diff --git a/cypress/composables/folders.ts b/cypress/composables/folders.ts
index 496e1602e9..41e94f9611 100644
--- a/cypress/composables/folders.ts
+++ b/cypress/composables/folders.ts
@@ -76,7 +76,11 @@ export function getVisibleListBreadcrumbs() {
 }
 
 export function getCurrentBreadcrumb() {
-	return getListBreadcrumbs().findChildByTestId('breadcrumbs-item-current');
+	return getListBreadcrumbs().findChildByTestId('breadcrumbs-item-current').find('input');
+}
+
+export function getCurrentBreadcrumbText() {
+	return getCurrentBreadcrumb().invoke('val');
 }
 
 export function getMainBreadcrumbsEllipsis() {
@@ -117,6 +121,11 @@ export function getListActionsToggle() {
 	return cy.getByTestId('folder-breadcrumbs-actions');
 }
 
+export function getCanvasBreadcrumbs() {
+	cy.getByTestId('canvas-breadcrumbs').should('exist');
+	return cy.getByTestId('canvas-breadcrumbs').findChildByTestId('folder-breadcrumbs');
+}
+
 export function getListActionItem(name: string) {
 	return cy
 		.getByTestId('folder-breadcrumbs-actions')
@@ -127,6 +136,10 @@ export function getListActionItem(name: string) {
 		});
 }
 
+export function getInlineEditInput() {
+	return cy.getByTestId('inline-edit-input');
+}
+
 export function getFolderCardActionToggle(folderName: string) {
 	return getFolderCard(folderName).find('[data-test-id="folder-card-actions"]');
 }
@@ -303,7 +316,9 @@ export function renameFolderFromListActions(folderName: string, newName: string)
 	getFolderCard(folderName).click();
 	getListActionsToggle().click();
 	getListActionItem('rename').click();
-	renameFolder(newName);
+	getInlineEditInput().should('be.visible');
+	getInlineEditInput().type(newName, { delay: 50 });
+	successToast().should('exist');
 }
 
 export function renameFolderFromCardActions(folderName: string, newName: string) {
@@ -372,12 +387,9 @@ export function deleteAndTransferFolderContentsFromCardDropdown(
 export function deleteAndTransferFolderContentsFromListDropdown(destinationName: string) {
 	getListActionsToggle().click();
 	getListActionItem('delete').click();
-	getCurrentBreadcrumb()
-		.find('span')
-		.invoke('text')
-		.then((currentFolderName) => {
-			deleteFolderAndMoveContents(currentFolderName, destinationName);
-		});
+	getCurrentBreadcrumbText().then((currentFolderName) => {
+		deleteFolderAndMoveContents(String(currentFolderName), destinationName);
+	});
 }
 
 export function createNewProject(projectName: string, options: { openAfterCreate?: boolean } = {}) {
diff --git a/cypress/e2e/49-folders.cy.ts b/cypress/e2e/49-folders.cy.ts
index 00ebc00259..061ddcb7dc 100644
--- a/cypress/e2e/49-folders.cy.ts
+++ b/cypress/e2e/49-folders.cy.ts
@@ -19,7 +19,8 @@ import {
 	duplicateWorkflowFromCardActions,
 	duplicateWorkflowFromWorkflowPage,
 	getAddResourceDropdown,
-	getCurrentBreadcrumb,
+	getCanvasBreadcrumbs,
+	getCurrentBreadcrumbText,
 	getFolderCard,
 	getFolderCardActionItem,
 	getFolderCardActionToggle,
@@ -75,7 +76,7 @@ describe('Folders', () => {
 			getFolderCards().should('have.length.greaterThan', 0);
 			// Clicking on the success toast should navigate to the folder
 			successToast().find('a').click();
-			getCurrentBreadcrumb().should('contain.text', 'My Folder');
+			getCurrentBreadcrumbText().should('equal', 'My Folder');
 			// 2. In a folder
 			createFolderFromListHeaderButton('My Folder 2');
 			getFolderCard('My Folder 2').should('exist');
@@ -116,7 +117,7 @@ describe('Folders', () => {
 			getFolderCards().should('have.length.greaterThan', 0);
 			// Clicking on the success toast should navigate to the folder
 			successToast().contains('My Folder 2').find('a').contains('Open folder').click();
-			getCurrentBreadcrumb().should('contain.text', 'My Folder 2');
+			getCurrentBreadcrumbText().should('equal', 'My Folder 2');
 		});
 
 		it('should create folder from the list header dropdown', () => {
@@ -137,7 +138,7 @@ describe('Folders', () => {
 			successToast().should('exist');
 			// Should be automatically navigated to the new folder
 			getFolderCard('Child Folder').should('exist');
-			getCurrentBreadcrumb().should('contain.text', 'Created from card dropdown');
+			getCurrentBreadcrumbText().should('equal', 'Created from card dropdown');
 		});
 
 		it('should navigate folders using breadcrumbs and dropdown menu', () => {
@@ -146,15 +147,15 @@ describe('Folders', () => {
 			// Open folder using menu item
 			getFolderCardActionToggle('Navigate Test').click();
 			getFolderCardActionItem('Navigate Test', 'open').click();
-			getCurrentBreadcrumb().should('contain.text', 'Navigate Test');
+			getCurrentBreadcrumbText().should('equal', 'Navigate Test');
 			// Create new child folder and navigate to it
 			createFolderFromListHeaderButton('Child Folder');
 			getFolderCard('Child Folder').should('exist');
 			getFolderCard('Child Folder').click();
-			getCurrentBreadcrumb().should('contain.text', 'Child Folder');
+			getCurrentBreadcrumbText().should('equal', 'Child Folder');
 			// Navigate back to parent folder using breadcrumbs
 			getVisibleListBreadcrumbs().contains('Navigate Test').click();
-			getCurrentBreadcrumb().should('contain.text', 'Navigate Test');
+			getCurrentBreadcrumbText().should('equal', 'Navigate Test');
 			// Go back to home project using breadcrumbs
 			getHomeProjectBreadcrumb().click();
 			getListBreadcrumbs().should('not.exist');
@@ -168,14 +169,14 @@ describe('Folders', () => {
 			// One level deep:
 			// - Breadcrumbs should only show home project and current folder
 			getHomeProjectBreadcrumb().should('exist');
-			getCurrentBreadcrumb().should('contain.text', 'Multi-level Test');
+			getCurrentBreadcrumbText().should('equal', 'Multi-level Test');
 			getFolderCard('Child Folder').should('exist');
 
 			createFolderInsideFolder('Child Folder 2', 'Child Folder');
 			// Two levels deep:
 			// - Breadcrumbs should also show parent folder, without hidden ellipsis
 			getHomeProjectBreadcrumb().should('exist');
-			getCurrentBreadcrumb().should('contain.text', 'Child Folder');
+			getCurrentBreadcrumbText().should('equal', 'Child Folder');
 			getVisibleListBreadcrumbs().should('have.length', 1);
 			getMainBreadcrumbsEllipsis().should('not.exist');
 
@@ -202,7 +203,7 @@ describe('Folders', () => {
 			cy.reload();
 			// Main list breadcrumbs should show home project, parent, grandparent, with one hidden element
 			getHomeProjectBreadcrumb().should('exist');
-			getCurrentBreadcrumb().should('contain.text', 'Child Folder 2');
+			getCurrentBreadcrumbText().should('equal', 'Child Folder 2');
 			getVisibleListBreadcrumbs().should('have.length', 1);
 			getVisibleListBreadcrumbs().first().should('contain.text', 'Child Folder');
 			getMainBreadcrumbsEllipsis().should('exist');
@@ -290,6 +291,24 @@ describe('Folders', () => {
 			getFolderCard('Workflows go here').click();
 			getWorkflowCard('Created from list breadcrumbs').should('exist');
 		});
+
+		it('should show new workflow breadcrumbs correctly', () => {
+			goToPersonalProject();
+			createFolderFromProjectHeader('Workflow breadcrumbs test');
+			getFolderCard('Workflow breadcrumbs test').should('exist').click();
+			getFolderEmptyState().find('button').contains('Create Workflow').click();
+			// Should show breadcrumbs before and after saving new workflow
+			getCanvasBreadcrumbs().should('exist');
+			getCanvasBreadcrumbs().findChildByTestId('home-project').should('contain.text', 'Personal');
+			getCanvasBreadcrumbs().find('li[data-test-id="breadcrumbs-item"]').should('have.length', 1);
+			// Save workflow and reload
+			cy.getByTestId('workflow-save-button').click();
+			cy.reload();
+			// Should still show the same breadcrumbs
+			getCanvasBreadcrumbs().should('exist');
+			getCanvasBreadcrumbs().findChildByTestId('home-project').should('contain.text', 'Personal');
+			getCanvasBreadcrumbs().find('li[data-test-id="breadcrumbs-item"]').should('have.length', 1);
+		});
 	});
 
 	describe('Rename and delete folders', () => {
@@ -298,7 +317,7 @@ describe('Folders', () => {
 			createFolderFromProjectHeader('Rename Me');
 			getFolderCard('Rename Me').should('exist');
 			renameFolderFromListActions('Rename Me', 'Renamed');
-			getCurrentBreadcrumb().should('contain.text', 'Renamed');
+			getCurrentBreadcrumbText().should('equal', 'Renamed');
 		});
 
 		it('should rename folder from card dropdown', () => {
@@ -416,7 +435,7 @@ describe('Folders', () => {
 			createFolderFromProjectHeader('Destination 5');
 			moveFolderFromListActions('Move me too - I am empty', 'Destination 5');
 			// Since we moved the current folder, we should be in the destination folder
-			getCurrentBreadcrumb().should('contain.text', 'Destination 5');
+			getCurrentBreadcrumbText().should('equal', 'Destination 5');
 		});
 
 		it('should move folder with contents to another folder - from list dropdown', () => {
@@ -432,7 +451,7 @@ describe('Folders', () => {
 			// Move the folder
 			moveFolderFromListActions('Move me - I have family 2', 'Destination 6');
 			// Since we moved the current folder, we should be in the destination folder
-			getCurrentBreadcrumb().should('contain.text', 'Destination 6');
+			getCurrentBreadcrumbText().should('equal', 'Destination 6');
 			// Moved folder should be there
 			getFolderCard('Move me - I have family 2').should('exist').click();
 			// After navigating to the moved folder, both the workflow and the folder should be there
@@ -456,7 +475,7 @@ describe('Folders', () => {
 			getFolderCard('Move me to root').click();
 			getHomeProjectBreadcrumb().should('contain.text', 'Personal');
 			getListBreadcrumbs().findChildByTestId('breadcrumbs-item').should('not.exist');
-			getCurrentBreadcrumb().should('contain.text', 'Move me to root');
+			getCurrentBreadcrumbText().should('equal', 'Move me to root');
 		});
 
