diff --git a/src/browser/components/AIView.tsx b/src/browser/components/AIView.tsx
index 91dfa2bb66..ae2435bde9 100644
--- a/src/browser/components/AIView.tsx
+++ b/src/browser/components/AIView.tsx
@@ -329,8 +329,8 @@ const AIViewInner: React.FC<AIViewProps> = ({
 
   const openTerminal = useOpenTerminal();
   const handleOpenTerminal = useCallback(() => {
-    openTerminal(workspaceId);
-  }, [workspaceId, openTerminal]);
+    openTerminal(workspaceId, runtimeConfig);
+  }, [workspaceId, openTerminal, runtimeConfig]);
 
   // Auto-scroll when messages or todos update (during streaming)
   useEffect(() => {
diff --git a/src/browser/components/WorkspaceHeader.tsx b/src/browser/components/WorkspaceHeader.tsx
index c93d487956..adfaf64dfa 100644
--- a/src/browser/components/WorkspaceHeader.tsx
+++ b/src/browser/components/WorkspaceHeader.tsx
@@ -29,8 +29,8 @@ export const WorkspaceHeader: React.FC<WorkspaceHeaderProps> = ({
   const { canInterrupt } = useWorkspaceSidebarState(workspaceId);
   const { startSequence: startTutorial, isSequenceCompleted } = useTutorial();
   const handleOpenTerminal = useCallback(() => {
-    openTerminal(workspaceId);
-  }, [workspaceId, openTerminal]);
+    openTerminal(workspaceId, runtimeConfig);
+  }, [workspaceId, openTerminal, runtimeConfig]);
 
   // Start workspace tutorial on first entry (only if settings tutorial is done)
   useEffect(() => {
diff --git a/src/browser/hooks/useOpenTerminal.ts b/src/browser/hooks/useOpenTerminal.ts
index 403a4fb887..39d6f4a8eb 100644
--- a/src/browser/hooks/useOpenTerminal.ts
+++ b/src/browser/hooks/useOpenTerminal.ts
@@ -1,40 +1,50 @@
 import { useCallback } from "react";
 import { useAPI } from "@/browser/contexts/API";
+import type { RuntimeConfig } from "@/common/types/runtime";
+import { isSSHRuntime } from "@/common/types/runtime";
 
 /**
  * Hook to open a terminal window for a workspace.
  * Handles the difference between Desktop (Electron) and Browser (Web) environments.
  *
- * In Electron (desktop) mode: Opens the user's native terminal emulator
+ * For SSH workspaces: Always opens a web-based xterm.js terminal that connects
+ * through the backend PTY service (works in both browser and Electron modes).
+ *
+ * For local workspaces in Electron: Opens the user's native terminal emulator
  * (Ghostty, Terminal.app, etc.) with the working directory set to the workspace path.
  *
- * In browser mode: Opens a web-based xterm.js terminal in a popup window.
+ * For local workspaces in browser: Opens a web-based xterm.js terminal in a popup window.
  */
 export function useOpenTerminal() {
   const { api } = useAPI();
 
   return useCallback(
-    (workspaceId: string) => {
+    (workspaceId: string, runtimeConfig?: RuntimeConfig) => {
       // Check if running in browser mode
       // window.api is only available in Electron (set by preload.ts)
       // If window.api exists, we're in Electron; if not, we're in browser mode
       const isBrowser = !window.api;
+      const isSSH = isSSHRuntime(runtimeConfig);
 
-      if (isBrowser) {
-        // In browser mode, we must open the window client-side using window.open
-        // The backend cannot open a window on the user's client
-        const url = `/terminal.html?workspaceId=${encodeURIComponent(workspaceId)}`;
-        window.open(
-          url,
-          `terminal-${workspaceId}-${Date.now()}`,
-          "width=1000,height=600,popup=yes"
-        );
+      // SSH workspaces always use web terminal (in browser popup or Electron window)
+      // because the PTY service handles the SSH connection to the remote host
+      if (isBrowser || isSSH) {
+        if (isBrowser) {
+          // In browser mode, we must open the window client-side using window.open
+          // The backend cannot open a window on the user's client
+          const url = `/terminal.html?workspaceId=${encodeURIComponent(workspaceId)}`;
+          window.open(
+            url,
+            `terminal-${workspaceId}-${Date.now()}`,
+            "width=1000,height=600,popup=yes"
+          );
+        }
 
