}: SetProjectLocationDialogProps): React.JSX.Element {
+  const open = option !== null
+  // Why: keep the last option rendered through the close animation, so the body
+  // doesn't blank out as the dialog slides away.
+  const [renderOption, setRenderOption] = useState(option)
+  if (option !== null && option !== renderOption) {
+    setRenderOption(option)
+  }
+  const activeOption = option ?? renderOption
+  // Why: Radix dismisses on Escape from a document-capture listener, so the host
+  // browser can never intercept it itself. The body parks a back-out here so
+  // Escape steps out of the browser instead of discarding the half-filled form.
+  const exitHostBrowser = useRef<(() => boolean) | null>(null)
+
+  return (
+    <Dialog
+      open={open}
+      onOpenChange={(next) => {
+        if (!next) {
+          onClose()
+        }
+      }}
+    >
+      <DialogContent
+        data-testid="set-project-location-dialog"
+        className="sm:max-w-lg"
+        onEscapeKeyDown={(event) => {
+          if (exitHostBrowser.current?.()) {
+            // Radix only skips onDismiss when the escape was defaultPrevented.
+            event.preventDefault()
+          }
+        }}
+      >
+        {activeOption ? (
+          <SetProjectLocationDialogBody
+            key={activeOption.id}
+            option={activeOption}
+            projectName={projectName}
+            projectKind={projectKind}
+            defaultCloneUrl={defaultCloneUrl}
+            exitHostBrowser={exitHostBrowser}
+            onReady={onReady}
+          />
+        ) : null}
+      </DialogContent>
+    </Dialog>
+  )
+}
+
+function SetProjectLocationDialogBody({
+  option,
+  projectName,
+  projectKind,
+  defaultCloneUrl,
+  exitHostBrowser,
+  onReady
+}: {
+  option: NeedsSetupProjectHostOption
+  projectName: string
+  projectKind: RepoKind
+  defaultCloneUrl: string
+  exitHostBrowser: RefObject<(() => boolean) | null>
+  onReady: (setupId: string) => void
+}): React.JSX.Element {
+  const setupProjectExistingFolder = useAppStore((state) => state.setupProjectExistingFolder)
+  const setupProjectClone = useAppStore((state) => state.setupProjectClone)
+  const [view, setView] = useState<DialogView>('choose')
+  const [browseField, setBrowseField] = useState<BrowseField>('existing')
+  const [setupPath, setSetupPath] = useState('')
+  const [setupKind, setSetupKind] = useState<RepoKind>(projectKind)
+  const [cloneUrl, setCloneUrl] = useState(defaultCloneUrl)
+  const [cloneDestination, setCloneDestination] = useState('')
+  const [isSubmitting, setIsSubmitting] = useState(false)
+  const parsedHost = parseExecutionHostId(option.hostId)
+  // Remote hosts browse in-dialog; the local host gets the native folder picker.
+  const remoteHost =
+    parsedHost?.kind === 'ssh' || parsedHost?.kind === 'runtime' ? parsedHost : null
+  const canClone = projectKind === 'git'
+  // Both views browse for a path; this is the field each one writes back to.
