diff --git a/packages/shared/src/types/agent.ts b/packages/shared/src/types/agent.ts
index 394de331..e33a1fb4 100644
--- a/packages/shared/src/types/agent.ts
+++ b/packages/shared/src/types/agent.ts
@@ -17,11 +17,13 @@ export interface AgentInstructionsFileSummary {
   language: string;
   markdown: boolean;
   isEntryFile: boolean;
+  editable: boolean;
+  deprecated: boolean;
+  virtual: boolean;
 }
 
 export interface AgentInstructionsFileDetail extends AgentInstructionsFileSummary {
   content: string;
-  editable: boolean;
 }
 
 export interface AgentInstructionsBundle {
diff --git a/server/src/__tests__/agent-instructions-routes.test.ts b/server/src/__tests__/agent-instructions-routes.test.ts
index 783daed7..3924fc04 100644
--- a/server/src/__tests__/agent-instructions-routes.test.ts
+++ b/server/src/__tests__/agent-instructions-routes.test.ts
@@ -109,7 +109,16 @@ describe("agent instructions bundle routes", () => {
       warnings: [],
       legacyPromptTemplateActive: false,
       legacyBootstrapPromptTemplateActive: false,
-      files: [{ path: "AGENTS.md", size: 12, language: "markdown", markdown: true, isEntryFile: true }],
+      files: [{
+        path: "AGENTS.md",
+        size: 12,
+        language: "markdown",
+        markdown: true,
+        isEntryFile: true,
+        editable: true,
+        deprecated: false,
+        virtual: false,
+      }],
     });
     mockAgentInstructionsService.readFile.mockResolvedValue({
       path: "AGENTS.md",
@@ -118,6 +127,8 @@ describe("agent instructions bundle routes", () => {
       markdown: true,
       isEntryFile: true,
       editable: true,
+      deprecated: false,
+      virtual: false,
       content: "# Agent\n",
     });
     mockAgentInstructionsService.writeFile.mockResolvedValue({
@@ -129,6 +140,8 @@ describe("agent instructions bundle routes", () => {
         markdown: true,
         isEntryFile: true,
         editable: true,
+        deprecated: false,
+        virtual: false,
         content: "# Updated Agent\n",
       },
       adapterConfig: {
diff --git a/server/src/services/agent-instructions.ts b/server/src/services/agent-instructions.ts
index 7df8006d..197fe960 100644
--- a/server/src/services/agent-instructions.ts
+++ b/server/src/services/agent-instructions.ts
@@ -10,6 +10,7 @@ const ENTRY_KEY = "instructionsEntryFile";
 const FILE_KEY = "instructionsFilePath";
 const PROMPT_KEY = "promptTemplate";
 const BOOTSTRAP_PROMPT_KEY = "bootstrapPromptTemplate";
+const LEGACY_PROMPT_TEMPLATE_PATH = "promptTemplate.legacy.md";
 
 type BundleMode = "managed" | "external";
 
@@ -26,6 +27,9 @@ type AgentInstructionsFileSummary = {
   language: string;
   markdown: boolean;
   isEntryFile: boolean;
+  editable: boolean;
+  deprecated: boolean;
+  virtual: boolean;
 };
 
 type AgentInstructionsFileDetail = AgentInstructionsFileSummary & {
@@ -171,6 +175,9 @@ async function readFileSummary(rootPath: string, relativePath: string, entryFile
     language: inferLanguage(relativePath),
     markdown: isMarkdown(relativePath),
     isEntryFile: relativePath === entryFile,
+    editable: true,
+    deprecated: false,
+    virtual: false,
   };
 }
 
