diff --git a/.story_kit/stories/current/38_auto_open_project_on_server_startup.md b/.story_kit/stories/archived/38_auto_open_project_on_server_startup.md
similarity index 97%
rename from .story_kit/stories/current/38_auto_open_project_on_server_startup.md
rename to .story_kit/stories/archived/38_auto_open_project_on_server_startup.md
index 8c4d079..9612b06 100644
--- a/.story_kit/stories/current/38_auto_open_project_on_server_startup.md
+++ b/.story_kit/stories/archived/38_auto_open_project_on_server_startup.md
@@ -1,6 +1,6 @@
 ---
 name: Auto-Open Project on Server Startup
-test_plan: pending
+test_plan: approved
 ---
 
 # Story 38: Auto-Open Project on Server Startup
diff --git a/frontend/src/components/AgentPanel.test.tsx b/frontend/src/components/AgentPanel.test.tsx
index 04cc1fd..b2e6864 100644
--- a/frontend/src/components/AgentPanel.test.tsx
+++ b/frontend/src/components/AgentPanel.test.tsx
@@ -1,7 +1,7 @@
 import { render, screen, waitFor } from "@testing-library/react";
 import userEvent from "@testing-library/user-event";
 import { beforeAll, beforeEach, describe, expect, it, vi } from "vitest";
-import type { AgentInfo, AgentConfigInfo } from "../api/agents";
+import type { AgentConfigInfo, AgentInfo } from "../api/agents";
 import { agentsApi } from "../api/agents";
 
 vi.mock("../api/agents", () => {
@@ -147,9 +147,7 @@ describe("AgentPanel diff command", () => {
 		await userEvent.click(expandButton);
 
 		expect(
-			await screen.findByText(
-				'cd "/tmp/wt" && git difftool develop...HEAD',
-			),
+			await screen.findByText('cd "/tmp/wt" && git difftool develop...HEAD'),
 		).toBeInTheDocument();
 	});
 
@@ -178,9 +176,7 @@ describe("AgentPanel diff command", () => {
 		await userEvent.click(expandButton);
 
 		expect(
-			await screen.findByText(
-				'cd "/tmp/wt" && git difftool master...HEAD',
-			),
+			await screen.findByText('cd "/tmp/wt" && git difftool master...HEAD'),
 		).toBeInTheDocument();
 	});
 });
diff --git a/frontend/src/components/AgentPanel.tsx b/frontend/src/components/AgentPanel.tsx
index f99647b..8b951d2 100644
--- a/frontend/src/components/AgentPanel.tsx
+++ b/frontend/src/components/AgentPanel.tsx
@@ -108,7 +108,10 @@ function agentKey(storyId: string, agentName: string): string {
 function DiffCommand({
 	worktreePath,
 	baseBranch,
-}: { worktreePath: string; baseBranch: string }) {
+}: {
+	worktreePath: string;
+	baseBranch: string;
+}) {
 	const [copied, setCopied] = useState(false);
 	const command = `cd "${worktreePath}" && git difftool ${baseBranch}...HEAD`;
 
@@ -652,19 +655,20 @@ export function AgentPanel({ stories }: AgentPanelProps) {
 								</div>
 
 								{/* Empty state when expanded with no agents */}
-								{expandedKey === story.story_id && storyAgentEntries.length === 0 && (
-									<div
-										style={{
-											borderTop: "1px solid #2a2a2a",
-											padding: "12px",
-											fontSize: "0.8em",
-											color: "#555",
-											textAlign: "center",
-										}}
-									>
-										No agents started. Use the Run button to start an agent.
-									</div>
-								)}
+								{expandedKey === story.story_id &&
+									storyAgentEntries.length === 0 && (
+										<div
+											style={{
+												borderTop: "1px solid #2a2a2a",
+												padding: "12px",
+												fontSize: "0.8em",
+												color: "#555",
+												textAlign: "center",
+											}}
+										>
+											No agents started. Use the Run button to start an agent.
+										</div>
+									)}
 
 								{/* Expanded detail per agent */}
 								{storyAgentEntries.map(([key, a]) => {
diff --git a/frontend/src/components/Chat.test.tsx b/frontend/src/components/Chat.test.tsx
index 5144678..6493e59 100644
--- a/frontend/src/components/Chat.test.tsx
+++ b/frontend/src/components/Chat.test.tsx
@@ -487,10 +487,13 @@ describe("Chat review panel", () => {
 		render(<Chat projectPath="/tmp/project" onCloseProject={vi.fn()} />);
 
 		expect(await screen.findByText("Upcoming Stories")).toBeInTheDocument();
-		expect(
-			await screen.findByText("View Upcoming Stories"),
-		).toBeInTheDocument();
-		expect(await screen.findByText("32_worktree")).toBeInTheDocument();
+		// Both AgentPanel and ReviewPanel display story names, so multiple elements are expected
+		const storyNameElements = await screen.findAllByText(
+			"View Upcoming Stories",
+		);
+		expect(storyNameElements.length).toBeGreaterThan(0);
+		const worktreeElements = await screen.findAllByText("32_worktree");
+		expect(worktreeElements.length).toBeGreaterThan(0);
 	});
 
 	it("collect coverage button triggers collection and refreshes gate", async () => {
diff --git a/server/src/main.rs b/server/src/main.rs
index b5e4570..116cb79 100644
--- a/server/src/main.rs
+++ b/server/src/main.rs
@@ -41,14 +41,49 @@ fn remove_port_file(path: &Path) {
     let _ = std::fs::remove_file(path);
 }
 
