diff --git a/apps/desktop/src/renderer/screens/main/components/TopBar/WorkspaceTabs/WorkspaceDropdown.tsx b/apps/desktop/src/renderer/screens/main/components/TopBar/WorkspaceTabs/WorkspaceDropdown.tsx
index 0ec504a01a..29b14a50f2 100644
--- a/apps/desktop/src/renderer/screens/main/components/TopBar/WorkspaceTabs/WorkspaceDropdown.tsx
+++ b/apps/desktop/src/renderer/screens/main/components/TopBar/WorkspaceTabs/WorkspaceDropdown.tsx
@@ -1,32 +1,92 @@
 import { Button } from "@superset/ui/button";
+import { ButtonGroup } from "@superset/ui/button-group";
 import {
 	DropdownMenu,
 	DropdownMenuContent,
 	DropdownMenuTrigger,
 } from "@superset/ui/dropdown-menu";
 import { toast } from "@superset/ui/sonner";
-import { useState } from "react";
-import { HiMiniFolderOpen, HiMiniPlus } from "react-icons/hi2";
+import { Tooltip, TooltipContent, TooltipTrigger } from "@superset/ui/tooltip";
+import { useRef, useState } from "react";
+import {
+	HiChevronDown,
+	HiChevronUp,
+	HiMiniFolderOpen,
+	HiMiniPlus,
+} from "react-icons/hi2";
 import { trpc } from "renderer/lib/trpc";
 import { useOpenNew } from "renderer/react-query/projects";
 import { useCreateWorkspace } from "renderer/react-query/workspaces";
 
+const INITIAL_PROJECTS_LIMIT = 5;
+
+/**
+ * Formats a path for display, replacing the home directory with ~ and
+ * removing the trailing project name directory.
+ */
+function formatPath(
+	path: string,
+	projectName: string,
+	homeDir: string | undefined,
+): string {
+	const normalizedPath = path.replace(/\\/g, "/");
+	const normalizedHome = homeDir ? homeDir.replace(/\\/g, "/") : null;
+
+	let displayPath = normalizedPath;
+	if (
+		normalizedHome &&
+		(normalizedPath === normalizedHome ||
+			normalizedPath.startsWith(`${normalizedHome}/`))
+	) {
+		displayPath = `~${normalizedPath.slice(normalizedHome.length)}`;
+	} else {
+		displayPath = normalizedPath.replace(/^\/(?:Users|home)\/[^/]+/, "~");
+	}
+
+	const escapedProjectName = projectName.replace(/[.*+?^${}()|[\]\\]/g, "\\$&");
+	const suffixPattern = new RegExp(`/${escapedProjectName}$`);
+	return displayPath.replace(suffixPattern, "");
+}
+
 export interface WorkspaceDropdownProps {
 	className?: string;
 }
 
 export function WorkspaceDropdown({ className }: WorkspaceDropdownProps) {
 	const [isOpen, setIsOpen] = useState(false);
+	const [showAllProjects, setShowAllProjects] = useState(false);
+	const primaryButtonRef = useRef<HTMLButtonElement>(null);
+	const dropdownTriggerRef = useRef<HTMLButtonElement>(null);
 
+	const { data: activeWorkspace } = trpc.workspaces.getActive.useQuery();
 	const { data: recentProjects = [] } = trpc.projects.getRecents.useQuery();
+	const { data: homeDir } = trpc.window.getHomeDir.useQuery();
 	const createWorkspace = useCreateWorkspace();
 	const openNew = useOpenNew();
 