@@ -239,6 +246,21 @@ function deriveBundleState(agent: AgentLike): BundleState {
 }
 
 function toBundle(agent: AgentLike, state: BundleState, files: AgentInstructionsFileSummary[]): AgentInstructionsBundle {
+  const nextFiles = [...files];
+  if (state.legacyPromptTemplateActive && !nextFiles.some((file) => file.path === LEGACY_PROMPT_TEMPLATE_PATH)) {
+    const legacyPromptTemplate = asString(state.config[PROMPT_KEY]) ?? "";
+    nextFiles.push({
+      path: LEGACY_PROMPT_TEMPLATE_PATH,
+      size: legacyPromptTemplate.length,
+      language: "markdown",
+      markdown: true,
+      isEntryFile: false,
+      editable: true,
+      deprecated: true,
+      virtual: true,
+    });
+  }
+  nextFiles.sort((left, right) => left.path.localeCompare(right.path));
   return {
     agentId: agent.id,
     companyId: agent.companyId,
@@ -250,7 +272,7 @@ function toBundle(agent: AgentLike, state: BundleState, files: AgentInstructions
     warnings: state.warnings,
     legacyPromptTemplateActive: state.legacyPromptTemplateActive,
     legacyBootstrapPromptTemplateActive: state.legacyBootstrapPromptTemplateActive,
-    files,
+    files: nextFiles,
   };
 }
 
@@ -317,6 +339,21 @@ export function agentInstructionsService() {
 
   async function readFile(agent: AgentLike, relativePath: string): Promise<AgentInstructionsFileDetail> {
     const state = deriveBundleState(agent);
+    if (relativePath === LEGACY_PROMPT_TEMPLATE_PATH) {
+      const content = asString(state.config[PROMPT_KEY]);
+      if (content === null) throw notFound("Instructions file not found");
+      return {
+        path: LEGACY_PROMPT_TEMPLATE_PATH,
+        size: content.length,
+        language: "markdown",
+        markdown: true,
+        isEntryFile: false,
+        editable: true,
+        deprecated: true,
+        virtual: true,
+        content,
+      };
+    }
     if (!state.rootPath) throw notFound("Agent instructions bundle is not configured");
     const absolutePath = resolvePathWithinRoot(state.rootPath, relativePath);
     const [content, stat] = await Promise.all([
@@ -331,12 +368,14 @@ export function agentInstructionsService() {
       language: inferLanguage(normalizedPath),
       markdown: isMarkdown(normalizedPath),
       isEntryFile: normalizedPath === state.entryFile,
-      content,
       editable: true,
+      deprecated: false,
+      virtual: false,
+      content,
     };
   }
 
