diff --git a/crates/giskard-server/static/app.css b/crates/giskard-server/static/app.css
index 50da83d..43ff0f6 100644
--- a/crates/giskard-server/static/app.css
+++ b/crates/giskard-server/static/app.css
@@ -96,7 +96,7 @@
   .project-toggle { width:24px; height:24px; padding:0; border-color:transparent; background:transparent; color:var(--muted); line-height:1; }
   .project-toggle:hover { border-color:var(--border); color:var(--fg); }
   .project-name {
-    flex:1; min-width:0; padding:2px 0; border:0; background:transparent; color:var(--fg);
+    flex:1; min-width:0; padding:5px 8px; border:0; border-radius:6px; background:transparent; color:var(--fg);
     font-weight:600; text-align:left; overflow:hidden; text-overflow:ellipsis; white-space:nowrap;
   }
   .project-name:hover { border-color:transparent; color:var(--accent); }
@@ -116,7 +116,8 @@
   /* Selected thread: a whisper of accent tint over the neutral raised fill plus a thin accent
      rail, no bold. The ~9% tint gives selection a hint of color that a plain hover (bare --panel2)
      lacks, so the two separate cleanly at a glance while staying restrained and editor-like. */
-  .thread.active { background:var(--panel2); background:color-mix(in srgb, var(--accent) 9%, var(--panel2)); color:var(--fg); box-shadow:inset 2px 0 0 var(--accent); }
+  .thread.active,
+  .project-name.active { background:var(--panel2); background:color-mix(in srgb, var(--accent) 9%, var(--panel2)); color:var(--fg); box-shadow:inset 2px 0 0 var(--accent); }
   .thread.active .thread-title { color:var(--fg); }
   .thread-status { flex:none; width:10px; text-align:center; color:var(--muted); font-weight:700; }
   .thread-title { min-width:0; overflow:hidden; text-overflow:ellipsis; white-space:nowrap; }
@@ -136,7 +137,8 @@
      the only persistent signal on touch. */
   @media (hover: hover) {
     .thread:hover { background:var(--panel2); }
-    .thread.active:hover { background:var(--panel2); background:color-mix(in srgb, var(--accent) 13%, var(--panel2)); }
+    .thread.active:hover,
+    .project-name.active:hover { background:var(--panel2); background:color-mix(in srgb, var(--accent) 13%, var(--panel2)); color:var(--fg); }
     .thread-menu-btn:hover { border-color:var(--border); color:var(--fg); }
   }
   .thread-menu { position:absolute; right:0; top:30px; z-index:20; min-width:130px; padding:4px; border:1px solid var(--border); border-radius:6px; background:var(--panel); box-shadow:0 12px 32px rgba(0,0,0,.35); }
diff --git a/crates/giskard-server/static/app.js b/crates/giskard-server/static/app.js
index 73aef3c..741e4bd 100644
--- a/crates/giskard-server/static/app.js
+++ b/crates/giskard-server/static/app.js
@@ -1003,7 +1003,7 @@ function threadRow(pid, t) {
   const title = t.title || t.id.slice(0,8);
   const el = document.createElement("div"); el.className="thread mono";
   applyThreadTitleToElement(el, pid, t.id, title);
-  markThreadRowActive(el, !!state.threadId && String(t.id) === String(state.threadId));
+  markSidebarRowActive(el, !!state.threadId && String(t.id) === String(state.threadId));
 
   const menuBtn = document.createElement("button");
   menuBtn.type = "button"; menuBtn.className = "thread-menu-btn";
@@ -1364,23 +1364,28 @@ function renderAllThreadActivityIndicators() {
   document.querySelectorAll(".thread").forEach(el => renderThreadActivityIndicator(el.dataset.tid, hosts));
 }
 
-// Mark a single thread row as the selected one (or not). `aria-current` mirrors the visual state for
+// Mark a sidebar row as the selected one (or not). `aria-current` mirrors the visual state for
 // assistive tech and gives the CSS a stable hook.
-function markThreadRowActive(el, active) {
+function markSidebarRowActive(el, active) {
   if (!el) return;
   el.classList.toggle("active", active);
   if (active) el.setAttribute("aria-current", "true");
   else el.removeAttribute("aria-current");
 }
 
-// Derive the sidebar selection from `state.threadId` rather than tracking it imperatively. Thread
-// rows are rebuilt whenever the list reloads, so any highlight set by hand goes stale on the next
-// re-render (leaving a previously selected row looking selected); recomputing from the single source
-// of truth keeps exactly one row active.
+// Derive the sidebar selection from thread/draft state rather than tracking it imperatively.
+// Rows are rebuilt whenever the list reloads, so any highlight set by hand goes stale on the next
+// re-render; recomputing from the single source of truth keeps persisted threads and draft project
+// rows mutually exclusive.
 function syncActiveThreadHighlight() {
   const tid = state.threadId ? String(state.threadId) : null;
+  const draftPid = isDraftThread() && state.projectId ? String(state.projectId) : null;
   document.querySelectorAll(".thread").forEach(el =>
-    markThreadRowActive(el, tid !== null && String(el.dataset.tid) === tid));
+    markSidebarRowActive(el, tid !== null && String(el.dataset.tid) === tid));
+  document.querySelectorAll(".project-name").forEach(el => {
+    const project = el.closest(".proj");
+    markSidebarRowActive(el, draftPid !== null && project && String(project.dataset.pid) === draftPid);
+  });
 }
 
 function setThreadActivity(tid, activity) {
diff --git a/docs/screenshots/ide-desktop.png b/docs/screenshots/ide-desktop.png
index fed483a..d21f737 100644
Binary files a/docs/screenshots/ide-desktop.png and b/docs/screenshots/ide-desktop.png differ
diff --git a/tests/e2e/tests/draft-composer.spec.ts b/tests/e2e/tests/draft-composer.spec.ts
index 155c650..78ae603 100644
--- a/tests/e2e/tests/draft-composer.spec.ts
+++ b/tests/e2e/tests/draft-composer.spec.ts
@@ -48,6 +48,30 @@ test.describe("draft composer", () => {
 
   const modelButton = (page: Page) => page.locator("#modelPickerBtn");
 
+  test("highlights the project that owns the current draft", async ({ page }) => {
+    const project = page.locator(".proj", { hasText: "Demo" });
+    const projectName = project.locator(".project-name");
+
+    await project.locator(".project-add").click();
+
+    await expect(page.locator("#transcript")).toContainText("Start a new thread");
+    await expect(projectName).toHaveClass(/\bactive\b/);
+    await expect(projectName).toHaveAttribute("aria-current", "true");
+    await expect(page.locator(".thread.active")).toHaveCount(0);
+
+    const shadow = await projectName.evaluate((el) => getComputedStyle(el).boxShadow);
+    expect(shadow).not.toBe("none");
+
+    await page.locator("#input").fill("Create the highlighted draft's thread");
+    await page.locator("#sendBtn").click();
+    await expect(
+      page.locator("#transcript .msg.agent", { hasText: SCRIPTED_REPLY }),
+    ).toBeVisible();
+
+    await expect(projectName).not.toHaveClass(/\bactive\b/);
+    await expect(page.locator(".thread.active")).toHaveCount(1);
+  });
+
   test("keeps a message typed while the new thread is still opening", async ({ page }) => {
     const message = "Typed before the draft finished opening";
     const release = await holdProjectFetch(page);