diff --git a/crates/worker-runtime/src/catalog.rs b/crates/worker-runtime/src/catalog.rs
index ec4eeace..1026eaa1 100644
--- a/crates/worker-runtime/src/catalog.rs
+++ b/crates/worker-runtime/src/catalog.rs
@@ -90,8 +90,8 @@ pub struct WorkingDirectoryRequest {
 }
 
 #[derive(Clone, Debug, PartialEq, Eq, Serialize, Deserialize)]
-pub struct WorkingDirectoryAllocationClaim {
-    pub allocation_id: String,
+pub struct WorkingDirectoryClaim {
+    pub working_directory_id: String,
     #[serde(default, skip_serializing_if = "Option::is_none")]
     pub relative_cwd: Option<String>,
 }
@@ -107,13 +107,13 @@ pub enum WorkingDirectoryStatusKind {
 #[derive(Clone, Debug, PartialEq, Eq, Serialize, Deserialize)]
 pub struct WorkingDirectoryCleanupTarget {
     pub kind: String,
-    pub allocation_id: String,
+    pub working_directory_id: String,
     pub repository_id: String,
 }
 
 #[derive(Clone, Debug, PartialEq, Eq, Serialize, Deserialize)]
 pub struct WorkingDirectorySummary {
-    pub allocation_id: String,
+    pub working_directory_id: String,
     pub repository_id: String,
     #[serde(default, skip_serializing_if = "Option::is_none")]
     pub requested_selector: Option<String>,
@@ -152,9 +152,9 @@ pub struct CreateWorkerRequest {
     #[serde(default, skip_serializing_if = "Option::is_none")]
     pub initial_input: Option<WorkerInput>,
     #[serde(default, skip_serializing_if = "Option::is_none")]
-    pub working_directory: Option<WorkingDirectoryRequest>,
+    pub working_directory_request: Option<WorkingDirectoryRequest>,
     #[serde(default, skip_serializing_if = "Option::is_none")]
-    pub working_directory_allocation: Option<WorkingDirectoryAllocationClaim>,
+    pub working_directory: Option<WorkingDirectoryClaim>,
 }
 
 /// Worker lifecycle status for the in-memory embedded runtime.
diff --git a/crates/worker-runtime/src/http_server.rs b/crates/worker-runtime/src/http_server.rs
index 16cef36d..e63fc7c3 100644
--- a/crates/worker-runtime/src/http_server.rs
+++ b/crates/worker-runtime/src/http_server.rs
@@ -863,8 +863,8 @@ mod tests {
                 digest: bundle.metadata.digest,
             },
             initial_input: None,
+            working_directory_request: None,
             working_directory: None,
-            working_directory_allocation: None,
         }
     }
 
@@ -1148,8 +1148,8 @@ mod ws_tests {
                 digest: bundle.metadata.digest,
             },
             initial_input: None,
+            working_directory_request: None,
             working_directory: None,
-            working_directory_allocation: None,
         }
     }
 
diff --git a/crates/worker-runtime/src/runtime.rs b/crates/worker-runtime/src/runtime.rs
index 097567f1..44ef2309 100644
--- a/crates/worker-runtime/src/runtime.rs
+++ b/crates/worker-runtime/src/runtime.rs
@@ -1592,8 +1592,8 @@ mod tests {
                 digest: bundle.metadata.digest,
             },
             initial_input: None,
+            working_directory_request: None,
             working_directory: None,
-            working_directory_allocation: None,
         }
     }
 
diff --git a/crates/worker-runtime/src/worker_backend.rs b/crates/worker-runtime/src/worker_backend.rs
index 8480c1d4..71f94397 100644
--- a/crates/worker-runtime/src/worker_backend.rs
+++ b/crates/worker-runtime/src/worker_backend.rs
@@ -375,23 +375,23 @@ where
 
         let mut request = request;
         let working_directory = match (
+            request.request.working_directory_request.as_ref(),
             request.request.working_directory.as_ref(),
-            request.request.working_directory_allocation.as_ref(),
         ) {
             (Some(_), Some(_)) => {
                 return WorkerExecutionSpawnResult::Rejected(WorkerExecutionResult::rejected(
                     WorkerExecutionOperation::Spawn,
-                    "worker spawn cannot specify both working_directory and working_directory_allocation",
+                    "worker spawn cannot specify both working_directory_request and working_directory",
                 ));
             }
-            (Some(workspace_request), None) => {
+            (Some(working_directory_request), None) => {
                 let Some(materializer) = self.working_directory_materializer.as_ref() else {
                     return WorkerExecutionSpawnResult::Rejected(WorkerExecutionResult::rejected(
                         WorkerExecutionOperation::Spawn,
                         "working directory materialization requested, but no materializer is configured for this runtime backend",
                     ));
                 };
-                match materializer.materialize(&request.worker_ref, workspace_request) {
+                match materializer.materialize(&request.worker_ref, working_directory_request) {
                     Ok(binding) => {
                         request.working_directory = Some(binding.clone());
                         Some(binding)
@@ -406,16 +406,16 @@ where
                     }
                 }
             }
-            (None, Some(allocation)) => {
+            (None, Some(working_directory)) => {
                 let Some(materializer) = self.working_directory_materializer.as_ref() else {
                     return WorkerExecutionSpawnResult::Rejected(WorkerExecutionResult::rejected(
                         WorkerExecutionOperation::Spawn,
-                        "working directory allocation requested, but no materializer is configured for this runtime backend",
+                        "working directory working_directory requested, but no materializer is configured for this runtime backend",
                     ));
                 };
-                match materializer.bind_allocation(
-                    &allocation.allocation_id,
-                    allocation.relative_cwd.as_deref(),
+                match materializer.bind_working_directory(
+                    &working_directory.working_directory_id,
+                    working_directory.relative_cwd.as_deref(),
                 ) {
                     Ok(binding) => {
                         request.working_directory = Some(binding.clone());
@@ -780,8 +780,8 @@ mod tests {
                 digest: bundle.metadata.digest,
             },
             initial_input: None,
+            working_directory_request: None,
             working_directory: None,
-            working_directory_allocation: None,
         }
     }
 
@@ -933,7 +933,7 @@ mod tests {
         .unwrap();
         runtime.store_config_bundle(test_bundle()).unwrap();
         let mut request = create_request("chat");
-        request.working_directory = Some(working_directory_request(repo.path()));
+        request.working_directory_request = Some(working_directory_request(repo.path()));
 
         let detail = runtime.create_worker(request).unwrap();
 
diff --git a/crates/worker-runtime/src/working_directory.rs b/crates/worker-runtime/src/working_directory.rs
index 8885823a..1053ba88 100644
--- a/crates/worker-runtime/src/working_directory.rs
+++ b/crates/worker-runtime/src/working_directory.rs
@@ -12,7 +12,7 @@ use std::time::{SystemTime, UNIX_EPOCH};
 
 const WORKING_DIRECTORIES_DIR: &str = "working-directories";
 const MATERIALIZATION_RECORD: &str = "materialization.json";
-static NEXT_ALLOCATION_SEQUENCE: AtomicU64 = AtomicU64::new(0);
+static NEXT_WORKING_DIRECTORY_SEQUENCE: AtomicU64 = AtomicU64::new(0);
 
 #[derive(Clone, Debug, PartialEq, Eq, Serialize, Deserialize)]
 pub struct WorkingDirectoryEvidence {
@@ -27,7 +27,7 @@ pub struct WorkingDirectoryEvidence {
 }
 
