diff --git a/packages/host/directory-picker-native/src/native-picker.ts b/packages/host/directory-picker-native/src/native-picker.ts
index 2c8e236acc..079211f5a3 100644
--- a/packages/host/directory-picker-native/src/native-picker.ts
+++ b/packages/host/directory-picker-native/src/native-picker.ts
@@ -64,8 +64,15 @@ export async function pickNativeDirectory(
   }
 
   if (platform === 'win32') {
+    // PowerShell 7 renders the modern IFileDialog folder picker, while Windows
+    // PowerShell 5.1's FolderBrowserDialog is hardwired to the legacy
+    // SHBrowseForFolder tree; prefer pwsh and fall back only when it is absent.
+    // Both hosts spawn DPI-unaware, so the script opts the process into system
+    // DPI awareness before any window is created.
     const script = [
       "$ErrorActionPreference = 'Stop'",
+      "Add-Type -TypeDefinition 'using System; using System.Runtime.InteropServices; public static class DpiAware { [DllImport(\"user32.dll\")] public static extern bool SetProcessDPIAware(); }'",
+      '[DpiAware]::SetProcessDPIAware() | Out-Null',
       'Add-Type -AssemblyName System.Windows.Forms',
       '$dialog = New-Object System.Windows.Forms.FolderBrowserDialog',
       "$dialog.Description = 'Select Workspace Directory'",
@@ -76,6 +83,13 @@ export async function pickNativeDirectory(
       '  [Console]::WriteLine($dialog.SelectedPath)',
       '}',
     ].join('; ')
+    try {
+      const result = await run('pwsh.exe', ['-NoProfile', '-STA', '-Command', script], signal)
+      return outputPath(result.stdout)
+    } catch (error: unknown) {
+      rethrowIfAborted(signal, error)
+      if (!isMissingCommand(error)) throw error
+    }
     const result = await run('powershell.exe', ['-NoProfile', '-STA', '-Command', script], signal)
     return outputPath(result.stdout)
   }
diff --git a/packages/host/directory-picker-native/tests/native-picker.spec.ts b/packages/host/directory-picker-native/tests/native-picker.spec.ts
index 87e25ff877..8d26c6ab36 100644
--- a/packages/host/directory-picker-native/tests/native-picker.spec.ts
+++ b/packages/host/directory-picker-native/tests/native-picker.spec.ts
@@ -46,28 +46,62 @@ describe('native directory picker', () => {
     await expect(pickNativeDirectory(signal(), { platform: 'darwin', run })).rejects.toBe(reason)
   })
 
-  it('uses the Windows STA folder dialog and maps empty output to cancellation', async () => {
+  it('prefers pwsh for the Windows folder dialog and maps empty output to cancellation', async () => {
     const run = vi.fn<DirectoryPickerRunner>(async () => ({ stdout: 'C:\\work\\project\r\n', stderr: '' }))
     await expect(pickNativeDirectory(signal(), { platform: 'win32', run })).resolves.toBe('C:\\work\\project')
     expect(run).toHaveBeenCalledWith(
-      'powershell.exe',
+      'pwsh.exe',
       expect.arrayContaining(['-NoProfile', '-STA', '-Command']),
       expect.any(AbortSignal),
     )
-    expect(run.mock.calls[0]?.[1].at(-1)).toContain("$ErrorActionPreference = 'Stop'")
+    const script = run.mock.calls[0]?.[1].at(-1)
+    expect(script).toContain("$ErrorActionPreference = 'Stop'")
+    expect(script).toContain('SetProcessDPIAware')
     run.mockResolvedValueOnce({ stdout: '', stderr: '' })
     await expect(pickNativeDirectory(signal(), { platform: 'win32', run })).resolves.toBeNull()
     run.mockRejectedValueOnce(failure(1, 'Add-Type failed'))
     await expect(pickNativeDirectory(signal(), { platform: 'win32', run })).rejects.toThrow('command failed')
   })
 
+  it('falls back to Windows PowerShell 5.1 only when pwsh is missing', async () => {
+    const run = vi.fn<DirectoryPickerRunner>()
+      .mockRejectedValueOnce(failure('ENOENT'))
+      .mockResolvedValueOnce({ stdout: 'C:\\work\\fallback\r\n', stderr: '' })
+    await expect(pickNativeDirectory(signal(), { platform: 'win32', run })).resolves.toBe('C:\\work\\fallback')
+    expect(run.mock.calls.map(call => call[0])).toEqual(['pwsh.exe', 'powershell.exe'])
+    // Both runtimes execute the identical script, so DPI awareness holds either way.
+    expect(run.mock.calls[0]?.[1].at(-1)).toBe(run.mock.calls[1]?.[1].at(-1))
+
+    const cancelled = vi.fn<DirectoryPickerRunner>()
+      .mockRejectedValueOnce(failure('ENOENT'))
+      .mockResolvedValueOnce({ stdout: '', stderr: '' })
+    await expect(pickNativeDirectory(signal(), { platform: 'win32', run: cancelled })).resolves.toBeNull()
+
+    const failed = vi.fn<DirectoryPickerRunner>()
+      .mockRejectedValueOnce(failure('ENOENT'))
+      .mockRejectedValueOnce(failure(2))
+    await expect(pickNativeDirectory(signal(), { platform: 'win32', run: failed })).rejects.toThrow('command failed')
+
+    const brokenPwsh = vi.fn<DirectoryPickerRunner>(async () => { throw failure(7) })
+    await expect(pickNativeDirectory(signal(), { platform: 'win32', run: brokenPwsh })).rejects.toThrow('command failed')
+    expect(brokenPwsh).toHaveBeenCalledOnce()
+  })
+
+  it('does not fall back when the caller aborted the pwsh spawn', async () => {
+    const abort = new AbortController()
+    abort.abort(new Error('closed'))
+    const run = vi.fn<DirectoryPickerRunner>(async () => { throw failure('ENOENT') })
+    await expect(pickNativeDirectory(abort.signal, { platform: 'win32', run })).rejects.toThrow('command failed')
+    expect(run).toHaveBeenCalledOnce()
+  })
+
   it('runs the default command adapter without a shell and preserves command failures', async () => {
     execFileMock.mockImplementationOnce((_command, _args, _options, callback) => {
       callback(null, 'C:\\work\\default\r\n', '')
     })
     await expect(pickNativeDirectory(signal(), { platform: 'win32' })).resolves.toBe('C:\\work\\default')
     const [command, args, options] = execFileMock.mock.calls[0]!
-    expect(command).toBe('powershell.exe')
+    expect(command).toBe('pwsh.exe')
     expect(args).toEqual(expect.arrayContaining(['-NoProfile', '-STA', '-Command']))
     expect(options.encoding).toBe('utf8')
     expect(options.windowsHide).toBe(true)