diff --git a/src/vs/workbench/api/common/extHostChatSessions.ts b/src/vs/workbench/api/common/extHostChatSessions.ts
index 35b43eceef17e..b56178412a2ec 100644
--- a/src/vs/workbench/api/common/extHostChatSessions.ts
+++ b/src/vs/workbench/api/common/extHostChatSessions.ts
@@ -75,7 +75,7 @@ export class ExtHostChatSessions extends Disposable implements ExtHostChatSessio
 		commands.registerArgumentProcessor({
 			processArgument: (arg) => {
 				if (arg && arg.$mid === MarshalledId.ChatSessionContext) {
-					const id = arg.id;
+					const id = arg.session.id;
 					const sessionContent = this._sessionMap.get(id);
 					if (sessionContent) {
 						return sessionContent;
diff --git a/src/vs/workbench/contrib/chat/browser/actions/chatActions.ts b/src/vs/workbench/contrib/chat/browser/actions/chatActions.ts
index b3530ff79ab00..4bd9c19cd3429 100644
--- a/src/vs/workbench/contrib/chat/browser/actions/chatActions.ts
+++ b/src/vs/workbench/contrib/chat/browser/actions/chatActions.ts
@@ -580,7 +580,7 @@ export function registerChatActions() {
 
 								const ckey = contextKeyService.createKey('chatSessionType', session.providerType);
 								const actions = menuService.getMenuActions(MenuId.ChatSessionsMenu, contextKeyService);
-								const menuActions = getContextMenuActions(actions, 'navigation');
+								const menuActions = getContextMenuActions(actions, 'inline');
 								ckey.reset();
 
 								// Use primary actions if available, otherwise fall back to secondary actions
@@ -756,7 +756,7 @@ export function registerChatActions() {
 						const contextItem = context.item as ICodingAgentPickerItem;
 						commandService.executeCommand(buttonItem.id, {
 							uri: contextItem.uri,
-							session: contextItem.session,
+							session: contextItem.session?.session,
 							$mid: MarshalledId.ChatSessionContext
 						});
 
diff --git a/src/vs/workbench/contrib/chat/browser/chatSessions.ts b/src/vs/workbench/contrib/chat/browser/chatSessions.ts
index aad0a7fa7733a..4fe7799caa73e 100644
--- a/src/vs/workbench/contrib/chat/browser/chatSessions.ts
+++ b/src/vs/workbench/contrib/chat/browser/chatSessions.ts
@@ -20,20 +20,24 @@ import { IContextKeyService, ContextKeyExpr } from '../../../../platform/context
 import { IKeybindingService } from '../../../../platform/keybinding/common/keybinding.js';
 import { IOpenerService } from '../../../../platform/opener/common/opener.js';
 import { IHoverService } from '../../../../platform/hover/browser/hover.js';
+import { IMenuService, MenuId, MenuRegistry } from '../../../../platform/actions/common/actions.js';
+import { getActionBarActions } from '../../../../platform/actions/browser/menuEntryActionViewItem.js';
+import { Disposable, DisposableStore } from '../../../../base/common/lifecycle.js';
 import { ViewPaneContainer } from '../../../browser/parts/views/viewPaneContainer.js';
+import { MarshalledId } from '../../../../base/common/marshallingIds.js';
 import { ViewPane, IViewPaneOptions } from '../../../browser/parts/views/viewPane.js';
 import { Extensions, IViewContainersRegistry, IViewDescriptorService, ViewContainerLocation, IViewsRegistry, IViewDescriptor } from '../../../common/views.js';
 import { IExtensionService } from '../../../services/extensions/common/extensions.js';
 import { IWorkbenchLayoutService } from '../../../services/layout/browser/layoutService.js';
 import { WorkbenchAsyncDataTree } from '../../../../platform/list/browser/listService.js';
 import { IChatSessionItem, IChatSessionItemProvider, IChatSessionsExtensionPoint, IChatSessionsService } from '../common/chatSessionsService.js';
+import { ChatContextKeys } from '../common/chatContextKeys.js';
 import { IAsyncDataSource, ITreeRenderer, ITreeNode } from '../../../../base/browser/ui/tree/tree.js';
 import { IListVirtualDelegate } from '../../../../base/browser/ui/list/list.js';
 import { CancellationToken } from '../../../../base/common/cancellation.js';
 import { FuzzyScore } from '../../../../base/common/filters.js';
 import { ResourceLabels, IResourceLabel } from '../../../browser/labels.js';
 import { ActionBar } from '../../../../base/browser/ui/actionbar/actionbar.js';
-import { Disposable } from '../../../../base/common/lifecycle.js';
 import { append, $, getActiveWindow, clearNode } from '../../../../base/browser/dom.js';
 import { URI } from '../../../../base/common/uri.js';
 import { IEditorGroupsService, IEditorGroup } from '../../../services/editor/common/editorGroupsService.js';
@@ -45,7 +49,6 @@ import { EditorInput } from '../../../common/editor/editorInput.js';
 import { ChatEditorInput } from './chatEditorInput.js';
 import { IChatWidgetService, IChatWidget } from './chat.js';
 import { ChatAgentLocation, ChatConfiguration } from '../common/constants.js';
-import { MenuId, MenuRegistry } from '../../../../platform/actions/common/actions.js';
 import { registerIcon } from '../../../../platform/theme/common/iconRegistry.js';
 import { IWorkbenchContribution } from '../../../common/contributions.js';
 import { IViewsService } from '../../../services/views/common/viewsService.js';
@@ -56,6 +59,16 @@ import { coalesce } from '../../../../base/common/arrays.js';
 
