diff --git a/src/vs/workbench/api/browser/mainThreadChatSessions.ts b/src/vs/workbench/api/browser/mainThreadChatSessions.ts
index fff57e96b30..edb808986f9 100644
--- a/src/vs/workbench/api/browser/mainThreadChatSessions.ts
+++ b/src/vs/workbench/api/browser/mainThreadChatSessions.ts
@@ -6,6 +6,7 @@
 import { raceCancellationError } from '../../../base/common/async.js';
 import { CancellationToken } from '../../../base/common/cancellation.js';
 import { Emitter, Event } from '../../../base/common/event.js';
+import { IMarkdownString, MarkdownString } from '../../../base/common/htmlContent.js';
 import { Disposable, DisposableMap, DisposableStore, IDisposable } from '../../../base/common/lifecycle.js';
 import { revive } from '../../../base/common/marshalling.js';
 import { URI, UriComponents } from '../../../base/common/uri.js';
@@ -87,7 +88,8 @@ export class MainThreadChatSessions extends Disposable implements MainThreadChat
 			return sessions.map(session => ({
 				...session,
 				id: session.id,
-				iconPath: session.iconPath ? this._reviveIconPath(session.iconPath) : undefined
+				iconPath: session.iconPath ? this._reviveIconPath(session.iconPath) : undefined,
+				tooltip: session.tooltip ? this._reviveTooltip(session.tooltip) : undefined
 			}));
 		} catch (error) {
 			this._logService.error('Error providing chat sessions:', error);
@@ -307,6 +309,24 @@ export class MainThreadChatSessions extends Disposable implements MainThreadChat
 		return undefined;
 	}
 
+	private _reviveTooltip(tooltip: string | IMarkdownString | undefined): string | MarkdownString | undefined {
+		if (!tooltip) {
+			return undefined;
+		}
+
+		// If it's already a string, return as-is
+		if (typeof tooltip === 'string') {
+			return tooltip;
+		}
+
+		// If it's a serialized IMarkdownString, revive it to MarkdownString
+		if (typeof tooltip === 'object' && 'value' in tooltip) {
+			return MarkdownString.lift(tooltip);
+		}
+
+		return undefined;
+	}
+
 	async $showChatSession(chatSessionType: string, sessionId: string, position: EditorGroupColumn | undefined): Promise<void> {
 		const sessionUri = ChatSessionUri.forSession(chatSessionType, sessionId);
 
diff --git a/src/vs/workbench/api/common/extHost.api.impl.ts b/src/vs/workbench/api/common/extHost.api.impl.ts
index 3a97d98f1eb..c3503baaaef 100644
--- a/src/vs/workbench/api/common/extHost.api.impl.ts
+++ b/src/vs/workbench/api/common/extHost.api.impl.ts
@@ -1867,6 +1867,7 @@ export function createApiFactoryAndRegisterActors(accessor: ServicesAccessor): I
 			ChatResponseTurn2: extHostTypes.ChatResponseTurn2,
 			ChatToolInvocationPart: extHostTypes.ChatToolInvocationPart,
 			ChatLocation: extHostTypes.ChatLocation,
+			ChatSessionStatus: extHostTypes.ChatSessionStatus,
 			ChatRequestEditorData: extHostTypes.ChatRequestEditorData,
 			ChatRequestNotebookData: extHostTypes.ChatRequestNotebookData,
 			ChatReferenceBinaryData: extHostTypes.ChatReferenceBinaryData,
diff --git a/src/vs/workbench/api/common/extHostChatSessions.ts b/src/vs/workbench/api/common/extHostChatSessions.ts
index b56178412a2..2def43f4f60 100644
--- a/src/vs/workbench/api/common/extHostChatSessions.ts
+++ b/src/vs/workbench/api/common/extHostChatSessions.ts
@@ -11,7 +11,7 @@ import { MarshalledId } from '../../../base/common/marshallingIds.js';
 import { IExtensionDescription } from '../../../platform/extensions/common/extensions.js';
 import { ILogService } from '../../../platform/log/common/log.js';
 import { IChatAgentRequest, IChatAgentResult } from '../../contrib/chat/common/chatAgents.js';
-import { IChatSessionItem } from '../../contrib/chat/common/chatSessionsService.js';
+import { IChatSessionItem, ChatSessionStatus } from '../../contrib/chat/common/chatSessionsService.js';
 import { ChatAgentLocation } from '../../contrib/chat/common/constants.js';
 import { Proxied } from '../../services/extensions/common/proxyIdentifier.js';
 import { ChatSessionDto, ExtHostChatSessionsShape, IChatAgentProgressShape, MainContext, MainThreadChatSessionsShape } from './extHost.protocol.js';
@@ -128,6 +128,22 @@ export class ExtHostChatSessions extends Disposable implements ExtHostChatSessio
 		await this._proxy.$showChatSession(chatSessionType, sessionId, typeConvert.ViewColumn.from(options?.viewColumn));
 	}
 