 #[derive(Clone, Debug, PartialEq, Eq, Serialize, Deserialize)]
-pub struct WorkingDirectoryAllocation {
+pub struct WorkingDirectory {
     pub id: String,
     pub repository_id: String,
     pub materializer_kind: MaterializerKind,
@@ -38,10 +38,10 @@ pub struct WorkingDirectoryAllocation {
     pub status: WorkingDirectoryStatusKind,
 }
 
-impl WorkingDirectoryAllocation {
+impl WorkingDirectory {
     pub fn status_summary(&self) -> WorkingDirectorySummary {
         WorkingDirectorySummary {
-            allocation_id: self.id.clone(),
+            working_directory_id: self.id.clone(),
             repository_id: self.repository_id.clone(),
             requested_selector: self.evidence.requested_selector.clone(),
             materializer_kind: self.materializer_kind.clone(),
@@ -57,10 +57,10 @@ impl WorkingDirectoryAllocation {
 
 #[derive(Clone, Debug, PartialEq, Eq)]
 pub struct WorkingDirectoryBinding {
-    pub allocation: WorkingDirectoryAllocation,
+    pub working_directory: WorkingDirectory,
     pub workspace_root: PathBuf,
     pub cwd: PathBuf,
-    allocation_root: PathBuf,
+    working_directory_root: PathBuf,
     source_repository_path: PathBuf,
 }
 
@@ -73,8 +73,8 @@ impl WorkingDirectoryBinding {
         &self.cwd
     }
 
-    pub fn allocation_root(&self) -> &Path {
-        &self.allocation_root
+    pub fn working_directory_root(&self) -> &Path {
+        &self.working_directory_root
     }
 
     pub fn source_repository_path(&self) -> &Path {
@@ -83,7 +83,7 @@ impl WorkingDirectoryBinding {
 
     pub fn status(&self) -> WorkingDirectoryStatus {
         WorkingDirectoryStatus {
-            summary: self.allocation.status_summary(),
+            summary: self.working_directory.status_summary(),
         }
     }
 }
@@ -118,27 +118,29 @@ pub trait WorkingDirectoryMaterializer: Send + Sync + 'static {
         request: &WorkingDirectoryRequest,
     ) -> Result<WorkingDirectoryBinding, WorkingDirectoryDiagnostic>;
 
-    fn preallocate(
+    fn create(
         &self,
         request: &WorkingDirectoryRequest,
     ) -> Result<WorkingDirectoryBinding, WorkingDirectoryDiagnostic>;
 
-    fn bind_allocation(
+    fn bind_working_directory(
         &self,
-        allocation_id: &str,
+        working_directory_id: &str,
         relative_cwd: Option<&str>,
     ) -> Result<WorkingDirectoryBinding, WorkingDirectoryDiagnostic>;
 
-    fn list_allocations(&self) -> Result<Vec<WorkingDirectoryStatus>, WorkingDirectoryDiagnostic>;
-
-    fn allocation_status(
+    fn list_working_directories(
         &self,
-        allocation_id: &str,
+    ) -> Result<Vec<WorkingDirectoryStatus>, WorkingDirectoryDiagnostic>;
+
+    fn working_directory_status(
+        &self,
+        working_directory_id: &str,
     ) -> Result<WorkingDirectoryStatus, WorkingDirectoryDiagnostic>;
 
-    fn cleanup_allocation(
+    fn cleanup_working_directory(
         &self,
-        allocation_id: &str,
+        working_directory_id: &str,
     ) -> Result<WorkingDirectoryStatus, WorkingDirectoryDiagnostic>;
 
     fn cleanup(&self, binding: &WorkingDirectoryBinding) -> Result<(), WorkingDirectoryDiagnostic>;
@@ -160,7 +162,7 @@ impl LocalGitWorktreeMaterializer {
         &self.runtime_root
     }
 
-    fn allocation_id(worker_ref: &WorkerRef, repository_id: &str) -> String {
+    fn working_directory_id(worker_ref: &WorkerRef, repository_id: &str) -> String {
         format!(
             "{}-{}-{}",
             sanitize_path_component(worker_ref.runtime_id.as_str()),
@@ -169,10 +171,10 @@ impl LocalGitWorktreeMaterializer {
         )
     }
 
-    fn allocation_root(&self, allocation_id: &str) -> PathBuf {
+    fn working_directory_root(&self, working_directory_id: &str) -> PathBuf {
         self.runtime_root
             .join(WORKING_DIRECTORIES_DIR)
-            .join(allocation_id)
+            .join(working_directory_id)
     }
 
     fn write_record(
@@ -180,11 +182,11 @@ impl LocalGitWorktreeMaterializer {
         binding: &WorkingDirectoryBinding,
     ) -> Result<(), WorkingDirectoryDiagnostic> {
         let record = WorkingDirectoryMaterializationRecord {
-            allocation: binding.allocation.clone(),
+            working_directory: binding.working_directory.clone(),
             workspace_root: binding.workspace_root.clone(),
             source_repository_path: binding.source_repository_path.clone(),
         };
-        let path = binding.allocation_root.join(MATERIALIZATION_RECORD);
+        let path = binding.working_directory_root.join(MATERIALIZATION_RECORD);
         let raw = serde_json::to_vec_pretty(&record).map_err(|error| {
             WorkingDirectoryDiagnostic::new(
                 "working_directory_record_serialize_failed",
@@ -201,38 +203,38 @@ impl LocalGitWorktreeMaterializer {
 
     fn read_binding(
         &self,
-        allocation_id: &str,
+        working_directory_id: &str,
     ) -> Result<WorkingDirectoryBinding, WorkingDirectoryDiagnostic> {
-        let allocation_root = self.allocation_root(allocation_id);
-        let path = allocation_root.join(MATERIALIZATION_RECORD);
+        let working_directory_root = self.working_directory_root(working_directory_id);
+        let path = working_directory_root.join(MATERIALIZATION_RECORD);
         let raw = fs::read(&path).map_err(|_| {
             WorkingDirectoryDiagnostic::new(
-                "working_directory_allocation_not_found",
-                "working directory allocation was not found",
+                "working_directory_not_found",
+                "working directory working_directory was not found",
             )
         })?;
         let record: WorkingDirectoryMaterializationRecord = serde_json::from_slice(&raw).map_err(|_| {
             WorkingDirectoryDiagnostic::new(
                 "working_directory_record_invalid",
-                "working directory allocation record is invalid; backend-private path details were omitted",
+                "working directory working_directory record is invalid; backend-private path details were omitted",
             )
         })?;
         Ok(WorkingDirectoryBinding {
-            allocation: record.allocation,
+            working_directory: record.working_directory,
             workspace_root: record.workspace_root.clone(),
             cwd: record.workspace_root,
-            allocation_root,
+            working_directory_root,
             source_repository_path: record.source_repository_path,
         })
     }
 
-    fn materialize_with_allocation_id(
+    fn materialize_with_working_directory_id(
         &self,
-        allocation_id: String,
+        working_directory_id: String,
         request: &WorkingDirectoryRequest,
         cleanup_policy: &str,
     ) -> Result<WorkingDirectoryBinding, WorkingDirectoryDiagnostic> {
-        validate_allocation_id(&allocation_id)?;
+        validate_working_directory_id(&working_directory_id)?;
         if request.materializer != MaterializerKind::LocalGitWorktree {
             return Err(WorkingDirectoryDiagnostic::new(
                 "working_directory_materializer_unsupported",
@@ -299,26 +301,26 @@ impl LocalGitWorktreeMaterializer {
             .map(|value| value.trim().to_string())
             .filter(|value| !value.is_empty());
 
