diff --git a/clients/tabby-chat-panel/package.json b/clients/tabby-chat-panel/package.json
index ee4608375f5d..b107bf01035d 100644
--- a/clients/tabby-chat-panel/package.json
+++ b/clients/tabby-chat-panel/package.json
@@ -1,7 +1,7 @@
 {
   "name": "tabby-chat-panel",
   "type": "module",
-  "version": "0.5.0",
+  "version": "0.6.0",
   "keywords": [],
   "sideEffects": false,
   "exports": {
diff --git a/clients/tabby-chat-panel/src/index.ts b/clients/tabby-chat-panel/src/index.ts
index 857d83a42362..030294b76f18 100644
--- a/clients/tabby-chat-panel/src/index.ts
+++ b/clients/tabby-chat-panel/src/index.ts
@@ -107,7 +107,7 @@ export interface ErrorMessage {
 /**
  * Represents a filepath to identify a file.
  */
-export type Filepath = FilepathInGitRepository | FilepathUri
+export type Filepath = FilepathInGitRepository | FilepathUri | FilepathAbsoluteUri
 
 /**
  * This is used for files in a Git repository, and should be used in priority.
@@ -135,11 +135,30 @@ export interface FilepathInGitRepository {
 }
 
 /**
- * This is used for files not in a Git repository.
+ * This is used for files in the workspace, but not in a Git repository.
  */
 export interface FilepathUri {
   kind: 'uri'
 
+  /**
+   * A string that can be parsed as a URI, used to identify the directory in the client.
+   * The scheme of the URI could be 'file' or some other protocol to access the directory.
+   */
+  baseDir: string
+
+  /**
+   * A string that is a relative path to `baseDir`.
+   */
+  filepath: string
+}
+
+/**
+ * This is used for files not in a Git repository and not in the workspace.
+ * Also used for untitled files not saved.
+ */
+export interface FilepathAbsoluteUri {
+  kind: 'absolute-uri'
+
   /**
    * A string that can be parsed as a URI, used to identify the file in the client.
    * The scheme of the URI could be:
diff --git a/clients/vscode/src/chat/utils.ts b/clients/vscode/src/chat/utils.ts
index 721468c01069..5c0c0fad6184 100644
--- a/clients/vscode/src/chat/utils.ts
+++ b/clients/vscode/src/chat/utils.ts
@@ -1,13 +1,6 @@
 import path from "path";
 import { TextEditor, Position as VSCodePosition, Range as VSCodeRange, Uri, workspace } from "vscode";
-import type {
-  Filepath,
-  Position as ChatPanelPosition,
-  LineRange,
-  PositionRange,
-  Location,
-  FilepathInGitRepository,
-} from "tabby-chat-panel";
+import type { Filepath, Position as ChatPanelPosition, LineRange, PositionRange, Location } from "tabby-chat-panel";
 import type { GitProvider } from "../git/GitProvider";
 import { getLogger } from "../logger";
 
@@ -31,15 +24,12 @@ export function isValidForSyncActiveEditorSelection(editor: TextEditor): boolean
 }
 
 export function localUriToChatPanelFilepath(uri: Uri, gitProvider: GitProvider): Filepath {
-  let uriFilePath = uri.toString(true);
-  if (uri.scheme === DocumentSchemes.vscodeNotebookCell) {
-    const notebook = parseNotebookCellUri(uri);
-    if (notebook) {
-      // add fragment `#cell={number}` to filepath
-      uriFilePath = uri.with({ scheme: notebook.notebook.scheme, fragment: `cell=${notebook.handle}` }).toString(true);
-    }
+  let localUri = uri;
+  if (localUri.scheme === DocumentSchemes.vscodeNotebookCell) {
+    localUri = convertFromNotebookCellUri(localUri);
   }
 
+  const uriFilePath = uri.toString(true);
   const workspaceFolder = workspace.getWorkspaceFolder(uri);
 
   let repo = gitProvider.getRepository(uri);
@@ -58,86 +48,57 @@ export function localUriToChatPanelFilepath(uri: Uri, gitProvider: GitProvider):
     }
   }
 
+  if (workspaceFolder) {
+    const baseDir = workspaceFolder.uri.toString(true);
+    const relativeFilePath = path.relative(baseDir, uriFilePath);
+    if (!relativeFilePath.startsWith("..")) {
+      return {
+        kind: "uri",
+        filepath: relativeFilePath,
+        baseDir: baseDir,
+      };
+    }
+  }
+
   return {
-    kind: "uri",
+    kind: "absolute-uri",
     uri: uriFilePath,
   };
 }
 
