diff --git a/packages/server/src/server/paseo-worktree-service.test.ts b/packages/server/src/server/paseo-worktree-service.test.ts
index 0ac2dcb9f..134b7a2de 100644
--- a/packages/server/src/server/paseo-worktree-service.test.ts
+++ b/packages/server/src/server/paseo-worktree-service.test.ts
@@ -73,6 +73,50 @@ test("creates a worktree and registers it in the source workspace project withou
   expect(events).toEqual([`workspace:${result.workspace.workspaceId}`]);
 });
 
+test("refreshes a source project that became Git while creating a worktree", async () => {
+  const { repoDir, tempDir } = createGitRepo();
+  cleanupPaths.push(tempDir);
+  const deps = createDeps();
+  const sourceProject = {
+    ...createPersistedProjectRecordForTest({
+      projectId: "prj_existing-source",
+      rootPath: repoDir,
+      displayName: "Repository",
+    }),
+    kind: "non_git" as const,
+    customName: "My project",
+  };
+  const sourceWorkspace = createPersistedWorkspaceRecordForTest({
+    workspaceId: "ws-main-checkout",
+    projectId: sourceProject.projectId,
+    cwd: repoDir,
+    kind: "local_checkout",
+    displayName: "main",
+  });
+  deps.projects.set(sourceProject.projectId, sourceProject);
+  deps.workspaces.set(sourceWorkspace.workspaceId, sourceWorkspace);
+
+  const result = await createPaseoWorktree(
+    {
+      cwd: repoDir,
+      worktreeSlug: "project-became-git",
+      runSetup: false,
+      paseoHome: path.join(tempDir, ".paseo"),
+    },
+    deps,
+  );
+
+  expect(result.workspace.projectId).toBe(sourceProject.projectId);
+  expect(deps.projects.get(sourceProject.projectId)).toMatchObject({
+    projectId: sourceProject.projectId,
+    rootPath: repoDir,
+    kind: "git",
+    displayName: "Repository",
+    customName: "My project",
+    archivedAt: null,
+  });
+});
+
 test("repairs a legacy source workspace whose project record is missing", async () => {
   const { repoDir, tempDir } = createGitRepo();
   cleanupPaths.push(tempDir);
@@ -727,7 +771,7 @@ test.skipIf(isPlatform("win32"))(
 );
 
 interface TestDeps extends CreatePaseoWorktreeDeps {
-  projectRegistry: Pick<ProjectRegistry, "get" | "getOrCreateActiveByRoot">;
+  projectRegistry: Pick<ProjectRegistry, "get" | "getOrCreateActiveByRoot" | "upsert">;
   projects: Map<string, PersistedProjectRecord>;
   workspaces: Map<string, PersistedWorkspaceRecord>;
 }
@@ -760,6 +804,9 @@ function createDeps(options?: {
         projects.set(project.projectId, project);
         return project;
       },
+      upsert: async (project) => {
+        projects.set(project.projectId, project);
+      },
     },
     workspaceRegistry: {
       get: async (workspaceId) => workspaces.get(workspaceId) ?? null,
@@ -841,15 +888,30 @@ function createWorkspaceGitServiceStub(): WorkspaceGitService {
       unsubscribe: () => {},
     }),
     peekSnapshot: (cwd) => createWorkspaceGitSnapshot(cwd),
-    getCheckout: async (cwd) => ({
-      cwd,
-      isGit: false,
-      currentBranch: null,
-      remoteUrl: null,
-      worktreeRoot: null,
-      isPaseoOwnedWorktree: false,
-      mainRepoRoot: null,
-    }),
+    getCheckout: async (cwd) => {
+      try {
+        const snapshot = createWorkspaceGitSnapshot(cwd);
+        return {
+          cwd,
+          isGit: snapshot.git.isGit,
+          currentBranch: snapshot.git.currentBranch,
+          remoteUrl: snapshot.git.remoteUrl,
+          worktreeRoot: snapshot.git.repoRoot,
+          isPaseoOwnedWorktree: snapshot.git.isPaseoOwnedWorktree,
+          mainRepoRoot: snapshot.git.mainRepoRoot,
+        };
+      } catch {
+        return {
+          cwd,
+          isGit: false,
+          currentBranch: null,
+          remoteUrl: null,
+          worktreeRoot: null,
+          isPaseoOwnedWorktree: false,
+          mainRepoRoot: null,
+        };
+      }
+    },
     getSnapshot: async (cwd) => createWorkspaceGitSnapshot(cwd),
     resolveRepoRoot: async (cwd) => {
       try {
diff --git a/packages/server/src/server/paseo-worktree-service.ts b/packages/server/src/server/paseo-worktree-service.ts
index fd9488718..fa93cdde4 100644
--- a/packages/server/src/server/paseo-worktree-service.ts
+++ b/packages/server/src/server/paseo-worktree-service.ts
@@ -1,6 +1,7 @@
 import type { WorkspaceGitService } from "./workspace-git-service.js";
 import { resolve } from "node:path";
 import {
+  type PersistedProjectRecord,
   type PersistedWorkspaceRecord,
   type ProjectRegistry,
   type WorkspaceRegistry,
@@ -51,7 +52,7 @@ export interface AttemptFirstAgentBranchAutoNameResult {
 }
 