-        let allocation_root = self.allocation_root(&allocation_id);
-        let workspace_root = allocation_root
+        let working_directory_root = self.working_directory_root(&working_directory_id);
+        let workspace_root = working_directory_root
             .join("root")
             .join(sanitize_path_component(&request.repository.id));
         if workspace_root.exists() {
             return Err(WorkingDirectoryDiagnostic::new(
-                "working_directory_allocation_exists",
-                "working directory allocation target already exists; cleanup or choose a new allocation",
+                "working_directory_exists",
+                "working directory working_directory target already exists; cleanup or choose a new working_directory",
             ));
         }
         fs::create_dir_all(workspace_root.parent().ok_or_else(|| {
             WorkingDirectoryDiagnostic::new(
                 "working_directory_invalid_target",
-                "working directory allocation target has no parent directory",
+                "working directory working_directory target has no parent directory",
             )
         })?)
         .map_err(|_| {
             WorkingDirectoryDiagnostic::new(
                 "working_directory_create_failed",
-                "failed to create working directory allocation directory; backend-private path details were omitted",
+                "failed to create working directory working_directory directory; backend-private path details were omitted",
             )
         })?;
 
@@ -334,8 +336,8 @@ impl LocalGitWorktreeMaterializer {
             ],
         )?;
 
-        let allocation = WorkingDirectoryAllocation {
-            id: allocation_id.clone(),
+        let working_directory = WorkingDirectory {
+            id: working_directory_id.clone(),
             repository_id: request.repository.id.clone(),
             materializer_kind: MaterializerKind::LocalGitWorktree,
             dirty_state_policy: DirtyStatePolicy::CleanPointOnly,
@@ -353,17 +355,17 @@ impl LocalGitWorktreeMaterializer {
             },
             cleanup_target: WorkingDirectoryCleanupTarget {
                 kind: "git_worktree".to_string(),
-                allocation_id,
+                working_directory_id,
                 repository_id: request.repository.id.clone(),
             },
             cleanup_policy: cleanup_policy.to_string(),
             status: WorkingDirectoryStatusKind::Active,
         };
         let binding = WorkingDirectoryBinding {
-            allocation,
+            working_directory,
             workspace_root: workspace_root.clone(),
             cwd: workspace_root,
-            allocation_root,
+            working_directory_root,
             source_repository_path: source_root,
         };
         self.write_record(&binding)?;
@@ -377,36 +379,46 @@ impl WorkingDirectoryMaterializer for LocalGitWorktreeMaterializer {
         worker_ref: &WorkerRef,
         request: &WorkingDirectoryRequest,
     ) -> Result<WorkingDirectoryBinding, WorkingDirectoryDiagnostic> {
-        let allocation_id = Self::allocation_id(worker_ref, &request.repository.id);
-        self.materialize_with_allocation_id(allocation_id, request, "remove_on_worker_stop")
+        let working_directory_id = Self::working_directory_id(worker_ref, &request.repository.id);
+        self.materialize_with_working_directory_id(
+            working_directory_id,
+            request,
+            "remove_on_worker_stop",
+        )
     }
 
-    fn preallocate(
+    fn create(
         &self,
         request: &WorkingDirectoryRequest,
     ) -> Result<WorkingDirectoryBinding, WorkingDirectoryDiagnostic> {
-        let allocation_id = next_allocation_id(&request.repository.id);
-        self.materialize_with_allocation_id(allocation_id, request, "manual_or_worker_stop")
+        let working_directory_id = next_working_directory_id(&request.repository.id);
+        self.materialize_with_working_directory_id(
+            working_directory_id,
+            request,
+            "manual_or_worker_stop",
+        )
     }
 
-    fn bind_allocation(
+    fn bind_working_directory(
         &self,
-        allocation_id: &str,
+        working_directory_id: &str,
         relative_cwd: Option<&str>,
     ) -> Result<WorkingDirectoryBinding, WorkingDirectoryDiagnostic> {
-        validate_allocation_id(allocation_id)?;
-        let binding = self.read_binding(allocation_id)?;
-        if binding.allocation.status != WorkingDirectoryStatusKind::Active {
+        validate_working_directory_id(working_directory_id)?;
+        let binding = self.read_binding(working_directory_id)?;
+        if binding.working_directory.status != WorkingDirectoryStatusKind::Active {
             return Err(WorkingDirectoryDiagnostic::new(
                 "working_directory_not_active",
-                "working directory allocation is not active",
+                "working directory working_directory is not active",
             ));
         }
         let cwd = validate_relative_cwd(binding.workspace_root(), relative_cwd)?;
         Ok(WorkingDirectoryBinding { cwd, ..binding })
     }
 
-    fn list_allocations(&self) -> Result<Vec<WorkingDirectoryStatus>, WorkingDirectoryDiagnostic> {
+    fn list_working_directories(
+        &self,
+    ) -> Result<Vec<WorkingDirectoryStatus>, WorkingDirectoryDiagnostic> {
         let root = self.runtime_root.join(WORKING_DIRECTORIES_DIR);
         let entries = match fs::read_dir(&root) {
             Ok(entries) => entries,
@@ -414,7 +426,7 @@ impl WorkingDirectoryMaterializer for LocalGitWorktreeMaterializer {
             Err(_) => {
                 return Err(WorkingDirectoryDiagnostic::new(
                     "working_directory_list_failed",
-                    "failed to list working directory allocations; backend-private path details were omitted",
+                    "failed to list working directory working_directories; backend-private path details were omitted",
                 ));
             }
         };
@@ -427,43 +439,46 @@ impl WorkingDirectoryMaterializer for LocalGitWorktreeMaterializer {
             if !file_type.is_dir() {
                 continue;
             }
-            let allocation_id = entry.file_name().to_string_lossy().to_string();
-            if validate_allocation_id(&allocation_id).is_err() {
+            let working_directory_id = entry.file_name().to_string_lossy().to_string();
+            if validate_working_directory_id(&working_directory_id).is_err() {
                 continue;
             }
-            if let Ok(status) = self.allocation_status(&allocation_id) {
+            if let Ok(status) = self.working_directory_status(&working_directory_id) {
                 statuses.push(status);
             }
         }
-        statuses
-            .sort_by(|left, right| left.summary.allocation_id.cmp(&right.summary.allocation_id));
+        statuses.sort_by(|left, right| {
+            left.summary
+                .working_directory_id
+                .cmp(&right.summary.working_directory_id)
+        });
         Ok(statuses)
     }
 
-    fn allocation_status(
+    fn working_directory_status(
         &self,
-        allocation_id: &str,
+        working_directory_id: &str,
     ) -> Result<WorkingDirectoryStatus, WorkingDirectoryDiagnostic> {
-        validate_allocation_id(allocation_id)?;
-        Ok(self.read_binding(allocation_id)?.status())
+        validate_working_directory_id(working_directory_id)?;
+        Ok(self.read_binding(working_directory_id)?.status())
     }
 
