diff --git a/crates/tui/src/working_set.rs b/crates/tui/src/working_set.rs
index c2a5f14d..2c792971 100644
--- a/crates/tui/src/working_set.rs
+++ b/crates/tui/src/working_set.rs
@@ -93,9 +93,18 @@ impl Workspace {
 
     fn build_file_index(&self) -> HashMap<String, Vec<PathBuf>> {
         let mut index: HashMap<String, Vec<PathBuf>> = HashMap::new();
+        let mut total: usize = 0;
         let builder = discovery_walk_builder(&self.root, Some(6));
 
         for entry in builder.build().flatten() {
+            if total >= FILE_INDEX_MAX_ENTRIES {
+                tracing::warn!(
+                    target: "working_set",
+                    limit = FILE_INDEX_MAX_ENTRIES,
+                    "file-index discovery hit the entry cap; truncating to keep first-turn latency bounded (#697)"
+                );
+                return index;
+            }
             if entry
                 .file_type()
                 .is_some_and(|ft| ft.is_file() || ft.is_dir())
@@ -105,11 +114,15 @@ impl Workspace {
                     .entry(name)
                     .or_default()
                     .push(entry.path().to_path_buf());
+                total += 1;
             }
         }
 
         // Also index AI-tool dot-directories with gitignore disabled.
         for dir_name in DISCOVERY_ALWAYS_DIRS {
+            if total >= FILE_INDEX_MAX_ENTRIES {
+                break;
+            }
             let dot_dir = self.root.join(dir_name);
             if !dot_dir.is_dir() {
                 continue;
@@ -122,6 +135,9 @@ impl Workspace {
                 .ignore(false)
                 .max_depth(Some(5));
             for entry in dot_builder.build().flatten() {
+                if total >= FILE_INDEX_MAX_ENTRIES {
+                    break;
+                }
                 // Exclude machine-generated bulk (e.g. .deepseek/snapshots/).
                 if path_is_excluded_from_discovery(&self.root, entry.path()) {
                     continue;
@@ -135,6 +151,7 @@ impl Workspace {
                         .entry(name)
                         .or_default()
                         .push(entry.path().to_path_buf());
+                    total += 1;
                 }
             }
         }
@@ -207,6 +224,15 @@ impl Workspace {
 /// monorepos.
 const COMPLETIONS_WALK_DEPTH: usize = 6;
 
+/// Hard cap on the number of `(file or directory)` entries indexed by
+/// [`WorkingSet::build_file_index`]. The fuzzy-resolve index is a
+/// convenience for [`WorkingSet::fuzzy_resolve`]; missing entries fall
+/// back to literal-path resolution. Capping here keeps the first
+/// `fuzzy_resolve` call bounded on huge workspaces (#697 reported a
+/// ~10s hang on the first turn). For typical projects 50K is well
+/// above the actual entry count and the cap is a no-op.
+const FILE_INDEX_MAX_ENTRIES: usize = 50_000;
+
 /// Directories that must remain discoverable for `@`-mention completion and
 /// fuzzy file resolution even when excluded by `.gitignore`. AI-tool
 /// convention directories (`.deepseek/`, `.cursor/`, `.claude/`, `.agents/`)