diff --git a/crates/project_panel/src/project_panel.rs b/crates/project_panel/src/project_panel.rs
index 473d590356..9c23e7ff8c 100644
--- a/crates/project_panel/src/project_panel.rs
+++ b/crates/project_panel/src/project_panel.rs
@@ -2184,9 +2184,14 @@ impl ProjectPanel {
                 });
                 let file_name = entry.path.file_name().unwrap_or_default().to_string();
                 let selection = selection.unwrap_or_else(|| {
-                    let file_stem = entry.path.file_stem().map(|s| s.to_string());
-                    let selection_end =
-                        file_stem.map_or(file_name.len(), |file_stem| file_stem.len());
+                    // Folders have no extension, so select the whole name. Only
+                    // files keep their extension unselected for quick renames.
+                    let selection_end = if entry.is_dir() {
+                        file_name.len()
+                    } else {
+                        let file_stem = entry.path.file_stem();
+                        file_stem.map_or(file_name.len(), |file_stem| file_stem.len())
+                    };
                     0..selection_end
                 });
                 self.filename_editor.update(cx, |editor, cx| {
diff --git a/crates/project_panel/src/project_panel_tests.rs b/crates/project_panel/src/project_panel_tests.rs
index 8a745af785..a228749dc1 100644
--- a/crates/project_panel/src/project_panel_tests.rs
+++ b/crates/project_panel/src/project_panel_tests.rs
@@ -1165,6 +1165,71 @@ async fn test_editing_files(cx: &mut gpui::TestAppContext) {
     );
 }
 
+#[gpui::test]
+async fn test_rename_folder_with_dot_selects_whole_name(cx: &mut gpui::TestAppContext) {
+    init_test(cx);
+
+    let fs = FakeFs::new(cx.executor());
+    fs.insert_tree(
+        "/root1",
+        json!({
+            "my.folder": {},
+            "archive.tar.gz": "",
+        }),
+    )
+    .await;
+
+    let project = Project::test(fs.clone(), ["/root1".as_ref()], cx).await;
+    let window = cx.add_window(|window, cx| MultiWorkspace::test_new(project.clone(), window, cx));
+    let workspace = window
+        .read_with(cx, |mw, _| mw.workspace().clone())
+        .unwrap();
+    let cx = &mut VisualTestContext::from_window(window.into(), cx);
+    let panel = workspace.update_in(cx, |workspace, window, cx| {
+        let panel = ProjectPanel::new(workspace, window, cx);
+        workspace.add_panel(panel.clone(), window, cx);
+        panel
+    });
+    cx.run_until_parked();
+
+    // Renaming a folder whose name contains a dot should pre-select the whole
+    // name. The dot belongs to the directory name; it is not a file extension.
+    select_path(&panel, "root1/my.folder", cx);
+    panel.update_in(cx, |panel, window, cx| panel.rename(&Rename, window, cx));
+    panel.update_in(cx, |panel, window, cx| {
+        panel.filename_editor.update(cx, |editor, cx| {
+            let selections = editor
+                .selections
+                .all::<MultiBufferOffset>(&editor.display_snapshot(cx));
+            assert_eq!(selections.len(), 1);
+            assert_eq!(selections[0].start, MultiBufferOffset(0));
+            assert_eq!(
+                selections[0].end,
+                MultiBufferOffset("my.folder".len()),
+                "Renaming a folder should select the whole name, including dots"
+            );
+        });
+        panel.cancel(&Cancel, window, cx);
+    });
+    cx.run_until_parked();
+
+    // Files keep the existing behavior: the last extension stays unselected.
+    select_path(&panel, "root1/archive.tar.gz", cx);
+    panel.update_in(cx, |panel, window, cx| panel.rename(&Rename, window, cx));
+    panel.update_in(cx, |panel, _, cx| {
+        panel.filename_editor.update(cx, |editor, cx| {
+            let selections = editor
+                .selections
+                .all::<MultiBufferOffset>(&editor.display_snapshot(cx));
+            assert_eq!(
+                selections[0].end,
+                MultiBufferOffset("archive.tar".len()),
+                "Renaming a file should keep the last extension unselected"
+            );
+        });
+    });
+}
+
 #[gpui::test(iterations = 10)]
 async fn test_adding_directories_via_file(cx: &mut gpui::TestAppContext) {
     init_test(cx);