diff --git a/src/utils/project-name.ts b/src/utils/project-name.ts
index 287f4272..6e8e88ff 100644
--- a/src/utils/project-name.ts
+++ b/src/utils/project-name.ts
@@ -1,12 +1,24 @@
+import { homedir } from 'os'
 import path from 'path';
 import { logger } from './logger.js';
 import { detectWorktree } from './worktree.js';
 
+/**
+ * Expand leading ~ to the user's home directory.
+ * Handles "~", "~/", and "~/subpath" but not "~user/" (which is rare in cwd).
+ */
+function expandTilde(p: string): string {
+  if (p === '~' || p.startsWith('~/')) {
+    return p.replace(/^~/, homedir())
+  }
+  return p
+}
+
 /**
  * Extract project name from working directory path
- * Handles edge cases: null/undefined cwd, drive roots, trailing slashes
+ * Handles edge cases: null/undefined cwd, drive roots, trailing slashes, unexpanded ~
  *
- * @param cwd - Current working directory (absolute path)
+ * @param cwd - Current working directory (absolute path, or ~-prefixed path)
  * @returns Project name or "unknown-project" if extraction fails
  */
 export function getProjectName(cwd: string | null | undefined): string {
@@ -15,8 +27,11 @@ export function getProjectName(cwd: string | null | undefined): string {
     return 'unknown-project';
   }
 
+  // Expand leading ~ before path operations
+  const expanded = expandTilde(cwd)
+
   // Extract basename (handles trailing slashes automatically)
-  const basename = path.basename(cwd);
+  const basename = path.basename(expanded);
 
   // Edge case: Drive roots on Windows (C:\, J:\) or Unix root (/)
   // path.basename('C:\') returns '' (empty string)
@@ -69,7 +84,8 @@ export function getProjectContext(cwd: string | null | undefined): ProjectContex
     return { primary, parent: null, isWorktree: false, allProjects: [primary] };
   }
 
-  const worktreeInfo = detectWorktree(cwd);
+  const expandedCwd = expandTilde(cwd);
+  const worktreeInfo = detectWorktree(expandedCwd);
 
   if (worktreeInfo.isWorktree && worktreeInfo.parentProjectName) {
     // In a worktree: include parent first for chronological ordering
diff --git a/tests/utils/project-name.test.ts b/tests/utils/project-name.test.ts
new file mode 100644
index 00000000..2354cbcd
--- /dev/null
+++ b/tests/utils/project-name.test.ts
@@ -0,0 +1,99 @@
+/**
+ * Project Name Tests
+ *
+ * Tests tilde expansion and project name extraction.
+ * Source: src/utils/project-name.ts
+ */
+
+import { describe, it, expect } from 'bun:test';
+import { homedir } from 'os';
+import { getProjectName, getProjectContext } from '../../src/utils/project-name.js';
+
+describe('getProjectName', () => {
+  describe('tilde expansion', () => {
+    it('resolves bare ~ to home directory basename', () => {
+      const home = homedir();
+      const expected = home.split('/').pop() || home.split('\\').pop() || '';
+      expect(getProjectName('~')).toBe(expected);
+    });
+
+    it('resolves ~/subpath to subpath', () => {
+      expect(getProjectName('~/projects/my-app')).toBe('my-app');
+    });
+
+    it('resolves ~/ to home directory basename', () => {
+      const home = homedir();
+      const expected = home.split('/').pop() || home.split('\\').pop() || '';
+      expect(getProjectName('~/')).toBe(expected);
+    });
+  });
+
+  describe('normal paths', () => {
+    it('extracts basename from absolute path', () => {
+      expect(getProjectName('/home/user/my-project')).toBe('my-project');
+    });
+
+    it('extracts basename from nested path', () => {
+      expect(getProjectName('/Users/test/work/deep/nested/project')).toBe('project');
+    });
+
+    it('handles trailing slash', () => {
+      expect(getProjectName('/home/user/my-project/')).toBe('my-project');
+    });
+  });
+
+  describe('edge cases', () => {
+    it('returns unknown-project for null', () => {
+      expect(getProjectName(null)).toBe('unknown-project');
+    });
+
+    it('returns unknown-project for undefined', () => {
+      expect(getProjectName(undefined)).toBe('unknown-project');
+    });
+
+    it('returns unknown-project for empty string', () => {
+      expect(getProjectName('')).toBe('unknown-project');
+    });
+
+    it('returns unknown-project for whitespace', () => {
+      expect(getProjectName('   ')).toBe('unknown-project');
+    });
+  });
+
+  describe('realistic scenarios from #1478', () => {
+    it('handles ~ the same as full home path', () => {
+      const home = homedir();
+      expect(getProjectName('~')).toBe(getProjectName(home));
+    });
+
+    it('handles ~/projects/app the same as /full/path/projects/app', () => {
+      const home = homedir();
+      expect(getProjectName('~/projects/app')).toBe(
+        getProjectName(`${home}/projects/app`)
+      );
+    });
+  });
+});
+
+describe('getProjectContext', () => {
+  it('returns primary project name for normal path', () => {
+    const ctx = getProjectContext('/home/user/my-project');
+    expect(ctx.primary).toBe('my-project');
+    expect(ctx.parent).toBeNull();
+    expect(ctx.isWorktree).toBe(false);
+    expect(ctx.allProjects).toEqual(['my-project']);
+  });
+
+  it('resolves ~ path correctly', () => {
+    const home = homedir();
+    const ctx = getProjectContext('~');
+    const ctxHome = getProjectContext(home);
+    expect(ctx.primary).toBe(ctxHome.primary);
+  });
+
+  it('returns unknown-project context for null', () => {
+    const ctx = getProjectContext(null);
+    expect(ctx.primary).toBe('unknown-project');
+    expect(ctx.parent).toBeNull();
+  });
+});