diff --git a/editors/vscode/client/ConfigService.ts b/editors/vscode/client/ConfigService.ts
index c60a687a065c4..c5feb2ccff925 100644
--- a/editors/vscode/client/ConfigService.ts
+++ b/editors/vscode/client/ConfigService.ts
@@ -1,3 +1,4 @@
+import * as fs from "node:fs";
 import * as path from "node:path";
 import { ConfigurationChangeEvent, RelativePattern, Uri, workspace, WorkspaceFolder } from "vscode";
 import { DiagnosticPullMode } from "vscode-languageclient";
@@ -18,6 +19,9 @@ export class ConfigService implements IDisposable {
 
   private workspaceConfigs: Map<string, WorkspaceConfig> = new Map();
 
+  // Cache for binary path lookups to avoid repeated expensive searches
+  private binaryPathCache: Map<string, string | undefined> = new Map();
+
   public onConfigChange:
     | ((this: ConfigService, config: ConfigurationChangeEvent) => Promise<void>)
     | undefined;
@@ -64,10 +68,14 @@ export class ConfigService implements IDisposable {
 
   public addWorkspaceConfig(workspace: WorkspaceFolder): void {
     this.workspaceConfigs.set(workspace.uri.path, new WorkspaceConfig(workspace));
+    // Invalidate cache when workspace folders change
+    this.binaryPathCache.clear();
   }
 
   public removeWorkspaceConfig(workspace: WorkspaceFolder): void {
     this.workspaceConfigs.delete(workspace.uri.path);
+    // Invalidate cache when workspace folders change
+    this.binaryPathCache.clear();
   }
 
   public getWorkspaceConfig(workspace: Uri): WorkspaceConfig | undefined {
@@ -109,6 +117,117 @@ export class ConfigService implements IDisposable {
     return false;
   }
 
+  /**
+   * Checks if a binary exists at the given path.
+   * Handles both Unix and Windows path differences.
+   */
+  private checkBinaryExists(binaryPath: string): boolean {
+    try {
+      // Check if file exists and is executable (on Unix) or accessible (on Windows)
+      fs.accessSync(binaryPath, fs.constants.F_OK);
+      return true;
+    } catch {
+      return false;
+    }
+  }
+
+  /**
+   * Searches for a binary in node_modules/.bin directories using file system operations.
+   * This is much faster than workspace.findFiles in large monorepos.
+   * Limits search depth and scope to avoid timeouts.
+   * Note: This method searches upward from the start path toward the filesystem root.
+   * For nested subdirectories within the workspace, the findFiles fallback handles those cases.
+   */
+  private async searchBinaryInNodeModules(
+    startPath: string,
+    binaryName: string,
+    maxDepth: number = 3,
+    currentDepth: number = 0,
+  ): Promise<string | undefined> {
+    // Limit depth to avoid deep recursion in large monorepos
+    if (currentDepth >= maxDepth) {
+      return undefined;
+    }
+
+    try {
+      const nodeModulesPath = path.join(startPath, "node_modules", ".bin");
+
+      // Skip .pnpm directories to avoid traversing into pnpm's internal structure
+      // Check if we're inside a .pnpm directory path
+      if (
+        startPath.includes(path.sep + ".pnpm" + path.sep) ||
+        startPath.endsWith(path.sep + ".pnpm")
+      ) {
+        // Skip traversing into .pnpm directories - go directly to parent
+        const parentPath = path.dirname(startPath);
+        if (parentPath === startPath || parentPath === "/" || parentPath.match(/^[A-Za-z]:\\?$/i)) {
+          return undefined;
+        }
+        return this.searchBinaryInNodeModules(parentPath, binaryName, maxDepth, currentDepth + 1);
+      }
+
+      // Check if this .bin directory exists
+      if (fs.existsSync(nodeModulesPath)) {
+        const binaryPath = path.join(nodeModulesPath, binaryName);
+        if (this.checkBinaryExists(binaryPath)) {
+          return binaryPath;
+        }
+
+        // Check with .exe extension on Windows
+        if (process.platform === "win32") {
+          const exePath = `${binaryPath}.exe`;
+          if (this.checkBinaryExists(exePath)) {
+            return exePath;
+          }
+        }
+      }
+
+      // Search in parent directories starting at the workspace root toward the filesystem root
+      const parentPath = path.dirname(startPath);
+
+      // Stop if we've reached the filesystem root or if parent is same as current
+      if (parentPath === startPath || parentPath === "/" || parentPath.match(/^[A-Za-z]:\\?$/i)) {
+        return undefined;
+      }
+
+      // Recursively search parent directory
+      return this.searchBinaryInNodeModules(parentPath, binaryName, maxDepth, currentDepth + 1);
+    } catch {
+      // Ignore errors (permission denied, etc.) and continue searching
+      return undefined;
+    }
+  }
+
+  /**
+   * Wraps workspace.findFiles with a timeout to prevent indefinite hanging.
+   * Returns empty array if the search times out or fails.
+   */
+  private async findFilesWithTimeout(
+    pattern: RelativePattern,
+    exclude: string | null,
+    maxResults: number,
+    timeoutMs: number = 5000,
+  ): Promise<Uri[]> {
+    const searchPromise = workspace.findFiles(pattern, exclude, maxResults);
+    let timeoutId: ReturnType<typeof setTimeout> | undefined;
+    const timeoutPromise = new Promise<Uri[]>((_, reject) => {
+      timeoutId = setTimeout(() => reject(new Error("Binary search timeout")), timeoutMs);
+    });
+
+    try {
+      return await Promise.race([searchPromise, timeoutPromise]);
+    } catch {
+      // Timeout or other error - return empty array to indicate failure
+      // This allows graceful degradation without throwing
+      return [];
+    } finally {
+      // Clear timeout to prevent resource leak
+      if (timeoutId !== undefined) {
+        clearTimeout(timeoutId);
+      }
+    }
+  }
+
   private async searchBinaryPath(
     settingsBinary: string | undefined,
     defaultPattern: string,
@@ -119,14 +238,72 @@ export class ConfigService implements IDisposable {
     }
 