+  const pathFields: Record<BrowseField, { value: string; set: (path: string) => void }> = {
+    existing: { value: setupPath, set: setSetupPath },
+    clone: { value: cloneDestination, set: setCloneDestination }
+  }
+
+  const browsing = view === 'browse' && remoteHost !== null
+  useEffect(() => {
+    exitHostBrowser.current = browsing
+      ? () => {
+          setView(browseField)
+          return true
+        }
+      : null
+    return () => {
+      exitHostBrowser.current = null
+    }
+  }, [browseField, browsing, exitHostBrowser])
+
+  const openHostBrowser = (field: BrowseField): void => {
+    if (!remoteHost) {
+      void pickLocalProjectLocationFolder(pathFields[field].set)
+      return
+    }
+    setBrowseField(field)
+    setView('browse')
+  }
+
+  const handleExistingSubmit = async (): Promise<void> => {
+    if (!setupPath.trim()) {
+      return
+    }
+    setIsSubmitting(true)
+    try {
+      const result = await setupProjectExistingFolder({
+        projectId: option.projectId,
+        hostId: option.hostId,
+        path: setupPath.trim(),
+        kind: setupKind,
+        displayName: projectName
+      })
+      if (result) {
+        onReady(result.setup.id)
+      }
+    } finally {
+      setIsSubmitting(false)
+    }
+  }
+
+  const handleCloneSubmit = async (): Promise<void> => {
+    if (!cloneUrl.trim() || !cloneDestination.trim()) {
+      return
+    }
+    setIsSubmitting(true)
+    try {
+      const result = await setupProjectClone({
+        projectId: option.projectId,
+        hostId: option.hostId,
+        url: cloneUrl.trim(),
+        destination: cloneDestination.trim(),
+        displayName: projectName
+      })
+      if (result) {
+        onReady(result.setup.id)
+      }
+    } finally {
+      setIsSubmitting(false)
+    }
+  }
+
+  if (browsing && remoteHost) {
+    return (
+      <CreateProjectParentBrowser
+        sshTargetId={remoteHost.kind === 'ssh' ? remoteHost.targetId : null}
+        runtimeEnvironmentId={remoteHost.kind === 'runtime' ? remoteHost.environmentId : null}
+        createParent={pathFields[browseField].value}
+        onParentChange={pathFields[browseField].set}
+        onClose={() => setView(browseField)}
+      />
+    )
+  }
+
+  return (
+    <>
+      <DialogHeader>
+        <DialogTitle>
+          {translate(
+            'auto.components.new.workspace.SetProjectLocationDialog.title',
+            'Set project location'
+          )}
+        </DialogTitle>
+        <DialogDescription>
+          {translate(
+            'auto.components.new.workspace.SetProjectLocationDialog.description',
+            'Choose where {{project}} lives on {{host}}.',
+            { project: projectName, host: option.label }
+          )}
+        </DialogDescription>
+      </DialogHeader>
+      {view === 'choose' ? (
+        <div className="space-y-2">
+          <LocationActionButton
+            icon={FolderOpen}
+            title={translate(
+              'auto.components.new.workspace.SetProjectLocationDialog.browseFolder',
+              'Browse folder'
+            )}
+            description={translate(
+              'auto.components.new.workspace.SetProjectLocationDialog.browseFolderHelp',
+              'Use an existing checkout or folder on this host.'
+            )}
+            onClick={() => {
+              setView('existing')
+              // Local hosts get the native picker straight away — one click instead of two.
+              if (!remoteHost && !setupPath) {
+                void pickLocalProjectLocationFolder(setSetupPath)
+              }
+            }}
+          />
+          {canClone ? (
+            <LocationActionButton
+              icon={Download}
+              title={translate(
+                'auto.components.new.workspace.SetProjectLocationDialog.cloneFromUrl',
+                'Clone from URL'
+              )}
+              description={translate(
+                'auto.components.new.workspace.SetProjectLocationDialog.cloneFromUrlHelp',
+                'Clone this repository onto {{host}}.',
+                { host: option.label }
+              )}
+              onClick={() => setView('clone')}
