diff --git a/.changeset/fn-8568-chat-tag-creation.md b/.changeset/fn-8568-chat-tag-creation.md
new file mode 100644
index 0000000000..d3cdc53b82
--- /dev/null
+++ b/.changeset/fn-8568-chat-tag-creation.md
@@ -0,0 +1,7 @@
+---
+"@runfusion/fusion": patch
+---
+
+summary: Apply a newly created chat tag to the open conversation immediately.
+category: fix
+dev: Chat context-menu tag creation now returns and assigns the new tag ID.
diff --git a/packages/dashboard/app/components/ChatView.tsx b/packages/dashboard/app/components/ChatView.tsx
index 1c62c6b8cf..0184b980e6 100644
--- a/packages/dashboard/app/components/ChatView.tsx
+++ b/packages/dashboard/app/components/ChatView.tsx
@@ -3167,6 +3167,38 @@ export function ChatView({ projectId, addToast, floating = false, compactLayout
     ? filteredSessions.find((session) => session.id === contextMenu.sessionId) ?? (activeSession?.id === contextMenu.sessionId ? activeSession : undefined)
     : undefined;
 
+  /**
+   * FNXC:ChatTags 2026-07-24-23:19:
+   * A tag created from a session context menu must be assigned to that open session immediately,
+   * preserving its existing tags so the user never has to select the newly created tag twice.
+   */
+  const handleCreateTagForSession = useCallback(async () => {
+    const name = newTagName.trim();
+    if (!name) return;
+
+    let tag;
+    try {
+      tag = await createTag(name);
+    } catch {
+      addToast(t("chat.failedToCreateTag", "Failed to create tag"), "error");
+      return;
+    }
+
+    if (contextMenu?.sessionId) {
+      const tagIds = (contextMenuSession?.tags ?? []).map((candidate) => candidate.id);
+      if (!tagIds.includes(tag.id)) {
+        try {
+          await setSessionTags(contextMenu.sessionId, [...tagIds, tag.id]);
+        } catch {
+          addToast(t("chat.failedToUpdateTags", "Failed to update tags"), "error");
+          return;
+        }
+      }
+    }
+
+    setNewTagName("");
+  }, [addToast, contextMenu, contextMenuSession, createTag, newTagName, setSessionTags, t]);
+
   const mobileDirectSessionSwitcher = showMobileSessionSwitcher ? (
     <div className="chat-mobile-session-menu" ref={mobileSessionMenuRef}>
       <button
@@ -3684,8 +3716,8 @@ export function ChatView({ projectId, addToast, floating = false, compactLayout
               </div>;
             })}
             <div className="chat-tag-create-row">
-              <input className="input" value={newTagName} placeholder={t("chat.newTag", "New tag")} aria-label={t("chat.newTag", "New tag")} onChange={(event) => setNewTagName(event.target.value)} onKeyDown={(event) => { if (event.key === "Enter") { event.preventDefault(); void createTag(newTagName).then(() => setNewTagName("")).catch(() => addToast(t("chat.failedToCreateTag", "Failed to create tag"), "error")); } }} />
-              <button type="button" className="btn btn-sm" onClick={() => void createTag(newTagName).then(() => setNewTagName("")).catch(() => addToast(t("chat.failedToCreateTag", "Failed to create tag"), "error"))}>{t("chat.addTag", "Add")}</button>
+              <input className="input" value={newTagName} placeholder={t("chat.newTag", "New tag")} aria-label={t("chat.newTag", "New tag")} onChange={(event) => setNewTagName(event.target.value)} onKeyDown={(event) => { if (event.key === "Enter") { event.preventDefault(); void handleCreateTagForSession(); } }} />
+              <button type="button" className="btn btn-sm" onClick={() => void handleCreateTagForSession()}>{t("chat.addTag", "Add")}</button>
             </div>
           </div>
           <button
diff --git a/packages/dashboard/app/components/__tests__/ChatView.core-interactions.test.tsx b/packages/dashboard/app/components/__tests__/ChatView.core-interactions.test.tsx
index 63add30da7..d8bf5ad0a8 100644
--- a/packages/dashboard/app/components/__tests__/ChatView.core-interactions.test.tsx
+++ b/packages/dashboard/app/components/__tests__/ChatView.core-interactions.test.tsx
