diff --git a/src/core/webview/ClineProvider.ts b/src/core/webview/ClineProvider.ts
index 905e657b37e..73760100645 100644
--- a/src/core/webview/ClineProvider.ts
+++ b/src/core/webview/ClineProvider.ts
@@ -1825,6 +1825,58 @@ export class ClineProvider
 		return this.mcpHub
 	}
 
+	/**
+	 * Handle workspace folder change by re-initializing the CodeIndexManager
+	 * This ensures the code index corresponds to the currently active workspace folder
+	 */
+	public async handleWorkspaceFolderChange() {
+		if (!this.codeIndexManager) {
+			return
+		}
+
+		try {
+			// Dispose of the old code index status subscription
+			if (this.codeIndexStatusSubscription) {
+				this.codeIndexStatusSubscription.dispose()
+				this.codeIndexStatusSubscription = undefined
+			}
+
+			// Get a new instance of CodeIndexManager for the current workspace
+			const newManager = CodeIndexManager.getInstance(this.context)
+			if (!newManager) {
+				this.log("No workspace folder available for code index")
+				return
+			}
+
+			// Re-initialize the manager
+			await newManager.initialize(this.contextProxy)
+
+			// Re-subscribe to status updates
+			this.codeIndexStatusSubscription = newManager.onProgressUpdate((update: IndexProgressUpdate) => {
+				this.postMessageToWebview({
+					type: "indexingStatusUpdate",
+					values: update,
+				})
+			})
+			if (this.webviewDisposables && this.codeIndexStatusSubscription) {
+				this.webviewDisposables.push(this.codeIndexStatusSubscription)
+			}
+
+			// Update the reference
+			;(this as any).codeIndexManager = newManager
+
+			// Send the current status to the webview
+			this.postMessageToWebview({
+				type: "indexingStatusUpdate",
+				values: newManager.getCurrentStatus(),
+			})
+
+			this.log(`Code index re-initialized for workspace: ${getWorkspacePath()}`)
+		} catch (error) {
+			this.log(`Failed to re-initialize code index: ${error}`)
+		}
+	}
+
 	/**
 	 * Check if the current state is compliant with MDM policy
 	 * @returns true if compliant, false if blocked
diff --git a/src/integrations/workspace/WorkspaceTracker.ts b/src/integrations/workspace/WorkspaceTracker.ts
index 7de8f994c03..10ce5535d54 100644
--- a/src/integrations/workspace/WorkspaceTracker.ts
+++ b/src/integrations/workspace/WorkspaceTracker.ts
@@ -97,11 +97,16 @@ class WorkspaceTracker {
 		}
 		this.resetTimer = setTimeout(async () => {
 			if (this.prevWorkSpacePath !== this.cwd) {
-				await this.providerRef.deref()?.postMessageToWebview({
-					type: "workspaceUpdated",
-					filePaths: [],
-					openedTabs: this.getOpenedTabsInfo(),
-				})
+				const provider = this.providerRef.deref()
+				if (provider) {
+					await provider.postMessageToWebview({
+						type: "workspaceUpdated",
+						filePaths: [],
+						openedTabs: this.getOpenedTabsInfo(),
+					})
+					// Trigger code index re-initialization for the new workspace
+					await provider.handleWorkspaceFolderChange()
+				}
 				this.filePaths.clear()
 				this.prevWorkSpacePath = this.cwd
 				this.initializeFilePaths()
diff --git a/src/integrations/workspace/__tests__/WorkspaceTracker.spec.ts b/src/integrations/workspace/__tests__/WorkspaceTracker.spec.ts
index b0a617d9709..e22b8bfc875 100644
--- a/src/integrations/workspace/__tests__/WorkspaceTracker.spec.ts
+++ b/src/integrations/workspace/__tests__/WorkspaceTracker.spec.ts
@@ -82,7 +82,8 @@ describe("WorkspaceTracker", () => {
 		// Create provider mock
 		mockProvider = {
 			postMessageToWebview: vitest.fn().mockResolvedValue(undefined),
-		} as unknown as ClineProvider & { postMessageToWebview: Mock }
+			handleWorkspaceFolderChange: vitest.fn().mockResolvedValue(undefined),
+		} as unknown as ClineProvider & { postMessageToWebview: Mock; handleWorkspaceFolderChange: Mock }
 