+	private convertChatSessionStatus(status: vscode.ChatSessionStatus | undefined): ChatSessionStatus | undefined {
+		if (status === undefined) {
+			return undefined;
+		}
+		switch (status) {
+			case 0: // vscode.ChatSessionStatus.Failed
+				return ChatSessionStatus.Failed;
+			case 1: // vscode.ChatSessionStatus.Completed
+				return ChatSessionStatus.Completed;
+			case 2: // vscode.ChatSessionStatus.InProgress
+				return ChatSessionStatus.InProgress;
+			default:
+				return undefined;
+		}
+	}
+
 	async $provideChatSessionItems(handle: number, token: vscode.CancellationToken): Promise<IChatSessionItem[]> {
 		const entry = this._chatSessionItemProviders.get(handle);
 		if (!entry) {
@@ -150,7 +166,10 @@ export class ExtHostChatSessions extends Disposable implements ExtHostChatSessio
 				response.push({
 					id: sessionContent.id,
 					label: sessionContent.label,
-					iconPath: sessionContent.iconPath
+					iconPath: sessionContent.iconPath,
+					description: sessionContent.description,
+					status: this.convertChatSessionStatus(sessionContent.status),
+					tooltip: typeConvert.MarkdownString.fromStrict(sessionContent.tooltip)
 				});
 			}
 		}
diff --git a/src/vs/workbench/api/common/extHostTypes.ts b/src/vs/workbench/api/common/extHostTypes.ts
index 328e184142a..cce0d4b72c9 100644
--- a/src/vs/workbench/api/common/extHostTypes.ts
+++ b/src/vs/workbench/api/common/extHostTypes.ts
@@ -4853,6 +4853,12 @@ export enum ChatLocation {
 	Editor = 4,
 }
 
+export enum ChatSessionStatus {
+	Failed = 0,
+	Completed = 1,
+	InProgress = 2
+}
+
 export enum ChatResponseReferencePartStatusKind {
 	Complete = 1,
 	Partial = 2,
diff --git a/src/vs/workbench/contrib/chat/browser/chatSessions.ts b/src/vs/workbench/contrib/chat/browser/chatSessions.ts
index 3e966a8c3dd..bf1fd0581f9 100644
--- a/src/vs/workbench/contrib/chat/browser/chatSessions.ts
+++ b/src/vs/workbench/contrib/chat/browser/chatSessions.ts
@@ -16,6 +16,7 @@ import { Disposable, DisposableStore } from '../../../../base/common/lifecycle.j
 import { MarshalledId } from '../../../../base/common/marshallingIds.js';
 import { ThemeIcon } from '../../../../base/common/themables.js';
 import { URI } from '../../../../base/common/uri.js';
+import { isMarkdownString } from '../../../../base/common/htmlContent.js';
 import * as nls from '../../../../nls.js';
 import { getActionBarActions } from '../../../../platform/actions/browser/menuEntryActionViewItem.js';
 import { IMenuService, MenuId, MenuRegistry } from '../../../../platform/actions/common/actions.js';
@@ -48,9 +49,9 @@ import { IEditorGroup, IEditorGroupsService } from '../../../services/editor/com
 import { IEditorService } from '../../../services/editor/common/editorService.js';
 import { IExtensionService } from '../../../services/extensions/common/extensions.js';
 import { IWorkbenchLayoutService } from '../../../services/layout/browser/layoutService.js';
+import { IChatSessionItem, IChatSessionItemProvider, IChatSessionsExtensionPoint, IChatSessionsService, ChatSessionStatus } from '../common/chatSessionsService.js';
 import { IViewsService } from '../../../services/views/common/viewsService.js';
 import { ChatContextKeys } from '../common/chatContextKeys.js';
-import { IChatSessionItem, IChatSessionItemProvider, IChatSessionsExtensionPoint, IChatSessionsService } from '../common/chatSessionsService.js';
 import { ChatSessionUri } from '../common/chatUri.js';
 import { ChatAgentLocation, ChatConfiguration } from '../common/constants.js';
 import { IChatWidget, IChatWidgetService } from './chat.js';
@@ -81,6 +82,7 @@ interface ILocalChatSessionItem extends IChatSessionItem {
 	widget?: IChatWidget;
 	sessionType: 'editor' | 'widget';
 	description?: string;
+	status?: ChatSessionStatus;
 }
 
 export class ChatSessionsView extends Disposable implements IWorkbenchContribution {
@@ -548,14 +550,23 @@ class SessionsDataSource implements IAsyncDataSource<IChatSessionItemProvider, C
 }
 