-    fn cleanup_allocation(
+    fn cleanup_working_directory(
         &self,
-        allocation_id: &str,
+        working_directory_id: &str,
     ) -> Result<WorkingDirectoryStatus, WorkingDirectoryDiagnostic> {
-        validate_allocation_id(allocation_id)?;
-        let binding = self.read_binding(allocation_id)?;
+        validate_working_directory_id(working_directory_id)?;
+        let binding = self.read_binding(working_directory_id)?;
         self.cleanup(&binding)?;
-        self.allocation_status(allocation_id)
+        self.working_directory_status(working_directory_id)
     }
 
     fn cleanup(&self, binding: &WorkingDirectoryBinding) -> Result<(), WorkingDirectoryDiagnostic> {
-        let mut allocation = binding.allocation.clone();
-        let allocation_root = binding.allocation_root.canonicalize().map_err(|_| {
+        let mut working_directory = binding.working_directory.clone();
+        let working_directory_root = binding.working_directory_root.canonicalize().map_err(|_| {
             WorkingDirectoryDiagnostic::new(
                 "working_directory_cleanup_target_invalid",
-                "working directory allocation root is unavailable; backend-private path details were omitted",
+                "working directory working directory root is unavailable; backend-private path details were omitted",
             )
         })?;
         let workspace_root = binding.workspace_root.canonicalize().map_err(|_| {
@@ -472,10 +487,10 @@ impl WorkingDirectoryMaterializer for LocalGitWorktreeMaterializer {
                 "working directory root is unavailable; backend-private path details were omitted",
             )
         })?;
-        if !workspace_root.starts_with(&allocation_root) {
+        if !workspace_root.starts_with(&working_directory_root) {
             return Err(WorkingDirectoryDiagnostic::new(
                 "working_directory_cleanup_escape_rejected",
-                "working directory cleanup target is outside the allocation root",
+                "working directory cleanup target is outside the working directory root",
             ));
         }
         let workspace_root_arg = path_str(&workspace_root)?;
@@ -495,16 +510,16 @@ impl WorkingDirectoryMaterializer for LocalGitWorktreeMaterializer {
                 Ok(())
             }
         });
-        allocation.status = if remove_result.is_ok() {
+        working_directory.status = if remove_result.is_ok() {
             WorkingDirectoryStatusKind::Removed
         } else {
             WorkingDirectoryStatusKind::CleanupPending
         };
         let updated = WorkingDirectoryBinding {
-            allocation,
+            working_directory,
             workspace_root: binding.workspace_root.clone(),
             cwd: binding.cwd.clone(),
-            allocation_root: binding.allocation_root.clone(),
+            working_directory_root: binding.working_directory_root.clone(),
             source_repository_path: binding.source_repository_path.clone(),
         };
         let _ = self.write_record(&updated);
@@ -514,7 +529,7 @@ impl WorkingDirectoryMaterializer for LocalGitWorktreeMaterializer {
 
 #[derive(Clone, Debug, PartialEq, Eq, Serialize, Deserialize)]
 struct WorkingDirectoryMaterializationRecord {
-    allocation: WorkingDirectoryAllocation,
+    working_directory: WorkingDirectory,
     workspace_root: PathBuf,
     source_repository_path: PathBuf,
 }
@@ -586,29 +601,31 @@ fn sanitize_path_component(value: &str) -> String {
     }
 }
 
-fn next_allocation_id(repository_id: &str) -> String {
+fn next_working_directory_id(repository_id: &str) -> String {
     let now = SystemTime::now()
         .duration_since(UNIX_EPOCH)
         .map(|duration| duration.as_millis())
         .unwrap_or_default();
-    let sequence = NEXT_ALLOCATION_SEQUENCE.fetch_add(1, Ordering::Relaxed);
+    let sequence = NEXT_WORKING_DIRECTORY_SEQUENCE.fetch_add(1, Ordering::Relaxed);
     format!(
         "alloc-{now}-{sequence}-{}",
         sanitize_path_component(repository_id)
     )
 }
 
-fn validate_allocation_id(allocation_id: &str) -> Result<(), WorkingDirectoryDiagnostic> {
-    let sanitized = sanitize_path_component(allocation_id);
-    if allocation_id.is_empty()
-        || allocation_id != sanitized
-        || allocation_id.contains(std::path::MAIN_SEPARATOR)
-        || allocation_id.contains('/')
-        || allocation_id.contains('\\')
+fn validate_working_directory_id(
+    working_directory_id: &str,
+) -> Result<(), WorkingDirectoryDiagnostic> {
+    let sanitized = sanitize_path_component(working_directory_id);
+    if working_directory_id.is_empty()
+        || working_directory_id != sanitized
+        || working_directory_id.contains(std::path::MAIN_SEPARATOR)
+        || working_directory_id.contains('/')
+        || working_directory_id.contains('\\')
     {
         return Err(WorkingDirectoryDiagnostic::new(
-            "working_directory_allocation_id_invalid",
-            "working directory allocation id is invalid",
+            "working_directory_id_invalid",
+            "working directory working_directory id is invalid",
         ));
     }
     Ok(())
@@ -639,7 +656,7 @@ fn validate_relative_cwd(
     {
         return Err(WorkingDirectoryDiagnostic::new(
             "working_directory_relative_cwd_invalid",
-            "working directory relative_cwd must be a relative path inside the allocation root",
+            "working directory relative_cwd must be a relative path inside the working directory root",
         ));
     }
     let target = workspace_root
@@ -654,7 +671,7 @@ fn validate_relative_cwd(
     if !target.starts_with(&workspace_root) || !target.is_dir() {
         return Err(WorkingDirectoryDiagnostic::new(
             "working_directory_relative_cwd_escape_rejected",
-            "working directory relative_cwd must resolve to a directory inside the allocation root",
+            "working directory relative_cwd must resolve to a directory inside the working directory root",
         ));
     }
     Ok(target)
@@ -728,16 +745,16 @@ mod tests {
             "worktree should be detached, got {branch}"
         );
         assert_eq!(
-            binding.allocation.materializer_kind,
+            binding.working_directory.materializer_kind,
             MaterializerKind::LocalGitWorktree
         );
         assert_eq!(
-            binding.allocation.dirty_state_policy,
+            binding.working_directory.dirty_state_policy,
             DirtyStatePolicy::CleanPointOnly
         );
         assert!(
             binding
-                .allocation_root()
+                .working_directory_root()
                 .join(MATERIALIZATION_RECORD)
                 .exists()
         );
@@ -805,7 +822,7 @@ mod tests {
     }
 