-function isJupyterNotebookFilepath(filepath: Filepath): boolean {
-  const _filepath = filepath.kind === "uri" ? filepath.uri : filepath.filepath;
-  const extname = path.extname(_filepath);
-  return extname.startsWith(".ipynb");
-}
-
 export function chatPanelFilepathToLocalUri(filepath: Filepath, gitProvider: GitProvider): Uri | null {
-  const isNotebook = isJupyterNotebookFilepath(filepath);
-
-  if (filepath.kind === "uri") {
+  let result: Uri | null = null;
+  if (filepath.kind === "absolute-uri") {
     try {
-      if (isNotebook) {
-        const handle = chatPanelFilePathToNotebookCellHandle(filepath.uri);
-        if (typeof handle === "number") {
-          return generateLocalNotebookCellUri(Uri.parse(filepath.uri), handle);
-        }
-      }
-
-      return Uri.parse(filepath.uri, true);
+      result = Uri.parse(filepath.uri, true);
     } catch (e) {
-      // FIXME(@icycodes): this is a hack for uri is relative filepaths in workspaces
-      const workspaceRoot = workspace.workspaceFolders?.[0];
-      if (workspaceRoot) {
-        return Uri.joinPath(workspaceRoot.uri, filepath.uri);
+      // do nothing
+    }
+  } else if (filepath.kind === "uri") {
+    try {
+      const workspaceFolder = workspace.getWorkspaceFolder(Uri.parse(filepath.baseDir, true));
+      if (workspaceFolder) {
+        result = Uri.joinPath(workspaceFolder.uri, filepath.filepath);
       }
+    } catch (e) {
+      // do nothing
     }
   } else if (filepath.kind === "git") {
     const localGitRoot = gitProvider.findLocalRootUriByRemoteUrl(filepath.gitUrl);
     if (localGitRoot) {
-      // handling for Jupyter Notebook (.ipynb) files
-      if (isNotebook) {
-        return chatPanelFilepathToVscodeNotebookCellUri(localGitRoot, filepath);
-      }
-
-      return Uri.joinPath(localGitRoot, filepath.filepath);
+      result = Uri.joinPath(localGitRoot, filepath.filepath);
     }
   }
-  logger.warn(`Invalid filepath params.`, filepath);
-  return null;
-}
-
-function chatPanelFilepathToVscodeNotebookCellUri(root: Uri, filepath: FilepathInGitRepository): Uri | null {
-  if (filepath.kind !== "git") {
-    logger.warn(`Invalid filepath params.`, filepath);
-    return null;
-  }
-
-  const filePathUri = Uri.parse(filepath.filepath);
-  const notebookUri = Uri.joinPath(root, filePathUri.path);
 
-  const handle = chatPanelFilePathToNotebookCellHandle(filepath.filepath);
-  if (typeof handle === "undefined") {
+  if (result == null) {
     logger.warn(`Invalid filepath params.`, filepath);
     return null;
   }
-  return generateLocalNotebookCellUri(notebookUri, handle);
-}
-
-function chatPanelFilePathToNotebookCellHandle(filepath: string): number | undefined {
-  let handle: number | undefined;
-
-  const fileUri = Uri.parse(filepath);
-  const fragment = fileUri.fragment;
-  const searchParams = new URLSearchParams(fragment);
-  if (searchParams.has("cell")) {
-    const cellString = searchParams.get("cell")?.toString() || "";
-    handle = parseInt(cellString, 10);
-  }
 
-  if (typeof handle === "undefined" || isNaN(handle)) {
-    return undefined;
+  if (isJupyterNotebookFilepath(result)) {
+    result = convertToNotebookCellUri(result);
   }
-
-  return handle;
+  return result;
 }
 
 export function vscodePositionToChatPanelPosition(position: VSCodePosition): ChatPanelPosition {
@@ -191,10 +152,39 @@ export function chatPanelLocationToVSCodeRange(location: Location | undefined):
   return null;
 }
 