 // Tree delegate for session items
-class SessionsDelegate implements IListVirtualDelegate<IChatSessionItem> {
+class SessionsDelegate implements IListVirtualDelegate<ChatSessionItemWithProvider> {
 	static readonly ITEM_HEIGHT = 22;
+	static readonly ITEM_HEIGHT_WITH_DESCRIPTION = 38; // Slightly smaller for cleaner look
 
-	getHeight(element: IChatSessionItem): number {
-		return SessionsDelegate.ITEM_HEIGHT;
+	getHeight(element: ChatSessionItemWithProvider): number {
+		// Check if element has a non-empty description
+		const hasDescription = 'description' in element &&
+			typeof element.description === 'string' &&
+			element.description.trim().length > 0;
+
+		// Only give taller height to non-local sessions with descriptions
+		const isLocalSession = element.provider.chatSessionType === 'local';
+
+		return hasDescription && !isLocalSession ? SessionsDelegate.ITEM_HEIGHT_WITH_DESCRIPTION : SessionsDelegate.ITEM_HEIGHT;
 	}
 
-	getTemplateId(element: IChatSessionItem): string {
+	getTemplateId(element: ChatSessionItemWithProvider): string {
 		return SessionsRenderer.TEMPLATE_ID;
 	}
 }
@@ -636,8 +647,11 @@ class SessionsRenderer extends Disposable implements ITreeRenderer<IChatSessionI
 
 	renderTemplate(container: HTMLElement): ISessionTemplateData {
 		const element = append(container, $('.chat-session-item'));
-		const resourceLabel = this.labels.create(element, { supportHighlights: true });
-		const actionsContainer = append(resourceLabel.element, $('.actions'));
+
+		// Create a container that holds both the label and actions
+		const contentContainer = append(element, $('.session-content'));
+		const resourceLabel = this.labels.create(contentContainer, { supportHighlights: true });
+		const actionsContainer = append(contentContainer, $('.actions'));
 		const actionBar = new ActionBar(actionsContainer);
 		const elementDisposable = new DisposableStore();
 
@@ -656,6 +670,13 @@ class SessionsRenderer extends Disposable implements ITreeRenderer<IChatSessionI
 		// Clear previous element disposables
 		templateData.elementDisposable.clear();
 
+		// Add CSS class for local sessions
+		if (sessionWithProvider.provider.chatSessionType === 'local') {
+			templateData.container.classList.add('local-session');
+		} else {
+			templateData.container.classList.remove('local-session');
+		}
+
 		// Handle different icon types
 		let iconResource: URI | undefined;
 		let iconTheme: ThemeIcon | undefined;
@@ -688,7 +709,14 @@ class SessionsRenderer extends Disposable implements ITreeRenderer<IChatSessionI
 			resource: iconResource
 		}, {
 			fileKind: undefined,
-			icon: iconTheme || iconUri
+			icon: iconTheme || iconUri,
+			title: 'tooltip' in session && session.tooltip ?
+				(typeof session.tooltip === 'string' ? session.tooltip :
+					isMarkdownString(session.tooltip) ? {
+						markdown: session.tooltip,
+						markdownNotSupportedFallback: session.tooltip.value
+					} : undefined) :
+				undefined
 		});
 
 		// Create context overlay for this specific session item
diff --git a/src/vs/workbench/contrib/chat/browser/media/chatSessions.css b/src/vs/workbench/contrib/chat/browser/media/chatSessions.css
index 8dc856511fb..99e46288009 100644
--- a/src/vs/workbench/contrib/chat/browser/media/chatSessions.css
+++ b/src/vs/workbench/contrib/chat/browser/media/chatSessions.css
@@ -41,6 +41,22 @@
 	opacity: 0.7;
 }
 
