diff --git a/apps/desktop/src/lib/trpc/routers/projects/projects.ts b/apps/desktop/src/lib/trpc/routers/projects/projects.ts
index 33383c5cd2e..15a02853d58 100644
--- a/apps/desktop/src/lib/trpc/routers/projects/projects.ts
+++ b/apps/desktop/src/lib/trpc/routers/projects/projects.ts
@@ -3,8 +3,10 @@ import { access } from "node:fs/promises";
 import { basename, join } from "node:path";
 import type { BrowserWindow } from "electron";
 import { dialog } from "electron";
+import { track } from "main/lib/analytics";
 import { db } from "main/lib/db";
 import type { Project } from "main/lib/db/schemas";
+import { terminalManager } from "main/lib/terminal";
 import { nanoid } from "nanoid";
 import { PROJECT_COLOR_VALUES } from "shared/constants/project-colors";
 import simpleGit from "simple-git";
@@ -548,6 +550,67 @@ export const createProjectsRouter = (getWindow: () => BrowserWindow | null) => {
 
 				return { success: true };
 			}),
+
+		close: publicProcedure
+			.input(z.object({ id: z.string() }))
+			.mutation(async ({ input }) => {
+				const project = db.data.projects.find((p) => p.id === input.id);
+
+				if (!project) {
+					throw new Error("Project not found");
+				}
+
+				// Find all workspaces for this project
+				const projectWorkspaces = db.data.workspaces.filter(
+					(w) => w.projectId === input.id,
+				);
+
+				// Kill all terminal processes in all workspaces of this project
+				let totalFailed = 0;
+				for (const workspace of projectWorkspaces) {
+					const terminalResult = await terminalManager.killByWorkspaceId(
+						workspace.id,
+					);
+					totalFailed += terminalResult.failed;
+				}
+
+				// Remove all workspace records and hide the project
+				await db.update((data) => {
+					// Remove all workspaces for this project
+					data.workspaces = data.workspaces.filter(
+						(w) => w.projectId !== input.id,
+					);
+
+					// Hide the project by setting tabOrder to null
+					const p = data.projects.find((p) => p.id === input.id);
+					if (p) {
+						p.tabOrder = null;
+					}
+
+					// Update active workspace if it was in this project
+					const closedWorkspaceIds = new Set(
+						projectWorkspaces.map((w) => w.id),
+					);
+					if (
+						data.settings.lastActiveWorkspaceId &&
+						closedWorkspaceIds.has(data.settings.lastActiveWorkspaceId)
+					) {
+						const sorted = data.workspaces
+							.slice()
+							.sort((a, b) => b.lastOpenedAt - a.lastOpenedAt);
+						data.settings.lastActiveWorkspaceId = sorted[0]?.id || undefined;
+					}
+				});
+
+				const terminalWarning =
+					totalFailed > 0
+						? `${totalFailed} terminal process(es) may still be running`
+						: undefined;
+
+				track("project_closed", { project_id: input.id });
+
+				return { success: true, terminalWarning };
+			}),
 	});
 };
 
diff --git a/apps/desktop/src/renderer/react-query/projects/index.ts b/apps/desktop/src/renderer/react-query/projects/index.ts
index f18b249d9b3..74473d8bc6b 100644
--- a/apps/desktop/src/renderer/react-query/projects/index.ts
+++ b/apps/desktop/src/renderer/react-query/projects/index.ts
@@ -1,3 +1,4 @@
+export { useCloseProject } from "./useCloseProject";
 export { useOpenNew } from "./useOpenNew";
 export { useReorderProjects } from "./useReorderProjects";
 export { useUpdateProject } from "./useUpdateProject";
diff --git a/apps/desktop/src/renderer/react-query/projects/useCloseProject.ts b/apps/desktop/src/renderer/react-query/projects/useCloseProject.ts
new file mode 100644
index 00000000000..f88ac0e56d2
--- /dev/null
+++ b/apps/desktop/src/renderer/react-query/projects/useCloseProject.ts
@@ -0,0 +1,24 @@
+import { trpc } from "renderer/lib/trpc";
+
+/**
+ * Mutation hook for closing a project (hides from tabs, keeps worktrees on disk)
+ * Automatically invalidates all workspace and project queries on success
+ */
+export function useCloseProject(
+	options?: Parameters<typeof trpc.projects.close.useMutation>[0],
+) {
+	const utils = trpc.useUtils();
+
+	return trpc.projects.close.useMutation({
+		...options,
+		onSuccess: async (...args) => {
+			// Auto-invalidate all workspace queries
+			await utils.workspaces.invalidate();
+			// Invalidate project queries since close updates project metadata
+			await utils.projects.getRecents.invalidate();
+
+			// Call user's onSuccess if provided
+			await options?.onSuccess?.(...args);
+		},
+	});
+}
diff --git a/apps/desktop/src/renderer/screens/main/components/TopBar/WorkspaceTabs/WorkspaceGroupContextMenu.tsx b/apps/desktop/src/renderer/screens/main/components/TopBar/WorkspaceTabs/WorkspaceGroupContextMenu.tsx
index 2e299fe7393..15f87c6e92c 100644
--- a/apps/desktop/src/renderer/screens/main/components/TopBar/WorkspaceTabs/WorkspaceGroupContextMenu.tsx
+++ b/apps/desktop/src/renderer/screens/main/components/TopBar/WorkspaceTabs/WorkspaceGroupContextMenu.tsx
@@ -6,7 +6,10 @@ import {
 } from "@superset/ui/context-menu";
 import type { KeyboardEvent, ReactNode } from "react";
 import { useEffect, useRef, useState } from "react";
-import { useUpdateProject } from "renderer/react-query/projects";
+import {
+	useCloseProject,
+	useUpdateProject,
+} from "renderer/react-query/projects";
 import { PROJECT_COLORS } from "shared/constants/project-colors";
 
 interface WorkspaceGroupContextMenuProps {
@@ -26,6 +29,7 @@ export function WorkspaceGroupContextMenu({
 	const inputRef = useRef<HTMLInputElement | null>(null);
 	const skipBlurSubmit = useRef(false);
 	const updateProject = useUpdateProject();
+	const closeProject = useCloseProject();
 
 	useEffect(() => {
 		setName(projectName);
@@ -146,12 +150,11 @@ export function WorkspaceGroupContextMenu({
 				<button
 					type="button"
 					onClick={() => {
-						// TODO: Implement worktree configuration
-						inputRef.current?.focus();
+						closeProject.mutate({ id: projectId });
 					}}
-					className="w-full px-2 py-1.5 text-left text-sm text-foreground transition-colors hover:bg-accent"
+					className="w-full px-2 py-1.5 text-left text-sm text-destructive transition-colors hover:bg-destructive/10"
 				>
-					Configure worktree setup
+					Close Project
 				</button>
 			</ContextMenuContent>
 		</ContextMenu>