-  async function ensureManagedBundle(
+  async function ensureWritableBundle(
     agent: AgentLike,
     options?: { clearLegacyPromptTemplate?: boolean },
   ): Promise<{ adapterConfig: Record<string, unknown>; state: BundleState }> {
@@ -421,7 +460,21 @@ export function agentInstructionsService() {
     file: AgentInstructionsFileDetail;
     adapterConfig: Record<string, unknown>;
   }> {
-    const prepared = await ensureManagedBundle(agent, options);
+    const current = deriveBundleState(agent);
+    if (relativePath === LEGACY_PROMPT_TEMPLATE_PATH) {
+      const adapterConfig: Record<string, unknown> = {
+        ...current.config,
+        [PROMPT_KEY]: content,
+      };
+      const nextAgent = { ...agent, adapterConfig };
+      const [bundle, file] = await Promise.all([
+        getBundle(nextAgent),
+        readFile(nextAgent, LEGACY_PROMPT_TEMPLATE_PATH),
+      ]);
+      return { bundle, file, adapterConfig };
+    }
+
+    const prepared = await ensureWritableBundle(agent, options);
     const absolutePath = resolvePathWithinRoot(prepared.state.rootPath!, relativePath);
     await fs.mkdir(path.dirname(absolutePath), { recursive: true });
     await fs.writeFile(absolutePath, content, "utf8");
@@ -438,6 +491,9 @@ export function agentInstructionsService() {
     adapterConfig: Record<string, unknown>;
   }> {
     const state = deriveBundleState(agent);
+    if (relativePath === LEGACY_PROMPT_TEMPLATE_PATH) {
+      throw unprocessable("Cannot delete the legacy promptTemplate pseudo-file");
+    }
     if (!state.rootPath) throw notFound("Agent instructions bundle is not configured");
     const normalizedPath = normalizeRelativeFilePath(relativePath);
     if (normalizedPath === state.entryFile) {
@@ -525,7 +581,7 @@ export function agentInstructionsService() {
     writeFile,
     deleteFile,
     exportFiles,
-    ensureManagedBundle,
+    ensureManagedBundle: ensureWritableBundle,
     materializeManagedBundle,
   };
 }
diff --git a/ui/src/components/PackageFileTree.tsx b/ui/src/components/PackageFileTree.tsx
index 0a449022..76fbb04c 100644
--- a/ui/src/components/PackageFileTree.tsx
+++ b/ui/src/components/PackageFileTree.tsx
@@ -175,49 +175,57 @@ export function PackageFileTree({
   onToggleCheck,
   renderFileExtra,
   fileRowClassName,
+  showCheckboxes = true,
   depth = 0,
 }: {
   nodes: FileTreeNode[];
   selectedFile: string | null;
   expandedDirs: Set<string>;
-  checkedFiles: Set<string>;
+  checkedFiles?: Set<string>;
   onToggleDir: (path: string) => void;
   onSelectFile: (path: string) => void;
-  onToggleCheck: (path: string, kind: "file" | "dir") => void;
+  onToggleCheck?: (path: string, kind: "file" | "dir") => void;
   /** Optional extra content rendered at the end of each file row (e.g. action badge) */
   renderFileExtra?: (node: FileTreeNode, checked: boolean) => ReactNode;
   /** Optional additional className for file rows */
   fileRowClassName?: (node: FileTreeNode, checked: boolean) => string | undefined;
+  showCheckboxes?: boolean;
   depth?: number;
 }) {
+  const effectiveCheckedFiles = checkedFiles ?? new Set<string>();
+
   return (
     <div>
       {nodes.map((node) => {
         const expanded = node.kind === "dir" && expandedDirs.has(node.path);
         if (node.kind === "dir") {
           const childFiles = collectAllPaths(node.children, "file");
-          const allChecked = [...childFiles].every((p) => checkedFiles.has(p));
-          const someChecked = [...childFiles].some((p) => checkedFiles.has(p));
+          const allChecked = [...childFiles].every((p) => effectiveCheckedFiles.has(p));
+          const someChecked = [...childFiles].some((p) => effectiveCheckedFiles.has(p));
           return (
             <div key={node.path}>
               <div
                 className={cn(
-                  "group grid w-full grid-cols-[auto_minmax(0,1fr)_2.25rem] items-center gap-x-1 pr-3 text-left text-sm text-muted-foreground hover:bg-accent/30 hover:text-foreground",
+                  showCheckboxes
+                    ? "group grid w-full grid-cols-[auto_minmax(0,1fr)_2.25rem] items-center gap-x-1 pr-3 text-left text-sm text-muted-foreground hover:bg-accent/30 hover:text-foreground"
+                    : "group grid w-full grid-cols-[minmax(0,1fr)_2.25rem] items-center gap-x-1 pr-3 text-left text-sm text-muted-foreground hover:bg-accent/30 hover:text-foreground",
                   TREE_ROW_HEIGHT_CLASS,
                 )}
                 style={{
                   paddingInlineStart: `${TREE_BASE_INDENT + depth * TREE_STEP_INDENT - 8}px`,
                 }}
               >
-                <label className="flex items-center pl-2">
-                  <input
-                    type="checkbox"
-                    checked={allChecked}
-                    ref={(el) => { if (el) el.indeterminate = someChecked && !allChecked; }}
-                    onChange={() => onToggleCheck(node.path, "dir")}
-                    className="mr-2 accent-foreground"
-                  />
-                </label>
+                {showCheckboxes && (
+                  <label className="flex items-center pl-2">
+                    <input
+                      type="checkbox"
+                      checked={allChecked}
+                      ref={(el) => { if (el) el.indeterminate = someChecked && !allChecked; }}
+                      onChange={() => onToggleCheck?.(node.path, "dir")}
+                      className="mr-2 accent-foreground"
+                    />
+                  </label>
+                )}
                 <button
                   type="button"
                   className="flex min-w-0 items-center gap-2 py-1 text-left"
@@ -249,12 +257,13 @@ export function PackageFileTree({
                   nodes={node.children}
                   selectedFile={selectedFile}
                   expandedDirs={expandedDirs}
-                  checkedFiles={checkedFiles}
+                  checkedFiles={effectiveCheckedFiles}
                   onToggleDir={onToggleDir}
                   onSelectFile={onSelectFile}
                   onToggleCheck={onToggleCheck}
                   renderFileExtra={renderFileExtra}
                   fileRowClassName={fileRowClassName}
+                  showCheckboxes={showCheckboxes}
                   depth={depth + 1}
                 />
               )}
@@ -263,7 +272,7 @@ export function PackageFileTree({
         }
 
