diff --git a/codex-rs/app-server/src/request_processors/turn_processor.rs b/codex-rs/app-server/src/request_processors/turn_processor.rs
index da51172754..c27a3f38b3 100644
--- a/codex-rs/app-server/src/request_processors/turn_processor.rs
+++ b/codex-rs/app-server/src/request_processors/turn_processor.rs
@@ -441,11 +441,12 @@ impl TurnRequestProcessor {
             return Ok(None);
         }
 
-        let cwd = request.cwd;
-        let effective_cwd = cwd
+        let requested_cwd = request.cwd;
+        let effective_cwd = requested_cwd
             .as_ref()
             .map(|cwd| AbsolutePathBuf::resolve_path_against_base(cwd, base_snapshot.cwd.as_path()))
             .unwrap_or_else(|| base_snapshot.cwd.clone());
+        let cwd = requested_cwd.map(|_| effective_cwd.to_path_buf());
         let runtime_workspace_roots = request.runtime_workspace_roots.map(|workspace_roots| {
             resolve_runtime_workspace_roots(workspace_roots, &effective_cwd)
         });
diff --git a/codex-rs/app-server/tests/suite/v2/thread_settings.rs b/codex-rs/app-server/tests/suite/v2/thread_settings.rs
index 0a9bb6f913..961524933a 100644
--- a/codex-rs/app-server/tests/suite/v2/thread_settings.rs
+++ b/codex-rs/app-server/tests/suite/v2/thread_settings.rs
@@ -191,22 +191,23 @@ async fn thread_settings_update_applies_partial_patch_and_emits_full_state() ->
 }
 
 #[tokio::test]
-async fn thread_settings_update_retargets_permissions_when_cwd_changes() -> Result<()> {
+async fn thread_settings_update_absolutizes_relative_cwd_before_permissions() -> Result<()> {
     let server = create_mock_responses_server_repeating_assistant("Done").await;
     let codex_home = TempDir::new()?;
     write_config(&codex_home, &server.uri())?;
-    let next_cwd = TempDir::new()?;
-    let next_cwd_abs = AbsolutePathBuf::try_from(next_cwd.path())?;
 
     let mut mcp = McpProcess::new(codex_home.path()).await?;
     timeout(DEFAULT_READ_TIMEOUT, mcp.initialize()).await??;
     let ThreadStartResponse { thread, .. } = start_thread(&mut mcp).await?;
+    let next_cwd = std::path::PathBuf::from("next-cwd");
+    let next_cwd_abs = thread.cwd.join(&next_cwd);
+    std::fs::create_dir_all(next_cwd_abs.as_path())?;
 
     let response = send_thread_settings_update(
         &mut mcp,
         ThreadSettingsUpdateParams {
             thread_id: thread.id,
-            cwd: Some(next_cwd.path().to_path_buf()),
+            cwd: Some(next_cwd),
             permissions: Some(PermissionProfileSelectionParams::new(":workspace")),
             ..Default::default()
         },