+            />
+          ) : null}
+        </div>
+      ) : null}
+      {view === 'existing' ? (
+        <ExistingFolderForm
+          setupPath={setupPath}
+          setupKind={setupKind}
+          isSubmitting={isSubmitting}
+          onBack={() => setView('choose')}
+          onPathChange={setSetupPath}
+          onKindChange={setSetupKind}
+          onBrowse={() => openHostBrowser('existing')}
+          onSubmit={() => void handleExistingSubmit()}
+        />
+      ) : null}
+      {view === 'clone' ? (
+        <CloneForm
+          cloneUrl={cloneUrl}
+          cloneDestination={cloneDestination}
+          isSubmitting={isSubmitting}
+          onBack={() => setView('choose')}
+          onCloneUrlChange={setCloneUrl}
+          onCloneDestinationChange={setCloneDestination}
+          onBrowse={() => openHostBrowser('clone')}
+          onSubmit={() => void handleCloneSubmit()}
+        />
+      ) : null}
+    </>
+  )
+}
diff --git a/src/renderer/src/components/new-workspace/SetProjectLocationForms.tsx b/src/renderer/src/components/new-workspace/SetProjectLocationForms.tsx
new file mode 100644
index 00000000000..1793e65a9cf
--- /dev/null
+++ b/src/renderer/src/components/new-workspace/SetProjectLocationForms.tsx
@@ -0,0 +1,224 @@
+import { ArrowLeft, FolderOpen, LoaderCircle } from 'lucide-react'
+import { Button } from '@/components/ui/button'
+import { Input } from '@/components/ui/input'
+import {
+  Select,
+  SelectContent,
+  SelectItem,
+  SelectTrigger,
+  SelectValue
+} from '@/components/ui/select'
+import { translate } from '@/i18n/i18n'
+import { cn } from '@/lib/utils'
+import type { RepoKind } from '../../../../shared/repo-types'
+
+export function ExistingFolderForm({
+  setupPath,
+  setupKind,
+  isSubmitting,
+  onBack,
+  onPathChange,
+  onKindChange,
+  onBrowse,
+  onSubmit
+}: {
+  setupPath: string
+  setupKind: RepoKind
+  isSubmitting: boolean
+  onBack: () => void
+  onPathChange: (value: string) => void
+  onKindChange: (value: RepoKind) => void
+  onBrowse: () => void
+  onSubmit: () => void
+}): React.JSX.Element {
+  return (
+    <div className="space-y-3">
+      <StepBackButton
+        onBack={onBack}
+        label={translate(
+          'auto.components.settings.RepositoryPane.existingFolder',
+          'Existing folder'
+        )}
+      />
+      <div className="flex gap-2">
+        <Input
+          value={setupPath}
+          onChange={(event) => onPathChange(event.target.value)}
+          placeholder={translate(
+            'auto.components.settings.RepositoryPane.setupExistingFolderPathPlaceholder',
+            '/path/to/project/on/host'
+          )}
+          className="h-9 min-w-0 flex-1 font-mono text-sm"
+          spellCheck={false}
+        />
+        <Button
+          type="button"
+          variant="outline"
+          size="icon"
+          className="size-9 shrink-0"
+          onClick={onBrowse}
+          aria-label={translate(
+            'auto.components.sidebar.CreateProjectLocationField.f520f83a97',
+            'Browse host filesystem'
+          )}
+        >
+          <FolderOpen className="size-4" />
+        </Button>
+      </div>
+      <Select value={setupKind} onValueChange={(value) => onKindChange(value as RepoKind)}>
+        <SelectTrigger className="h-9 text-xs">
+          <SelectValue />
+        </SelectTrigger>
+        <SelectContent>
+          <SelectItem value="git">
+            {translate('auto.components.settings.RepositoryPane.setupKindGit', 'Git repo')}
+          </SelectItem>
+          <SelectItem value="folder">
+            {translate('auto.components.settings.RepositoryPane.setupKindFolder', 'Folder')}
+          </SelectItem>
+        </SelectContent>
+      </Select>
+      <div className="flex justify-end">
+        <Button
+          type="button"
+          size="sm"
+          disabled={!setupPath.trim() || isSubmitting}
+          onClick={onSubmit}
+        >
+          {isSubmitting ? <LoaderCircle className="size-3.5 animate-spin" /> : null}
+          {isSubmitting
+            ? translate('auto.components.settings.RepositoryPane.settingUpHost', 'Importing...')