 		it('should move workflow from project root to folder', () => {
diff --git a/packages/frontend/@n8n/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.vue b/packages/frontend/@n8n/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.vue
index 32dac9db47..f5d3b2e600 100644
--- a/packages/frontend/@n8n/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.vue
+++ b/packages/frontend/@n8n/design-system/src/components/N8nBreadcrumbs/Breadcrumbs.vue
@@ -235,17 +235,15 @@ const handleTooltipClose = () => {
 					:class="{
 						[$style.item]: true,
 						[$style.current]: props.highlightLastItem && index === items.length - 1,
-						[$style.dragging]: props.dragActive && index !== items.length - 1,
+						[$style.dragging]: props.dragActive,
 					}"
 					:title="item.label"
-					:data-test-id="
-						index === items.length - 1 ? 'breadcrumbs-item-current' : 'breadcrumbs-item'
-					"
 					:data-resourceid="item.id"
+					data-test-id="breadcrumbs-item"
 					data-target="folder-breadcrumb-item"
 					@click.prevent="emitItemSelected(item.id)"
 					@mouseenter="emitItemHover(item.id)"
-					@mouseup="index !== items.length - 1 ? onItemMouseUp(item) : {}"
+					@mouseup="onItemMouseUp(item)"
 				>
 					<n8n-link v-if="item.href" :href="item.href" theme="text">{{ item.label }}</n8n-link>
 					<n8n-text v-else>{{ item.label }}</n8n-text>
@@ -330,8 +328,6 @@ const handleTooltipClose = () => {
 
 .hidden-items-menu {
 	display: flex;
-	position: relative;
-	top: var(--spacing-5xs);
 	color: var(--color-text-base);
 }
 
@@ -411,7 +407,7 @@ const handleTooltipClose = () => {
 	.item * {
 		color: var(--color-text-base);
 		font-size: var(--font-size-2xs);
-		line-height: var(--font-line-heigh-xsmall);
+		line-height: var(--font-line-height-xsmall);
 	}
 
 	.item a:hover * {
@@ -427,13 +423,14 @@ const handleTooltipClose = () => {
 // Medium theme overrides
 .medium {
 	li {
-		padding: var(--spacing-4xs);
+		padding: var(--spacing-3xs) var(--spacing-4xs) var(--spacing-4xs);
 	}
 
 	.item,
 	.item * {
 		color: var(--color-text-base);
 		font-size: var(--font-size-s);
+		line-height: var(--font-line-height-xsmall);
 	}
 
 	.item {
diff --git a/packages/frontend/@n8n/design-system/src/components/N8nBreadcrumbs/__snapshots__/BreadCrumbs.test.ts.snap b/packages/frontend/@n8n/design-system/src/components/N8nBreadcrumbs/__snapshots__/BreadCrumbs.test.ts.snap
index 4a73ea746d..152c4e706d 100644
--- a/packages/frontend/@n8n/design-system/src/components/N8nBreadcrumbs/__snapshots__/BreadCrumbs.test.ts.snap
+++ b/packages/frontend/@n8n/design-system/src/components/N8nBreadcrumbs/__snapshots__/BreadCrumbs.test.ts.snap
@@ -6,13 +6,13 @@ exports[`Breadcrumbs > does not highlight last item for "highlightLastItem = fal
     <!--v-if-->
     <!--v-if-->
     <!--v-if-->
-    <li class="item" title="Folder 1" data-test-id="breadcrumbs-item" data-resourceid="1" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="item" title="Folder 1" data-resourceid="1" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Folder 2" data-test-id="breadcrumbs-item" data-resourceid="2" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="item" title="Folder 2" data-resourceid="2" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Folder 3" data-test-id="breadcrumbs-item" data-resourceid="3" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="item" title="Folder 3" data-resourceid="3" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Current" data-test-id="breadcrumbs-item-current" data-resourceid="4" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <li class="item" title="Current" data-resourceid="4" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
     <!--v-if-->
   </ul>
 </div>"
@@ -24,13 +24,13 @@ exports[`Breadcrumbs > renders custom separator correctly 1`] = `
     <!--v-if-->
     <!--v-if-->
     <!--v-if-->
-    <li class="item" title="Folder 1" data-test-id="breadcrumbs-item" data-resourceid="1" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="item" title="Folder 1" data-resourceid="1" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
     <li class="separator">➮</li>
-    <li class="item" title="Folder 2" data-test-id="breadcrumbs-item" data-resourceid="2" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="item" title="Folder 2" data-resourceid="2" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
     <li class="separator">➮</li>
-    <li class="item" title="Folder 3" data-test-id="breadcrumbs-item" data-resourceid="3" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="item" title="Folder 3" data-resourceid="3" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
     <li class="separator">➮</li>
-    <li class="item current" title="Current" data-test-id="breadcrumbs-item-current" data-resourceid="4" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <li class="item current" title="Current" data-resourceid="4" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
     <!--v-if-->
   </ul>
 </div>"
@@ -42,13 +42,13 @@ exports[`Breadcrumbs > renders default version correctly 1`] = `
     <!--v-if-->
     <!--v-if-->
     <!--v-if-->
-    <li class="item" title="Folder 1" data-test-id="breadcrumbs-item" data-resourceid="1" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="item" title="Folder 1" data-resourceid="1" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Folder 2" data-test-id="breadcrumbs-item" data-resourceid="2" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="item" title="Folder 2" data-resourceid="2" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Folder 3" data-test-id="breadcrumbs-item" data-resourceid="3" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="item" title="Folder 3" data-resourceid="3" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item current" title="Current" data-test-id="breadcrumbs-item-current" data-resourceid="4" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <li class="item current" title="Current" data-resourceid="4" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
     <!--v-if-->
   </ul>
 </div>"
@@ -61,13 +61,13 @@ exports[`Breadcrumbs > renders slots correctly 1`] = `
     <li class="separator">/</li>
     <!--v-if-->
     <!--v-if-->
-    <li class="item" title="Folder 1" data-test-id="breadcrumbs-item" data-resourceid="1" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="item" title="Folder 1" data-resourceid="1" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Folder 2" data-test-id="breadcrumbs-item" data-resourceid="2" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="item" title="Folder 2" data-resourceid="2" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Folder 3" data-test-id="breadcrumbs-item" data-resourceid="3" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="item" title="Folder 3" data-resourceid="3" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item current" title="Current" data-test-id="breadcrumbs-item-current" data-resourceid="4" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <li class="item current" title="Current" data-resourceid="4" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
     <!--v-if-->
   </ul>
   <div>[POST] Custom content</div>
@@ -80,13 +80,13 @@ exports[`Breadcrumbs > renders small version correctly 1`] = `
     <!--v-if-->
     <!--v-if-->
     <!--v-if-->
-    <li class="item" title="Folder 1" data-test-id="breadcrumbs-item" data-resourceid="1" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
+    <li class="item" title="Folder 1" data-resourceid="1" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder1" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 1</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Folder 2" data-test-id="breadcrumbs-item" data-resourceid="2" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
+    <li class="item" title="Folder 2" data-resourceid="2" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder2" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 2</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item" title="Folder 3" data-test-id="breadcrumbs-item" data-resourceid="3" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
+    <li class="item" title="Folder 3" data-resourceid="3" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><a href="/folder3" target="_blank" class="n8n-link"><span class="text"><span class="n8n-text size-medium regular">Folder 3</span></span></a></li>
     <li class="separator">/</li>
-    <li class="item current" title="Current" data-test-id="breadcrumbs-item-current" data-resourceid="4" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
+    <li class="item current" title="Current" data-resourceid="4" data-test-id="breadcrumbs-item" data-target="folder-breadcrumb-item"><span class="n8n-text size-medium regular">Current</span></li>
     <!--v-if-->
   </ul>
 </div>"
diff --git a/packages/frontend/@n8n/design-system/src/css/_tokens.scss b/packages/frontend/@n8n/design-system/src/css/_tokens.scss
index 6aa16e2152..7a41a36e5c 100644
--- a/packages/frontend/@n8n/design-system/src/css/_tokens.scss
+++ b/packages/frontend/@n8n/design-system/src/css/_tokens.scss
@@ -616,7 +616,7 @@
 	--font-size-xl: 1.25rem;
 	--font-size-2xl: 1.75rem;
 
-	--font-line-heigh-xsmall: 1;
+	--font-line-height-xsmall: 1;
 	--font-line-height-compact: 1.25;
 	--font-line-height-regular: 1.3;
 	--font-line-height-loose: 1.35;
diff --git a/packages/frontend/editor-ui/src/Interface.ts b/packages/frontend/editor-ui/src/Interface.ts
index 682862b84a..502496a775 100644
--- a/packages/frontend/editor-ui/src/Interface.ts
+++ b/packages/frontend/editor-ui/src/Interface.ts
@@ -328,7 +328,13 @@ export interface IWorkflowDb {
 	versionId: string;
 	usedCredentials?: IUsedCredential[];
 	meta?: WorkflowMetadata;
-	parentFolder?: { id: string; name: string };
+	parentFolder?: {
+		id: string;
+		name: string;
+		parentFolderId: string | null;
+		createdAt?: string;
+		updatedAt?: string;
+	};
 }
 
 // For workflow list we don't need the full workflow data
@@ -348,7 +354,6 @@ export type FolderShortInfo = {
 	id: string;
 	name: string;
 	parentFolder?: string;
-	parentFolderId?: string | null;
 };
 
 export type BaseFolderItem = BaseResource & {
@@ -356,12 +361,18 @@ export type BaseFolderItem = BaseResource & {
 	updatedAt: string;
 	workflowCount: number;
 	subFolderCount: number;
-	parentFolder?: FolderShortInfo;
+	parentFolder?: ResourceParentFolder;
 	homeProject?: ProjectSharingData;
 	sharedWithProjects?: ProjectSharingData[];
 	tags?: ITag[];
 };
 
+export type ResourceParentFolder = {
+	id: string;
+	name: string;
+	parentFolderId: string | null;
+};
+
 export interface FolderListItem extends BaseFolderItem {
 	resource: 'folder';
 }
diff --git a/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputBase.vue b/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputBase.vue
index 666b29ef68..452c843882 100644
--- a/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputBase.vue
+++ b/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputBase.vue
@@ -27,16 +27,13 @@ const hiddenValue = computed(() => {
 </template>
 
