diff --git a/packages/cli/src/commands/__tests__/settings.test.ts b/packages/cli/src/commands/__tests__/settings.test.ts
index db4268b0c..086496bf4 100644
--- a/packages/cli/src/commands/__tests__/settings.test.ts
+++ b/packages/cli/src/commands/__tests__/settings.test.ts
@@ -62,6 +62,7 @@ describe("settings commands", () => {
     expect(parseValue("ntfyEnabled", "yes")).toBe(true);
     expect(parseValue("maxConcurrent", "4")).toBe(4);
     expect(parseValue("worktreeNaming", "task-id")).toBe("task-id");
+    expect(parseValue("worktreesDir", "~/.fn-worktrees/{repo}")).toBe("~/.fn-worktrees/{repo}");
     expect(parseValue("defaultNodeId", "node-abc-123")).toBe("node-abc-123");
     expect(parseValue("unavailableNodePolicy", "block")).toBe("block");
     expect(parseValue("unavailableNodePolicy", "fallback-local")).toBe("fallback-local");
@@ -164,8 +165,23 @@ describe("settings commands", () => {
     expect(updateSettings).toHaveBeenCalledWith({ runStepsInNewSessions: true });
   });
 
-  it("runSettingsSet with project updates maxParallelSteps", async () => {
-    const updateSettings = vi.fn().mockResolvedValue(makeSettings({ maxParallelSteps: 3 }));
+  it("runSettingsSet with project updates worktreesDir", async () => {
+    const updateSettings = vi.fn().mockResolvedValue(makeSettings({ worktreesDir: "~/.fn-worktrees/{repo}" }));
+    const getSettings = vi.fn().mockResolvedValue(makeSettings({ worktreesDir: "~/.fn-worktrees/{repo}" }));
+    vi.mocked(resolveProject).mockResolvedValue({
+      projectId: "proj-1",
+      projectName: "demo-project",
+      projectPath: "/projects/demo",
+      isRegistered: true,
+      store: { updateSettings, getSettings } as any,
+    });
+
+    await runSettingsSet("worktreesDir", "~/.fn-worktrees/{repo}", "demo-project");
+
+    expect(updateSettings).toHaveBeenCalledWith({ worktreesDir: "~/.fn-worktrees/{repo}" });
+  });
+
+  it("runSettingsSet with project updates maxParallelSteps", async () => {    const updateSettings = vi.fn().mockResolvedValue(makeSettings({ maxParallelSteps: 3 }));
     const getSettings = vi.fn().mockResolvedValue(makeSettings({ maxParallelSteps: 3 }));
     vi.mocked(resolveProject).mockResolvedValue({
       projectId: "proj-1",
diff --git a/packages/cli/src/commands/settings.ts b/packages/cli/src/commands/settings.ts
index eab2b96d8..178d7d24f 100644
--- a/packages/cli/src/commands/settings.ts
+++ b/packages/cli/src/commands/settings.ts
@@ -6,6 +6,7 @@ export const VALID_SETTINGS = [
   "maxConcurrent",
   "maxWorktrees",
   "worktreeNaming",
+  "worktreesDir",
   "taskPrefix",
   "ntfyTopic",
   "autoResolveConflicts",
@@ -24,6 +25,7 @@ const PROJECT_ONLY_SETTINGS = [
   "maxConcurrent",
   "maxWorktrees",
   "worktreeNaming",
+  "worktreesDir",
   "taskPrefix",
   "autoResolveConflicts",
   "smartConflictResolution",
@@ -52,7 +54,7 @@ const ENUM_SETTINGS: Record<string, readonly string[]> = {
   unavailableNodePolicy: ["block", "fallback-local"],
 };
 
-const STRING_SETTINGS: readonly string[] = ["taskPrefix", "ntfyTopic", "defaultModel", "defaultNodeId"];
+const STRING_SETTINGS: readonly string[] = ["taskPrefix", "ntfyTopic", "defaultModel", "defaultNodeId", "worktreesDir"];
 
