diff --git a/Sources/ContentView.swift b/Sources/ContentView.swift
index 956b802db64b..482b9951ee69 100644
--- a/Sources/ContentView.swift
+++ b/Sources/ContentView.swift
@@ -75,6 +75,68 @@ func cmuxAccentColor() -> Color {
     Color(nsColor: cmuxAccentNSColor())
 }
 
+private func sidebarSelectedWorkspaceRelativeLuminance(_ color: NSColor) -> CGFloat {
+    let rgbColor = color.usingColorSpace(.sRGB) ?? color
+    var red: CGFloat = 0
+    var green: CGFloat = 0
+    var blue: CGFloat = 0
+    var alpha: CGFloat = 0
+    rgbColor.getRed(&red, green: &green, blue: &blue, alpha: &alpha)
+
+    func linearized(_ component: CGFloat) -> CGFloat {
+        if component <= 0.03928 {
+            return component / 12.92
+        }
+        return pow((component + 0.055) / 1.055, 2.4)
+    }
+
+    let linearRed = linearized(red)
+    let linearGreen = linearized(green)
+    let linearBlue = linearized(blue)
+    return (0.2126 * linearRed) + (0.7152 * linearGreen) + (0.0722 * linearBlue)
+}
+
+private func sidebarSelectedWorkspaceContrastRatio(
+    between first: NSColor,
+    and second: NSColor
+) -> CGFloat {
+    let firstLuminance = sidebarSelectedWorkspaceRelativeLuminance(first)
+    let secondLuminance = sidebarSelectedWorkspaceRelativeLuminance(second)
+    let lighter = max(firstLuminance, secondLuminance)
+    let darker = min(firstLuminance, secondLuminance)
+    return (lighter + 0.05) / (darker + 0.05)
+}
+
+private func sidebarSelectedWorkspaceReadableBackgroundNSColor(_ color: NSColor) -> NSColor {
+    let minimumContrast: CGFloat = 4.5
+    var adjusted = color.usingColorSpace(.sRGB) ?? color
+    var iteration = 0
+
+    // Keep the assigned hue, but darken overly bright custom colors until the
+    // existing white selected-state foreground remains readable.
+    while sidebarSelectedWorkspaceContrastRatio(between: adjusted, and: NSColor.white) < minimumContrast,
+          iteration < 12 {
+        guard let darkened = adjusted.blended(withFraction: 0.12, of: .black) else { break }
+        adjusted = darkened.usingColorSpace(.sRGB) ?? darkened
+        iteration += 1
+    }
+
+    return adjusted
+}
+
+private func sidebarSelectedWorkspaceCustomBackgroundNSColor(
+    hex: String,
+    colorScheme: ColorScheme
+) -> NSColor? {
+    guard let color = WorkspaceTabColorSettings.displayNSColor(
+        hex: hex,
+        colorScheme: colorScheme
+    ) else {
+        return nil
+    }
+    return sidebarSelectedWorkspaceReadableBackgroundNSColor(color)
+}
+
 struct SidebarRemoteErrorCopyEntry: Equatable {
     let workspaceTitle: String
     let target: String
@@ -112,8 +174,19 @@ enum SidebarRemoteErrorCopySupport {
     }
 }
 
-func sidebarSelectedWorkspaceBackgroundNSColor(for colorScheme: ColorScheme) -> NSColor {
-    if let hex = UserDefaults.standard.string(forKey: "sidebarSelectionColorHex"),
+func sidebarSelectedWorkspaceBackgroundNSColor(
+    for colorScheme: ColorScheme,
+    customHex: String? = nil,
+    sidebarSelectionColorHex: String? = UserDefaults.standard.string(forKey: "sidebarSelectionColorHex")
+) -> NSColor {
+    if let customHex,
+       let customColor = sidebarSelectedWorkspaceCustomBackgroundNSColor(
+        hex: customHex,
+        colorScheme: colorScheme
+       ) {
+        return customColor
+    }
+    if let hex = sidebarSelectionColorHex,
        let parsed = NSColor(hex: hex) {
         return parsed
     }
@@ -13323,10 +13396,11 @@ private struct TabItemView: View, Equatable {
     }
 
     private var selectionBackgroundColor: NSColor {
-        if let hex = sidebarSelectionColorHex, let parsed = NSColor(hex: hex) {
-            return parsed
-        }
-        return cmuxAccentNSColor(for: colorScheme)
+        sidebarSelectedWorkspaceBackgroundNSColor(
+            for: colorScheme,
+            customHex: tab.customColor,
+            sidebarSelectionColorHex: sidebarSelectionColorHex
+        )
     }
 
     private var backgroundColor: Color {