 <style lang="scss" scoped>
-$--horiz-padding: 15px;
-
 .el-input {
 	display: inline-grid;
 	font: inherit;
-	padding: 10px 0;
 
 	:deep(input) {
 		border: 1px solid transparent;
-		padding: 0 $--horiz-padding - 2px; // -2px for borders
+		padding: var(--spacing-3xs) calc(var(--spacing-3xs) - 2px); // -2px for borders
 		width: 100%;
 		grid-area: 1 / 2;
 		font: inherit;
@@ -48,7 +45,7 @@ $--horiz-padding: 15px;
 		content: attr(data-value) ' ';
 		visibility: hidden;
 		white-space: nowrap;
-		padding: 0 $--horiz-padding;
+		padding: var(--spacing-3xs);
 	}
 
 	&:not(.static-size)::after {
diff --git a/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputEdit.vue b/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputEdit.vue
index c334e7091d..01ab8a0f00 100644
--- a/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputEdit.vue
+++ b/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputEdit.vue
@@ -37,6 +37,7 @@ onBeforeUnmount(() => {
 function focus() {
 	if (inputRef.value) {
 		inputRef.value.focus();
+		inputRef.value.select();
 	}
 }
 
@@ -67,7 +68,7 @@ function onEscape() {
 	<ExpandableInputBase :model-value="modelValue" :placeholder="placeholder">
 		<input
 			ref="inputRef"
-			class="el-input__inner"
+			:class="['el-input__inner', $style.input]"
 			:value="modelValue"
 			:placeholder="placeholder"
 			:maxlength="maxlength"
@@ -78,3 +79,10 @@ function onEscape() {
 		/>
 	</ExpandableInputBase>
 </template>
+
+<style module lang="scss">
+.input {
+	padding: var(--spacing-4xs);
+	font-size: var(--font-size-s);
+}
+</style>
diff --git a/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputPreview.vue b/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputPreview.vue
index d4f2851583..a502c120ed 100644
--- a/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputPreview.vue
+++ b/packages/frontend/editor-ui/src/components/ExpandableInput/ExpandableInputPreview.vue
@@ -10,18 +10,18 @@ defineProps<Props>();
 
 <template>
 	<ExpandableInputBase :model-value="modelValue" :static-size="true">
-		<input
-			:class="{ 'el-input__inner': true, clickable: true }"
-			:value="modelValue"
-			:disabled="true"
-			size="4"
-		/>
+		<input class="clickable preview" :value="modelValue" :disabled="true" size="4" />
 	</ExpandableInputBase>
 </template>
 
 <style lang="scss" scoped>
-input,
-input:hover {
+input.preview {
+	padding: var(--spacing-4xs);
+	border-radius: var(--border-radius-base);
+}
+
+.preview,
+.preview:hover {
 	background-color: unset;
 	transition: unset;
 	pointer-events: none; // fix firefox bug
diff --git a/packages/frontend/editor-ui/src/components/Folders/FolderBreadcrumbs.test.ts b/packages/frontend/editor-ui/src/components/Folders/FolderBreadcrumbs.test.ts
new file mode 100644
index 0000000000..0e565b7a17
--- /dev/null
+++ b/packages/frontend/editor-ui/src/components/Folders/FolderBreadcrumbs.test.ts
@@ -0,0 +1,126 @@
+import { createComponentRenderer } from '@/__tests__/render';
+import type { FolderShortInfo, UserAction } from '@/Interface';
+import FolderBreadcrumbs from './FolderBreadcrumbs.vue';
+import { setActivePinia } from 'pinia';
+import { createTestingPinia } from '@pinia/testing';
+import { useRoute } from 'vue-router';
+import type { Mock } from 'vitest';
+import { mockedStore } from '@/__tests__/utils';
+import { useProjectsStore } from '@/stores/projects.store';
+import { ProjectTypes, type Project } from '@/types/projects.types';
+import { useFoldersStore } from '@/stores/folders.store';
+
+vi.mock('vue-router', async (importOriginal) => ({
+	// eslint-disable-next-line @typescript-eslint/consistent-type-imports
+	...(await importOriginal<typeof import('vue-router')>()),
+	useRoute: vi.fn().mockReturnValue({}),
+	useRouter: vi.fn(() => ({
+		replace: vi.fn(),
+	})),
+}));
+
+const TEST_PROJECT: Project = {
+	id: '1',
+	name: 'Test Project',
+	icon: { type: 'icon', value: 'folder' },
+	type: ProjectTypes.Personal,
+	createdAt: new Date().toISOString(),
+	updatedAt: new Date().toISOString(),
+	relations: [],
+	scopes: [],
+};
+
+const TEST_FOLDER: FolderShortInfo = {
+	id: '1',
+	name: 'Test Folder',
+};
+
+const TEST_FOLDER_CHILD: FolderShortInfo = {
+	id: '2',
+	name: 'Test Folder Child',
+	parentFolder: TEST_FOLDER.id,
+};
+
+const TEST_ACTIONS: UserAction[] = [
+	{ label: 'Action 1', value: 'action1', disabled: false },
+	{ label: 'Action 2', value: 'action2', disabled: true },
+];
+
+const renderComponent = createComponentRenderer(FolderBreadcrumbs, {});
+
+describe('FolderBreadcrumbs', () => {
+	let projectsStore: ReturnType<typeof mockedStore<typeof useProjectsStore>>;
+	let foldersStore: ReturnType<typeof mockedStore<typeof useFoldersStore>>;
+
+	beforeEach(() => {
+		setActivePinia(createTestingPinia());
+		projectsStore = mockedStore(useProjectsStore);
+		foldersStore = mockedStore(useFoldersStore);
+		(useRoute as Mock).mockReturnValue({
+			query: { projectId: TEST_PROJECT.id },
+		});
+		projectsStore.currentProject = TEST_PROJECT;
+	});
+
+	afterEach(() => {
+		vi.clearAllMocks();
+	});
+
+	it('should render folder breadcrumbs with actions', () => {
+		const { getByTestId } = renderComponent({
+			props: {
+				currentFolder: TEST_FOLDER,
+				actions: TEST_ACTIONS,
+			},
+		});
+		expect(getByTestId('folder-breadcrumbs')).toBeVisible();
+		expect(getByTestId('home-project')).toBeVisible();
+		expect(getByTestId('breadcrumbs-item')).toBeVisible();
+		expect(getByTestId('folder-breadcrumbs-actions')).toBeVisible();
+	});
+
+	it('should only render project breadcrumb if currentFolder is not provided', () => {
+		const { getByTestId, queryByTestId } = renderComponent({
+			props: {
+				currentFolder: null,
+			},
+		});
+		expect(getByTestId('folder-breadcrumbs')).toBeVisible();
+		expect(getByTestId('home-project')).toBeVisible();
+		expect(queryByTestId('breadcrumbs-item')).not.toBeInTheDocument();
+		expect(queryByTestId('folder-breadcrumbs-actions')).not.toBeInTheDocument();
+	});
+
+	it('should render 1 level of breadcrumbs', () => {
+		foldersStore.getCachedFolder.mockReturnValue(TEST_FOLDER);
+
+		const { getByTestId, queryAllByTestId } = renderComponent({
+			props: {
+				currentFolder: TEST_FOLDER_CHILD,
+				visibleLevels: 1,
+			},
+		});
+		// In this case, breadcrumbs should contain home project and current folder
+		// while parent is hidden by ellipsis
+		expect(getByTestId('folder-breadcrumbs')).toBeVisible();
+		expect(getByTestId('home-project')).toBeVisible();
+		expect(queryAllByTestId('breadcrumbs-item')).toHaveLength(1);
+		expect(getByTestId('ellipsis')).toBeVisible();
+	});
+
+	it('should render 2 levels of breadcrumbs', () => {
+		foldersStore.getCachedFolder.mockReturnValue(TEST_FOLDER);
+
+		const { getByTestId, queryAllByTestId, queryByTestId } = renderComponent({
+			props: {
+				currentFolder: TEST_FOLDER_CHILD,
+				visibleLevels: 2,
+			},
+		});
+		// Now, parent folder should also be visible
+		expect(getByTestId('folder-breadcrumbs')).toBeVisible();
+		expect(getByTestId('home-project')).toBeVisible();
+		expect(queryAllByTestId('breadcrumbs-item')).toHaveLength(2);
+		expect(queryByTestId('ellipsis')).not.toBeInTheDocument();
+	});
+});
diff --git a/packages/frontend/editor-ui/src/components/Folders/FolderBreadcrumbs.vue b/packages/frontend/editor-ui/src/components/Folders/FolderBreadcrumbs.vue
index 01c7ee75fd..e374ae23cb 100644
--- a/packages/frontend/editor-ui/src/components/Folders/FolderBreadcrumbs.vue
+++ b/packages/frontend/editor-ui/src/components/Folders/FolderBreadcrumbs.vue
@@ -1,24 +1,28 @@
 <script setup lang="ts">
 import { useI18n } from '@/composables/useI18n';
-import type { FolderPathItem } from '@/Interface';
 import { useProjectsStore } from '@/stores/projects.store';
 import { ProjectTypes } from '@/types/projects.types';
 import type { UserAction } from '@n8n/design-system/types';
 import { type PathItem } from '@n8n/design-system/components/N8nBreadcrumbs/Breadcrumbs.vue';
-import { computed } from 'vue';
+import { computed, onBeforeUnmount, ref, watch } from 'vue';
 import { useFoldersStore } from '@/stores/folders.store';
+import type { FolderPathItem, FolderShortInfo } from '@/Interface';
 
 type Props = {
-	actions: UserAction[];
-	breadcrumbs: {
-		visibleItems: FolderPathItem[];
-		hiddenItems: FolderPathItem[];
-	};
+	// Current folder can be null when showing breadcrumbs for workflows in project root
+	currentFolder?: FolderShortInfo | null;
+	actions?: UserAction[];
 	hiddenItemsTrigger?: 'hover' | 'click';
+	currentFolderAsLink?: boolean;
+	visibleLevels?: 1 | 2;
 };
 
 const props = withDefaults(defineProps<Props>(), {
+	currentFolder: null,
+	actions: () => [],
 	hiddenItemsTrigger: 'click',
+	currentFolderAsLink: false,
+	visibleLevels: 1,
 });
 
 const emit = defineEmits<{
@@ -33,6 +37,11 @@ const i18n = useI18n();
 const projectsStore = useProjectsStore();
 const foldersStore = useFoldersStore();
 