@@ -1180,6 +1180,96 @@ describe("ChatView core interactions", () => {
     expect(screen.getByTestId("chat-context-delete")).toBeInTheDocument();
   });
 
+  function setupStatefulTagCreationMock(initialTags: Array<{ id: string; projectId: string; name: string; createdAt: string; updatedAt: string }> = []) {
+    const createdTag = { id: "tag-new", projectId: "proj-123", name: "New tag", createdAt: "2026-07-24T00:00:00.000Z", updatedAt: "2026-07-24T00:00:00.000Z" };
+    const createTag = vi.fn();
+    const setSessionTags = vi.fn();
+
+    mockUseChat.mockImplementation(() => {
+      const [tags, setTags] = useState(initialTags);
+      const [sessions, setSessions] = useState<ChatSessionInfo[]>([{ id: "session-001", agentId: "agent-001", status: "active", title: "Test Chat", tags: initialTags, createdAt: createdTag.createdAt, updatedAt: createdTag.updatedAt }]);
+      return {
+        ...defaultChatState,
+        tags,
+        sessions,
+        filteredSessions: sessions,
+        createTag: async (name) => {
+          createTag(name);
+          setTags((previous) => [...previous, createdTag]);
+          return createdTag;
+        },
+        setSessionTags: async (sessionId, tagIds) => {
+          setSessionTags(sessionId, tagIds);
+          setSessions((previous) => previous.map((session) => session.id === sessionId ? { ...session, tags: [...tags, createdTag].filter((tag) => tagIds.includes(tag.id)) } : session));
+        },
+      } as UseChatReturn;
+    });
+
+    return { createTag, createdTag, setSessionTags };
+  }
+
+  it("assigns a newly created tag from the context-menu Enter path", async () => {
+    const { createTag, createdTag, setSessionTags } = setupStatefulTagCreationMock();
+    await renderWithAct(<ChatView projectId="proj-123" addToast={vi.fn()} />);
+    await userEvent.pointer({ target: screen.getByTestId("chat-session-session-001"), keys: "[MouseRight]" });
+
+    const input = screen.getByLabelText("New tag");
+    await userEvent.type(input, "  New tag  ");
+    fireEvent.keyDown(input, { key: "Enter" });
+
+    await waitFor(() => expect(createTag).toHaveBeenCalledWith("New tag"));
+    await waitFor(() => expect(setSessionTags).toHaveBeenCalledWith("session-001", [createdTag.id]));
+    expect(screen.getByTestId(`chat-context-tag-${createdTag.id}`)).toHaveAttribute("aria-checked", "true");
+    expect(screen.getByTestId("chat-session-tags-session-001")).toHaveTextContent(createdTag.name);
+  });
+
+  it("assigns a newly created tag from the context-menu Add button", async () => {
+    const { createdTag, setSessionTags } = setupStatefulTagCreationMock();
+    await renderWithAct(<ChatView projectId="proj-123" addToast={vi.fn()} />);
+    await userEvent.pointer({ target: screen.getByTestId("chat-session-session-001"), keys: "[MouseRight]" });
+
+    await userEvent.type(screen.getByLabelText("New tag"), "New tag");
+    await userEvent.click(screen.getByRole("button", { name: "Add" }));
+
+    await waitFor(() => expect(setSessionTags).toHaveBeenCalledWith("session-001", [createdTag.id]));
+    expect(screen.getByTestId(`chat-context-tag-${createdTag.id}`)).toHaveAttribute("aria-checked", "true");
+  });
+
+  it("preserves existing tags when creating a context-menu tag", async () => {
+    const existingTag = { id: "tag-existing", projectId: "proj-123", name: "Existing", createdAt: "2026-07-24T00:00:00.000Z", updatedAt: "2026-07-24T00:00:00.000Z" };
+    const { createdTag, setSessionTags } = setupStatefulTagCreationMock([existingTag]);
+    await renderWithAct(<ChatView projectId="proj-123" addToast={vi.fn()} />);
+    await userEvent.pointer({ target: screen.getByTestId("chat-session-session-001"), keys: "[MouseRight]" });
+
+    await userEvent.type(screen.getByLabelText("New tag"), "New tag");
+    await userEvent.click(screen.getByRole("button", { name: "Add" }));
+
