diff --git a/README.md b/README.md
index 1dbdf8e..c6496ec 100644
--- a/README.md
+++ b/README.md
@@ -283,6 +283,38 @@ launcher metadata. AgentWorkforce records
 Use `--no-launch-metadata` or `AGENTWORKFORCE_LAUNCH_METADATA=0` to skip
 metadata writing and session-log refresh for that launch.
 
+### Persona sources
+
+Three places a persona can live, surfaced as `SOURCE` in `agentworkforce list`,
+`sources list`, and the interactive picker:
+
+- **`built-in`** — bundled with `@agentworkforce/cli`. Reserved for personas
+  that are directly about Agent Workforce itself, e.g. `persona-maker` and
+  `persona-improver`. Every user has these without installing anything. This
+  is intentionally a small set.
+- **`personal`** — `~/.agentworkforce/workforce/personas/`. For things one
+  user wants on every repo on their machine, but doesn't want to commit.
+- **`cwd`** — `<cwd>/.agentworkforce/workforce/personas/`. Personas codified
+  in the working tree so the whole team gets them on checkout. Two flavors
+  end up here:
+  - **library personas you've copied in** via `agentworkforce install <pkg>` —
+    generalized personas that can be extended to multiple codebases, similar
+    to the shadcn copy-and-own model. Example: the Relay team's
+    [`@agentrelay/personas`](https://github.com/AgentWorkforce/relay/tree/main/packages/personas)
+    pack.
+  - **repo-specific overrides** — hand-authored or `extends`-based personas
+    that encode rules unique to this codebase. Often extend a library persona
+    with project-specific auth, conventions, or skills. See
+    [AgentWorkforce/relay#839](https://github.com/AgentWorkforce/relay/pull/839)
+    for a worked example.
+
+Both flavors physically share the `cwd` directory; the distinction is
+conceptual — "did this persona come from a published pack, or did we write
+it for this codebase?"
+
+Cascade order is `cwd` → configured persona dirs → `personal` → `built-in`;
+higher layers may override or `extends` lower ones field-by-field.
+
 ### Persona pack installs
 
 Install a persona pack into the current project:
diff --git a/packages/cli/src/cli.ts b/packages/cli/src/cli.ts
index d685a7e..3f93ca0 100644
--- a/packages/cli/src/cli.ts
+++ b/packages/cli/src/cli.ts
@@ -67,6 +67,7 @@ import {
 import {
   buildPersonaSourceDirectories,
   defaultCwdPersonaDir,
+  formatPersonaSourceLabel,
   loadLocalPersonas,
   loadPersonaSourceConfig,
   normalizePersonaDir,
@@ -81,7 +82,9 @@ const USAGE = `Usage: agentworkforce <command> [args...]
 
 Run with no arguments inside a TTY to open an interactive persona picker —
 the top 3 most recently used personas are shown first, and typing fuzzy-
-searches across persona names and descriptions.
+searches across persona names and descriptions. Each row's SOURCE column
+is one of: built-in (bundled), cwd (./.agentworkforce/workforce/personas),
+personal (~/.agentworkforce/workforce/personas), or dir:N (configured).
 