+// Notebook URI utils
+function isJupyterNotebookFilepath(uri: Uri): boolean {
+  const extname = path.extname(uri.fsPath);
+  return extname.startsWith(".ipynb");
+}
+
+function convertToNotebookCellUri(uri: Uri): Uri {
+  let handle: number | undefined;
+
+  const searchParams = new URLSearchParams(uri.fragment);
+  const cellString = searchParams.get("cell");
+  if (cellString) {
+    handle = parseInt(cellString, 10);
+  }
+  handle = handle || 0;
+
+  searchParams.set("cell", handle.toString());
+  return generateNotebookCellUri(uri, handle);
+}
+
+function convertFromNotebookCellUri(uri: Uri): Uri {
+  const parsed = parseNotebookCellUri(uri);
+  if (!parsed) {
+    return uri;
+  }
+  return uri.with({ scheme: parsed.notebook.scheme, fragment: `cell=${parsed.handle}` });
+}
+
 const nb_lengths = ["W", "X", "Y", "Z", "a", "b", "c", "d", "e", "f"];
 const nb_padRegexp = new RegExp(`^[${nb_lengths.join("")}]+`);
 const nb_radix = 7;
-export function parseNotebookCellUri(cell: Uri): { notebook: Uri; handle: number } | undefined {
+
+function parseNotebookCellUri(cell: Uri): { notebook: Uri; handle: number } | undefined {
   if (cell.scheme !== DocumentSchemes.vscodeNotebookCell) {
     return undefined;
   }
@@ -215,7 +205,7 @@ export function parseNotebookCellUri(cell: Uri): { notebook: Uri; handle: number
   };
 }
 
-export function generateLocalNotebookCellUri(notebook: Uri, handle: number): Uri {
+function generateNotebookCellUri(notebook: Uri, handle: number): Uri {
   const s = handle.toString(nb_radix);
   const p = s.length < nb_lengths.length ? nb_lengths[s.length - 1] : "z";
   const fragment = `${p}${s}s${Buffer.from(notebook.scheme).toString("base64")}`;
diff --git a/ee/tabby-ui/components/message-markdown/index.tsx b/ee/tabby-ui/components/message-markdown/index.tsx
index 1ba2c7aa7f85..27df1ef89031 100644
--- a/ee/tabby-ui/components/message-markdown/index.tsx
+++ b/ee/tabby-ui/components/message-markdown/index.tsx
@@ -9,7 +9,7 @@ import {
   MessageAttachmentClientCode
 } from '@/lib/gql/generates/graphql'
 import { AttachmentCodeItem, AttachmentDocItem, FileContext } from '@/lib/types'
-import { cn } from '@/lib/utils'
+import { cn, getFilepathFromContext } from '@/lib/utils'
 import {
   HoverCard,
   HoverCardContent,
@@ -21,7 +21,6 @@ import './style.css'
 
 import {
   FileLocation,
-  Filepath,
   LookupSymbolHint,
   SymbolInfo
 } from 'tabby-chat-panel/index'
@@ -175,26 +174,8 @@ export function MessageMarkdown({
     setSymbolLocationMap(map => new Map(map.set(keyword, undefined)))
     const hints: LookupSymbolHint[] = []
     if (activeSelection && activeSelection?.range) {
-      // FIXME(@icycodes): this is intended to convert the filepath to Filepath type
-      // We should remove this after FileContext.filepath use type Filepath instead of string
-      let filepath: Filepath
-      if (
-        activeSelection.git_url.length > 1 &&
-        !activeSelection.filepath.includes(':')
-      ) {
-        filepath = {
-          kind: 'git',
-          filepath: activeSelection.filepath,
-          gitUrl: activeSelection.git_url
-        }
-      } else {
-        filepath = {
-          kind: 'uri',
-          uri: activeSelection.filepath
-        }
-      }
       hints.push({
-        filepath,
+        filepath: getFilepathFromContext(activeSelection),
         location: {
           start: activeSelection.range.start,
           end: activeSelection.range.end
diff --git a/ee/tabby-ui/lib/utils/index.ts b/ee/tabby-ui/lib/utils/index.ts
index 9b7f57702a50..77577b6dafd6 100644
--- a/ee/tabby-ui/lib/utils/index.ts
+++ b/ee/tabby-ui/lib/utils/index.ts
@@ -215,14 +215,22 @@ export function convertEditorContext(
     }
   }
 
+  // FIXME: improve this conversion
   const convertFilepath = (filepath: Filepath) => {
-    if (filepath.kind === 'uri') {
+    if (filepath.kind === 'absolute-uri') {
       return {
         filepath: filepath.uri,
         git_url: ''
       }
     }
 
+    if (filepath.kind === 'uri') {
+      return {
+        filepath: filepath.filepath,
+        git_url: ''
+      }
+    }
+
     return {
       filepath: filepath.filepath,
       git_url: filepath.gitUrl
@@ -237,6 +245,7 @@ export function convertEditorContext(
   }
 }
 
+// FIXME: improve this conversion
 export function getFilepathFromContext(context: FileContext): Filepath {
   if (context.git_url.length > 1 && !context.filepath.includes(':')) {
     return {
@@ -246,7 +255,7 @@ export function getFilepathFromContext(context: FileContext): Filepath {
     }
   } else {
     return {
-      kind: 'uri',
+      kind: 'absolute-uri',
       uri: context.filepath
     }
   }