+            : translate(
+                'auto.components.new.workspace.SetProjectLocationDialog.saveLocation',
+                'Set location'
+              )}
+        </Button>
+      </div>
+    </div>
+  )
+}
+
+export function CloneForm({
+  cloneUrl,
+  cloneDestination,
+  isSubmitting,
+  onBack,
+  onCloneUrlChange,
+  onCloneDestinationChange,
+  onBrowse,
+  onSubmit
+}: {
+  cloneUrl: string
+  cloneDestination: string
+  isSubmitting: boolean
+  onBack: () => void
+  onCloneUrlChange: (value: string) => void
+  onCloneDestinationChange: (value: string) => void
+  onBrowse: () => void
+  onSubmit: () => void
+}): React.JSX.Element {
+  return (
+    <div className="space-y-3">
+      <StepBackButton
+        onBack={onBack}
+        label={translate('auto.components.settings.RepositoryPane.cloneFromUrl', 'Clone from URL')}
+      />
+      <Input
+        value={cloneUrl}
+        onChange={(event) => onCloneUrlChange(event.target.value)}
+        placeholder={translate(
+          'auto.components.settings.RepositoryPane.cloneUrlPlaceholder',
+          'Repository URL'
+        )}
+        className="h-9 min-w-0"
+        spellCheck={false}
+      />
+      <div className="flex gap-2">
+        <Input
+          value={cloneDestination}
+          onChange={(event) => onCloneDestinationChange(event.target.value)}
+          placeholder={translate(
+            'auto.components.settings.RepositoryPane.cloneDestinationPlaceholder',
+            '/destination/on/host'
+          )}
+          className="h-9 min-w-0 flex-1 font-mono text-sm"
+          spellCheck={false}
+        />
+        <Button
+          type="button"
+          variant="outline"
+          size="icon"
+          className="size-9 shrink-0"
+          onClick={onBrowse}
+          aria-label={translate(
+            'auto.components.sidebar.CreateProjectLocationField.f520f83a97',
+            'Browse host filesystem'
+          )}
+        >
+          <FolderOpen className="size-4" />
+        </Button>
+      </div>
+      <div className="flex justify-end">
+        <Button
+          type="button"
+          size="sm"
+          disabled={!cloneUrl.trim() || !cloneDestination.trim() || isSubmitting}
+          onClick={onSubmit}
+        >
+          {isSubmitting ? <LoaderCircle className="size-3.5 animate-spin" /> : null}
+          {isSubmitting
+            ? translate('auto.components.settings.RepositoryPane.cloningHost', 'Cloning...')
+            : translate('auto.components.settings.RepositoryPane.cloneHost', 'Clone')}
+        </Button>
+      </div>
+    </div>
+  )
+}
+
+export function LocationActionButton({
+  icon: Icon,
+  title,
+  description,
+  onClick
+}: {
+  icon: typeof FolderOpen
+  title: string
+  description: string
+  onClick: () => void
+}): React.JSX.Element {
+  return (
+    <button
+      type="button"
+      onClick={onClick}
+      className={cn(
+        'flex min-h-[3.25rem] w-full items-center gap-3 rounded-md border border-border/70 bg-muted/20 px-3 py-2.5 text-left transition-colors',
+        'hover:bg-accent focus-visible:bg-accent focus-visible:ring-[3px] focus-visible:ring-ring/50 focus-visible:outline-none'
+      )}
+    >
+      <span className="grid size-7 shrink-0 place-items-center rounded-md text-muted-foreground">