 export interface CreatePaseoWorktreeDeps extends CreateWorktreeCoreDeps {
-  projectRegistry: Pick<ProjectRegistry, "get" | "getOrCreateActiveByRoot">;
+  projectRegistry: Pick<ProjectRegistry, "get" | "getOrCreateActiveByRoot" | "upsert">;
   workspaceRegistry: Pick<WorkspaceRegistry, "get" | "list" | "upsert">;
   workspaceGitService: WorkspaceGitService;
 }
@@ -258,14 +259,17 @@ async function resolveSourceProjectIdForWorktree(options: {
   inputCwd: string;
   projectId?: string;
   repoRoot: string;
-  deps: Pick<CreatePaseoWorktreeDeps, "projectRegistry" | "workspaceRegistry">;
+  deps: Pick<
+    CreatePaseoWorktreeDeps,
+    "projectRegistry" | "workspaceRegistry" | "workspaceGitService"
+  >;
 }): Promise<string> {
   if (options.projectId) {
     const project = await options.deps.projectRegistry.get(options.projectId);
     if (!project || project.archivedAt) {
       throw new Error(`Project not found for worktree: ${options.projectId}`);
     }
-    return project.projectId;
+    return (await refreshProjectKind(project, options.deps)).projectId;
   }
 
   const sourceWorkspace = await findWorkspaceForSource({
@@ -276,7 +280,7 @@ async function resolveSourceProjectIdForWorktree(options: {
 
   if (sourceWorkspace) {
     const sourceProject = await options.deps.projectRegistry.get(sourceWorkspace.projectId);
-    if (sourceProject) return sourceProject.projectId;
+    if (sourceProject) return (await refreshProjectKind(sourceProject, options.deps)).projectId;
     // COMPAT(worktreeMissingSourceProject): added in v0.1.107, remove after 2027-01-15.
     // Orphaned legacy workspace FKs fall through to exact-root allocation.
   }
@@ -287,7 +291,20 @@ async function resolveSourceProjectIdForWorktree(options: {
     displayName: options.repoRoot.split(/[\\/]/).findLast(Boolean) ?? options.repoRoot,
     timestamp: new Date().toISOString(),
   });
-  return project.projectId;
+  return (await refreshProjectKind(project, options.deps)).projectId;
+}
+
+async function refreshProjectKind(
+  project: PersistedProjectRecord,
+  deps: Pick<CreatePaseoWorktreeDeps, "projectRegistry" | "workspaceGitService">,
+): Promise<PersistedProjectRecord> {
+  const checkout = await deps.workspaceGitService.getCheckout(project.rootPath);
+  const kind: PersistedProjectRecord["kind"] = checkout.isGit ? "git" : "non_git";
+  if (project.kind === kind) return project;
+
+  const refreshed = { ...project, kind, updatedAt: new Date().toISOString() };
+  await deps.projectRegistry.upsert(refreshed);
+  return refreshed;
 }
 
 async function findWorkspaceForSource(options: {