 export const VIEWLET_ID = 'workbench.view.chat.sessions';
 
+// Helper function to create context overlay for session items
+function getSessionItemContextOverlay(session: IChatSessionItem, provider?: IChatSessionItemProvider): [string, any][] {
+	const overlay: [string, any][] = [];
+	if (provider) {
+		overlay.push([ChatContextKeys.sessionType.key, provider.chatSessionType]);
+	}
+
+	return overlay;
+}
+
 // Extended interface for local chat session items that includes editor information or widget information
 interface ILocalChatSessionItem extends IChatSessionItem {
 	editor?: EditorInput;
@@ -546,6 +559,7 @@ interface ISessionTemplateData {
 	container: HTMLElement;
 	resourceLabel: IResourceLabel;
 	actionBar: ActionBar;
+	elementDisposable: DisposableStore;
 }
 
 // Renderer for session items in the tree
@@ -557,6 +571,8 @@ class SessionsRenderer extends Disposable implements ITreeRenderer<IChatSessionI
 		private readonly labels: ResourceLabels,
 		@IThemeService private readonly themeService: IThemeService,
 		@ILogService private readonly logService: ILogService,
+		@IMenuService private readonly menuService: IMenuService,
+		@IContextKeyService private readonly contextKeyService: IContextKeyService,
 	) {
 		super();
 
@@ -615,17 +631,24 @@ class SessionsRenderer extends Disposable implements ITreeRenderer<IChatSessionI
 	renderTemplate(container: HTMLElement): ISessionTemplateData {
 		const element = append(container, $('.chat-session-item'));
 		const resourceLabel = this.labels.create(element, { supportHighlights: true });
-		const actionBar = new ActionBar(container);
+		const actionsContainer = append(resourceLabel.element, $('.actions'));
+		const actionBar = new ActionBar(actionsContainer);
+		const elementDisposable = new DisposableStore();
 
 		return {
 			container: element,
 			resourceLabel,
-			actionBar
+			actionBar,
+			elementDisposable
 		};
 	}
 
 	renderElement(element: ITreeNode<IChatSessionItem, FuzzyScore>, index: number, templateData: ISessionTemplateData): void {
 		const session = element.element;
+		const sessionWithProvider = session as IChatSessionItem & { provider: IChatSessionItemProvider };
+
+		// Clear previous element disposables
+		templateData.elementDisposable.clear();
 