+        <Icon className="size-4" />
+      </span>
+      <span className="min-w-0 flex-1">
+        <span className="block text-sm font-medium leading-5">{title}</span>
+        <span className="mt-0.5 block text-xs font-normal leading-4 text-muted-foreground">
+          {description}
+        </span>
+      </span>
+    </button>
+  )
+}
+
+function StepBackButton({
+  onBack,
+  label
+}: {
+  onBack: () => void
+  label: string
+}): React.JSX.Element {
+  return (
+    <Button type="button" variant="ghost" size="sm" className="-ml-2 gap-2" onClick={onBack}>
+      <ArrowLeft className="size-4" />
+      {label}
+    </Button>
+  )
+}
diff --git a/src/renderer/src/components/new-workspace/pick-local-project-folder.ts b/src/renderer/src/components/new-workspace/pick-local-project-folder.ts
new file mode 100644
index 00000000000..c49f24b6b33
--- /dev/null
+++ b/src/renderer/src/components/new-workspace/pick-local-project-folder.ts
@@ -0,0 +1,14 @@
+import { toast } from 'sonner'
+
+export async function pickLocalProjectLocationFolder(
+  onPicked: (path: string) => void
+): Promise<void> {
+  try {
+    const path = await window.api.repos.pickFolder()
+    if (path) {
+      onPicked(path)
+    }
+  } catch (error) {
+    toast.error(error instanceof Error ? error.message : String(error))
+  }
+}
diff --git a/src/renderer/src/hooks/useComposerState-host-retarget.test.ts b/src/renderer/src/hooks/useComposerState-host-retarget.test.ts
index 7e2c35cb75d..e057f401a4f 100644
--- a/src/renderer/src/hooks/useComposerState-host-retarget.test.ts
+++ b/src/renderer/src/hooks/useComposerState-host-retarget.test.ts
@@ -55,7 +55,7 @@ describe('useComposerState host retarget', () => {
       'const handleProjectHostSetupChange',
       'const handleProjectChange'
     )
-    expect(switchSection).toContain('setSelectedProjectHostSetupOverrideId(option.id)')
+    expect(switchSection).toContain('setSelectedProjectHostSetupOverrideId(target.id)')
     expect(switchSection).toContain('preserveStartFrom: true')
     expect(switchSection).toContain('forceResetStartFrom: true')
   })
diff --git a/src/renderer/src/hooks/useComposerState.ts b/src/renderer/src/hooks/useComposerState.ts
index ec91d1f969a..b74133490eb 100644
--- a/src/renderer/src/hooks/useComposerState.ts
+++ b/src/renderer/src/hooks/useComposerState.ts
@@ -2796,12 +2796,21 @@ export function useComposerState(options: UseComposerStateOptions): UseComposerS
   const handleProjectHostSetupChange = useCallback(
     (setupId: string): void => {
       const option = projectHostSetupOptions.find((candidate) => candidate.id === setupId)
-      if (!option || option.kind !== 'ready') {
+      const target =
+        option?.kind === 'ready'
+          ? option
+          : // Why: a just-created setup lands in the store before the memoized picker options refresh.
+            useAppStore
+              .getState()
+              .projectHostSetups.find(
+                (candidate) => candidate.id === setupId && candidate.setupState === 'ready'
+              )
+      if (!target) {
         return
       }
       // Why: switching run host for the same project must not erase the task/PR source the user is starting from.