-        // We also notify the backend, though in browser mode the backend handler currently does nothing.
-        // This is kept for consistency and in case the backend logic changes to track open windows.
+        // Open web terminal window (Electron pops up BrowserWindow, browser already opened above)
+        // For SSH: this is the only way to get a terminal that works through PTY service
         void api?.terminal.openWindow({ workspaceId });
       } else {
-        // In Electron (desktop) mode, open the native system terminal
+        // In Electron (desktop) mode with local workspace, open the native system terminal
         // This spawns the user's preferred terminal emulator (Ghostty, Terminal.app, etc.)
         void api?.terminal.openNative({ workspaceId });
       }
diff --git a/src/browser/utils/commands/sources.ts b/src/browser/utils/commands/sources.ts
index 01791e58b6..70e4dc4544 100644
--- a/src/browser/utils/commands/sources.ts
+++ b/src/browser/utils/commands/sources.ts
@@ -9,6 +9,7 @@ import { CommandIds } from "@/browser/utils/commandIds";
 import type { ProjectConfig } from "@/node/config";
 import type { FrontendWorkspaceMetadata } from "@/common/types/workspace";
 import type { BranchListResult } from "@/common/orpc/types";
+import type { RuntimeConfig } from "@/common/types/runtime";
 
 export interface BuildSourcesParams {
   api: APIClient | null;
@@ -44,7 +45,7 @@ export interface BuildSourcesParams {
   onRemoveProject: (path: string) => void;
   onToggleSidebar: () => void;
   onNavigateWorkspace: (dir: "next" | "prev") => void;
-  onOpenWorkspaceInTerminal: (workspaceId: string) => void;
+  onOpenWorkspaceInTerminal: (workspaceId: string, runtimeConfig?: RuntimeConfig) => void;
   onToggleTheme: () => void;
   onSetTheme: (theme: ThemeMode) => void;
   onOpenSettings?: (section?: string) => void;
@@ -130,6 +131,7 @@ export function buildCoreSources(p: BuildSourcesParams): Array<() => CommandActi
     // Remove current workspace (rename action intentionally omitted until we add a proper modal)
     if (selected?.namedWorkspacePath) {
       const workspaceDisplayName = `${selected.projectName}/${selected.namedWorkspacePath.split("/").pop() ?? selected.namedWorkspacePath}`;
+      const selectedMeta = p.workspaceMetadata.get(selected.workspaceId);
       list.push({
         id: CommandIds.workspaceOpenTerminalCurrent(),
         title: "Open Current Workspace in Terminal",
@@ -137,7 +139,7 @@ export function buildCoreSources(p: BuildSourcesParams): Array<() => CommandActi
         section: section.workspaces,
         shortcutHint: formatKeybind(KEYBINDS.OPEN_TERMINAL),
         run: () => {
-          p.onOpenWorkspaceInTerminal(selected.workspaceId);
+          p.onOpenWorkspaceInTerminal(selected.workspaceId, selectedMeta?.runtimeConfig);
         },
       });
       list.push({
@@ -204,7 +206,8 @@ export function buildCoreSources(p: BuildSourcesParams): Array<() => CommandActi
             },
           ],
           onSubmit: (vals) => {
-            p.onOpenWorkspaceInTerminal(vals.workspaceId);
+            const meta = p.workspaceMetadata.get(vals.workspaceId);
+            p.onOpenWorkspaceInTerminal(vals.workspaceId, meta?.runtimeConfig);
           },
         },
       });