+    await waitFor(() => expect(setSessionTags).toHaveBeenCalledWith("session-001", [existingTag.id, createdTag.id]));
+    expect(screen.getByTestId("chat-session-tags-session-001")).toHaveTextContent("Existing");
+    expect(screen.getByTestId("chat-session-tags-session-001")).toHaveTextContent(createdTag.name);
+  });
+
+  it("does not create or assign a blank context-menu tag", async () => {
+    const createTag = vi.fn();
+    const setSessionTags = vi.fn();
+    setupMockChat({
+      sessions: [{ id: "session-001", agentId: "agent-001", status: "active", title: "Test Chat", createdAt: "2026-07-24T00:00:00.000Z", updatedAt: "2026-07-24T00:00:00.000Z" }],
+      filteredSessions: [{ id: "session-001", agentId: "agent-001", status: "active", title: "Test Chat", createdAt: "2026-07-24T00:00:00.000Z", updatedAt: "2026-07-24T00:00:00.000Z" }],
+      createTag,
+      setSessionTags,
+    });
+    await renderWithAct(<ChatView projectId="proj-123" addToast={vi.fn()} />);
+    await userEvent.pointer({ target: screen.getByTestId("chat-session-session-001"), keys: "[MouseRight]" });
+
+    const input = screen.getByLabelText("New tag");
+    await userEvent.type(input, "   ");
+    fireEvent.keyDown(input, { key: "Enter" });
+    await userEvent.click(screen.getByRole("button", { name: "Add" }));
+
+    expect(createTag).not.toHaveBeenCalled();
+    expect(setSessionTags).not.toHaveBeenCalled();
+  });
+
   it("renders tag rename and deletion controls from the conversation menu", async () => {
     const renameTag = vi.fn().mockResolvedValue(undefined);
     const deleteTag = vi.fn().mockResolvedValue(undefined);
diff --git a/packages/dashboard/app/hooks/useChat.ts b/packages/dashboard/app/hooks/useChat.ts
index 35d590578b..2a331144ec 100644
--- a/packages/dashboard/app/hooks/useChat.ts
+++ b/packages/dashboard/app/hooks/useChat.ts
@@ -151,7 +151,7 @@ export interface UseChatReturn {
    */
   setSessionThinkingLevel: (id: string, level: string) => Promise<void>;
   deleteSession: (id: string) => Promise<void>;
-  createTag: (name: string) => Promise<void>;
+  createTag: (name: string) => Promise<ChatTag>;
   renameTag: (id: string, name: string) => Promise<void>;
   deleteTag: (id: string) => Promise<void>;
   setSessionTags: (sessionId: string, tagIds: string[]) => Promise<void>;
@@ -1705,7 +1705,7 @@ export function useChat(
   }, [trimmedSearchQuery, projectId]);
 
   /* FNXC:ChatTags 2026-08-05-10:55: optimistic assignment keeps shared Chat hosts in sync while a failed API mutation rolls back exactly the prior session snapshot. */
-  const createTag = useCallback(async (name: string) => { const response = await apiCreateChatTag(name, projectId); setTags((previous) => [...previous, response.tag].sort((a, b) => a.name.localeCompare(b.name))); }, [projectId]);
+  const createTag = useCallback(async (name: string): Promise<ChatTag> => { const response = await apiCreateChatTag(name, projectId); setTags((previous) => [...previous, response.tag].sort((a, b) => a.name.localeCompare(b.name))); return response.tag; }, [projectId]);
   const renameTag = useCallback(async (id: string, name: string) => { const response = await apiRenameChatTag(id, name, projectId); setTags((previous) => previous.map((tag) => tag.id === id ? response.tag : tag).sort((a, b) => a.name.localeCompare(b.name))); setSessions((previous) => previous.map((session) => ({ ...session, tags: (session.tags ?? []).map((tag) => tag.id === id ? response.tag : tag) }))); }, [projectId]);
   const deleteTag = useCallback(async (id: string) => { await apiDeleteChatTag(id, projectId); setTags((previous) => previous.filter((tag) => tag.id !== id)); setSessions((previous) => previous.map((session) => ({ ...session, tags: (session.tags ?? []).filter((tag) => tag.id !== id) }))); setSelectedTagId((selected) => selected === id ? null : selected); }, [projectId]);
   const setSessionTags = useCallback(async (sessionId: string, tagIds: string[]) => {