diff --git a/src/extension.ts b/src/extension.ts
index 6d62328..91571d6 100644
--- a/src/extension.ts
+++ b/src/extension.ts
@@ -351,7 +351,7 @@ class ClaudeChatProvider {
 				this._createImageFile(message.imageData, message.imageType);
 				return;
 			case 'permissionResponse':
-				this._handlePermissionResponse(message.id, message.approved, message.alwaysAllow);
+				this._handlePermissionResponse(message.id, message.approved, message.alwaysAllow, message.scope);
 				return;
 			case 'getPermissions':
 				this._sendPermissions();
@@ -1500,6 +1500,7 @@ class ClaudeChatProvider {
 		const toolUseId = request.tool_use_id;
 
 		console.log(`Permission request for tool: ${toolName}, requestId: ${requestId}`);
+		console.log('Permission suggestions:', JSON.stringify(suggestions));
 
 		// Check if this tool is pre-approved
 		const isPreApproved = await this._isToolPreApproved(toolName, input);
@@ -1532,6 +1533,20 @@ class ClaudeChatProvider {
 			pattern = this.getCommandPattern(input.command as string);
 		}
 
+		// Compute scope availability from suggestions
+		let hasProjectScope = false;
+		let hasUserScope = false;
+		if (Array.isArray(suggestions)) {
+			for (const suggestion of suggestions) {
+				if (suggestion.destination === 'projectSettings' || suggestion.destination === 'localSettings') {
+					hasProjectScope = true;
+				}
+				if (suggestion.destination === 'userSettings') {
+					hasUserScope = true;
+				}
+			}
+		}
+
 		// Send permission request to the UI with pending status
 		this._sendAndSaveMessage({
 			type: 'permissionRequest',
@@ -1543,7 +1558,9 @@ class ClaudeChatProvider {
 				suggestions: suggestions,
 				decisionReason: request.decision_reason,
 				blockedPath: request.blocked_path,
-				status: 'pending'
+				status: 'pending',
+				hasProjectScope: hasProjectScope,
+				hasUserScope: hasUserScope
 			}
 		});
 	}
@@ -1561,13 +1578,33 @@ class ClaudeChatProvider {
 			suggestions?: any[];
 			toolUseId: string;
 		},
-		alwaysAllow?: boolean
+		alwaysAllow?: boolean,
+		scope?: string
 	): void {
 		if (!this._currentClaudeProcess?.stdin || this._currentClaudeProcess.stdin.destroyed) {
 			console.error('Cannot send permission response: stdin not available');
 			return;
 		}
 
+		// Filter suggestions by scope if specified
+		let filteredSuggestions = pendingRequest.suggestions;
+		if (alwaysAllow && Array.isArray(pendingRequest.suggestions) && scope) {
+			let scopeFiltered: any[];
+			if (scope === 'project') {
+				scopeFiltered = pendingRequest.suggestions.filter(
+					(s: any) => s.destination === 'projectSettings' || s.destination === 'localSettings'
+				);
+			} else if (scope === 'allProjects') {
+				scopeFiltered = pendingRequest.suggestions.filter(
+					(s: any) => s.destination === 'userSettings'
+				);
+			} else {
+				scopeFiltered = pendingRequest.suggestions;
+			}
+			// Fall back to all suggestions if filtering yields empty array
+			filteredSuggestions = scopeFiltered.length > 0 ? scopeFiltered : pendingRequest.suggestions;
+		}
+
 		let response: any;
 		if (approved) {
 			response = {
@@ -1578,8 +1615,8 @@ class ClaudeChatProvider {
 					response: {
 						behavior: 'allow',
 						updatedInput: pendingRequest.input,
-						// Pass back suggestions if user chose "always allow"
-						updatedPermissions: alwaysAllow ? pendingRequest.suggestions : undefined,
+						// Pass back filtered suggestions if user chose "always allow"
+						updatedPermissions: alwaysAllow ? filteredSuggestions : undefined,
 						toolUseID: pendingRequest.toolUseId
 					}
 				}
@@ -1615,7 +1652,7 @@ class ClaudeChatProvider {
 	 * Handle permission response from webview UI
 	 * Sends control_response back to Claude CLI via stdin
 	 */
-	private _handlePermissionResponse(id: string, approved: boolean, alwaysAllow?: boolean): void {
+	private _handlePermissionResponse(id: string, approved: boolean, alwaysAllow?: boolean, scope?: string): void {
 		const pendingRequest = this._pendingPermissionRequests.get(id);
 		if (!pendingRequest) {
 			console.error('No pending permission request found for id:', id);
@@ -1626,7 +1663,7 @@ class ClaudeChatProvider {
 		this._pendingPermissionRequests.delete(id);
 