+const hiddenBreadcrumbsItemsAsync = ref<Promise<PathItem[]>>(new Promise(() => {}));
+
+// This will be used to filter out items that are already visible in the breadcrumbs
+const visibleIds = ref<Set<string>>(new Set());
+
 const currentProject = computed(() => projectsStore.currentProject);
 
 const projectName = computed(() => {
@@ -46,6 +55,64 @@ const isDragging = computed(() => {
 	return foldersStore.draggedElement !== null;
 });
 
+const hasMoreItems = computed(() => {
+	return visibleBreadcrumbsItems.value[0]?.parentFolder !== undefined;
+});
+
+const visibleBreadcrumbsItems = computed<FolderPathItem[]>(() => {
+	visibleIds.value.clear();
+	if (!props.currentFolder) return [];
+
+	const items: FolderPathItem[] = [];
+	// Only show parent folder if we are showing 2 levels of visible breadcrumbs
+	const parent =
+		props.visibleLevels === 2
+			? foldersStore.getCachedFolder(props.currentFolder.parentFolder ?? '')
+			: null;
+
+	if (parent) {
+		items.push({
+			id: parent.id,
+			label: parent.name,
+			href: `/projects/${projectsStore.currentProjectId}/folders/${parent.id}/workflows`,
+			parentFolder: parent.parentFolder,
+		});
+		visibleIds.value.add(parent.id);
+	}
+	items.push({
+		id: props.currentFolder.id,
+		label: props.currentFolder.name,
+		parentFolder: props.currentFolder.parentFolder,
+		href: props.currentFolderAsLink
+			? `/projects/${projectsStore.currentProjectId}/folders/${props.currentFolder.id}/workflows`
+			: undefined,
+	});
+	if (projectsStore.currentProjectId) {
+		visibleIds.value.add(projectsStore.currentProjectId);
+	}
+	visibleIds.value.add(props.currentFolder.id);
+
+	return items;
+});
+
+const fetchHiddenBreadCrumbsItems = async () => {
+	if (!projectName.value || !props.currentFolder?.parentFolder || !projectsStore.currentProjectId) {
+		hiddenBreadcrumbsItemsAsync.value = Promise.resolve([]);
+	} else {
+		try {
+			const loadedItems = foldersStore.getHiddenBreadcrumbsItems(
+				{ id: projectsStore.currentProjectId, name: projectName.value },
+				props.currentFolder.parentFolder,
+				{ addLinks: true },
+			);
+			const filtered = (await loadedItems).filter((item) => !visibleIds.value.has(item.id));
+			hiddenBreadcrumbsItemsAsync.value = Promise.resolve(filtered);
+		} catch (error) {
+			hiddenBreadcrumbsItemsAsync.value = Promise.resolve([]);
+		}
+	}
+};
+
 const onItemSelect = (item: PathItem) => {
 	emit('itemSelected', item);
 };
@@ -54,8 +121,8 @@ const onAction = (action: string) => {
 	emit('action', action);
 };
 
-const onProjectMouseUp = () => {
-	if (!isDragging.value || !currentProject.value?.name) {
+const onProjectDrop = () => {
+	if (!currentProject.value?.name) {
 		return;
 	}
 	emit('projectDrop', currentProject.value.id, currentProject.value.name);
@@ -82,6 +149,22 @@ const onItemHover = (item: PathItem) => {
 		name: item.label,
 	};
 };
+
+// Watch for changes in the current folder to fetch hidden breadcrumbs items
+watch(
+	() => props.currentFolder?.parentFolder,
+	() => {
+		// Updating the promise will invalidate breadcrumbs component internal cache
+		hiddenBreadcrumbsItemsAsync.value = new Promise(() => {});
+	},
+	{ immediate: true },
+);
+
+// Resolve the promise to an empty array when the component is unmounted
+// to avoid having dangling promises
+onBeforeUnmount(() => {
+	hiddenBreadcrumbsItemsAsync.value = Promise.resolve([]);
+});
 </script>
 <template>
 	<div
@@ -89,33 +172,45 @@ const onItemHover = (item: PathItem) => {
 		data-test-id="folder-breadcrumbs"
 	>
 		<n8n-breadcrumbs
-			v-if="breadcrumbs.visibleItems"
+			v-if="visibleBreadcrumbsItems.length"
 			v-model:drag-active="isDragging"
-			:items="breadcrumbs.visibleItems"
+			:items="visibleBreadcrumbsItems"
 			:highlight-last-item="false"
-			:path-truncated="breadcrumbs.visibleItems[0].parentFolder"
-			:hidden-items="breadcrumbs.hiddenItems"
+			:path-truncated="hasMoreItems"
+			:hidden-items="hasMoreItems ? hiddenBreadcrumbsItemsAsync : undefined"
 			:hidden-items-trigger="props.hiddenItemsTrigger"
-			data-test-id="folder-list-breadcrumbs"
+			@tooltip-opened="fetchHiddenBreadCrumbsItems"
 			@item-selected="onItemSelect"
 			@item-hover="onItemHover"
 			@item-drop="emit('itemDrop', $event)"
 		>
 			<template v-if="currentProject" #prepend>
-				<div
-					:class="{ [$style['home-project']]: true, [$style.dragging]: isDragging }"
-					data-test-id="home-project"
-					@mouseenter="onProjectHover"
-					@mouseup="isDragging ? onProjectMouseUp() : null"
-				>
-					<n8n-link :to="`/projects/${currentProject.id}`">
-						<N8nText size="medium" color="text-base">{{ projectName }}</N8nText>
-					</n8n-link>
-				</div>
+				<ProjectBreadcrumb
+					:current-project="currentProject"
+					:is-dragging="isDragging"
+					@project-drop="onProjectDrop"
+					@project-hover="onProjectHover"
+				/>
+			</template>
+			<template #append>
+				<slot name="append"></slot>
 			</template>
 		</n8n-breadcrumbs>
+		<!-- If there is no current folder, just show project badge -->
+		<div v-else-if="currentProject" :class="$style['home-project']">
+			<ProjectBreadcrumb
+				:current-project="currentProject"
+				:is-dragging="isDragging"
+				@project-drop="onProjectDrop"
+				@project-hover="onProjectHover"
+			/>
+			<slot name="append"></slot>
+		</div>
+		<div v-else>
+			<slot name="append"></slot>
+		</div>
 		<n8n-action-toggle
-			v-if="breadcrumbs.visibleItems"
+			v-if="visibleBreadcrumbsItems && actions?.length"
 			:actions="actions"
 			:class="$style['action-toggle']"
 			theme="dark"
@@ -131,30 +226,14 @@ const onItemHover = (item: PathItem) => {
 	align-items: center;
 }
 