     if (!settingsBinary) {
-      // try to find the binary in node_modules/.bin, resolve to the first workspace folder
-      const files = await workspace.findFiles(
-        new RelativePattern(cwd, `**/node_modules/.bin/${defaultPattern}`),
-        null,
-        1,
+      // Check cache first
+      const cacheKey = `auto:${defaultPattern}`;
+      if (this.binaryPathCache.has(cacheKey)) {
+        return this.binaryPathCache.get(cacheKey);
+      }
+
+      // Fast path: Check common locations first using file system operations
+      // This is much faster than recursive findFiles in large monorepos
+      const workspaceFolders = Array.from(this.workspaceConfigs.keys());
+
+      // Step 1: Check root node_modules/.bin in each workspace folder
+      for (const workspacePath of workspaceFolders) {
+        const rootBinPath = path.join(workspacePath, "node_modules", ".bin", defaultPattern);
+        if (this.checkBinaryExists(rootBinPath)) {
+          this.binaryPathCache.set(cacheKey, rootBinPath);
+          return rootBinPath;
+        }
+
+        // Also check with .exe extension on Windows
+        if (process.platform === "win32") {
+          const exePath = `${rootBinPath}.exe`;
+          if (this.checkBinaryExists(exePath)) {
+            this.binaryPathCache.set(cacheKey, exePath);
+            return exePath;
+          }
+        }
+      }
+
+      // Step 2: Search parent directories starting at the workspace root toward the filesystem root using file system operations
+      // This handles cases where binaries are in nested or ancestor packages
+      // Search all workspace folders in parallel for better performance
+      const searchPromises = workspaceFolders.map((workspacePath) =>
+        this.searchBinaryInNodeModules(workspacePath, defaultPattern, 3),
       );
+      const searchResults = await Promise.all(searchPromises);
+      const found = searchResults.find((result) => result !== undefined);
+      if (found) {
+        this.binaryPathCache.set(cacheKey, found);
+        return found;
+      }
 
-      return files.length > 0 ? files[0].fsPath : undefined;
+      // Step 3: Last resort - use findFiles with timeout protection
+      // Search recursively within workspace folders, excluding .pnpm-related directories
+      // Use Promise.race to add timeout protection
+      try {
+        const excludePattern = "**/{.pnpm,node_modules/.pnpm}/**";
+        const files = await this.findFilesWithTimeout(
+          new RelativePattern(cwd, `**/node_modules/.bin/${defaultPattern}`),
+          excludePattern,
+          1,
+          5000, // 5 second timeout
+        );
+
+        const result = files.length > 0 ? files[0].fsPath : undefined;
+        this.binaryPathCache.set(cacheKey, result);
+        return result;
+      } catch (error) {
+        // Timeout or other error - log and cache undefined to avoid retrying
+        // Note: Error logging is intentionally minimal to avoid noise in production
+        // but helps with debugging when needed
+        if (error instanceof Error && error.message === "Binary search timeout") {
+          // Timeout is expected in large monorepos, no need to log
+        }
+        this.binaryPathCache.set(cacheKey, undefined);
+        return undefined;
+      }
     }
 
     if (!workspace.isTrusted) {
@@ -156,6 +333,15 @@ export class ConfigService implements IDisposable {
     if (event.affectsConfiguration(ConfigService.namespace)) {
       this.vsCodeConfig.refresh();
       isConfigChanged = true;
+
+      // Clear cache when binary path settings change, as they affect binary resolution
+      if (
+        event.affectsConfiguration(`${ConfigService.namespace}.path.oxlint`) ||
+        event.affectsConfiguration(`${ConfigService.namespace}.path.oxfmt`) ||
+        event.affectsConfiguration(`${ConfigService.namespace}.path.server`)
+      ) {
+        this.binaryPathCache.clear();
+      }
     }
 
     for (const workspaceConfig of this.workspaceConfigs.values()) {