 		// Send the response to Claude via stdin
-		this._sendPermissionResponse(id, approved, pendingRequest, alwaysAllow);
+		this._sendPermissionResponse(id, approved, pendingRequest, alwaysAllow, scope);
 
 		// Update the permission request status in UI
 		this._postMessage({
diff --git a/src/script.ts b/src/script.ts
index 7029415..1264f7e 100644
--- a/src/script.ts
+++ b/src/script.ts
@@ -17,6 +17,7 @@ const getScript = (isTelemetryEnabled: boolean) => `<script>
 		let thinkingModeEnabled = false;
 		let lastPendingEditIndex = -1; // Track the last Edit/MultiEdit/Write toolUse without result
 		let lastPendingEditData = null; // Store diff data for the pending edit { filePath, oldContent, newContent }
+		let permissionScopes = {}; // Track selected scope per permission request ID
 
 		// Open diff using stored data (no file read needed)
 		function openDiffEditor() {
@@ -2402,16 +2403,28 @@ const getScript = (isTelemetryEnabled: boolean) => `<script>
 			const toolName = data.tool || 'Unknown Tool';
 			const status = data.status || 'pending';
 
-			// Create always allow button text with command styling for Bash
-			let alwaysAllowText = \`Always allow \${toolName}\`;
+			// Create always allow label - command pattern for Bash, tool name otherwise
+			let alwaysAllowLabel = toolName;
 			let alwaysAllowTooltip = '';
 			if (toolName === 'Bash' && data.pattern) {
 				const pattern = data.pattern;
-				// Remove the asterisk for display - show "npm i" instead of "npm i *"
 				const displayPattern = pattern.replace(' *', '');
 				const truncatedPattern = displayPattern.length > 30 ? displayPattern.substring(0, 30) + '...' : displayPattern;
-				alwaysAllowText = \`Always allow <code>\${truncatedPattern}</code>\`;
-				alwaysAllowTooltip = displayPattern.length > 30 ? \`title="\${displayPattern}"\` : '';
+				alwaysAllowLabel = '<code>' + truncatedPattern + '</code>';
+				alwaysAllowTooltip = displayPattern.length > 30 ? 'title="' + displayPattern + '"' : '';
+			}
+
+			// Show scope toggle only when CLI provides suggestions with scope info
+			permissionScopes[data.id] = 'project';
+
+			let scopeHtml = '';
+			if (data.hasProjectScope && data.hasUserScope) {
+				scopeHtml = ' for <span class="scope-toggle" onclick="togglePermissionScope(\\'' + data.id + '\\', event)" title="Click to toggle between this project and all projects">this project</span><span class="scope-suffix" id="scopeSuffix-' + data.id + '"> (just you)</span>';
+			} else if (data.hasProjectScope) {
+				scopeHtml = ' for this project (just you)';
+			} else if (data.hasUserScope) {
+				scopeHtml = ' for all projects';
+				permissionScopes[data.id] = 'allProjects';
 			}
 
 			// Show different content based on status
@@ -2437,9 +2450,9 @@ const getScript = (isTelemetryEnabled: boolean) => `<script>
 					<div class="permission-content">
 						<p>Allow <strong>\${toolName}</strong> to execute the tool call above?</p>
 						<div class="permission-buttons">
-							<button class="btn deny" onclick="respondToPermission('\${data.id}', false)">Deny</button>
-							<button class="btn always-allow" onclick="respondToPermission('\${data.id}', true, true)" \${alwaysAllowTooltip}>\${alwaysAllowText}</button>
-							<button class="btn allow" onclick="respondToPermission('\${data.id}', true)">Allow</button>
+							<button class="btn deny" onclick="respondToPermission('\${data.id}', false)">No</button>
+							<button class="btn always-allow" onclick="respondToPermission('\${data.id}', true, true)" \${alwaysAllowTooltip}>Yes, allow \${alwaysAllowLabel}\${scopeHtml}</button>
+							<button class="btn allow" onclick="respondToPermission('\${data.id}', true)">Yes</button>
 						</div>
 					</div>
 				\`;
@@ -2531,39 +2544,66 @@ const getScript = (isTelemetryEnabled: boolean) => `<script>
 		}
 		