     #[test]
-    fn preallocated_allocation_binds_safe_relative_cwd_and_lists_without_paths() {
+    fn working_directory_binds_safe_relative_cwd_and_lists_without_paths() {
         let repo = create_clean_repo();
         fs::create_dir_all(repo.path().join("crates/yoi")).unwrap();
         fs::write(repo.path().join("crates/yoi/lib.rs"), "// ok\n").unwrap();
@@ -813,15 +830,18 @@ mod tests {
         git(repo.path(), &["commit", "-m", "add crate"]);
         let runtime_root = tempfile::tempdir().unwrap();
         let materializer = LocalGitWorktreeMaterializer::new(runtime_root.path());
-        let allocation = materializer.preallocate(&request(repo.path())).unwrap();
+        let working_directory = materializer.create(&request(repo.path())).unwrap();
 
         let bound = materializer
-            .bind_allocation(&allocation.allocation.id, Some("crates/yoi"))
+            .bind_working_directory(&working_directory.working_directory.id, Some("crates/yoi"))
             .unwrap();
         assert_eq!(bound.cwd.file_name().unwrap(), "yoi");
-        let listed = materializer.list_allocations().unwrap();
+        let listed = materializer.list_working_directories().unwrap();
         assert_eq!(listed.len(), 1);
-        assert_eq!(listed[0].summary.allocation_id, allocation.allocation.id);
+        assert_eq!(
+            listed[0].summary.working_directory_id,
+            working_directory.working_directory.id
+        );
         assert_eq!(
             listed[0].summary.requested_selector.as_deref(),
             Some("HEAD")
@@ -837,32 +857,35 @@ mod tests {
         git(repo.path(), &["commit", "-m", "add inside"]);
         let runtime_root = tempfile::tempdir().unwrap();
         let materializer = LocalGitWorktreeMaterializer::new(runtime_root.path());
-        let allocation = materializer.preallocate(&request(repo.path())).unwrap();
+        let working_directory = materializer.create(&request(repo.path())).unwrap();
 
         assert_eq!(
             materializer
-                .bind_allocation(&allocation.allocation.id, Some("/tmp"))
+                .bind_working_directory(&working_directory.working_directory.id, Some("/tmp"))
                 .unwrap_err()
                 .code,
             "working_directory_relative_cwd_invalid"
         );
         assert_eq!(
             materializer
-                .bind_allocation(&allocation.allocation.id, Some("../outside"))
+                .bind_working_directory(&working_directory.working_directory.id, Some("../outside"))
                 .unwrap_err()
                 .code,
             "working_directory_relative_cwd_invalid"
         );
         assert_eq!(
             materializer
-                .bind_allocation(&allocation.allocation.id, Some("missing"))
+                .bind_working_directory(&working_directory.working_directory.id, Some("missing"))
                 .unwrap_err()
                 .code,
             "working_directory_relative_cwd_unavailable"
         );
         assert_eq!(
             materializer
-                .bind_allocation(&allocation.allocation.id, Some("inside/file.txt"))
+                .bind_working_directory(
+                    &working_directory.working_directory.id,
+                    Some("inside/file.txt")
+                )
                 .unwrap_err()
                 .code,
             "working_directory_relative_cwd_escape_rejected"
@@ -870,10 +893,11 @@ mod tests {
 
         #[cfg(unix)]
         {
-            std::os::unix::fs::symlink("/tmp", allocation.workspace_root().join("escape")).unwrap();
+            std::os::unix::fs::symlink("/tmp", working_directory.workspace_root().join("escape"))
+                .unwrap();
             assert_eq!(
                 materializer
-                    .bind_allocation(&allocation.allocation.id, Some("escape"))
+                    .bind_working_directory(&working_directory.working_directory.id, Some("escape"))
                     .unwrap_err()
                     .code,
                 "working_directory_relative_cwd_escape_rejected"
@@ -894,8 +918,12 @@ mod tests {
         materializer.cleanup(&binding).unwrap();
 
         assert!(!workspace_root.exists());
-        let raw =
-            fs::read_to_string(binding.allocation_root().join(MATERIALIZATION_RECORD)).unwrap();
+        let raw = fs::read_to_string(
+            binding
+                .working_directory_root()
+                .join(MATERIALIZATION_RECORD),
+        )
+        .unwrap();
         assert!(raw.contains("removed"));
     }
 }
diff --git a/crates/workspace-server/src/companion.rs b/crates/workspace-server/src/companion.rs
index 88708336..50e9d721 100644
--- a/crates/workspace-server/src/companion.rs
+++ b/crates/workspace-server/src/companion.rs
@@ -387,9 +387,9 @@ fn spawn_companion_worker(runtime: &RuntimeRegistry) -> CompanionWorkerState {
             },
             profile: Some(selector),
             initial_input: None,
-            working_directory: None,
+            working_directory_request: None,
+            resolved_working_directory_request: None,
             resolved_working_directory: None,
-            resolved_working_directory_allocation: None,
         },
     );
 
diff --git a/crates/workspace-server/src/hosts.rs b/crates/workspace-server/src/hosts.rs
index 2749b8a7..f1655640 100644
--- a/crates/workspace-server/src/hosts.rs
+++ b/crates/workspace-server/src/hosts.rs
@@ -13,7 +13,7 @@ use std::{
 };
 use worker_runtime::catalog::{
     ConfigBundleRef, CreateWorkerRequest, ProfileSelector, WorkerDetail as EmbeddedWorkerDetail,
-    WorkerStatus as EmbeddedWorkerStatus, WorkingDirectoryAllocationClaim, WorkingDirectoryRequest,
+    WorkerStatus as EmbeddedWorkerStatus, WorkingDirectoryClaim, WorkingDirectoryRequest,
     WorkingDirectorySummary,
 };
 use worker_runtime::config_bundle::{
@@ -295,15 +295,15 @@ pub struct WorkerSpawnRequest {
     pub profile: Option<ProfileSelector>,
     #[serde(default, skip_serializing_if = "Option::is_none")]
     pub initial_input: Option<EmbeddedWorkerInput>,
-    /// Optional safe working-directory selector. The Workspace server resolves
+    /// Optional safe working-directory creation request. The Workspace server resolves
     /// this into a runtime-internal `WorkingDirectoryRequest` from configured
     /// repositories before calling a host.
     #[serde(default, skip_serializing_if = "Option::is_none")]
-    pub working_directory: Option<WorkerSpawnWorkingDirectoryRequest>,
+    pub working_directory_request: Option<WorkerSpawnWorkingDirectoryRequest>,
     #[serde(skip, default)]
-    pub resolved_working_directory: Option<WorkingDirectoryRequest>,
+    pub resolved_working_directory_request: Option<WorkingDirectoryRequest>,
     #[serde(skip, default)]
-    pub resolved_working_directory_allocation: Option<WorkingDirectoryAllocationClaim>,
+    pub resolved_working_directory: Option<WorkingDirectoryClaim>,
 }
 
 #[derive(Debug, Clone, Serialize, Deserialize, PartialEq, Eq)]
@@ -1356,8 +1356,8 @@ impl WorkspaceWorkerRuntime for EmbeddedWorkerRuntime {
             profile,
             config_bundle,
             initial_input: request.initial_input.clone(),
+            working_directory_request: request.resolved_working_directory_request.clone(),
             working_directory: request.resolved_working_directory.clone(),
-            working_directory_allocation: request.resolved_working_directory_allocation.clone(),
         };
         match self.runtime.create_worker(create_request) {
             Ok(detail) => {
@@ -2032,8 +2032,8 @@ impl WorkspaceWorkerRuntime for RemoteWorkerRuntime {
             profile,
             config_bundle,
             initial_input: request.initial_input.clone(),
+            working_directory_request: request.resolved_working_directory_request.clone(),
             working_directory: request.resolved_working_directory.clone(),
-            working_directory_allocation: request.resolved_working_directory_allocation.clone(),
         };
         match self.post_json::<_, RuntimeHttpWorkerResponse>("/v1/workers", &create) {
             Ok(response) => WorkerSpawnResult {
@@ -3191,9 +3191,9 @@ mod tests {
             },
             profile: None,
             initial_input: None,
-            working_directory: None,
+            working_directory_request: None,
+            resolved_working_directory_request: None,
             resolved_working_directory: None,
-            resolved_working_directory_allocation: None,
         }
     }
 