+	const currentProject = recentProjects.find(
+		(p) => p.id === activeWorkspace?.projectId,
+	);
+	const otherProjects = recentProjects.filter(
+		(p) => p.id !== activeWorkspace?.projectId,
+	);
+	const visibleProjects = showAllProjects
+		? otherProjects
+		: otherProjects.slice(0, INITIAL_PROJECTS_LIMIT);
+	const hasMoreProjects = otherProjects.length > INITIAL_PROJECTS_LIMIT;
+
+	const closeDropdown = () => {
+		setIsOpen(false);
+		setShowAllProjects(false);
+		primaryButtonRef.current?.blur();
+		dropdownTriggerRef.current?.blur();
+	};
+
 	const handleCreateWorkspace = async (projectId: string) => {
 		toast.promise(createWorkspace.mutateAsync({ projectId }), {
 			loading: "Creating workspace...",
 			success: () => {
-				setIsOpen(false);
+				closeDropdown();
 				return "Workspace created";
 			},
 			error: (err) =>
@@ -35,6 +95,7 @@ export function WorkspaceDropdown({ className }: WorkspaceDropdownProps) {
 	};
 
 	const handleOpenNewProject = async () => {
+		closeDropdown();
 		try {
 			const result = await openNew.mutateAsync(undefined);
 			if (!result.canceled && result.project) {
@@ -48,54 +109,155 @@ export function WorkspaceDropdown({ className }: WorkspaceDropdownProps) {
 		}
 	};
 
