diff --git a/src/vs/platform/agentPlugins/common/pluginParsers.ts b/src/vs/platform/agentPlugins/common/pluginParsers.ts
index 3c8407d330784..1d6d8b4448d98 100644
--- a/src/vs/platform/agentPlugins/common/pluginParsers.ts
+++ b/src/vs/platform/agentPlugins/common/pluginParsers.ts
@@ -187,16 +187,18 @@ export function parseComponentPathConfig(raw: unknown): IComponentPathConfig {
 /**
  * Resolves the directories to scan for a given component type, combining
  * the default directory with any custom paths from the manifest config.
- * Paths that resolve outside the plugin root are silently ignored.
+ * Paths that resolve outside the boundary are silently ignored.
+ * @param boundaryUri The outermost directory that resolved paths must stay within. Defaults to {@link pluginUri}.
  */
-export function resolveComponentDirs(pluginUri: URI, defaultDir: string, config: IComponentPathConfig): readonly URI[] {
+export function resolveComponentDirs(pluginUri: URI, defaultDir: string, config: IComponentPathConfig, boundaryUri?: URI): readonly URI[] {
+	const boundary = (boundaryUri && isEqualOrParent(pluginUri, boundaryUri)) ? boundaryUri : pluginUri;
 	const dirs: URI[] = [];
 	if (!config.exclusive) {
 		dirs.push(joinPath(pluginUri, defaultDir));
 	}
 	for (const p of config.paths) {
 		const resolved = normalizePath(joinPath(pluginUri, p));
-		if (isEqualOrParent(resolved, pluginUri)) {
+		if (isEqualOrParent(resolved, boundary)) {
 			dirs.push(resolved);
 		}
 	}
@@ -811,6 +813,7 @@ export async function parsePlugin(
 	fileService: IFileService,
 	workspaceRoot: URI | undefined,
 	userHome: string,
+	boundaryUri?: URI,
 ): Promise<IParsedPlugin> {
 	const formatConfig = await detectPluginFormat(pluginUri, fileService);
 
@@ -819,10 +822,10 @@ export async function parsePlugin(
 	const manifest = (manifestJson && typeof manifestJson === 'object') ? manifestJson as Record<string, unknown> : undefined;
 
 	// Resolve component directories from manifest
-	const hookDirs = resolveComponentDirs(pluginUri, formatConfig.hookConfigPath, parseComponentPathConfig(manifest?.['hooks']));
-	const mcpDirs = resolveComponentDirs(pluginUri, '.mcp.json', parseComponentPathConfig(manifest?.['mcpServers']));
-	const skillDirs = resolveComponentDirs(pluginUri, 'skills', parseComponentPathConfig(manifest?.['skills']));
-	const agentDirs = resolveComponentDirs(pluginUri, 'agents', parseComponentPathConfig(manifest?.['agents']));
+	const hookDirs = resolveComponentDirs(pluginUri, formatConfig.hookConfigPath, parseComponentPathConfig(manifest?.['hooks']), boundaryUri);
+	const mcpDirs = resolveComponentDirs(pluginUri, '.mcp.json', parseComponentPathConfig(manifest?.['mcpServers']), boundaryUri);
+	const skillDirs = resolveComponentDirs(pluginUri, 'skills', parseComponentPathConfig(manifest?.['skills']), boundaryUri);
+	const agentDirs = resolveComponentDirs(pluginUri, 'agents', parseComponentPathConfig(manifest?.['agents']), boundaryUri);
 