+.home-project {
+	display: flex;
+	align-items: center;
+}
+
 .action-toggle {
 	span[role='button'] {
 		color: var(--color-text-base);
 	}
 }
-
-.home-project {
-	display: flex;
-	align-items: center;
-	padding: var(--spacing-4xs);
-	border: var(--border-width-base) var(--border-style-base) transparent;
-
-	&.dragging:hover {
-		border: var(--border-width-base) var(--border-style-base) var(--color-secondary);
-		border-radius: var(--border-radius-base);
-		background-color: var(--color-callout-secondary-background);
-		* {
-			cursor: grabbing;
-			color: var(--color-text-base);
-		}
-	}
-
-	&:hover * {
-		color: var(--color-text-dark);
-	}
-}
 </style>
diff --git a/packages/frontend/editor-ui/src/components/Folders/ProjectBreadcrumb.test.ts b/packages/frontend/editor-ui/src/components/Folders/ProjectBreadcrumb.test.ts
new file mode 100644
index 0000000000..41529a7dba
--- /dev/null
+++ b/packages/frontend/editor-ui/src/components/Folders/ProjectBreadcrumb.test.ts
@@ -0,0 +1,126 @@
+import { createComponentRenderer } from '@/__tests__/render';
+import { fireEvent } from '@testing-library/vue';
+import ProjectBreadcrumb from './ProjectBreadcrumb.vue';
+import { ProjectTypes } from '@/types/projects.types';
+import type { Project } from '@vue-flow/core';
+
+vi.mock('@/composables/useI18n', () => ({
+	useI18n: () => ({
+		baseText: vi.fn((key) => {
+			if (key === 'projects.menu.personal') return 'Personal';
+			return key;
+		}),
+	}),
+}));
+
+const mockComponents = {
+	'n8n-link': {
+		template: '<a :href="to"><slot /></a>',
+		props: ['to'],
+	},
+	ProjectIcon: {
+		template:
+			'<div class="project-icon" data-test-id="project-icon" :data-icon="icon.value"><slot /></div>',
+		props: ['icon', 'borderLess', 'size', 'title'],
+	},
+	N8nText: {
+		template: '<span class="n8n-text" data-test-id="project-label"><slot /></span>',
+		props: ['size', 'color'],
+	},
+};
+
+const renderComponent = createComponentRenderer(ProjectBreadcrumb, {
+	global: {
+		stubs: mockComponents,
+	},
+});
+
+describe('ProjectBreadcrumb', () => {
+	it('Renders personal project info correctly', () => {
+		const { getByTestId } = renderComponent({
+			props: {
+				currentProject: {
+					id: '1',
+					name: 'Test Project',
+					type: ProjectTypes.Personal,
+				} satisfies Partial<Project>,
+			},
+		});
+		expect(getByTestId('project-icon')).toHaveAttribute('data-icon', 'user');
+		expect(getByTestId('project-label')).toHaveTextContent('Personal');
+	});
+
+	it('Renders team project info correctly', () => {
+		const { getByTestId } = renderComponent({
+			props: {
+				currentProject: {
+					id: '1',
+					name: 'Team Project',
+					type: ProjectTypes.Team,
+					icon: { type: 'icon', value: 'folder' },
+				} satisfies Partial<Project>,
+			},
+		});
+		expect(getByTestId('project-icon')).toHaveAttribute('data-icon', 'folder');
+		expect(getByTestId('project-label')).toHaveTextContent('Team Project');
+	});
+
+	it('Renders team project emoji icon correctly', () => {
+		const { getByTestId } = renderComponent({
+			props: {
+				currentProject: {
+					id: '1',
+					name: 'Team Project',
+					type: ProjectTypes.Team,
+					icon: { type: 'emoji', value: '🔥' },
+				} satisfies Partial<Project>,
+			},
+		});
+		expect(getByTestId('project-icon')).toHaveAttribute('data-icon', '🔥');
+		expect(getByTestId('project-label')).toHaveTextContent('Team Project');
+	});
+
+	it('emits hover event', async () => {
+		const { emitted, getByTestId } = renderComponent({
+			props: {
+				currentProject: {
+					id: '1',
+					name: 'Test Project',
+					type: ProjectTypes.Personal,
+				} satisfies Partial<Project>,
+			},
+		});
+		await fireEvent.mouseEnter(getByTestId('home-project'));
+		expect(emitted('projectHover')).toBeTruthy();
+	});
+
+	it('emits project drop event if dragging', async () => {
+		const { emitted, getByTestId } = renderComponent({
+			props: {
+				isDragging: true,
+				currentProject: {
+					id: '1',
+					name: 'Test Project',
+					type: ProjectTypes.Personal,
+				} satisfies Partial<Project>,
+			},
+		});
+		await fireEvent.mouseUp(getByTestId('home-project'));
+		expect(emitted('projectDrop')).toBeTruthy();
+	});
+
+	it('does not emit project drop event if not dragging', async () => {
+		const { emitted, getByTestId } = renderComponent({
+			props: {
+				isDragging: false,
+				currentProject: {
+					id: '1',
+					name: 'Test Project',
+					type: ProjectTypes.Personal,
+				} satisfies Partial<Project>,
+			},
+		});
+		await fireEvent.mouseUp(getByTestId('home-project'));
+		expect(emitted('projectDrop')).toBeFalsy();
+	});
+});
diff --git a/packages/frontend/editor-ui/src/components/Folders/ProjectBreadcrumb.vue b/packages/frontend/editor-ui/src/components/Folders/ProjectBreadcrumb.vue
new file mode 100644
index 0000000000..d4faa09370
--- /dev/null
+++ b/packages/frontend/editor-ui/src/components/Folders/ProjectBreadcrumb.vue
@@ -0,0 +1,101 @@
+<script setup lang="ts">
+import { computed } from 'vue';
+import { useI18n } from '@/composables/useI18n';
+import {
+	type Project,
+	type ProjectIcon as ProjectIconType,
+	ProjectTypes,
+} from '@/types/projects.types';
+
+type Props = {
+	currentProject: Project;
+	isDragging?: boolean;
+};
+
+const props = withDefaults(defineProps<Props>(), {
+	isDragging: false,
+});
+
+const emit = defineEmits<{
+	projectHover: [];
+	projectDrop: [];
+}>();
+
+const i18n = useI18n();
+
+const projectIcon = computed((): ProjectIconType => {
+	if (props.currentProject?.type === ProjectTypes.Personal) {
+		return { type: 'icon', value: 'user' };
+	} else if (props.currentProject?.name) {
+		return props.currentProject.icon ?? { type: 'icon', value: 'layer-group' };
+	} else {
+		return { type: 'icon', value: 'home' };
+	}
+});
+
+const projectName = computed(() => {
+	if (props.currentProject.type === ProjectTypes.Personal) {
+		return i18n.baseText('projects.menu.personal');
+	}
+	return props.currentProject.name;
+});
+
+const onHover = () => {
+	emit('projectHover');
+};
+
+const onProjectMouseUp = () => {
+	if (props.isDragging) {
+		emit('projectDrop');
+	}
+};
+</script>
+<template>
+	<div
+		:class="{ [$style['home-project']]: true, [$style.dragging]: isDragging }"
+		data-test-id="home-project"
+		@mouseenter="onHover"
+		@mouseup="isDragging ? onProjectMouseUp() : null"
+	>
+		<n8n-link :to="`/projects/${currentProject.id}`" :class="[$style['project-link']]">
+			<ProjectIcon :icon="projectIcon" :border-less="true" size="mini" :title="projectName" />
+			<N8nText size="medium" color="text-base" :class="$style['project-label']">
+				{{ projectName }}
+			</N8nText>
+		</n8n-link>
+	</div>
+</template>
+
+<style module lang="scss">
+.home-project {
+	display: flex;
+	padding: var(--spacing-3xs) var(--spacing-4xs) var(--spacing-4xs);
+	border: var(--border-width-base) var(--border-style-base) transparent;
+
+	&.dragging:hover {
+		border: var(--border-width-base) var(--border-style-base) var(--color-secondary);
+		border-radius: var(--border-radius-base);
+		background-color: var(--color-callout-secondary-background);
+		* {
+			cursor: grabbing;
+			color: var(--color-text-base);
+		}
+	}
+
+	&:hover :global(.n8n-text) {
+		color: var(--color-text-dark);
+	}
+}
+
+.project-link :global(.n8n-text) {
+	display: flex;
+	align-items: center;
+	gap: var(--spacing-4xs);
+}
+
+:global(.n8n-text).project-label {
+	@media (max-width: $breakpoint-sm) {
+		display: none;
+	}
+}
+</style>
diff --git a/packages/frontend/editor-ui/src/components/InlineTextEdit.vue b/packages/frontend/editor-ui/src/components/InlineTextEdit.vue
index 8fb4657d71..76442eb7ae 100644
--- a/packages/frontend/editor-ui/src/components/InlineTextEdit.vue
+++ b/packages/frontend/editor-ui/src/components/InlineTextEdit.vue
@@ -40,6 +40,15 @@ watch(
 	},
 );
 
+watch(
+	() => props.modelValue,
+	(value) => {
+		if (isDisabled.value) return;
+		newValue.value = value;
+	},
+	{ immediate: true },
+);
+
 function onInput(val: string) {
 	if (isDisabled.value) return;
 	newValue.value = val;
@@ -79,7 +88,7 @@ function onEscape() {
 </script>
 
 <template>
-	<span class="inline-edit" @keydown.stop>
+	<span :class="$style['inline-edit']" @keydown.stop>
 		<span v-if="isEditEnabled && !isDisabled">
 			<ExpandableInputEdit
 				v-model="newValue"
@@ -87,6 +96,7 @@ function onEscape() {
 				:maxlength="maxLength"
 				:autofocus="true"
 				:event-bus="inputBus"
+				data-test-id="inline-edit-input"
 				@update:model-value="onInput"
 				@esc="onEscape"
 				@blur="onBlur"
@@ -94,13 +104,25 @@ function onEscape() {
 			/>
 		</span>
 
-		<span v-else class="preview" @click="onClick">
+		<span v-else :class="$style.preview" @click="onClick">
 			<ExpandableInputPreview :model-value="previewValue || modelValue" />
 		</span>
 	</span>
 </template>
 
-<style lang="scss" scoped>
+<style lang="scss" module>
+/* Magic numbers here but this keeps preview and this input vertically aligned  */
+.inline-edit {
+	display: block;
+	height: 25px;
+
+	input {
+		display: block;
+		height: 27px;
+		min-height: 27px;
+	}
+}
+
 .preview {
 	cursor: pointer;
 }
diff --git a/packages/frontend/editor-ui/src/components/MainHeader/MainHeader.vue b/packages/frontend/editor-ui/src/components/MainHeader/MainHeader.vue
index 7f537248a0..079108e089 100644
--- a/packages/frontend/editor-ui/src/components/MainHeader/MainHeader.vue
+++ b/packages/frontend/editor-ui/src/components/MainHeader/MainHeader.vue
@@ -25,6 +25,7 @@ import { useRoute, useRouter } from 'vue-router';
 
 import { useLocalStorage } from '@vueuse/core';
 import GithubButton from 'vue-github-button';
+import type { FolderShortInfo } from '@/Interface';
 
 const router = useRouter();
 const route = useRoute();
@@ -94,6 +95,17 @@ const showGitHubButton = computed(
 	() => !isEnterprise.value && !settingsStore.settings.inE2ETests && !githubButtonHidden.value,
 );
 
+const parentFolderForBreadcrumbs = computed<FolderShortInfo | undefined>(() => {
+	if (!workflow.value.parentFolder) {
+		return undefined;
+	}
+	return {
+		id: workflow.value.parentFolder.id,
+		name: workflow.value.parentFolder.name,
+		parentFolder: workflow.value.parentFolder.parentFolderId ?? undefined,
+	};
+});
+
 watch(route, (to, from) => {
 	syncTabsWithRoute(to, from);
 });
@@ -238,6 +250,7 @@ function hideGithubButton() {
 					:scopes="workflow.scopes"
 					:active="workflow.active"
 					:read-only="readOnly"
+					:current-folder="parentFolderForBreadcrumbs"
 				/>
 				<div v-if="showGitHubButton" :class="[$style['github-button'], 'hidden-sm-and-down']">
 					<div :class="$style['github-button-container']">
@@ -288,17 +301,19 @@ function hideGithubButton() {
 .top-menu {
 	position: relative;
 	display: flex;
+	height: var(--navbar--height);
 	align-items: center;
 	font-size: 0.9em;
 	font-weight: var(--font-weight-regular);
-	overflow: auto;
+	overflow-x: auto;
+	overflow-y: hidden;
 }
 
 .github-button {
 	display: flex;
 	align-items: center;
 	align-self: stretch;
-	padding: var(--spacing-5xs) var(--spacing-m) 0;
+	padding: var(--spacing-5xs) var(--spacing-m);
 	background-color: var(--color-background-xlight);
 	border-left: var(--border-width-base) var(--border-style-base) var(--color-foreground-base);
 }
diff --git a/packages/frontend/editor-ui/src/components/MainHeader/WorkflowDetails.test.ts b/packages/frontend/editor-ui/src/components/MainHeader/WorkflowDetails.test.ts
index 06d5555286..2c9a57cd36 100644
--- a/packages/frontend/editor-ui/src/components/MainHeader/WorkflowDetails.test.ts
+++ b/packages/frontend/editor-ui/src/components/MainHeader/WorkflowDetails.test.ts
@@ -4,11 +4,16 @@ import { EnterpriseEditionFeature, STORES, WORKFLOW_SHARE_MODAL_KEY } from '@/co
 import { createTestingPinia } from '@pinia/testing';
 import userEvent from '@testing-library/user-event';
 import { useUIStore } from '@/stores/ui.store';
+import { useRoute } from 'vue-router';
+import type { Mock } from 'vitest';
 