+/* Position session content and actions inline */
+.chat-sessions-tree .chat-session-item .session-content {
+	display: flex;
+	justify-content: space-between;
+	align-items: center;
+	width: 100%;
+	min-height: 22px;
+}
+
+.chat-sessions-tree .chat-session-item .actions {
+	margin-left: 8px;
+	display: flex;
+	align-items: center;
+	flex-shrink: 0;
+}
+
 /* Hide action bar actions by default */
 .chat-sessions-tree .chat-session-item .actions .action-label {
 	display: none;
@@ -50,5 +66,49 @@
 .chat-sessions-tree .chat-session-item:hover .actions .action-label,
 .chat-sessions-tree .monaco-list-row.focused .chat-session-item .actions .action-label,
 .chat-sessions-tree .monaco-list-row.selected .chat-session-item .actions .action-label {
+	display: flex;
+	align-items: center;
+}
+
+/* For items with descriptions, keep the structure but adjust alignment */
+.chat-sessions-tree .chat-session-item:not(.local-session) .session-content {
+	align-items: flex-start;
+	padding-top: 2px;
+	padding-bottom: 2px;
+}
+
+/* Ensure resource label takes up available space */
+.chat-sessions-tree .chat-session-item .monaco-icon-label {
+	flex: 1;
+	min-width: 0; /* Allow text to truncate */
+}
+
+/* Multi-line description support */
+.chat-sessions-tree .chat-session-item:not(.local-session) .monaco-icon-label-container {
+	flex-direction: column !important;
+	align-items: flex-start !important;
+	gap: 1px;
+}
+
+.chat-sessions-tree .chat-session-item:not(.local-session) .monaco-icon-name-container {
+	display: flex;
+	align-items: center;
+	width: 100%;
+}
+
+.chat-sessions-tree .chat-session-item:not(.local-session) .monaco-icon-description-container {
+	width: 100%;
+	padding-left: 0;
+}
+
+.chat-sessions-tree .chat-session-item:not(.local-session) .monaco-icon-description-container > .label-description {
+	margin-left: 0 !important;
+	margin-top: 0;
+	opacity: 0.6;
+	font-size: 0.9em;
+	color: var(--vscode-descriptionForeground);
+	white-space: normal !important;
+	word-wrap: break-word;
+	line-height: 1.3;
 	display: block;
 }
diff --git a/src/vs/workbench/contrib/chat/common/chatSessionsService.ts b/src/vs/workbench/contrib/chat/common/chatSessionsService.ts
index d8582519b1d..a86d73815dd 100644
--- a/src/vs/workbench/contrib/chat/common/chatSessionsService.ts
+++ b/src/vs/workbench/contrib/chat/common/chatSessionsService.ts
@@ -12,6 +12,13 @@ import { ThemeIcon } from '../../../../base/common/themables.js';
 import { IChatProgress } from './chatService.js';
 import { IChatAgentRequest } from './chatAgents.js';
 import { IRelaxedExtensionDescription } from '../../../../platform/extensions/common/extensions.js';
+import { IMarkdownString } from '../../../../base/common/htmlContent.js';
+
+export const enum ChatSessionStatus {
+	Failed = 0,
+	Completed = 1,
+	InProgress = 2
+}
 
 export interface IChatSessionsExtensionPoint {
 	readonly id: string;
@@ -23,13 +30,15 @@ export interface IChatSessionsExtensionPoint {
 	readonly when?: string;
 }
 export interface IChatSessionItem {
-
 	id: string;
 	label: string;
 	iconPath?: URI | {
 		light: URI;
 		dark: URI;
 	} | ThemeIcon;
+	description?: string | IMarkdownString;
+	status?: ChatSessionStatus;
+	tooltip?: string | IMarkdownString;
 }
 
 export interface ChatSession extends IDisposable {
diff --git a/src/vscode-dts/vscode.proposed.chatSessionsProvider.d.ts b/src/vscode-dts/vscode.proposed.chatSessionsProvider.d.ts
index a1045ff47b1..fcb48e72b89 100644
--- a/src/vscode-dts/vscode.proposed.chatSessionsProvider.d.ts
+++ b/src/vscode-dts/vscode.proposed.chatSessionsProvider.d.ts
@@ -4,6 +4,26 @@
  *--------------------------------------------------------------------------------------------*/
 
 declare module 'vscode' {
+	/**
+	 * Represents the status of a chat session.
+	 */
+	export enum ChatSessionStatus {
+		/**
+		 * The chat session failed to complete.
+		 */
+		Failed = 0,
+
+		/**
+		 * The chat session completed successfully.
+		 */
+		Completed = 1,
+
+		/**
+		 * The chat session is currently in progress.
+		 */
+		InProgress = 2
+	}
+
 	/**
 	 * Provides a list of information about chat sessions.
 	 */
@@ -46,6 +66,21 @@ declare module 'vscode' {
 		 * An icon for the participant shown in UI.
 		 */
 		iconPath?: IconPath;
+
+		/**
+		 * An optional description that provides additional context about the chat session.
+		 */
+		description?: string | MarkdownString;
+
+		/**
+		 * An optional status indicating the current state of the session.
+		 */
+		status?: ChatSessionStatus;
+
+		/**
+		 * The tooltip text when you hover over this item.
+		 */
+		tooltip?: string | MarkdownString;
 	}
 
 	export interface ChatSession {