@@ -3323,9 +3323,9 @@ mod tests {
                     },
                     profile: None,
                     initial_input: None,
-                    working_directory: None,
+                    working_directory_request: None,
+                    resolved_working_directory_request: None,
                     resolved_working_directory: None,
-                    resolved_working_directory_allocation: None,
                 },
             )
             .unwrap();
@@ -3425,9 +3425,9 @@ mod tests {
                     },
                     profile: Some(ProfileSelector::Builtin("builtin:coder".to_string())),
                     initial_input: None,
-                    working_directory: None,
+                    working_directory_request: None,
+                    resolved_working_directory_request: None,
                     resolved_working_directory: None,
-                    resolved_working_directory_allocation: None,
                 },
             )
             .unwrap();
@@ -3456,9 +3456,9 @@ mod tests {
                     acceptance: WorkerSpawnAcceptanceRequirement::SocketReady,
                     profile: None,
                     initial_input: None,
-                    working_directory: None,
+                    working_directory_request: None,
+                    resolved_working_directory_request: None,
                     resolved_working_directory: None,
-                    resolved_working_directory_allocation: None,
                 },
             )
             .unwrap();
diff --git a/crates/workspace-server/src/server.rs b/crates/workspace-server/src/server.rs
index c3e6c219..d42242d2 100644
--- a/crates/workspace-server/src/server.rs
+++ b/crates/workspace-server/src/server.rs
@@ -46,7 +46,7 @@ use crate::store::{ControlPlaneStore, WorkspaceRecord};
 use crate::{Error, Result};
 use worker_runtime::catalog::{
     ConfigBundleRef, DirtyStatePolicy, MaterializerKind, ProfileSelector,
-    RepositorySelector as RuntimeRepositorySelector, WorkingDirectoryAllocationClaim,
+    RepositorySelector as RuntimeRepositorySelector, WorkingDirectoryClaim,
     WorkingDirectoryRepository, WorkingDirectoryRequest, WorkingDirectorySummary,
 };
 use worker_runtime::config_bundle::ConfigBundle;
@@ -275,7 +275,7 @@ pub fn build_router(api: WorkspaceApi) -> Router {
             get(scoped_list_working_directories).post(scoped_create_working_directory),
         )
         .route(
-            "/api/w/{workspace_id}/working-directories/{allocation_id}",
+            "/api/w/{workspace_id}/working-directories/{working_directory_id}",
             get(scoped_working_directory_detail).delete(scoped_cleanup_working_directory),
         )
         .route("/api/runtimes", get(list_runtimes))
@@ -626,7 +626,7 @@ pub struct BrowserWorkingDirectoryDetailResponse {
 #[derive(Debug, Deserialize)]
 #[serde(deny_unknown_fields)]
 pub struct BrowserWorkerWorkingDirectorySelection {
-    pub allocation_id: String,
+    pub working_directory_id: String,
     #[serde(default)]
     pub relative_cwd: Option<String>,
 }
@@ -744,7 +744,7 @@ struct ScopedRuntimePath {
 #[derive(Debug, Deserialize)]
 struct ScopedWorkingDirectoryPath {
     workspace_id: String,
-    allocation_id: String,
+    working_directory_id: String,
 }
 
 #[derive(Debug, Deserialize)]
@@ -903,10 +903,10 @@ async fn scoped_create_working_directory(
     Json(request): Json<BrowserWorkingDirectoryCreateRequest>,
 ) -> ApiResult<Json<BrowserWorkingDirectoryDetailResponse>> {
     validate_workspace_scope(&api, &path.workspace_id)?;
-    let workspace_request = working_directory_request_for_browser(&api, request)?;
+    let working_directory_request = working_directory_request_for_browser(&api, request)?;
     let binding = api
         .working_directory_materializer
-        .preallocate(&workspace_request)
+        .create(&working_directory_request)
         .map_err(|diagnostic| {
             ApiError::from(Error::RuntimeOperationFailed {
                 runtime_id: EMBEDDED_WORKER_RUNTIME_ID.to_string(),
@@ -928,7 +928,7 @@ async fn scoped_working_directory_detail(
     validate_workspace_scope(&api, &path.workspace_id)?;
     let status = api
         .working_directory_materializer
-        .allocation_status(&path.allocation_id)
+        .working_directory_status(&path.working_directory_id)
         .map_err(|diagnostic| {
             ApiError::from(Error::RuntimeOperationFailed {
                 runtime_id: EMBEDDED_WORKER_RUNTIME_ID.to_string(),
@@ -950,7 +950,7 @@ async fn scoped_cleanup_working_directory(
     validate_workspace_scope(&api, &path.workspace_id)?;
     let status = api
         .working_directory_materializer
-        .cleanup_allocation(&path.allocation_id)
+        .cleanup_working_directory(&path.working_directory_id)
         .map_err(|diagnostic| {
             ApiError::from(Error::RuntimeOperationFailed {
                 runtime_id: EMBEDDED_WORKER_RUNTIME_ID.to_string(),
@@ -1621,28 +1621,28 @@ async fn create_workspace_worker(
             content: initial_text,
         })
     };
-    let resolved_working_directory_allocation =
+    let resolved_working_directory =
         request
             .working_directory
-            .map(|selection| WorkingDirectoryAllocationClaim {
-                allocation_id: selection.allocation_id,
+            .map(|selection| WorkingDirectoryClaim {
+                working_directory_id: selection.working_directory_id,
                 relative_cwd: selection.relative_cwd,
             });
-    if resolved_working_directory_allocation.is_some()
-        && request.runtime_id != EMBEDDED_WORKER_RUNTIME_ID
-    {
+    if resolved_working_directory.is_some() && request.runtime_id != EMBEDDED_WORKER_RUNTIME_ID {
         return Err(Error::RuntimeOperationFailed {
             runtime_id: request.runtime_id.clone(),
             code: "working_directory_runtime_unsupported".to_string(),
-            message: "preallocated working directories are only supported by the embedded local runtime in v0".to_string(),
+            message:
+                "created working directories are only supported by the embedded local runtime in v0"
+                    .to_string(),
         }
         .into());
     }
-    if let Some(allocation) = resolved_working_directory_allocation.as_ref() {
+    if let Some(working_directory) = resolved_working_directory.as_ref() {
         api.working_directory_materializer
-            .bind_allocation(
-                &allocation.allocation_id,
-                allocation.relative_cwd.as_deref(),
+            .bind_working_directory(
+                &working_directory.working_directory_id,
+                working_directory.relative_cwd.as_deref(),
             )
             .map_err(|diagnostic| {
                 working_directory_api_error(request.runtime_id.clone(), diagnostic)
@@ -1660,9 +1660,9 @@ async fn create_workspace_worker(
                 },
                 profile: Some(profile_selector),
                 initial_input,
-                working_directory: None,
-                resolved_working_directory: None,
-                resolved_working_directory_allocation,
+                working_directory_request: None,
+                resolved_working_directory_request: None,
+                resolved_working_directory,
             },
         )
         .map_err(|err| err.into_error())?;
@@ -1751,8 +1751,8 @@ async fn create_runtime_worker(
     AxumPath(runtime_id): AxumPath<String>,
     Json(mut request): Json<WorkerSpawnRequest>,
 ) -> ApiResult<Json<WorkerSpawnResult>> {
-    request.resolved_working_directory = request
-        .working_directory
+    request.resolved_working_directory_request = request
+        .working_directory_request
         .as_ref()
         .map(|working_directory| {
             configured_working_directory_request(&api.config, working_directory)
@@ -2713,7 +2713,7 @@ fn working_directory_repository_options(
 
 fn working_directory_summaries(api: &WorkspaceApi) -> ApiResult<Vec<WorkingDirectorySummary>> {
     api.working_directory_materializer
-        .list_allocations()
+        .list_working_directories()
         .map(|items| items.into_iter().map(|status| status.summary).collect())
         .map_err(|diagnostic| {
             ApiError::from(Error::RuntimeOperationFailed {
@@ -3418,8 +3418,8 @@ mod tests {
                 digest: bundle.metadata.digest,
             },
             initial_input: None,
+            working_directory_request: None,
             working_directory: None,
-            working_directory_allocation: None,
         }
     }
 