         const FileIcon = fileIcon(node.name);
-        const checked = checkedFiles.has(node.path);
+        const checked = effectiveCheckedFiles.has(node.path);
         const extraClassName = fileRowClassName?.(node, checked);
         return (
           <div
@@ -278,14 +287,16 @@ export function PackageFileTree({
               paddingInlineStart: `${TREE_BASE_INDENT + depth * TREE_STEP_INDENT - 8}px`,
             }}
           >
-            <label className="flex items-center pl-2">
-              <input
-                type="checkbox"
-                checked={checked}
-                onChange={() => onToggleCheck(node.path, "file")}
-                className="mr-2 accent-foreground"
-              />
-            </label>
+            {showCheckboxes && (
+              <label className="flex items-center pl-2">
+                <input
+                  type="checkbox"
+                  checked={checked}
+                  onChange={() => onToggleCheck?.(node.path, "file")}
+                  className="mr-2 accent-foreground"
+                />
+              </label>
+            )}
             <button
               type="button"
               className="flex min-w-0 flex-1 items-center gap-2 py-1 text-left"
diff --git a/ui/src/pages/AgentDetail.tsx b/ui/src/pages/AgentDetail.tsx
index 68f52e64..554d271e 100644
--- a/ui/src/pages/AgentDetail.tsx
+++ b/ui/src/pages/AgentDetail.tsx
@@ -29,6 +29,7 @@ import { EntityRow } from "../components/EntityRow";
 import { Identity } from "../components/Identity";
 import { PageSkeleton } from "../components/PageSkeleton";
 import { BudgetPolicyCard } from "../components/BudgetPolicyCard";
+import { PackageFileTree, buildFileTree } from "../components/PackageFileTree";
 import { ScrollToBottom } from "../components/ScrollToBottom";
 import { formatCents, formatDate, relativeTime, formatTokens, visibleRunCostUsd } from "../lib/utils";
 import { cn } from "../lib/utils";
@@ -1495,6 +1496,7 @@ function PromptsTab({
     entryFile: string;
   } | null>(null);
   const [newFilePath, setNewFilePath] = useState("");
+  const [expandedDirs, setExpandedDirs] = useState<Set<string>>(new Set());
   const [awaitingRefresh, setAwaitingRefresh] = useState(false);
   const lastFileVersionRef = useRef<string | null>(null);
 
@@ -1516,8 +1518,17 @@ function PromptsTab({
   const currentEntryFile = bundleDraft?.entryFile ?? bundle?.entryFile ?? "AGENTS.md";
   const currentRootPath = bundleDraft?.rootPath ?? bundle?.rootPath ?? "";
   const fileOptions = bundle?.files.map((file) => file.path) ?? [];
+  const visibleFilePaths = useMemo(
+    () => [...new Set([currentEntryFile, ...fileOptions])],
+    [currentEntryFile, fileOptions],
+  );
+  const fileTree = useMemo(
+    () => buildFileTree(Object.fromEntries(visibleFilePaths.map((filePath) => [filePath, ""]))),
+    [visibleFilePaths],
+  );
   const selectedOrEntryFile = selectedFile || currentEntryFile;
   const selectedFileExists = fileOptions.includes(selectedOrEntryFile);
+  const selectedFileSummary = bundle?.files.find((file) => file.path === selectedOrEntryFile) ?? null;
 
   const { data: selectedFileDetail, isLoading: fileLoading } = useQuery({
     queryKey: queryKeys.agents.instructionsFile(agent.id, selectedOrEntryFile),
@@ -1585,6 +1596,19 @@ function PromptsTab({
     }
   }, [bundle, selectedFile]);
 