 		// Handle different icon types
 		let iconResource: URI | undefined;
@@ -661,9 +684,51 @@ class SessionsRenderer extends Disposable implements ITreeRenderer<IChatSessionI
 			fileKind: undefined,
 			icon: iconTheme || iconUri
 		});
+
+		// Create context overlay for this specific session item
+		const contextOverlay = getSessionItemContextOverlay(session, sessionWithProvider.provider);
+
+		const contextKeyService = this.contextKeyService.createOverlay(contextOverlay);
+
+		// Create menu for this session item
+		const menu = templateData.elementDisposable.add(
+			this.menuService.createMenu(MenuId.ChatSessionsMenu, contextKeyService)
+		);
+
+		// Setup action bar with contributed actions
+		const setupActionBar = () => {
+			templateData.actionBar.clear();
+
+			// Create marshalled context for command execution
+			const marshalledSession = {
+				session: session,
+				$mid: MarshalledId.ChatSessionContext
+			};
+
+			const actions = menu.getActions({ arg: marshalledSession, shouldForwardArgs: true });
+
+			const { primary } = getActionBarActions(
+				actions,
+				'inline',
+			);
+
+			templateData.actionBar.push(primary, { icon: true, label: false });
+
+			// Set context for the action bar
+			templateData.actionBar.context = session;
+		};
+
+		// Setup initial action bar and listen for menu changes
+		templateData.elementDisposable.add(menu.onDidChange(() => setupActionBar()));
+		setupActionBar();
+	}
+
+	disposeElement(_element: ITreeNode<IChatSessionItem, FuzzyScore>, _index: number, templateData: ISessionTemplateData): void {
+		templateData.elementDisposable.clear();
 	}
 
 	disposeTemplate(templateData: ISessionTemplateData): void {
+		templateData.elementDisposable.dispose();
 		templateData.resourceLabel.dispose();
 		templateData.actionBar.dispose();
 	}
@@ -867,7 +932,7 @@ class SessionsViewPane extends ViewPane {
 		this.dataSource = new SessionsDataSource(this.provider);
 
 		const delegate = new SessionsDelegate();
-		const renderer = new SessionsRenderer(this.labels, this.themeService, this.logService);
+		const renderer = this.instantiationService.createInstance(SessionsRenderer, this.labels);
 		this._register(renderer);
 
 		this.tree = this.instantiationService.createInstance(
diff --git a/src/vs/workbench/contrib/chat/browser/media/chatSessions.css b/src/vs/workbench/contrib/chat/browser/media/chatSessions.css
index 358d8d158fcbb..8dc856511fb4d 100644
--- a/src/vs/workbench/contrib/chat/browser/media/chatSessions.css
+++ b/src/vs/workbench/contrib/chat/browser/media/chatSessions.css
@@ -40,3 +40,15 @@
 .chat-sessions-message .no-sessions-message .codicon {
 	opacity: 0.7;
 }
+
+/* Hide action bar actions by default */
+.chat-sessions-tree .chat-session-item .actions .action-label {
+	display: none;
+}
+
+/* Show action bar actions on hover and focus */
+.chat-sessions-tree .chat-session-item:hover .actions .action-label,
+.chat-sessions-tree .monaco-list-row.focused .chat-session-item .actions .action-label,
+.chat-sessions-tree .monaco-list-row.selected .chat-session-item .actions .action-label {
+	display: block;
+}
diff --git a/src/vs/workbench/contrib/chat/common/chatContextKeys.ts b/src/vs/workbench/contrib/chat/common/chatContextKeys.ts
index e0f5a4e53dc3d..7751b56a70bec 100644
--- a/src/vs/workbench/contrib/chat/common/chatContextKeys.ts
+++ b/src/vs/workbench/contrib/chat/common/chatContextKeys.ts
@@ -99,6 +99,8 @@ export namespace ChatContextKeys {
 	};
 
 	export const panelLocation = new RawContextKey<ViewContainerLocation>('chatPanelLocation', undefined, { type: 'number', description: localize('chatPanelLocation', "The location of the chat panel.") });
+
+	export const sessionType = new RawContextKey<string>('chatSessionType', '', { type: 'string', description: localize('chatSessionType', "The type of the current chat session item.") });
 }
 
 export namespace ChatContextKeyExprs {