 	// Handle embedded MCP servers in manifest
 	let embeddedMcp: IMcpServerDefinition[] = [];
diff --git a/src/vs/platform/agentPlugins/test/common/pluginParsers.test.ts b/src/vs/platform/agentPlugins/test/common/pluginParsers.test.ts
index afc3121f922f1..9d9a69923ed63 100644
--- a/src/vs/platform/agentPlugins/test/common/pluginParsers.test.ts
+++ b/src/vs/platform/agentPlugins/test/common/pluginParsers.test.ts
@@ -103,6 +103,26 @@ suite('pluginParsers', () => {
 			// Should only have the default dir, the traversal path is rejected
 			assert.strictEqual(dirs.length, 1);
 		});
+
+		test('allows paths that escape plugin root but stay within boundaryUri', () => {
+			const boundaryUri = URI.file('/workspace');
+			const dirs = resolveComponentDirs(pluginUri, 'skills', { paths: ['../shared-skills'], exclusive: false }, boundaryUri);
+			assert.strictEqual(dirs.length, 2);
+			assert.ok(dirs[1].path.endsWith('/shared-skills'));
+		});
+
+		test('rejects paths that escape boundaryUri', () => {
+			const boundaryUri = URI.file('/workspace');
+			const dirs = resolveComponentDirs(pluginUri, 'skills', { paths: ['../../outside'], exclusive: false }, boundaryUri);
+			assert.strictEqual(dirs.length, 1);
+		});
+
+		test('falls back to pluginUri when boundaryUri is not an ancestor of pluginUri', () => {
+			const boundaryUri = URI.file('/unrelated/directory');
+			const dirs = resolveComponentDirs(pluginUri, 'skills', { paths: ['custom'], exclusive: false }, boundaryUri);
+			assert.strictEqual(dirs.length, 2);
+			assert.ok(dirs[1].path.endsWith('/custom'));
+		});
 	});
 
 	// ---- normalizeMcpServerConfiguration --------------------------------
diff --git a/src/vs/workbench/contrib/chat/common/plugins/agentPluginServiceImpl.ts b/src/vs/workbench/contrib/chat/common/plugins/agentPluginServiceImpl.ts
index 3c3af139a2a3b..23fb44746437e 100644
--- a/src/vs/workbench/contrib/chat/common/plugins/agentPluginServiceImpl.ts
+++ b/src/vs/workbench/contrib/chat/common/plugins/agentPluginServiceImpl.ts
@@ -147,6 +147,8 @@ type PluginEntry = IAgentPlugin;
 interface IPluginSource {
 	readonly uri: URI;
 	readonly fromMarketplace: IMarketplacePlugin | undefined;
+	/** Repository root that serves as the boundary for component path resolution. */
+	readonly repositoryUri?: URI;
 	/** Called when remove is invoked on the plugin */
 	remove(): void;
 }
@@ -203,7 +205,7 @@ export abstract class AbstractAgentPluginDiscovery extends Disposable implements
 			if (!seenPluginUris.has(key)) {
 				seenPluginUris.add(key);
 				const format = await detectPluginFormat(source.uri, this._fileService);
-				plugins.push(this._toPlugin(source.uri, format, source.fromMarketplace, () => source.remove()));
+				plugins.push(this._toPlugin(source.uri, format, source.fromMarketplace, source.repositoryUri, () => source.remove()));
 			}
 		}
 
@@ -222,7 +224,7 @@ export abstract class AbstractAgentPluginDiscovery extends Disposable implements
 		}
 	}
 
-	private _toPlugin(uri: URI, format: IPluginFormatConfig, fromMarketplace: IMarketplacePlugin | undefined, removeCallback: () => void): IAgentPlugin {
+	private _toPlugin(uri: URI, format: IPluginFormatConfig, fromMarketplace: IMarketplacePlugin | undefined, repositoryUri: URI | undefined, removeCallback: () => void): IAgentPlugin {
 		const key = uri.toString();
 		const existing = this._pluginEntries.get(key);
 		if (existing) {
@@ -258,7 +260,7 @@ export abstract class AbstractAgentPluginDiscovery extends Disposable implements
 				}
 
 				const paths = parseComponentPathConfig(section);
-				const dirs = resolveComponentDirs(uri, defaultPath, paths);
+				const dirs = resolveComponentDirs(uri, defaultPath, paths, repositoryUri);
 				for (const d of dirs) {
 					const watcher = this._fileService.createWatcher(d, { recursive: false, excludes: [] });
 					reader.store.add(watcher);
@@ -632,9 +634,12 @@ export class MarketplaceAgentPluginDiscovery extends AbstractAgentPluginDiscover
 				continue;
 			}
 
+			const repositoryUri = this._pluginRepositoryService.getRepositoryUri(entry.plugin.marketplaceReference, entry.plugin.marketplaceType);
+
 			sources.push({
 				uri: stat.resource,
 				fromMarketplace: entry.plugin,
+				repositoryUri,
 				remove: () => {
 					this._enablementModel.remove(stat.resource.toString());
 					this._pluginMarketplaceService.removeInstalledPlugin(entry.pluginUri);