diff --git a/codex-rs/core-skills/src/loader_tests.rs b/codex-rs/core-skills/src/loader_tests.rs
index c80585871e..c03e8349e2 100644
--- a/codex-rs/core-skills/src/loader_tests.rs
+++ b/codex-rs/core-skills/src/loader_tests.rs
@@ -44,7 +44,7 @@ fn project_layers_for_cwd(cwd: &Path) -> Vec<ConfigLayerEntry> {
     };
     let project_root = cwd_dir
         .ancestors()
-        .find(|ancestor| ancestor.join(".git").exists())
+        .find(|ancestor| ancestor.join(".git").exists() && !is_ambient_git_marker_dir(ancestor))
         .unwrap_or(cwd_dir.as_path())
         .to_path_buf();
 
diff --git a/codex-rs/core/src/session/turn.rs b/codex-rs/core/src/session/turn.rs
index 1723904cff..53f377380b 100644
--- a/codex-rs/core/src/session/turn.rs
+++ b/codex-rs/core/src/session/turn.rs
@@ -69,6 +69,7 @@ use codex_analytics::build_track_events_context;
 use codex_async_utils::OrCancelExt;
 use codex_features::Feature;
 use codex_git_utils::get_git_repo_root;
+use codex_git_utils::get_git_repo_root_with_fs;
 use codex_hooks::HookEvent;
 use codex_hooks::HookEventAfterAgent;
 use codex_hooks::HookPayload;
@@ -100,6 +101,7 @@ use codex_protocol::protocol::WarningEvent;
 use codex_protocol::user_input::UserInput;
 use codex_tools::ToolName;
 use codex_tools::filter_request_plugin_install_discoverable_tools_for_client;
+use codex_utils_absolute_path::AbsolutePathBuf;
 use codex_utils_stream_parser::AssistantTextChunk;
 use codex_utils_stream_parser::AssistantTextStreamParser;
 use codex_utils_stream_parser::ProposedPlanSegment;
@@ -366,8 +368,13 @@ pub(crate) async fn run_turn(
     let mut stop_hook_active = false;
     // Although from the perspective of codex.rs, TurnDiffTracker has the lifecycle of a Task which contains
     // many turns, from the perspective of the user, it is a single turn.
-    let display_root = get_git_repo_root(turn_context.cwd.as_path())
-        .unwrap_or_else(|| turn_context.cwd.clone().into_path_buf());
+    let display_root = match turn_context.environments.primary_filesystem() {
+        Some(fs) => get_git_repo_root_with_fs(fs.as_ref(), &turn_context.cwd)
+            .await
+            .map(AbsolutePathBuf::into_path_buf),
+        None => get_git_repo_root(turn_context.cwd.as_path()),
+    }
+    .unwrap_or_else(|| turn_context.cwd.clone().into_path_buf());
     let turn_diff_tracker = Arc::new(tokio::sync::Mutex::new(TurnDiffTracker::with_display_root(
         display_root,
     )));
diff --git a/codex-rs/git-utils/src/info.rs b/codex-rs/git-utils/src/info.rs
index 556c06868a..81bc46b64f 100644
--- a/codex-rs/git-utils/src/info.rs
+++ b/codex-rs/git-utils/src/info.rs
@@ -38,6 +38,21 @@ pub fn get_git_repo_root(base_dir: &Path) -> Option<PathBuf> {
     find_ancestor_git_entry(base).map(|(repo_root, _)| repo_root)
 }
 
+/// Return the git repository root for `base_dir` using the provided executor
+/// filesystem. This is the remote-environment equivalent of [`get_git_repo_root`].
+pub async fn get_git_repo_root_with_fs(
+    fs: &dyn ExecutorFileSystem,
+    base_dir: &AbsolutePathBuf,
+) -> Option<AbsolutePathBuf> {
+    let base = match fs.get_metadata(base_dir, /*sandbox*/ None).await {
+        Ok(metadata) if metadata.is_directory => base_dir.clone(),
+        _ => base_dir.parent()?,
+    };
+    find_ancestor_git_entry_with_fs(fs, &base)
+        .await
+        .map(|(repo_root, _)| repo_root)
+}
+
 /// Timeout for git commands to prevent freezing on large repositories
 const GIT_COMMAND_TIMEOUT: TokioDuration = TokioDuration::from_secs(5);
 
diff --git a/codex-rs/git-utils/src/lib.rs b/codex-rs/git-utils/src/lib.rs
index bcd1a8b5c9..986a7434d2 100644
--- a/codex-rs/git-utils/src/lib.rs
+++ b/codex-rs/git-utils/src/lib.rs
@@ -31,6 +31,7 @@ pub use info::default_branch_name;
 pub use info::get_git_remote_urls;
 pub use info::get_git_remote_urls_assume_git_repo;
 pub use info::get_git_repo_root;
+pub use info::get_git_repo_root_with_fs;
 pub use info::get_has_changes;
 pub use info::get_head_commit_hash;
 pub use info::git_diff_to_remote;