-vi.mock('vue-router', () => ({
-	useRoute: () => vi.fn(),
-	useRouter: () => vi.fn(),
-	RouterLink: vi.fn(),
+vi.mock('vue-router', async (importOriginal) => ({
+	// eslint-disable-next-line @typescript-eslint/consistent-type-imports
+	...(await importOriginal<typeof import('vue-router')>()),
+	useRoute: vi.fn().mockReturnValue({}),
+	useRouter: vi.fn(() => ({
+		replace: vi.fn(),
+	})),
 }));
 
 vi.mock('@/stores/pushConnection.store', () => ({
@@ -46,6 +51,9 @@ const renderComponent = createComponentRenderer(WorkflowDetails, {
 	global: {
 		stubs: {
 			RouterLink: true,
+			FolderBreadcrumbs: {
+				template: '<div><slot name="append" /></div>',
+			},
 		},
 	},
 });
@@ -63,6 +71,9 @@ describe('WorkflowDetails', () => {
 		uiStore = useUIStore();
 	});
 	it('renders workflow name and tags', async () => {
+		(useRoute as Mock).mockReturnValue({
+			query: { parentFolderId: '1' },
+		});
 		const { getByTestId, getByText } = renderComponent({
 			props: {
 				...workflow,
diff --git a/packages/frontend/editor-ui/src/components/MainHeader/WorkflowDetails.vue b/packages/frontend/editor-ui/src/components/MainHeader/WorkflowDetails.vue
index 17ad302779..134c7cb9ce 100644
--- a/packages/frontend/editor-ui/src/components/MainHeader/WorkflowDetails.vue
+++ b/packages/frontend/editor-ui/src/components/MainHeader/WorkflowDetails.vue
@@ -46,6 +46,7 @@ import { useWorkflowHelpers } from '@/composables/useWorkflowHelpers';
 import { computed, ref, useCssModule, watch } from 'vue';
 import type {
 	ActionDropdownItem,
+	FolderShortInfo,
 	IWorkflowDataUpdate,
 	IWorkflowDb,
 	IWorkflowToShare,
@@ -56,6 +57,8 @@ import type { BaseTextKey } from '@/plugins/i18n';
 import { useNpsSurveyStore } from '@/stores/npsSurvey.store';
 import { usePageRedirectionHelper } from '@/composables/usePageRedirectionHelper';
 import { ProjectTypes } from '@/types/projects.types';
+import { useFoldersStore } from '@/stores/folders.store';
+import type { PathItem } from '@n8n/design-system/components/N8nBreadcrumbs/Breadcrumbs.vue';
 
 const props = defineProps<{
 	readOnly?: boolean;
@@ -65,6 +68,7 @@ const props = defineProps<{
 	meta: IWorkflowDb['meta'];
 	scopes: IWorkflowDb['scopes'];
 	active: IWorkflowDb['active'];
+	currentFolder?: FolderShortInfo;
 }>();
 
 const $style = useCssModule();
@@ -78,6 +82,7 @@ const uiStore = useUIStore();
 const usersStore = useUsersStore();
 const workflowsStore = useWorkflowsStore();
 const projectsStore = useProjectsStore();
+const foldersStore = useFoldersStore();
 const npsSurveyStore = useNpsSurveyStore();
 const i18n = useI18n();
 
@@ -139,6 +144,11 @@ const workflowMenuItems = computed<ActionDropdownItem[]>(() => {
 			label: locale.baseText('menuActions.download'),
 			disabled: !onWorkflowPage.value,
 		},
+		{
+			id: WORKFLOW_MENU_ACTIONS.RENAME,
+			label: locale.baseText('generic.rename'),
+			disabled: !onWorkflowPage.value || workflowPermissions.value.update !== true,
+		},
 	];
 
 	if ((workflowPermissions.value.delete && !props.readOnly) || isNewWorkflow.value) {
@@ -201,19 +211,6 @@ const workflowTagIds = computed(() => {
 	return (props.tags ?? []).map((tag) => (typeof tag === 'string' ? tag : tag.id));
 });
 
-const currentFolder = computed(() => {
-	if (props.id === PLACEHOLDER_EMPTY_WORKFLOW_ID) {
-		return undefined;
-	}
-
-	const workflow = workflowsStore.getWorkflowById(props.id);
-	if (!workflow) {
-		return undefined;
-	}
-
-	return workflow.parentFolder;
-});
-
 const currentProjectName = computed(() => {
 	if (projectsStore.currentProject?.type === ProjectTypes.Personal) {
 		return locale.baseText('projects.menu.personal');
@@ -221,6 +218,18 @@ const currentProjectName = computed(() => {
 	return projectsStore.currentProject?.name;
 });
 
+const currentFolderForBreadcrumbs = computed(() => {
+	if (!isNewWorkflow.value && props.currentFolder) {
+		return props.currentFolder;
+	}
+	const folderId = route.query.parentFolderId as string;
+
+	if (folderId) {
+		return foldersStore.getCachedFolder(folderId);
+	}
+	return null;
+});
+
 watch(
 	() => props.id,
 	() => {
@@ -345,8 +354,8 @@ async function onNameSubmit({
 	const newName = name.trim();
 	if (!newName) {
 		toast.showMessage({
-			title: locale.baseText('workflowDetails.showMessage.title'),
-			message: locale.baseText('workflowDetails.showMessage.message'),
+			title: locale.baseText('renameAction.emptyName.title'),
+			message: locale.baseText('renameAction.emptyName.message'),
 			type: 'error',
 		});
 
@@ -408,11 +417,15 @@ async function onWorkflowMenuSelect(action: WORKFLOW_MENU_ACTIONS): Promise<void
 					id: props.id,
 					name: props.name,
 					tags: props.tags,
-					parentFolderId: currentFolder?.value?.id,
+					parentFolderId: props.currentFolder?.id,
 				},
 			});
 			break;
 		}
+		case WORKFLOW_MENU_ACTIONS.RENAME: {
+			onNameToggle();
+			break;
+		}
 		case WORKFLOW_MENU_ACTIONS.DOWNLOAD: {
 			const workflowData = await workflowHelpers.getWorkflowDataToSave();
 			const { tags, ...data } = workflowData;
@@ -556,11 +569,11 @@ function showCreateWorkflowSuccessToast(id?: string) {
 		let toastText = locale.baseText('workflows.create.personal.toast.text');
 
 		if (projectsStore.currentProject) {
-			if (currentFolder.value) {
+			if (props.currentFolder) {
 				toastTitle = locale.baseText('workflows.create.folder.toast.title', {
 					interpolate: {
 						projectName: currentProjectName.value ?? '',
-						folderName: currentFolder.value.name ?? '',
+						folderName: props.currentFolder.name ?? '',
 					},
 				});
 			} else if (projectsStore.currentProject.id !== projectsStore.personalProject?.id) {
@@ -581,27 +594,50 @@ function showCreateWorkflowSuccessToast(id?: string) {
 		});
 	}
 }
+
+const onBreadcrumbsItemSelected = (item: PathItem) => {
+	if (item.href) {
+		void router.push(item.href).catch((error) => {
+			toast.showError(error, i18n.baseText('folders.open.error.title'));
+		});
+	}
+};
 </script>
 
 <template>
 	<div :class="$style.container">
-		<BreakpointsObserver :value-x-s="15" :value-s-m="25" :value-m-d="50" class="name-container">
+		<BreakpointsObserver
+			:value-x-s="15"
+			:value-s-m="25"
+			:value-m-d="50"
+			class="name-container"
+			data-test-id="canvas-breadcrumbs"
+		>
 			<template #default="{ value }">
-				<ShortenName :name="name" :limit="value" :custom="true" test-id="workflow-name-input">
-					<template #default="{ shortenedName }">
-						<InlineTextEdit
-							:model-value="name"
-							:preview-value="shortenedName"
-							:is-edit-enabled="isNameEditEnabled"
-							:max-length="MAX_WORKFLOW_NAME_LENGTH"
-							:disabled="readOnly || (!isNewWorkflow && !workflowPermissions.update)"
-							placeholder="Enter workflow name"
-							class="name"
-							@toggle="onNameToggle"
-							@submit="onNameSubmit"
-						/>
+				<FolderBreadcrumbs
+					:current-folder="currentFolderForBreadcrumbs"
+					:current-folder-as-link="true"
+					@item-selected="onBreadcrumbsItemSelected"
+				>
+					<template #append>
+						<span v-if="projectsStore.currentProject" :class="$style['path-separator']">/</span>
+						<ShortenName :name="name" :limit="value" :custom="true" test-id="workflow-name-input">
+							<template #default="{ shortenedName }">
+								<InlineTextEdit
+									:model-value="name"
+									:preview-value="shortenedName"
+									:is-edit-enabled="isNameEditEnabled"
+									:max-length="MAX_WORKFLOW_NAME_LENGTH"
+									:disabled="readOnly || (!isNewWorkflow && !workflowPermissions.update)"
+									placeholder="Enter workflow name"
+									class="name"
+									@toggle="onNameToggle"
+									@submit="onNameSubmit"
+								/>
+							</template>
+						</ShortenName>
 					</template>
-				</ShortenName>
+				</FolderBreadcrumbs>
 			</template>
 		</BreakpointsObserver>
 
@@ -728,7 +764,7 @@ $--text-line-height: 24px;
 $--header-spacing: 20px;
 
 .name-container {
-	margin-right: $--header-spacing;
+	margin-right: var(--spacing-s);
 
 	:deep(.el-input) {
 		padding: 0;
@@ -737,8 +773,7 @@ $--header-spacing: 20px;
 
 .name {
 	color: $custom-font-dark;
-	font-size: 15px;
-	display: block;
+	font-size: var(--font-size-s);
 }
 
 .activator {
@@ -805,6 +840,12 @@ $--header-spacing: 20px;
 	flex-wrap: nowrap;
 }
 