-      setSelectedProjectHostSetupOverrideId(option.id)
-      handleRepoChange(option.repoId, {
+      setSelectedProjectHostSetupOverrideId(target.id)
+      handleRepoChange(target.repoId, {
         preserveStartFrom: true,
         forceResetStartFrom: true
       })
diff --git a/src/renderer/src/i18n/locales/en.json b/src/renderer/src/i18n/locales/en.json
index 1be46cd92fc..d9d1be60ec2 100644
--- a/src/renderer/src/i18n/locales/en.json
+++ b/src/renderer/src/i18n/locales/en.json
@@ -1491,6 +1491,9 @@
         "connectTimedOut": "Connection timed out. It may still be connecting in the background.",
         "connectingHost": "Connecting…",
         "connectHost": "Connect",
+        "setLocation": "Set project location",
+        "setLocationOnHost": "Set project location on {{host}}",
+        "setLocationTooltip": "Choose a folder or clone this project onto {{host}}.",
         "addHost": "Add host",
         "addHostHint": "Register another machine or Orca server",
         "addSshHost": "Add SSH host",
@@ -12943,6 +12946,15 @@
       },
       "new": {
         "workspace": {
+          "SetProjectLocationDialog": {
+            "title": "Set project location",
+            "description": "Choose where {{project}} lives on {{host}}.",
+            "browseFolder": "Browse folder",
+            "browseFolderHelp": "Use an existing checkout or folder on this host.",
+            "cloneFromUrl": "Clone from URL",
+            "cloneFromUrlHelp": "Clone this repository onto {{host}}.",
+            "saveLocation": "Set location"
+          },
           "SmartWorkspaceNameField": {
             "2a0d535f69": "Create new branch",
             "a44229ce4d": "as workspace name",
diff --git a/src/renderer/src/lib/project-host-setup-options.test.ts b/src/renderer/src/lib/project-host-setup-options.test.ts
index 9eee19f9725..898fbd7b876 100644
--- a/src/renderer/src/lib/project-host-setup-options.test.ts
+++ b/src/renderer/src/lib/project-host-setup-options.test.ts
@@ -270,11 +270,30 @@ describe('buildProjectHostSetupOptions', () => {
         kind: 'needs-setup',
         label: 'Builder',
         detail: 'Project location not set',
-        isAvailable: true
+        isAvailable: true,
+        canSetLocation: true
       })
     ])
   })
 
+  // A `repo:<id>` project has no cross-host identity, so linking it on another host
+  // always fails in main — the row keeps its status line instead of a dead button.
+  it('cannot set a location for a host-local project', () => {
+    const options = buildProjectHostSetupOptions({
+      projectId: 'repo:local-repo',
+      eligibleRepos: [repo('local-repo')],
+      hosts: [host('local'), host('ssh:builder', { label: 'Builder' })],
+      projectHostSetups: [setup('local', 'repo:local-repo', 'local', 'local-repo')]
+    })
+
+    expect(options.at(-1)).toMatchObject({
+      kind: 'needs-setup',
+      detail: 'Project location not set',
+      isAvailable: true,
+      canSetLocation: false
+    })
+  })
+
   it.each([
     ['connecting' as const, 'Connecting to host'],
     ['disconnected' as const, 'Connect this host to set up projects'],
@@ -407,7 +426,8 @@ describe('buildProjectHostSetupOptions', () => {
         kind: 'needs-setup',
         label: 'GPU VM',
         detail: 'Project setup is in progress',
-        isAvailable: true
+        isAvailable: true,
+        canSetLocation: false
       })
     ])
   })
@@ -437,7 +457,10 @@ describe('buildProjectHostSetupOptions', () => {
           })
         ]
       }).at(-1)
-    ).toMatchObject({ detail: 'Project tracked on this host but not set up' })
+    ).toMatchObject({
+      detail: 'Project tracked on this host but not set up',
+      canSetLocation: true
+    })
 
     expect(
       buildProjectHostSetupOptions({
@@ -457,7 +480,7 @@ describe('buildProjectHostSetupOptions', () => {
           })
         ]
       }).at(-1)
-    ).toMatchObject({ detail: 'Project setup needs attention' })
+    ).toMatchObject({ detail: 'Project setup needs attention', canSetLocation: true })
 
     expect(
       buildProjectHostSetupOptions({
@@ -477,7 +500,10 @@ describe('buildProjectHostSetupOptions', () => {
           })
         ]
       }).at(-1)
-    ).toMatchObject({ detail: 'Project is unsupported on this host' })
+    ).toMatchObject({
+      detail: 'Project is unsupported on this host',
+      canSetLocation: false
+    })
   })
 
   it('marks incompatible runtime hosts as visible but unavailable', () => {
diff --git a/src/renderer/src/lib/project-host-setup-options.ts b/src/renderer/src/lib/project-host-setup-options.ts
index eca4dc397c6..b4e975b0569 100644
--- a/src/renderer/src/lib/project-host-setup-options.ts
+++ b/src/renderer/src/lib/project-host-setup-options.ts
@@ -6,6 +6,7 @@ import {
   type ExecutionHostId
 } from '../../../shared/execution-host'
 import type { ExecutionHostRegistryEntry } from '../../../shared/execution-host-registry'
+import { isHostLocalProjectId } from '../../../shared/project-host-setup-projection'
 import { isEphemeralVmRuntimeEnvironment } from '../../../shared/runtime-environments'
 import {
   PROJECT_HOST_SETUP_RUNTIME_CAPABILITY,
@@ -36,6 +37,9 @@ export type ProjectHostSetupOption =
       // Why: only a genuine connection error warrants an alarm glyph; a dormant
       // disconnected host is merely not-yet-connected, not broken.