@@ -3435,7 +3435,7 @@ mod tests {
     }
 
     #[tokio::test]
-    async fn browser_working_directory_preallocate_list_detail_and_cleanup_are_path_safe() {
+    async fn browser_working_directory_create_list_detail_and_cleanup_are_path_safe() {
         let dir = tempfile::tempdir().unwrap();
         init_clean_git_workspace(dir.path());
         let app = test_app(dir.path()).await;
@@ -3451,7 +3451,7 @@ mod tests {
             }),
         )
         .await;
-        let allocation_id = created["item"]["allocation_id"]
+        let working_directory_id = created["item"]["working_directory_id"]
             .as_str()
             .unwrap()
             .to_string();
@@ -3463,11 +3463,14 @@ mod tests {
 
         let list = get_json(app.clone(), &workspace_path).await;
         assert_eq!(list["items"].as_array().unwrap().len(), 1);
-        assert_eq!(list["items"][0]["allocation_id"], allocation_id);
+        assert_eq!(
+            list["items"][0]["working_directory_id"],
+            working_directory_id
+        );
 
-        let detail_path = format!("{workspace_path}/{allocation_id}");
+        let detail_path = format!("{workspace_path}/{working_directory_id}");
         let detail = get_json(app.clone(), &detail_path).await;
-        assert_eq!(detail["item"]["allocation_id"], allocation_id);
+        assert_eq!(detail["item"]["working_directory_id"], working_directory_id);
 
         let removed = request_json(app, "DELETE", &detail_path, None, StatusCode::OK).await;
         assert_eq!(removed["item"]["status"], "removed");
@@ -3489,7 +3492,7 @@ mod tests {
             }),
         )
         .await;
-        let allocation_id = created["item"]["allocation_id"].as_str().unwrap();
+        let working_directory_id = created["item"]["working_directory_id"].as_str().unwrap();
 
         let response = request_json(
             app,
@@ -3501,7 +3504,7 @@ mod tests {
                 "profile": "builtin:coder",
                 "initial_text": "",
                 "working_directory": {
-                    "allocation_id": allocation_id,
+                    "working_directory_id": working_directory_id,
                     "relative_cwd": "../escape"
                 }
             })),
@@ -3857,7 +3860,7 @@ mod tests {
                     "kind": "run_accepted",
                     "expected_segments": 0
                 },
-                "working_directory": {
+                "working_directory_request": {
                     "repository_id": TEST_REPOSITORY_ID,
                     "local_path": dir.path().display().to_string()
                 }
@@ -3892,7 +3895,7 @@ mod tests {
                     "kind": "run_accepted",
                     "expected_segments": 0
                 },
-                "working_directory": {
+                "working_directory_request": {
                     "repository_id": TEST_REPOSITORY_ID,
                     "selector": "HEAD"
                 }
@@ -4379,9 +4382,9 @@ mod tests {
                     },
                     profile: None,
                     initial_input: None,
-                    working_directory: None,
+                    working_directory_request: None,
+                    resolved_working_directory_request: None,
                     resolved_working_directory: None,
-                    resolved_working_directory_allocation: None,
                 },
             )
             .expect("spawn worker");
diff --git a/web/workspace/src/lib/workspace-sidebar/WorkersNavSection.svelte b/web/workspace/src/lib/workspace-sidebar/WorkersNavSection.svelte
index 526776d7..a51b61ba 100644
--- a/web/workspace/src/lib/workspace-sidebar/WorkersNavSection.svelte
+++ b/web/workspace/src/lib/workspace-sidebar/WorkersNavSection.svelte
@@ -48,7 +48,7 @@
   let runtimeId = $state('');
   let profile = $state('builtin:coder');
   let initialText = $state('');
-  let workingDirectoryAllocationId = $state('');
+  let workingDirectoryId = $state('');
   let workingDirectoryRepositoryId = $state('');
   let workingDirectorySelector = $state('HEAD');
   let relativeCwd = $state('');
@@ -114,7 +114,7 @@
         display_name: displayName,
         profile,
         initial_text: initialText,
-        working_directory_allocation_id: workingDirectoryAllocationId,
+        working_directory_id: workingDirectoryId,
         working_directory_repository_id: workingDirectoryRepositoryId,
         working_directory_selector: workingDirectorySelector,
         relative_cwd: relativeCwd,
@@ -122,7 +122,7 @@
       runtimeId = form.runtime_id;
       displayName = form.display_name;
       profile = form.profile;
-      workingDirectoryAllocationId = form.working_directory_allocation_id;
+      workingDirectoryId = form.working_directory_id;
       workingDirectoryRepositoryId = form.working_directory_repository_id;
       workingDirectorySelector = form.working_directory_selector;
       relativeCwd = form.relative_cwd;
@@ -158,9 +158,9 @@
       const payload = (await response.json()) as BrowserWorkingDirectoryCreateResponse;
       const items = options?.working_directories ?? [];
       options = options
-        ? { ...options, working_directories: [...items.filter((item) => item.allocation_id !== payload.item.allocation_id), payload.item] }
+        ? { ...options, working_directories: [...items.filter((item) => item.working_directory_id !== payload.item.working_directory_id), payload.item] }
         : options;
-      workingDirectoryAllocationId = payload.item.allocation_id;
+      workingDirectoryId = payload.item.working_directory_id;
     } catch (err) {
       submitError = exceptionDisplayError(err, 'working directory create failed');
     } finally {
@@ -185,7 +185,7 @@
           display_name: displayName,
           profile,
           initial_text: initialText,
-          working_directory_allocation_id: workingDirectoryAllocationId,
+          working_directory_id: workingDirectoryId,
           working_directory_repository_id: workingDirectoryRepositoryId,
           working_directory_selector: workingDirectorySelector,
           relative_cwd: relativeCwd,
@@ -279,18 +279,18 @@
       <fieldset class="worker-working-directory">
         <legend>Working directory</legend>
         <label>
-          <span>Allocation</span>
-          <select bind:value={workingDirectoryAllocationId}>
-            <option value="">No allocation selected</option>
+          <span>Working directory</span>
+          <select bind:value={workingDirectoryId}>
+            <option value="">No working directory selected</option>
             {#each options?.working_directories ?? [] as directory}
-              <option value={directory.allocation_id} disabled={directory.status !== 'active'}>
+              <option value={directory.working_directory_id} disabled={directory.status !== 'active'}>
                 {directory.repository_id} · {directory.requested_selector ?? 'HEAD'} · {directory.resolved_commit.slice(0, 12)} · {directory.status}
               </option>
             {/each}
           </select>
         </label>
         <label>
-          <span>Repository for new allocation</span>
+          <span>Repository</span>
           <select bind:value={workingDirectoryRepositoryId}>
             {#if options?.repositories.length}
               {#each options.repositories as repository}
@@ -306,11 +306,11 @@
           <input bind:value={workingDirectorySelector} autocomplete="off" placeholder="HEAD" />
         </label>
         <button type="button" disabled={creatingWorkingDirectory || !workingDirectoryRepositoryId} onclick={() => void createWorkingDirectory()}>
-          {creatingWorkingDirectory ? 'Allocating…' : 'Create working directory'}
+          {creatingWorkingDirectory ? 'Creating…' : 'Create working directory'}
         </button>
         <label>
           <span>Relative cwd</span>
-          <input bind:value={relativeCwd} autocomplete="off" placeholder="Optional path inside allocation" />
+          <input bind:value={relativeCwd} autocomplete="off" placeholder="Optional path inside working directory" />
         </label>
       </fieldset>
       <label>
@@ -335,7 +335,7 @@
           {/if}
         </div>
       {/if}
-      <button type="submit" disabled={submitting || !runtimeId || !profile || !workingDirectoryAllocationId}>
+      <button type="submit" disabled={submitting || !runtimeId || !profile || !workingDirectoryId}>
         {submitting ? 'Starting…' : 'Start Coding Worker'}
       </button>
     </form>
diff --git a/web/workspace/src/lib/workspace-sidebar/types.ts b/web/workspace/src/lib/workspace-sidebar/types.ts
index f6d689f6..975b75bc 100644
--- a/web/workspace/src/lib/workspace-sidebar/types.ts
+++ b/web/workspace/src/lib/workspace-sidebar/types.ts
@@ -116,7 +116,7 @@ export type WorkingDirectoryRepositoryOption = {
 };
 