+/// Walk from `start` up through parent directories, returning the first
+/// directory that contains a `.story_kit/` subdirectory, or `None`.
+fn find_story_kit_root(start: &Path) -> Option<PathBuf> {
+    let mut current = start.to_path_buf();
+    loop {
+        if current.join(".story_kit").is_dir() {
+            return Some(current);
+        }
+        if !current.pop() {
+            return None;
+        }
+    }
+}
+
 #[tokio::main]
 async fn main() -> Result<(), std::io::Error> {
     let app_state = Arc::new(SessionState::default());
     let cwd = std::env::current_dir().unwrap_or_else(|_| PathBuf::from("."));
-    *app_state.project_root.lock().unwrap() = Some(cwd.clone());
     let store = Arc::new(
         JsonFileStore::from_path(PathBuf::from("store.json")).map_err(std::io::Error::other)?,
     );
+
+    // Auto-detect a .story_kit/ project in cwd or parent directories.
+    if let Some(project_root) = find_story_kit_root(&cwd) {
+        io::fs::open_project(
+            project_root.to_string_lossy().to_string(),
+            &app_state,
+            store.as_ref(),
+        )
+        .await
+        .unwrap_or_else(|e| {
+            eprintln!("Warning: failed to auto-open project at {project_root:?}: {e}");
+            project_root.to_string_lossy().to_string()
+        });
+
+        // Validate agent config for the detected project root.
+        config::ProjectConfig::load(&project_root)
+            .unwrap_or_else(|e| panic!("Invalid project.toml: {e}"));
+    } else {
+        // No .story_kit/ found — fall back to cwd so existing behaviour is preserved.
+        *app_state.project_root.lock().unwrap() = Some(cwd.clone());
+    }
+
     let workflow = Arc::new(std::sync::Mutex::new(WorkflowState::default()));
     let port = resolve_port();
     let agents = Arc::new(AgentPool::new(port));
@@ -70,10 +105,6 @@ async fn main() -> Result<(), std::io::Error> {
     println!("\x1b[96;1mFrontend:\x1b[0m \x1b[94mhttp://{addr}\x1b[0m");
     println!("\x1b[92;1mOpenAPI Docs:\x1b[0m \x1b[94mhttp://{addr}/docs\x1b[0m");
 
-    // Validate agent config at startup — panic on invalid project.toml.
-    config::ProjectConfig::load(&cwd)
-        .unwrap_or_else(|e| panic!("Invalid project.toml: {e}"));
-
     let port_file = write_port_file(&cwd, port);
 
     let result = Server::new(TcpListener::bind(&addr)).run(app).await;
@@ -136,4 +167,45 @@ name = "coder"
         remove_port_file(&path);
         assert!(!path.exists());
     }
+
+    #[test]
+    fn find_story_kit_root_returns_cwd_when_story_kit_in_cwd() {
+        let tmp = tempfile::tempdir().unwrap();
+        std::fs::create_dir_all(tmp.path().join(".story_kit")).unwrap();
+
+        let result = find_story_kit_root(tmp.path());
+        assert_eq!(result, Some(tmp.path().to_path_buf()));
+    }
+
+    #[test]
+    fn find_story_kit_root_returns_parent_when_story_kit_in_parent() {
+        let tmp = tempfile::tempdir().unwrap();
+        std::fs::create_dir_all(tmp.path().join(".story_kit")).unwrap();
+        let child = tmp.path().join("subdir").join("nested");
+        std::fs::create_dir_all(&child).unwrap();
+
+        let result = find_story_kit_root(&child);
+        assert_eq!(result, Some(tmp.path().to_path_buf()));
+    }
+
+    #[test]
+    fn find_story_kit_root_returns_none_when_no_story_kit() {
+        let tmp = tempfile::tempdir().unwrap();
+        // No .story_kit/ created
+
+        let result = find_story_kit_root(tmp.path());
+        assert_eq!(result, None);
+    }
+
+    #[test]
+    fn find_story_kit_root_prefers_nearest_ancestor() {
+        // If both cwd and a parent have .story_kit/, return cwd (nearest).
+        let tmp = tempfile::tempdir().unwrap();
+        std::fs::create_dir_all(tmp.path().join(".story_kit")).unwrap();
+        let child = tmp.path().join("inner");
+        std::fs::create_dir_all(child.join(".story_kit")).unwrap();
+
+        let result = find_story_kit_root(&child);
+        assert_eq!(result, Some(child));
+    }
 }