+	const handlePrimaryAction = () => {
+		primaryButtonRef.current?.blur();
+		if (currentProject) {
+			handleCreateWorkspace(currentProject.id);
+		} else {
+			handleOpenNewProject();
+		}
+	};
+
+	const handleOpenChange = (open: boolean) => {
+		if (open) {
+			setIsOpen(true);
+			dropdownTriggerRef.current?.blur();
+		} else {
+			closeDropdown();
+		}
+	};
+
 	return (
-		<DropdownMenu open={isOpen} onOpenChange={setIsOpen}>
-			<DropdownMenuTrigger className={className} asChild>
-				<Button
-					variant="ghost"
-					size="icon"
-					aria-label="Add new workspace"
-					className="ml-1 mt-1 size-7 text-muted-foreground hover:text-foreground"
-				>
-					<HiMiniPlus className="size-4" />
-				</Button>
-			</DropdownMenuTrigger>
-			<DropdownMenuContent className="w-80 p-0" align="start">
-				<div className="py-2">
-					{recentProjects.length > 0 && (
-						<div className="px-2 pb-2 border-b">
-							<p className="text-xs text-muted-foreground px-2 py-1.5">
-								Recent Projects
+		<ButtonGroup
+			className={[className, "group/split"].filter(Boolean).join(" ")}
+		>
+			<Tooltip>
+				<TooltipTrigger asChild>
+					<Button
+						ref={primaryButtonRef}
+						variant="ghost"
+						size="icon"
+						aria-label="New workspace"
+						className="ml-1 mt-1 size-7 text-muted-foreground hover:text-foreground group-hover/split:bg-accent/30 hover:!bg-accent"
+						onClick={handlePrimaryAction}
+						disabled={createWorkspace.isPending || openNew.isPending}
+					>
+						<HiMiniPlus className="size-5" />
+					</Button>
+				</TooltipTrigger>
+				<TooltipContent side="bottom" sideOffset={4}>
+					{currentProject
+						? `New workspace in ${currentProject.name}`
+						: "New workspace"}
+				</TooltipContent>
+			</Tooltip>
+			<DropdownMenu open={isOpen} onOpenChange={handleOpenChange}>
+				<Tooltip>
+					<TooltipTrigger asChild>
+						<DropdownMenuTrigger asChild>
+							<Button
+								ref={dropdownTriggerRef}
+								variant="ghost"
+								size="icon"
+								aria-label="More workspace options"
+								className="mt-1 size-7 w-4 text-muted-foreground hover:text-foreground group-hover/split:bg-accent/30 hover:!bg-accent"
+							>
+								<HiChevronDown className="size-2.5" />
+							</Button>
+						</DropdownMenuTrigger>
+					</TooltipTrigger>
+					<TooltipContent side="bottom" sideOffset={4}>
+						More options
+					</TooltipContent>
+				</Tooltip>
+				<DropdownMenuContent className="w-72 p-0" align="start">
+					<div className="px-3 py-2.5 border-b border-border/50">
+						<p className="text-sm font-medium text-foreground">New Workspace</p>
+						<p className="text-xs text-muted-foreground mt-0.5">
+							Select a project to create a workspace
+						</p>
+					</div>
+					{currentProject && (
+						<div className="py-1.5 border-b border-border/50">
+							<p className="text-[11px] font-medium text-muted-foreground uppercase tracking-wider px-3 py-1">
+								Current project
 							</p>
-							{recentProjects.map((project) => (
+							<div className="px-1.5">
 								<button
 									type="button"
-									key={project.id}
-									onClick={() => handleCreateWorkspace(project.id)}
+									onClick={() => handleCreateWorkspace(currentProject.id)}
 									disabled={createWorkspace.isPending}
-									className="w-full text-left px-2 py-1.5 text-sm rounded hover:bg-accent transition-colors"
+									className="w-full text-left px-2 py-1.5 text-sm rounded-md hover:bg-accent transition-colors group"
 								>
-									<div className="font-medium">{project.name}</div>
-									<div className="text-xs text-muted-foreground truncate">
-										{project.mainRepoPath}
+									<div className="font-medium truncate">
+										{currentProject.name}
+									</div>
+									<div className="text-[11px] text-muted-foreground truncate group-hover:text-muted-foreground/80">
+										{formatPath(
+											currentProject.mainRepoPath,
+											currentProject.name,
+											homeDir,
+										)}
 									</div>
 								</button>
-							))}
+							</div>
+						</div>
+					)}
+					{otherProjects.length > 0 && (
+						<div className="py-1.5">
+							<p className="text-[11px] font-medium text-muted-foreground uppercase tracking-wider px-3 py-1">
+								{currentProject ? "Other projects" : "Recent projects"}
+							</p>
+							<div className="px-1.5">
+								{visibleProjects.map((project) => (
+									<button
+										type="button"
+										key={project.id}
+										onClick={() => handleCreateWorkspace(project.id)}
+										disabled={createWorkspace.isPending}
+										className="w-full text-left px-2 py-1.5 text-sm rounded-md hover:bg-accent transition-colors group"
+									>
+										<div className="font-medium truncate">{project.name}</div>
+										<div className="text-[11px] text-muted-foreground truncate group-hover:text-muted-foreground/80">
+											{formatPath(project.mainRepoPath, project.name, homeDir)}
+										</div>
+									</button>
+								))}
+							</div>
+							{hasMoreProjects && (
+								<button
+									type="button"
+									onClick={() => setShowAllProjects(!showAllProjects)}
+									className="w-full text-left px-3 py-1.5 text-xs text-muted-foreground hover:text-foreground transition-colors flex items-center gap-1"
+								>
+									{showAllProjects ? (
+										<>
+											<HiChevronUp className="size-3" />
+											Show less
+										</>
+									) : (
+										<>
+											<HiChevronDown className="size-3" />
+											Show {otherProjects.length - INITIAL_PROJECTS_LIMIT} more
+										</>
+									)}
+								</button>
+							)}
 						</div>
 					)}
-					<div className="px-2 pt-2">
+					<div className="border-t border-border/50 p-1.5">
 						<button
 							type="button"
 							onClick={handleOpenNewProject}
 							disabled={openNew.isPending || createWorkspace.isPending}
-							className="w-full text-left px-2 py-1.5 text-sm rounded hover:bg-accent transition-colors flex items-center gap-2"
+							className="w-full text-left px-2 py-1.5 text-sm rounded-md hover:bg-accent transition-colors flex items-center gap-2"
 						>
-							<HiMiniFolderOpen className="h-4 w-4" />
-							<span>Open New Project...</span>
+							<HiMiniFolderOpen className="size-4 text-muted-foreground" />
+							<span>Browse for Project...</span>
 						</button>
 					</div>
-				</div>
-			</DropdownMenuContent>
-		</DropdownMenu>
+				</DropdownMenuContent>
+			</DropdownMenu>
+		</ButtonGroup>
 	);
 }