 Commands:
   create [flags]     Opens persona-maker@best for creating a new
@@ -1694,15 +1697,21 @@ function formatSourcesTable(
     dir: 'DIR'
   };
   const cols = ['cascade', 'config', 'source', 'exists', 'dir'] as const;
+  // Display label only — the underlying `source` literal flows through to
+  // --json so tooling that pins on `'cwd'` / `'user'` / `'library'` is fine.
+  const display: readonly SourceDirRow[] = rows.map((r) => ({
+    ...r,
+    source: formatPersonaSourceLabel(r.source)
+  }));
   const widths = Object.fromEntries(
-    cols.map((c) => [c, Math.max(headers[c].length, ...rows.map((r) => r[c].length))])
+    cols.map((c) => [c, Math.max(headers[c].length, ...display.map((r) => r[c].length))])
   ) as Record<(typeof cols)[number], number>;
   const line = (row: SourceDirRow) =>
     cols.map((c) => row[c].padEnd(widths[c])).join('  ').trimEnd();
   return [
     `Config: ${configPath}`,
     `Default create target: ${defaultCreateTarget ?? '(auto)'}`,
-    [line(headers), ...rows.map(line)].join('\n'),
+    [line(headers), ...display.map(line)].join('\n'),
     ''
   ].join('\n');
 }
@@ -2032,7 +2041,9 @@ function formatPersonaTable(
   };
   const rendered: RenderRow[] = rows.map((r) => ({
     persona: r.persona,
-    source: r.source,
+    // Show the user-facing label (`built-in` / `repo` / `personal` / `dir:N`).
+    // The internal cascade key is still in `--json` output for tooling.
+    source: formatPersonaSourceLabel(r.source),
     harness: r.harness,
     model: r.model,
     rating: r.rating,
@@ -3535,13 +3546,17 @@ function applyPatchInPlace(root: Record<string, unknown>, patch: ImproverPatch):
 export function buildTuiCandidates(): TuiCandidate[] {
   const byId = new Map<string, TuiCandidate>();
   for (const spec of listBuiltInPersonas()) {
-    byId.set(spec.id, { id: spec.id, description: spec.description, source: 'library' });
+    byId.set(spec.id, {
+      id: spec.id,
+      description: spec.description,
+      source: formatPersonaSourceLabel('library')
+    });
   }
   for (const [id, spec] of local.byId.entries()) {
     byId.set(id, {
       id,
       description: spec.description,
-      source: local.sources.get(id) ?? 'library'
+      source: formatPersonaSourceLabel(local.sources.get(id) ?? 'library')
     });
   }
   return [...byId.values()].sort((a, b) => a.id.localeCompare(b.id));
diff --git a/packages/cli/src/local-personas.test.ts b/packages/cli/src/local-personas.test.ts
index 55b79ab..3883447 100644
--- a/packages/cli/src/local-personas.test.ts
+++ b/packages/cli/src/local-personas.test.ts
@@ -6,6 +6,7 @@ import { join } from 'node:path';
 
 import {
   __mergeOverrideForTests,
+  formatPersonaSourceLabel,
   loadLocalPersonas,
   loadPersonaSourceConfig,
   type LocalPersonaOverride
@@ -1030,3 +1031,13 @@ test('override leaves channel alone: inherited claudeMdContent flows through', (
   assert.equal(merged.claudeMdContent, '# keep me\n');
   assert.equal(merged.claudeMd, undefined);
 });
+
+test('formatPersonaSourceLabel maps internal cascade keys to display labels', () => {
+  assert.equal(formatPersonaSourceLabel('library'), 'built-in');
+  assert.equal(formatPersonaSourceLabel('user'), 'personal');
+  // cwd passes through — it's already a precise pointer to a real dir.
+  assert.equal(formatPersonaSourceLabel('cwd'), 'cwd');
+  // dir:N passes through unchanged so cascade position stays legible.
+  assert.equal(formatPersonaSourceLabel('dir:1'), 'dir:1');
+  assert.equal(formatPersonaSourceLabel('dir:42'), 'dir:42');
+});
diff --git a/packages/cli/src/local-personas.ts b/packages/cli/src/local-personas.ts
index 593e571..286bb63 100644
--- a/packages/cli/src/local-personas.ts
+++ b/packages/cli/src/local-personas.ts
@@ -88,6 +88,31 @@ export interface LocalPersonaOverride {
 
 export type PersonaSource = string;
 
+/**
+ * Map an internal {@link PersonaSource} cascade label to the human-readable
+ * vocabulary surfaced in `agentworkforce list`, `sources list`, and the
+ * interactive picker:
+ *
+ *   - `library`  → `built-in` — bundled with `@agentworkforce/cli`,
+ *                  available to every user without an install step.
+ *   - `user`     → `personal` — `~/.agentworkforce/workforce/personas/`,
+ *                  i.e. personas a single user keeps across all repos.
+ *   - `cwd`      → `cwd`      — `<cwd>/.agentworkforce/workforce/personas/`,
+ *                  the working-tree dir; both installed library packs and
+ *                  hand-authored team overrides live here. Kept as-is
+ *                  because it's a precise pointer to a real directory.
+ *   - `dir:N`    → `dir:N`    — extra configurable persona dirs (passed
+ *                  through unchanged so position is still legible).
+ *
+ * Internal strings are left alone so `--save-in-directory <target>` and the
+ * JSON outputs of `list` / `sources list` keep their existing values.
+ */
+export function formatPersonaSourceLabel(source: PersonaSource): string {
+  if (source === 'library') return 'built-in';
+  if (source === 'user') return 'personal';
+  return source;
+}
+
 interface SourceLayer {
   key: string;
   source: PersonaSource;