diff --git a/extensions/ui-customization/footer.ts b/extensions/ui-customization/footer.ts
index dd19606e..9fd5d377 100644
--- a/extensions/ui-customization/footer.ts
+++ b/extensions/ui-customization/footer.ts
@@ -1,5 +1,5 @@
 import { homedir } from "node:os";
-import { relative } from "node:path";
+import { posix, win32 } from "node:path";
 import type { Theme } from "@earendil-works/pi-coding-agent";
 import {
   getCapabilities,
@@ -117,10 +117,21 @@ export function formatTokens(tokens: number) {
   return `${(tokens / 1_000_000).toFixed(1)}m`;
 }
 
-export function formatDirectory(cwd: string) {
-  const home = homedir();
-  if (cwd === home) return "~";
-  const display = cwd.startsWith(`${home}/`) ? `~/${relative(home, cwd)}` : cwd;
+export function formatDirectory(
+  cwd: string,
+  home = homedir(),
+  pathModule = process.platform === "win32" ? win32 : posix,
+) {
+  const relativePath = pathModule.relative(home, cwd);
+  const outsideHome =
+    relativePath === ".." ||
+    relativePath.startsWith(`..${pathModule.sep}`) ||
+    pathModule.isAbsolute(relativePath);
+  const display = outsideHome
+    ? cwd
+    : relativePath
+      ? `~/${relativePath.replaceAll(pathModule.sep, "/")}`
+      : "~";
   return sanitizeTerminalLabel(display);
 }
 
diff --git a/tests/extensions/ui-customization/footer.test.ts b/tests/extensions/ui-customization/footer.test.ts
index 9ec257f9..6be0465e 100644
--- a/tests/extensions/ui-customization/footer.test.ts
+++ b/tests/extensions/ui-customization/footer.test.ts
@@ -1,5 +1,6 @@
 import assert from "node:assert/strict";
 import test from "node:test";
+import { posix, win32 } from "node:path";
 import { visibleWidth } from "@earendil-works/pi-tui";
 import {
   DEFAULT_FOOTER_LINES,
@@ -9,6 +10,7 @@ import {
 import {
   buildSegmentCatalog,
   fitSegmentsToWidth,
+  formatDirectory,
   renderFooter,
   resolveLineSegments,
   type FooterSegment,
@@ -43,6 +45,39 @@ const gitInfo: GitInfoState = {
   pullRequest: { number: 42, url: "https://example.com/pr/42", isDraft: false },
 };
 
+test("formatDirectory shortens Windows Home paths", () => {
+  assert.equal(
+    formatDirectory("C:\\Users\\Adam\\project", "C:\\Users\\Adam", win32),
+    "~/project",
+  );
+  assert.equal(
+    formatDirectory("C:\\Users\\Adam", "C:\\Users\\Adam", win32),
+    "~",
+  );
+  assert.equal(
+    formatDirectory("C:\\Users\\Adam2\\project", "C:\\Users\\Adam", win32),
+    "C:\\Users\\Adam2\\project",
+  );
+  assert.equal(
+    formatDirectory("/Users/adam/project", "/Users/adam"),
+    "~/project",
+  );
+});
+
+test("formatDirectory respects POSIX backslashes as filename characters", () => {
+  assert.equal(
+    formatDirectory("/Users/adam\\project", "/Users/adam", posix),
+    "/Users/adam\\project",
+  );
+});
+
+test("formatDirectory compares Windows paths case-insensitively", () => {
+  assert.equal(
+    formatDirectory("c:\\users\\adam\\project", "C:\\Users\\Adam", win32),
+    "~/project",
+  );
+});
+
 test("default one-line layout leads with model context and ends with cwd", () => {
   const lines = renderFooter({
     cwd: "/Users/me/project",