 		function respondToPermission(id, approved, alwaysAllow = false) {
+			const scope = alwaysAllow ? (permissionScopes[id] || 'project') : undefined;
+
 			// Send response back to extension
 			vscode.postMessage({
 				type: 'permissionResponse',
 				id: id,
 				approved: approved,
-				alwaysAllow: alwaysAllow
+				alwaysAllow: alwaysAllow,
+				scope: scope
 			});
-			
+
 			// Update the UI to show the decision
 			const permissionMsg = document.querySelector(\`.permission-request:has([onclick*="\${id}"])\`);
 			if (permissionMsg) {
 				const buttons = permissionMsg.querySelector('.permission-buttons');
 				const permissionContent = permissionMsg.querySelector('.permission-content');
 				let decision = approved ? 'You allowed this' : 'You denied this';
-				
+
 				if (alwaysAllow && approved) {
-					decision = 'You allowed this and set it to always allow';
+					const scopeLabel = scope === 'allProjects' ? 'all projects' : 'this project';
+					decision = 'You allowed this for ' + scopeLabel;
 				}
-				
+
 				const emoji = approved ? '✅' : '❌';
 				const decisionClass = approved ? 'allowed' : 'denied';
-				
+
 				// Hide buttons
 				buttons.style.display = 'none';
-				
+
 				// Add decision div to permission-content
 				const decisionDiv = document.createElement('div');
 				decisionDiv.className = \`permission-decision \${decisionClass}\`;
 				decisionDiv.innerHTML = \`\${emoji} \${decision}\`;
 				permissionContent.appendChild(decisionDiv);
-				
+
 				permissionMsg.classList.add('permission-decided', decisionClass);
 			}
+
+			// Clean up scope tracking
+			delete permissionScopes[id];
+		}
+
+		function togglePermissionScope(permissionId, event) {
+			event.stopPropagation();
+			event.preventDefault();
+
+			const currentScope = permissionScopes[permissionId] || 'project';
+			const newScope = currentScope === 'project' ? 'allProjects' : 'project';
+			permissionScopes[permissionId] = newScope;
+
+			const toggleEl = event.target;
+			const suffixEl = document.getElementById('scopeSuffix-' + permissionId);
+
+			if (newScope === 'allProjects') {
+				toggleEl.textContent = 'all projects';
+				if (suffixEl) suffixEl.textContent = '';
+			} else {
+				toggleEl.textContent = 'this project';
+				if (suffixEl) suffixEl.textContent = ' (just you)';
+			}
 		}
 
 		function togglePermissionMenu(permissionId) {
diff --git a/src/ui-styles.ts b/src/ui-styles.ts
index 0c33137..706813a 100644
--- a/src/ui-styles.ts
+++ b/src/ui-styles.ts
@@ -265,7 +265,11 @@ const styles = `
         font-weight: 500;
         min-width: auto;
         padding: 6px 14px;
-        height: 28px;
+        white-space: normal;
+        text-align: left;
+        line-height: 1.3;
+        height: auto;
+        min-height: 28px;
     }
 
     .permission-buttons .btn.always-allow:hover {
@@ -287,6 +291,24 @@ const styles = `
         vertical-align: baseline;
     }
 
+    .scope-toggle {
+        text-decoration: underline;
+        cursor: pointer;
+        color: var(--vscode-textLink-foreground);
+        font-weight: 600;
+        transition: color 0.2s ease;
+    }
+
+    .scope-toggle:hover {
+        color: var(--vscode-textLink-activeForeground);
+    }
+
+    .scope-suffix {
+        font-weight: 400;
+        opacity: 0.8;
+        font-size: 11px;
+    }
+
     .permission-decision {
         font-size: 13px;
         font-weight: 600;