 export type WorkingDirectorySummary = {
-  allocation_id: string;
+  working_directory_id: string;
   repository_id: string;
   requested_selector?: string | null;
   materializer_kind: string;
@@ -127,7 +127,7 @@ export type WorkingDirectorySummary = {
   cleanup_policy: string;
   cleanup_target: {
     kind: string;
-    allocation_id: string;
+    working_directory_id: string;
     repository_id: string;
   };
 };
@@ -145,7 +145,7 @@ export type BrowserWorkingDirectoryListResponse = {
 };
 
 export type BrowserWorkerWorkingDirectorySelection = {
-  allocation_id: string;
+  working_directory_id: string;
   relative_cwd?: string | null;
 };
 
diff --git a/web/workspace/src/lib/workspace-sidebar/worker-launch.test.ts b/web/workspace/src/lib/workspace-sidebar/worker-launch.test.ts
index 66f7443f..375a86e8 100644
--- a/web/workspace/src/lib/workspace-sidebar/worker-launch.test.ts
+++ b/web/workspace/src/lib/workspace-sidebar/worker-launch.test.ts
@@ -45,7 +45,7 @@ const options: WorkerLaunchOptionsResponse = {
   ],
   working_directories: [
     {
-      allocation_id: "alloc-1-repo",
+      working_directory_id: "wd-1-repo",
       repository_id: "repo",
       requested_selector: "HEAD",
       materializer_kind: "local_git_worktree",
@@ -55,7 +55,7 @@ const options: WorkerLaunchOptionsResponse = {
       cleanup_policy: "manual_or_worker_stop",
       cleanup_target: {
         kind: "git_worktree",
-        allocation_id: "alloc-1-repo",
+        working_directory_id: "wd-1-repo",
         repository_id: "repo",
       },
     },
@@ -69,7 +69,7 @@ Deno.test("defaultWorkerLaunchForm chooses active runtime, coder profile, reposi
     display_name: "",
     profile: "",
     initial_text: "hello",
-    working_directory_allocation_id: "",
+    working_directory_id: "",
     working_directory_repository_id: "",
     working_directory_selector: "",
     relative_cwd: "",
@@ -79,18 +79,18 @@ Deno.test("defaultWorkerLaunchForm chooses active runtime, coder profile, reposi
   assertEquals(form.display_name, "Coding Worker");
   assertEquals(form.profile, "builtin:coder");
   assertEquals(form.initial_text, "hello");
-  assertEquals(form.working_directory_allocation_id, "alloc-1-repo");
+  assertEquals(form.working_directory_id, "wd-1-repo");
   assertEquals(form.working_directory_repository_id, "repo");
   assertEquals(form.working_directory_selector, "HEAD");
 });
 
-Deno.test("buildBrowserCreateWorkerRequest sends allocation id and relative cwd only", () => {
+Deno.test("buildBrowserCreateWorkerRequest sends working_directory id and relative cwd only", () => {
   const request = buildBrowserCreateWorkerRequest({
     runtime_id: "embedded",
     display_name: "Worker",
     profile: "builtin:coder",
     initial_text: "go",
-    working_directory_allocation_id: "alloc-1-repo",
+    working_directory_id: "wd-1-repo",
     working_directory_repository_id: "repo",
     working_directory_selector: "main",
     relative_cwd: "crates/yoi",
@@ -102,7 +102,7 @@ Deno.test("buildBrowserCreateWorkerRequest sends allocation id and relative cwd
     profile: "builtin:coder",
     initial_text: "go",
     working_directory: {
-      allocation_id: "alloc-1-repo",
+      working_directory_id: "wd-1-repo",
       relative_cwd: "crates/yoi",
     },
   });
diff --git a/web/workspace/src/lib/workspace-sidebar/worker-launch.ts b/web/workspace/src/lib/workspace-sidebar/worker-launch.ts
index bbc9f7e2..c09075c1 100644
--- a/web/workspace/src/lib/workspace-sidebar/worker-launch.ts
+++ b/web/workspace/src/lib/workspace-sidebar/worker-launch.ts
@@ -8,7 +8,7 @@ export type WorkerLaunchFormState = {
   display_name: string;
   profile: string;
   initial_text: string;
-  working_directory_allocation_id: string;
+  working_directory_id: string;
   working_directory_repository_id: string;
   working_directory_selector: string;
   relative_cwd: string;
@@ -54,12 +54,12 @@ export function defaultWorkerLaunchForm(
         ? current.profile
         : preferredProfile?.id || "",
     initial_text: current.initial_text,
-    working_directory_allocation_id: options?.working_directories.some(
+    working_directory_id: options?.working_directories.some(
         (directory) =>
-          directory.allocation_id === current.working_directory_allocation_id,
+          directory.working_directory_id === current.working_directory_id,
       )
-      ? current.working_directory_allocation_id
-      : preferredWorkingDirectory?.allocation_id || "",
+      ? current.working_directory_id
+      : preferredWorkingDirectory?.working_directory_id || "",
     working_directory_repository_id: current.working_directory_repository_id ||
       preferredRepository?.id || "",
     working_directory_selector: current.working_directory_selector ||
@@ -77,9 +77,9 @@ export function buildBrowserCreateWorkerRequest(
     profile: form.profile,
     initial_text: form.initial_text,
   };
-  if (form.working_directory_allocation_id) {
+  if (form.working_directory_id) {
     request.working_directory = {
-      allocation_id: form.working_directory_allocation_id,
+      working_directory_id: form.working_directory_id,
     };
     const relativeCwd = form.relative_cwd.trim();
     if (relativeCwd) {