+  useEffect(() => {
+    const nextExpanded = new Set<string>();
+    for (const filePath of visibleFilePaths) {
+      const parts = filePath.split("/");
+      let currentPath = "";
+      for (let i = 0; i < parts.length - 1; i++) {
+        currentPath = currentPath ? `${currentPath}/${parts[i]}` : parts[i]!;
+        nextExpanded.add(currentPath);
+      }
+    }
+    setExpandedDirs(nextExpanded);
+  }, [visibleFilePaths]);
+
   useEffect(() => {
     const versionKey = selectedFileDetail ? `${selectedFileDetail.path}:${selectedFileDetail.content}` : `draft:${selectedOrEntryFile}`;
     if (awaitingRefresh) {
@@ -1708,7 +1732,7 @@ function PromptsTab({
 
         {(bundle?.legacyPromptTemplateActive || bundle?.legacyBootstrapPromptTemplateActive) && (
           <div className="rounded-md border border-amber-500/25 bg-amber-500/10 px-3 py-2 text-xs text-amber-100">
-            Legacy inline prompt fields are still active for this agent. The next bundle save will migrate behavior into file-backed instructions and clear those legacy fields.
+            Legacy inline prompt state is still present. `promptTemplate` now appears as a deprecated virtual file entry so it is visible without masquerading as the live `AGENTS.md`.
           </div>
         )}
 
@@ -1827,30 +1851,40 @@ function PromptsTab({
               </Button>
             ))}
           </div>
-          <div className="space-y-1">
-            {[...new Set([currentEntryFile, ...fileOptions])].map((filePath) => {
-              const file = bundle?.files.find((entry) => entry.path === filePath);
-              return (
-                <button
-                  key={filePath}
-                  type="button"
-                  className={cn(
-                    "flex w-full items-center justify-between rounded-md border px-3 py-2 text-left text-sm",
-                    filePath === selectedOrEntryFile ? "border-foreground/30 bg-accent/30" : "border-border",
-                  )}
-                  onClick={() => {
-                    setSelectedFile(filePath);
-                    if (!fileOptions.includes(filePath)) setDraft("");
-                  }}
-                >
-                  <span className="truncate font-mono">{filePath}</span>
-                  <span className="ml-3 shrink-0 text-[11px] text-muted-foreground">
-                    {file?.isEntryFile ? "entry" : file ? `${file.size}b` : "new"}
-                  </span>
-                </button>
-              );
+          <PackageFileTree
+            nodes={fileTree}
+            selectedFile={selectedOrEntryFile}
+            expandedDirs={expandedDirs}
+            checkedFiles={new Set()}
+            onToggleDir={(dirPath) => setExpandedDirs((current) => {
+              const next = new Set(current);
+              if (next.has(dirPath)) next.delete(dirPath);
+              else next.add(dirPath);
+              return next;
             })}
-          </div>
+            onSelectFile={(filePath) => {
+              setSelectedFile(filePath);
+              if (!fileOptions.includes(filePath)) setDraft("");
+            }}
+            onToggleCheck={() => {}}
+            showCheckboxes={false}
+            renderFileExtra={(node) => {
+              const file = bundle?.files.find((entry) => entry.path === node.path);
+              if (!file) return null;
+              return (
+                <span
+                  className={cn(
+                    "ml-3 shrink-0 rounded border px-1.5 py-0.5 text-[10px] uppercase tracking-wide",
+                    file.deprecated
+                      ? "border-amber-500/40 bg-amber-500/10 text-amber-200"
+                      : "border-border text-muted-foreground",
+                  )}
+                >
+                  {file.deprecated ? "deprecated" : file.isEntryFile ? "entry" : `${file.size}b`}
+                </span>
+              );
+            }}
+          />
         </div>
 
         <div className="border border-border rounded-lg p-4 space-y-3">
@@ -1859,11 +1893,13 @@ function PromptsTab({
               <h4 className="text-sm font-medium font-mono">{selectedOrEntryFile}</h4>
               <p className="text-xs text-muted-foreground">
                 {selectedFileExists
-                  ? `${selectedFileDetail?.language ?? "text"} file`
+                  ? selectedFileSummary?.deprecated
+                    ? "Deprecated virtual file"
+                    : `${selectedFileDetail?.language ?? "text"} file`
                   : "New file in this bundle"}
               </p>
             </div>
-            {selectedFileExists && selectedOrEntryFile !== currentEntryFile && (
+            {selectedFileExists && !selectedFileSummary?.deprecated && selectedOrEntryFile !== currentEntryFile && (
               <Button
                 type="button"
                 size="sm"