diff --git a/src/git_draft/__main__.py b/src/git_draft/__main__.py
index 1450bf5..ca2ae18 100644
--- a/src/git_draft/__main__.py
+++ b/src/git_draft/__main__.py
@@ -8,7 +8,7 @@
 
 from .assistants import load_assistant
 from .common import open_editor
-from .manager import Manager, enclosing_repo
+from .manager import Manager
 
 
 logging.basicConfig(level=logging.INFO)
@@ -86,8 +86,7 @@ def callback(_option, _opt, _value, parser) -> None:
 def main() -> None:
     (opts, _args) = parser.parse_args()
 
-    repo = enclosing_repo()
-    manager = Manager(repo)
+    manager = Manager.enclosing()
 
     command = getattr(opts, "command", "generate")
     if command == "generate":
diff --git a/src/git_draft/manager.py b/src/git_draft/manager.py
index bf717fe..706d179 100644
--- a/src/git_draft/manager.py
+++ b/src/git_draft/manager.py
@@ -16,11 +16,6 @@
 _logger = logging.getLogger(__name__)
 
 
-def enclosing_repo(path: str | None = None) -> git.Repo:
-    """Returns the repository to which the given path belongs"""
-    return git.Repo(path, search_parent_directories=True)
-
-
 class _Note:
     """Structured metadata attached to a commit"""
 
@@ -157,6 +152,10 @@ class Manager:
     def __init__(self, repo: git.Repo) -> None:
         self._repo = repo
 
+    @classmethod
+    def enclosing(cls, path: str | None = None) -> Manager:
+        return cls(git.Repo(path, search_parent_directories=True))
+
     def generate_draft(
         self, prompt: str, assistant: Assistant, checkout=False, reset=False
     ) -> None:
@@ -206,15 +205,17 @@ def _exit_draft(self, apply: bool, delete=False) -> None:
         if not apply and branch.needs_rebase(self._repo):
             raise ValueError("Parent branch has moved, please rebase")
 
-        # https://stackoverflow.com/a/15993574
         note = branch.init_note
+        # https://stackoverflow.com/a/15993574
         self._repo.git.checkout("--detach")
         if apply:
-            # We discard index (internal) changes
+            # We discard index (internal) changes.
             self._repo.git.reset(note.origin_branch)
+            self._repo.git.checkout(note.origin_branch)
         else:
-            self._repo.git.reset("--hard", note.sync_sha or note.origin_branch)
-        self._repo.git.checkout(note.origin_branch)
+            self._repo.git.reset("--hard", note.origin_branch)
+            if note.sync_sha:
+                self._repo.git.checkout(note.sync_sha, "--", ".")
 
         if delete:
             self._repo.git.branch("-D", branch.name)
diff --git a/tests/git_draft/manager_test.py b/tests/git_draft/manager_test.py
index 475679b..c6c551a 100644
--- a/tests/git_draft/manager_test.py
+++ b/tests/git_draft/manager_test.py
@@ -1,5 +1,6 @@
 import dataclasses
 import git
+import os.path as osp
 from pathlib import PurePosixPath
 import pytest
 import tempfile
@@ -64,3 +65,42 @@ def test_generate_then_discard_draft(self, repo: git.Repo) -> None:
         manager.generate_draft("hello", _FakeAssistant())
         manager.discard_draft()
         assert len(list(repo.iter_commits())) == 1
+
+    def test_discard_restores_worktree(self, repo: git.Repo) -> None:
+        manager = sut.Manager(repo)
+
+        p1 = osp.join(repo.working_dir, "p1.txt")
+        with open(p1, "w") as writer:
+            writer.write("a1")
+        p2 = osp.join(repo.working_dir, "p2.txt")
+        with open(p2, "w") as writer:
+            writer.write("b1")
+
+        manager.generate_draft("hello", _FakeAssistant())
+        with open(p1, "w") as writer:
+            writer.write("a2")
+
+        manager.discard_draft()
+
+        with open(p1) as reader:
+            assert reader.read() == "a1"
+        with open(p2) as reader:
+            assert reader.read() == "b1"
+
+    def test_finalize_keeps_changes(self, repo: git.Repo) -> None:
+        manager = sut.Manager(repo)
+
+        p1 = osp.join(repo.working_dir, "p1.txt")
+        with open(p1, "w") as writer:
+            writer.write("a1")
+
+        manager.generate_draft("hello", _FakeAssistant(), checkout=True)
+        with open(p1, "w") as writer:
+            writer.write("a2")
+
+        manager.finalize_draft()
+
+        with open(p1) as reader:
+            assert reader.read() == "a2"
+        with open(osp.join(repo.working_dir, "PROMPT")) as reader:
+            assert reader.read() == "hello"