 // Validation ranges for numeric settings
 const NUMBER_RANGES: Record<string, { min: number; max: number }> = {
@@ -202,7 +204,7 @@ export async function runSettingsShow(projectName?: string): Promise<void> {
     },
     {
       title: "Worktrees",
-      keys: ["worktreeNaming", "recycleWorktrees"],
+      keys: ["worktreeNaming", "worktreesDir", "recycleWorktrees"],
     },
     {
       title: "Tasks",
diff --git a/packages/dashboard/app/components/SettingsModal.tsx b/packages/dashboard/app/components/SettingsModal.tsx
index 78b34c614..d68b82f57 100644
--- a/packages/dashboard/app/components/SettingsModal.tsx
+++ b/packages/dashboard/app/components/SettingsModal.tsx
@@ -410,6 +410,7 @@ export function SettingsModal({
     recycleWorktrees: false,
     executorAllowSiblingBranchRename: false,
     worktreeNaming: "random",
+    worktreesDir: "",
     includeTaskIdInCommit: true,
     worktreeInitCommand: "",
     ntfyEnabled: false,
@@ -1670,6 +1671,7 @@ export function SettingsModal({
       const payload = {
         ...form,
         worktreeInitCommand: form.worktreeInitCommand?.trim() || undefined,
+        worktreesDir: form.worktreesDir?.trim() || undefined,
         taskPrefix: form.taskPrefix?.trim() || undefined,
         githubTrackingDefaultRepo: form.githubTrackingDefaultRepo?.trim() || undefined,
         githubAuthToken: form.githubAuthToken?.trim() || undefined,
@@ -3733,6 +3735,19 @@ export function SettingsModal({
                   : "How to name fresh worktree directories. Only applies when recycling is off."}
               </small>
             </div>
+            <div className="form-group">
+              <label htmlFor="worktreesDir">Worktrees Directory</label>
+              <input
+                id="worktreesDir"
+                type="text"
+                placeholder="~/.fn-worktrees/{repo} or .worktrees"
+                value={form.worktreesDir || ""}
+                onChange={(e) =>
+                  setForm((f) => ({ ...f, worktreesDir: e.target.value }))
+                }
+              />
+              <small>Optional. Supports <code>~</code> and <code>{"{repo}"}</code>. Defaults to <code>&lt;projectRoot&gt;/.worktrees</code> when unset and only affects newly-created worktrees.</small>
+            </div>
             <div className="form-group">
               <label htmlFor="worktreeRebaseBeforeMerge" className="checkbox-label">
                 <input
diff --git a/packages/dashboard/app/components/__tests__/SettingsModal.test.tsx b/packages/dashboard/app/components/__tests__/SettingsModal.test.tsx
index fbe0de068..f38d8a1db 100644
--- a/packages/dashboard/app/components/__tests__/SettingsModal.test.tsx
+++ b/packages/dashboard/app/components/__tests__/SettingsModal.test.tsx
@@ -188,6 +188,7 @@ const defaultSettings = {
   ephemeralAgentsEnabled: true,
   executorAllowSiblingBranchRename: false,
   worktreeNaming: "random",
+  worktreesDir: "",
   includeTaskIdInCommit: true,
   worktreeInitCommand: "",
   ntfyEnabled: false,
@@ -2004,10 +2005,24 @@ describe("SettingsModal", () => {
       expect(input.value).toBe("3");
     });
 
-    it("allows clearing maxWorktrees without leaving a stuck zero", async () => {
+    it("includes worktreesDir in save payload", async () => {
       renderModal();
       await waitFor(() => expect(mockFetchSettings).toHaveBeenCalled());
 
+      fireEvent.click(screen.getByText("Worktrees"));
+      const input = screen.getByLabelText("Worktrees Directory") as HTMLInputElement;
+      fireEvent.change(input, { target: { value: "~/.fn-worktrees/{repo}" } });
+
+      await userEvent.click(screen.getByRole("button", { name: "Save" }));
+
+      await waitFor(() => expect(mockUpdateSettings).toHaveBeenCalled());
+      const payload = mockUpdateSettings.mock.calls[0][0] as Record<string, unknown>;
+      expect(payload.worktreesDir).toBe("~/.fn-worktrees/{repo}");
+    });
+
+    it("allows clearing maxWorktrees without leaving a stuck zero", async () => {      renderModal();
+      await waitFor(() => expect(mockFetchSettings).toHaveBeenCalled());
+
       // Open Worktrees section
       fireEvent.click(screen.getByText("Worktrees"));