       attention: boolean
+      // Why: available hosts without a path can be set up in place; connecting or
+      // in-progress/unsupported hosts need a different next step.
+      canSetLocation: boolean
       connectAction?: { kind: 'ssh'; targetId: string } | { kind: 'runtime'; environmentId: string }
     }
 
@@ -187,6 +191,7 @@ function buildNeedsSetupOptions({
           : availability.detail,
         isAvailable: availability.isAvailable,
         attention: host.health === 'error',
+        canSetLocation: canSetProjectLocation(projectId, availability.isAvailable, pendingSetup),
         ...(connectAction ? { connectAction } : {})
       }
     })
@@ -263,6 +268,23 @@ function getHostHealthUnavailableDetail(
   }
 }
 
+function canSetProjectLocation(
+  projectId: string,
+  isAvailable: boolean,
+  pendingSetup: ProjectHostSetup | undefined
+): boolean {
+  // Why: setting up on another host links by project identity, and a host-local
+  // `repo:<id>` project has none to match against — the call always fails, so offer
+  // the plain status line rather than a button that only ever toasts an error.
+  if (!isAvailable || isHostLocalProjectId(projectId)) {
+    return false
+  }
+  if (!pendingSetup) {
+    return true
+  }
+  return pendingSetup.setupState === 'not-set-up' || pendingSetup.setupState === 'error'
+}
+
 function getHostConnectAction(
   host: ExecutionHostRegistryEntry
 ): NeedsSetupProjectHostOption['connectAction'] | undefined {
diff --git a/src/shared/project-host-setup-projection.ts b/src/shared/project-host-setup-projection.ts
index 09f799e5527..8c3e5d15643 100644
--- a/src/shared/project-host-setup-projection.ts
+++ b/src/shared/project-host-setup-projection.ts
@@ -93,6 +93,8 @@ export function isProjectRemoteIdentityPending(
   return repo.gitRemoteIdentity === undefined && !hasProjectRemoteIdentity(repo)
 }
 
+const HOST_LOCAL_PROJECT_ID_PREFIX = 'repo:'
+
 export function getProjectIdentityKey(
   repo: Pick<Repo, 'id' | 'upstream' | 'repoIcon' | 'gitRemoteIdentity'>
 ): string {
@@ -104,7 +106,16 @@ export function getProjectIdentityKey(
   if (gitRemoteIdentity) {
     return `git:${gitRemoteIdentity.canonicalKey}`
   }
-  return `repo:${repo.id}`
+  return `${HOST_LOCAL_PROJECT_ID_PREFIX}${repo.id}`
+}
+
+/**
+ * True for the `repo:<id>` fallback above — a folder project, or a git repo with no
+ * remote. The id is a per-host repo id, so the same project on another host derives a
+ * different one and can never be matched there.
+ */
+export function isHostLocalProjectId(projectId: string): boolean {
+  return projectId.startsWith(HOST_LOCAL_PROJECT_ID_PREFIX)
 }
 
 export function getProjectIdForProviderIdentity(identity: ProjectProviderIdentity): string {