+.path-separator {
+	font-size: var(--font-size-xl);
+	color: var(--color-foreground-base);
+	margin: var(--spacing-4xs);
+}
+
 .group {
 	display: flex;
 	gap: var(--spacing-xs);
diff --git a/packages/frontend/editor-ui/src/components/layouts/ResourcesListLayout.vue b/packages/frontend/editor-ui/src/components/layouts/ResourcesListLayout.vue
index 920dabab45..67d970c455 100644
--- a/packages/frontend/editor-ui/src/components/layouts/ResourcesListLayout.vue
+++ b/packages/frontend/editor-ui/src/components/layouts/ResourcesListLayout.vue
@@ -14,7 +14,7 @@ import { useRoute, useRouter } from 'vue-router';
 
 import type { BaseTextKey } from '@/plugins/i18n';
 import type { Scope } from '@n8n/permissions';
-import type { BaseFolderItem, BaseResource, FolderShortInfo, ITag } from '@/Interface';
+import type { BaseFolderItem, BaseResource, ITag, ResourceParentFolder } from '@/Interface';
 import { isSharedResource, isResourceSortableByDate } from '@/utils/typeGuards';
 
 type ResourceKeyType = 'credentials' | 'workflows' | 'variables' | 'folders';
@@ -34,7 +34,7 @@ export type WorkflowResource = BaseResource & {
 	tags?: ITag[] | string[];
 	sharedWithProjects?: ProjectSharingData[];
 	readOnly: boolean;
-	parentFolder?: FolderShortInfo;
+	parentFolder?: ResourceParentFolder;
 };
 
 export type VariableResource = BaseResource & {
diff --git a/packages/frontend/editor-ui/src/composables/useFolders.ts b/packages/frontend/editor-ui/src/composables/useFolders.ts
index 8823ecd2f3..189109b601 100644
--- a/packages/frontend/editor-ui/src/composables/useFolders.ts
+++ b/packages/frontend/editor-ui/src/composables/useFolders.ts
@@ -133,12 +133,8 @@ export function useFolders() {
 	}
 
 	/**
-	 * Get the drag or drop target element from the event target and store
+	 * Handle the drop event by getting the dragged resource and drop target
 	 * @param event
-	 * @returns {
-	 * 	draggedResource: DragTarget | undefined;
-	 * 	dropTarget: DropTarget | undefined;
-	 * }
 	 */
 	function handleDrop(event: MouseEvent): {
 		draggedResource?: DragTarget;
diff --git a/packages/frontend/editor-ui/src/constants.ts b/packages/frontend/editor-ui/src/constants.ts
index 17d1a42c8e..a28ec4ef83 100644
--- a/packages/frontend/editor-ui/src/constants.ts
+++ b/packages/frontend/editor-ui/src/constants.ts
@@ -613,6 +613,7 @@ export const enum WORKFLOW_MENU_ACTIONS {
 	SETTINGS = 'settings',
 	DELETE = 'delete',
 	SWITCH_NODE_VIEW_VERSION = 'switch-node-view-version',
+	RENAME = 'rename',
 }
 
 /**
diff --git a/packages/frontend/editor-ui/src/plugins/i18n/locales/en.json b/packages/frontend/editor-ui/src/plugins/i18n/locales/en.json
index b468b8257c..74d87e7987 100644
--- a/packages/frontend/editor-ui/src/plugins/i18n/locales/en.json
+++ b/packages/frontend/editor-ui/src/plugins/i18n/locales/en.json
@@ -945,6 +945,7 @@
 	"folders.rename.message": "Rename \"{folderName}\"",
 	"folders.rename.error.title": "Problem renaming folder",
 	"folders.rename.success.message": "Folder renamed",
+	"folders.rename.placeholder": "Enter new folder name",
 	"folders.not.found.message": "Folder not found",
 	"folders.move.modal.title": "Move \"{folderName}\" to another folder",
 	"folders.move.modal.description": "Note: Moving this folder will also move all workflows and subfolders within it.",
@@ -1679,6 +1680,9 @@
 	"prompts.npsSurvey.yourEmailAddress": "Your email address",
 	"prompts.npsSurvey.reviewUs": "If you’d like to help even more, leave us a <a target=\"_blank\" href=\"https://www.g2.com/products/n8n/reviews/start\">review on G2</a>.",
 	"prompts.npsSurvey.thanks": "Thanks for your feedback",
+	"renameAction.emptyName.message": "Please enter a name, or press 'esc' to go back to the old one",
+	"renameAction.emptyName.title": "Name missing",
+	"renameAction.invalidName.title": "Invalid name",
 	"resourceLocator.id.placeholder": "Enter ID...",
 	"resourceLocator.mode.id": "By ID",
 	"resourceLocator.mode.url": "By URL",
@@ -2321,8 +2325,6 @@
 	"workflowDetails.active": "Active",
 	"workflowDetails.addTag": "Add tag",
 	"workflowDetails.chooseOrCreateATag": "Choose or create a tag",
-	"workflowDetails.showMessage.message": "Please enter a name, or press 'esc' to go back to the old one",
-	"workflowDetails.showMessage.title": "Name missing",
 	"workflowHelpers.showMessage.title": "Problem saving workflow",
 	"workflowOpen.active": "Active",
 	"workflowOpen.couldNotLoadActiveWorkflows": "Could not load active workflows",
diff --git a/packages/frontend/editor-ui/src/stores/folders.store.ts b/packages/frontend/editor-ui/src/stores/folders.store.ts
index 8665519bbc..0d90704115 100644
--- a/packages/frontend/editor-ui/src/stores/folders.store.ts
+++ b/packages/frontend/editor-ui/src/stores/folders.store.ts
@@ -11,6 +11,7 @@ import { useRootStore } from './root.store';
 import { ref } from 'vue';
 import { useI18n } from '@/composables/useI18n';
 import type { DragTarget, DropTarget } from '@/composables/useFolders';
+import type { PathItem } from '@n8n/design-system/components/N8nBreadcrumbs/Breadcrumbs.vue';
 
 const BREADCRUMBS_MIN_LOADING_TIME = 300;
 
@@ -182,18 +183,22 @@ export const useFoldersStore = defineStore(STORES.FOLDERS, () => {
 	async function getHiddenBreadcrumbsItems(
 		project: { id: string; name: string },
 		folderId: string,
+		options?: {
+			addLinks?: boolean;
+		},
 	) {
 		const startTime = Date.now();
 		const path = await getFolderPath(project.id, folderId);
 
 		// Process a folder and all its nested children recursively
-		const processFolderWithChildren = (
-			folder: FolderTreeResponseItem,
-		): Array<{ id: string; label: string }> => {
-			const result = [
+		const processFolderWithChildren = (folder: FolderTreeResponseItem): PathItem[] => {
+			const result: PathItem[] = [
 				{
 					id: folder.id,
 					label: folder.name,
+					href: options?.addLinks
+						? `/projects/${project.id}/folders/${folder.id}/workflows`
+						: undefined,
 				},
 			];
 
@@ -201,10 +206,13 @@ export const useFoldersStore = defineStore(STORES.FOLDERS, () => {
 			if (folder.children?.length) {
 				const childItems = folder.children.flatMap((child) => {
 					// Add this child
-					const childResult = [
+					const childResult: PathItem[] = [
 						{
 							id: child.id,
 							label: child.name,
+							href: options?.addLinks
+								? `/projects/${project.id}/folders/${child.id}/workflows`
+								: undefined,
 						},
 					];
 
diff --git a/packages/frontend/editor-ui/src/stores/projects.store.ts b/packages/frontend/editor-ui/src/stores/projects.store.ts
index 8370c36bd4..088cb21ba0 100644
--- a/packages/frontend/editor-ui/src/stores/projects.store.ts
+++ b/packages/frontend/editor-ui/src/stores/projects.store.ts
@@ -148,9 +148,19 @@ export const useProjectsStore = defineStore(STORES.PROJECTS, () => {
 	const setProjectNavActiveIdByWorkflowHomeProject = async (
 		homeProject?: IWorkflowDb['homeProject'],
 	) => {
+		// Handle personal projects
 		if (homeProject?.type === ProjectTypes.Personal) {
-			projectNavActiveId.value = 'home';
+			const isOwnPersonalProject = personalProject.value?.id === homeProject?.id;
+			// If it's current user's personal project, set it as current project
+			if (isOwnPersonalProject) {
+				projectNavActiveId.value = homeProject?.id ?? null;
+				currentProject.value = personalProject.value;
+			} else {
+				// Else default to overview page
+				projectNavActiveId.value = 'home';
+			}
 		} else {
+			// Handle team projects
 			projectNavActiveId.value = homeProject?.id ?? null;
 			if (homeProject?.id && !currentProjectId.value) {
 				await getProject(homeProject?.id);
diff --git a/packages/frontend/editor-ui/src/stores/workflows.store.ts b/packages/frontend/editor-ui/src/stores/workflows.store.ts
index 4fb3892515..8747bbf893 100644
--- a/packages/frontend/editor-ui/src/stores/workflows.store.ts
+++ b/packages/frontend/editor-ui/src/stores/workflows.store.ts
@@ -1138,6 +1138,13 @@ export const useWorkflowsStore = defineStore(STORES.WORKFLOWS, () => {
 		}
 	}
 
+	function setParentFolder(folder: IWorkflowDb['parentFolder']) {
+		workflow.value = {
+			...workflow.value,
+			parentFolder: folder,
+		};
+	}
+
 	function setNodes(nodes: INodeUi[]): void {
 		workflow.value.nodes = nodes;
 		nodes.forEach((node) => {
@@ -1843,6 +1850,7 @@ export const useWorkflowsStore = defineStore(STORES.WORKFLOWS, () => {
 		setWorkflowSettings,
 		setWorkflowPinData,
 		setWorkflowTagIds,
+		setParentFolder,
 		addWorkflowTagIds,
 		removeWorkflowTagId,
 		setWorkflowScopes,
diff --git a/packages/frontend/editor-ui/src/views/NodeView.vue b/packages/frontend/editor-ui/src/views/NodeView.vue
index 0647d22e9a..0e79d9ee18 100644
--- a/packages/frontend/editor-ui/src/views/NodeView.vue
+++ b/packages/frontend/editor-ui/src/views/NodeView.vue
@@ -114,6 +114,7 @@ import { getEasyAiWorkflowJson } from '@/utils/easyAiWorkflowUtils';
 import type { CanvasLayoutEvent } from '@/composables/useCanvasLayout';
 import { useClearExecutionButtonVisible } from '@/composables/useClearExecutionButtonVisible';
 import { LOGS_PANEL_STATE } from '@/components/CanvasChat/types/logs';
+import { useFoldersStore } from '@/stores/folders.store';
 
 defineOptions({
 	name: 'NodeView',
@@ -164,6 +165,7 @@ const tagsStore = useTagsStore();
 const pushConnectionStore = usePushConnectionStore();
 const ndvStore = useNDVStore();
 const templatesStore = useTemplatesStore();
+const foldersStore = useFoldersStore();
 
 const canvasEventBus = createEventBus<CanvasEventBusEvents>();
 
@@ -382,23 +384,59 @@ async function initializeRoute(force = false) {
 async function initializeWorkspaceForNewWorkflow() {
 	resetWorkspace();
 