 		// Create tracker instance
 		workspaceTracker = new WorkspaceTracker(mockProvider)
@@ -225,9 +226,14 @@ describe("WorkspaceTracker", () => {
 		// Simulate tab change event
 		await registeredTabChangeCallback!()
 
-		// Run the debounce timer for workspaceDidReset
+		// Run the debounce timer for workspaceDidReset (300ms)
 		vitest.advanceTimersByTime(300)
 
+		// Wait for the async operations in the timeout callback to complete
+		await Promise.resolve() // For the setTimeout callback
+		await Promise.resolve() // For the async operations inside
+		await Promise.resolve() // For handleWorkspaceFolderChange
+
 		// Should clear file paths and reset workspace
 		expect(mockProvider.postMessageToWebview).toHaveBeenCalledWith({
 			type: "workspaceUpdated",
@@ -235,13 +241,17 @@ describe("WorkspaceTracker", () => {
 			openedTabs: [],
 		})
 
+		// Should have called handleWorkspaceFolderChange
+		expect(mockProvider.handleWorkspaceFolderChange).toHaveBeenCalled()
+
 		// Run all remaining timers to complete initialization
-		await Promise.resolve() // Wait for initializeFilePaths to complete
 		vitest.runAllTimers()
 
+		// Wait for initializeFilePaths to complete
+		await Promise.resolve()
+
 		// Should initialize file paths for new workspace
 		expect(listFiles).toHaveBeenCalledWith("/test/new-workspace", true, 1000)
-		vitest.runAllTimers()
 	})
 
 	it("should not update file paths if workspace changes during initialization", async () => {
diff --git a/src/services/code-index/__tests__/manager.spec.ts b/src/services/code-index/__tests__/manager.spec.ts
index 8c64c2fdc62..dd21a2bb30c 100644
--- a/src/services/code-index/__tests__/manager.spec.ts
+++ b/src/services/code-index/__tests__/manager.spec.ts
@@ -13,6 +13,9 @@ vi.mock("vscode", () => ({
 			},
 		],
 	},
+	window: {
+		activeTextEditor: undefined,
+	},
 }))
 
 // Mock only the essential dependencies
diff --git a/src/services/code-index/manager.ts b/src/services/code-index/manager.ts
index 18e0752c34d..4d718d78563 100644
--- a/src/services/code-index/manager.ts
+++ b/src/services/code-index/manager.ts
@@ -29,17 +29,14 @@ export class CodeIndexManager {
 	private _cacheManager: CacheManager | undefined
 
 	public static getInstance(context: vscode.ExtensionContext): CodeIndexManager | undefined {
-		// Use first workspace folder consistently
-		const workspaceFolders = vscode.workspace.workspaceFolders
-		if (!workspaceFolders || workspaceFolders.length === 0) {
+		// Get the workspace path based on the active editor or current context
+		const workspacePath = getWorkspacePath()
+		if (!workspacePath) {
 			return undefined
 		}
 
-		// Always use the first workspace folder for consistency across all indexing operations.
-		// This ensures that the same workspace context is used throughout the indexing pipeline,
-		// preventing path resolution errors in multi-workspace scenarios.
-		const workspacePath = workspaceFolders[0].uri.fsPath
-
+		// Use the workspace folder of the active editor to support multi-folder workspaces.
+		// This ensures that the codebase index corresponds to the folder the user is currently working in.
 		if (!CodeIndexManager.instances.has(workspacePath)) {
 			CodeIndexManager.instances.set(workspacePath, new CodeIndexManager(workspacePath, context))
 		}