diff --git a/packages/jupyter-ai/jupyter_ai/personas/persona_manager.py b/packages/jupyter-ai/jupyter_ai/personas/persona_manager.py
index 039da0e15..0fb579cda 100644
--- a/packages/jupyter-ai/jupyter_ai/personas/persona_manager.py
+++ b/packages/jupyter-ai/jupyter_ai/personas/persona_manager.py
@@ -209,8 +209,21 @@ def _init_local_persona_classes(self) -> None:
         dotjupyter_dir = self.get_dotjupyter_dir()
         if dotjupyter_dir is None:
             self.log.info("No .jupyter directory found for loading local personas.")
-        else:
-            self._local_persona_classes = load_from_dir(dotjupyter_dir, self.log)
+            return
+
+        if find_persona_files(dotjupyter_dir):
+            self.send_system_message(
+                "Found persona files in `.jupyter` directory. Please move them to `.jupyter/personas/` subdirectory."
+            )
+
+        personas_subdir = os.path.join(dotjupyter_dir, "personas")
+        if not os.path.exists(personas_subdir):
+            self.log.info(
+                "No `personas` subdirectory found in `.jupyter` directory for loading local personas."
+            )
+            return
+
+        self._local_persona_classes = load_from_dir(personas_subdir, self.log)
 
     def _init_personas(self) -> dict[str, BasePersona]:
         """
@@ -562,6 +575,25 @@ def is_persona(username: str):
     return username.startswith("jupyter-ai-personas")
 
 
+def find_persona_files(dir: str) -> list[str]:
+    """Find persona Python files in a directory without loading them."""
+    if not os.path.exists(dir):
+        return []
+
+    try:
+        all_py_files = glob(os.path.join(dir, "*.py"))
+        py_files = []
+        for f in all_py_files:
+            fname_lower = Path(f).stem.lower()
+            if "persona" in fname_lower and not (
+                fname_lower.startswith("_") or fname_lower.startswith(".")
+            ):
+                py_files.append(f)
+        return py_files
+    except Exception:
+        return []
+
+
 def load_from_dir(dir: str, log: Logger) -> list[dict]:
     """
     Load _persona class declarations_ from Python files in the local filesystem.
@@ -583,31 +615,11 @@ def load_from_dir(dir: str, log: Logger) -> list[dict]:
     """
     persona_classes: list[dict] = []
 
-    log.info(f"Searching for persona files in {dir}")
-    # Check if root directory exists
-    if not os.path.exists(dir):
-        return persona_classes
-
-    # Find all .py files in the root directory that contain "persona" in the name
-    try:
-        all_py_files = glob(os.path.join(dir, "*.py"))
-        py_files = []
-        for f in all_py_files:
-            fname_lower = Path(f).stem.lower()
-            if "persona" in fname_lower and not (
-                fname_lower.startswith("_") or fname_lower.startswith(".")
-            ):
-                py_files.append(f)
-
-    except Exception as e:
-        # On exception with glob operation, return empty list
-        log.error(
-            f"{type(e).__name__} occurred while searching for Python files in {dir}"
-        )
+    py_files = find_persona_files(dir)
+    if not py_files:
         return persona_classes
 
-    if py_files:
-        log.info(f"Found files from {dir}: {[Path(f).name for f in py_files]}")
+    log.info(f"Loading persona files from {dir}: {[Path(f).name for f in py_files]}")
 
     # Temporarily add root_dir to sys.path for imports
     dir_in_path = dir in sys.path
diff --git a/packages/jupyter-ai/jupyter_ai/tests/test_personas.py b/packages/jupyter-ai/jupyter_ai/tests/test_personas.py
index 8256d02df..886ac2164 100644
--- a/packages/jupyter-ai/jupyter_ai/tests/test_personas.py
+++ b/packages/jupyter-ai/jupyter_ai/tests/test_personas.py
@@ -7,8 +7,8 @@
 from unittest.mock import Mock
 
 import pytest
-from jupyter_ai.personas.base_persona import BasePersona, PersonaDefaults
-from jupyter_ai.personas.persona_manager import load_from_dir
+from jupyter_ai.personas.base_persona import BasePersona
+from jupyter_ai.personas.persona_manager import find_persona_files, load_from_dir
 
 
 @pytest.fixture
@@ -24,6 +24,39 @@ def mock_logger():
     return Mock()
 
 
+class TestFindPersonaFiles:
+    """Test cases for find_persona_files function."""
+
+    def test_nonexistent_directory_returns_empty_list(self):
+        """Test that a non-existent directory returns an empty list."""
+        result = find_persona_files("/nonexistent/directory/path")
+        assert result == []
+
+    def test_empty_directory_returns_empty_list(self, tmp_persona_dir):
+        """Test that an empty directory returns an empty list."""
+        result = find_persona_files(str(tmp_persona_dir))
+        assert result == []
+
+    def test_finds_valid_ignores_invalid_persona_files(self, tmp_persona_dir):
+        """Test that persona files with valid filenames are found while private, hidden, and non-valid files are ignored."""
+        (tmp_persona_dir / "my_persona.py").write_text("pass")
+        (tmp_persona_dir / "PersonalAssistant.py").write_text("pass")
+
+        (tmp_persona_dir / "my_other_code.py").write_text("pass")
+        (tmp_persona_dir / "_private_persona.py").write_text("pass")
+        (tmp_persona_dir / ".hidden_persona.py").write_text("pass")
+
+        result = find_persona_files(str(tmp_persona_dir))
+        result_names = [Path(f).name for f in result]
+
+        assert "my_persona.py" in result_names
+        assert "PersonalAssistant.py" in result_names
+
+        assert "my_other_code.py" not in result_names
+        assert "_private_persona.py" not in result_names
+        assert ".hidden_persona.py" not in result_names
+
+
 class TestLoadPersonaClassesFromDirectory:
     """Test cases for load_from_dir function."""