+	const parentFolderId = route.query.parentFolderId as string | undefined;
+
 	await workflowsStore.getNewWorkflowData(
 		undefined,
 		projectsStore.currentProjectId,
-		route.query.parentFolderId as string | undefined,
+		parentFolderId,
 	);
 	workflowsStore.makeNewWorkflowShareable();
 
+	if (projectsStore.currentProjectId) {
+		await fetchAndSetProject(projectsStore.currentProjectId);
+	}
+	await fetchAndSetParentFolder(parentFolderId);
+
 	uiStore.nodeViewInitialized = true;
 	initializedWorkflowId.value = NEW_WORKFLOW_ID;
 }
 
+// These two methods load home project and parent folder data if they are not already loaded
+// This happens when user lands straight on the new workflow page and we have nothing in the store
+async function fetchAndSetParentFolder(folderId?: string) {
+	if (folderId) {
+		let parentFolder = foldersStore.getCachedFolder(folderId);
+		if (!parentFolder && projectsStore.currentProjectId) {
+			await foldersStore.getFolderPath(projectsStore.currentProjectId, folderId);
+			parentFolder = foldersStore.getCachedFolder(folderId);
+		}
+		if (parentFolder) {
+			workflowsStore.setParentFolder({
+				...parentFolder,
+				parentFolderId: parentFolder.parentFolder ?? null,
+			});
+		}
+	}
+}
+
+async function fetchAndSetProject(projectId: string) {
+	if (!projectsStore.currentProject) {
+		const project = await projectsStore.fetchProject(projectId);
+		projectsStore.setCurrentProject(project);
+	}
+}
+
 async function initializeWorkspaceForExistingWorkflow(id: string) {
 	try {
 		const workflowData = await workflowsStore.fetchWorkflow(id);
 
 		openWorkflow(workflowData);
 
+		if (workflowData.parentFolder) {
+			workflowsStore.setParentFolder(workflowData.parentFolder);
+		}
+
 		if (workflowData.meta?.onboardingId) {
 			trackOpenWorkflowFromOnboardingTemplate();
 		}
diff --git a/packages/frontend/editor-ui/src/views/WorkflowsView.vue b/packages/frontend/editor-ui/src/views/WorkflowsView.vue
index c39bb4116f..06d24ab6f7 100644
--- a/packages/frontend/editor-ui/src/views/WorkflowsView.vue
+++ b/packages/frontend/editor-ui/src/views/WorkflowsView.vue
@@ -32,7 +32,6 @@ import InsightsSummary from '@/features/insights/components/InsightsSummary.vue'
 import { useInsightsStore } from '@/features/insights/insights.store';
 import type {
 	FolderListItem,
-	FolderPathItem,
 	IUser,
 	UserAction,
 	WorkflowListItem,
@@ -136,6 +135,8 @@ const currentFolderId = ref<string | null>(null);
 
 const showCardsBadge = ref(false);
 
+const isNameEditEnabled = ref(false);
+
 /**
  * Folder actions
  * These can appear on the list header, and then they are applied to current folder
@@ -213,6 +214,12 @@ const currentFolder = computed(() => {
 	return currentFolderId.value ? foldersStore.breadcrumbsCache[currentFolderId.value] : null;
 });
 
+const currentFolderParent = computed(() => {
+	return currentFolder.value?.parentFolder
+		? foldersStore.breadcrumbsCache[currentFolder.value.parentFolder]
+		: null;
+});
+
 const isDragging = computed(() => {
 	return foldersStore.draggedElement !== null;
 });
@@ -504,6 +511,7 @@ const fetchWorkflows = async () => {
 				.map((r) => ({ id: r.id, name: r.name, parentFolder: r.parentFolder?.id })),
 		);
 
+		// This is for the case when user lands straight on a folder page
 		const isCurrentFolderCached = foldersStore.breadcrumbsCache[parentFolder ?? ''] !== undefined;
 		const needToFetchFolderPath = parentFolder && !isCurrentFolderCached && routeProjectId;
 
@@ -857,63 +865,6 @@ const moveResourceOnDrop = async (draggedResource: DragTarget, dropTarget: DropT
 
 // Breadcrumbs methods
 
-/**
- * Breadcrumbs: Calculate visible and hidden items for both main breadcrumbs and card breadcrumbs
- * We do this here and pass to each component to avoid recalculating in each card
- */
-const visibleBreadcrumbsItems = computed<FolderPathItem[]>(() => {
-	if (!currentFolder.value) return [];
-	const items: FolderPathItem[] = [];
-	const parent = foldersStore.getCachedFolder(currentFolder.value.parentFolder ?? '');
-	if (parent) {
-		items.push({
-			id: parent.id,
-			label: parent.name,
-			href: `/projects/${route.params.projectId}/folders/${parent.id}/workflows`,
-			parentFolder: parent.parentFolder,
-		});
-	}
-	items.push({
-		id: currentFolder.value.id,
-		label: currentFolder.value.name,
-		parentFolder: parent?.parentFolder,
-	});
-	return items;
-});
-
-const hiddenBreadcrumbsItems = computed<FolderPathItem[]>(() => {
-	const lastVisibleParent: FolderPathItem =
-		visibleBreadcrumbsItems.value[visibleBreadcrumbsItems.value.length - 1];
-	if (!lastVisibleParent) return [];
-	const items: FolderPathItem[] = [];
-	// Go through all the parent folders and add them to the hidden items
-	let parentFolder = lastVisibleParent.parentFolder;
-	while (parentFolder) {
-		const parent = foldersStore.getCachedFolder(parentFolder);
-
-		if (!parent) break;
-		items.unshift({
-			id: parent.id,
-			label: parent.name,
-			href: `/projects/${route.params.projectId}/folders/${parent.id}/workflows`,
-			parentFolder: parent.parentFolder,
-		});
-		parentFolder = parent.parentFolder;
-	}
-	return items;
-});
-
-/**
- * Main breadcrumbs items that show on top of the list
- * These show path to the current folder with up to 2 parents visible
- */
-const mainBreadcrumbs = computed(() => {
-	return {
-		visibleItems: visibleBreadcrumbsItems.value,
-		hiddenItems: hiddenBreadcrumbsItems.value,
-	};
-});
-
 const onBreadcrumbItemClick = (item: PathItem) => {
 	if (item.href) {
 		loading.value = true;
@@ -958,8 +909,7 @@ const onBreadCrumbsAction = async (action: string) => {
 			);
 			break;
 		case FOLDER_LIST_ITEM_ACTIONS.RENAME:
-			if (!route.params.folderId) return;
-			await renameFolder(route.params.folderId as string);
+			onNameToggle();
 			break;
 		case FOLDER_LIST_ITEM_ACTIONS.MOVE:
 			if (!currentFolder.value) return;
@@ -1307,6 +1257,69 @@ const onCreateWorkflowClick = () => {
 		},
 	});
 };
+
+const onNameToggle = () => {
+	isNameEditEnabled.value = !isNameEditEnabled.value;
+};
+
+const onNameSubmit = async ({
+	name,
+	onSubmit,
+}: {
+	name: string;
+	onSubmit: (saved: boolean) => void;
+}) => {
+	if (!currentFolder.value || !currentProject.value) return;
+
+	const newName = name.trim();
+	if (!newName) {
+		toast.showMessage({
+			title: i18n.baseText('renameAction.emptyName.title'),
+			message: i18n.baseText('renameAction.emptyName.message'),
+			type: 'error',
+		});
+
+		onSubmit(false);
+		return;
+	}
+
+	if (newName === currentFolder.value.name) {
+		isNameEditEnabled.value = false;
+
+		onSubmit(true);
+		return;
+	}
+
+	const validationResult = folderHelpers.validateFolderName(newName);
+	if (typeof validationResult === 'string') {
+		toast.showMessage({
+			title: i18n.baseText('renameAction.invalidName.title'),
+			message: validationResult,
+			type: 'error',
+		});
+		onSubmit(false);
+		return;
+	} else {
+		try {
+			await foldersStore.renameFolder(currentProject.value?.id, currentFolder.value.id, newName);
+			foldersStore.breadcrumbsCache[currentFolder.value.id].name = newName;
+			toast.showMessage({
+				title: i18n.baseText('folders.rename.success.message', {
+					interpolate: { folderName: newName },
+				}),
+				type: 'success',
+			});
+			telemetry.track('User renamed folder', {
+				folder_id: currentFolder.value.id,
+			});
+			isNameEditEnabled.value = false;
+			onSubmit(true);
+		} catch (error) {
+			toast.showError(error, i18n.baseText('folders.rename.error.title'));
+			onSubmit(false);
+		}
+	}
+};
 </script>
 
 <template>
@@ -1417,14 +1430,31 @@ const onCreateWorkflowClick = () => {
 				data-test-id="main-breadcrumbs"
 			>
 				<FolderBreadcrumbs
-					:breadcrumbs="mainBreadcrumbs"
+					:current-folder="currentFolderParent"
 					:actions="mainBreadcrumbsActions"
 					:hidden-items-trigger="isDragging ? 'hover' : 'click'"
+					:current-folder-as-link="true"
 					@item-selected="onBreadcrumbItemClick"
 					@action="onBreadCrumbsAction"
 					@item-drop="onBreadCrumbsItemDrop"
 					@project-drop="moveFolderToProjectRoot"
-				/>
+				>
+					<template #append>
+						<span :class="$style['path-separator']">/</span>
+						<InlineTextEdit
+							data-test-id="breadcrumbs-item-current"
+							:model-value="currentFolder.name"
+							:preview-value="currentFolder.name"
+							:is-edit-enabled="isNameEditEnabled"
+							:max-length="30"
+							:disabled="readOnlyEnv || !hasPermissionToUpdateFolders"
+							:class="{ [$style.name]: true, [$style['pointer-disabled']]: isDragging }"
+							:placeholder="i18n.baseText('folders.rename.placeholder')"
+							@toggle="onNameToggle"
+							@submit="onNameSubmit"
+						/>
+					</template>
+				</FolderBreadcrumbs>
 			</div>
 		</template>
 		<template #item="{ item: data, index }">
@@ -1716,6 +1746,21 @@ const onCreateWorkflowClick = () => {
 		background-color: var(--color-callout-secondary-background);
 	}
 }
+
+.path-separator {
+	font-size: var(--font-size-xl);
+	color: var(--color-foreground-base);
+	margin: var(--spacing-4xs);
+}
+
+.name {
+	color: $custom-font-dark;
+	font-size: var(--font-size-s);
+}
+
+.pointer-disabled {
+	pointer-events: none;
+}
 </style>
 
 <style lang="scss">