diff --git a/src/hooks/prometheus-md-only/index.test.ts b/src/hooks/prometheus-md-only/index.test.ts
index ac0c93c9..71e31aa0 100644
--- a/src/hooks/prometheus-md-only/index.test.ts
+++ b/src/hooks/prometheus-md-only/index.test.ts
@@ -373,8 +373,8 @@ describe("prometheus-md-only", () => {
       ).rejects.toThrow("can only write/edit .md files inside .sisyphus/")
     })
 
-    test("should block nested .sisyphus directories", async () => {
-      // #given
+    test("should allow nested .sisyphus directories (ctx.directory may be parent)", async () => {
+      // #given - when ctx.directory is parent of actual project, path includes project name
       const hook = createPrometheusMdOnlyHook(createMockPluginInput())
       const input = {
         tool: "Write",
@@ -385,10 +385,10 @@ describe("prometheus-md-only", () => {
         args: { filePath: "src/.sisyphus/plans/x.md" },
       }
 
-      // #when / #then
+      // #when / #then - should allow because .sisyphus is in path
       await expect(
         hook["tool.execute.before"](input, output)
-      ).rejects.toThrow("can only write/edit .md files inside .sisyphus/")
+      ).resolves.toBeUndefined()
     })
 
     test("should block path traversal attempts", async () => {
@@ -426,5 +426,60 @@ describe("prometheus-md-only", () => {
         hook["tool.execute.before"](input, output)
       ).resolves.toBeUndefined()
     })
+
+    test("should allow nested project path with .sisyphus (Windows real-world case)", async () => {
+      // #given - simulates when ctx.directory is parent of actual project
+      // User reported: xauusd-dxy-plan\.sisyphus\drafts\supabase-email-templates.md
+      const hook = createPrometheusMdOnlyHook(createMockPluginInput())
+      const input = {
+        tool: "Write",
+        sessionID: TEST_SESSION_ID,
+        callID: "call-1",
+      }
+      const output = {
+        args: { filePath: "xauusd-dxy-plan\\.sisyphus\\drafts\\supabase-email-templates.md" },
+      }
+
+      // #when / #then
+      await expect(
+        hook["tool.execute.before"](input, output)
+      ).resolves.toBeUndefined()
+    })
+
+    test("should allow nested project path with mixed separators", async () => {
+      // #given
+      const hook = createPrometheusMdOnlyHook(createMockPluginInput())
+      const input = {
+        tool: "Write",
+        sessionID: TEST_SESSION_ID,
+        callID: "call-1",
+      }
+      const output = {
+        args: { filePath: "my-project/.sisyphus\\plans/task.md" },
+      }
+
+      // #when / #then
+      await expect(
+        hook["tool.execute.before"](input, output)
+      ).resolves.toBeUndefined()
+    })
+
+    test("should block nested project path without .sisyphus", async () => {
+      // #given
+      const hook = createPrometheusMdOnlyHook(createMockPluginInput())
+      const input = {
+        tool: "Write",
+        sessionID: TEST_SESSION_ID,
+        callID: "call-1",
+      }
+      const output = {
+        args: { filePath: "my-project\\src\\code.ts" },
+      }
+
+      // #when / #then
+      await expect(
+        hook["tool.execute.before"](input, output)
+      ).rejects.toThrow("can only write/edit .md files")
+    })
   })
 })
diff --git a/src/hooks/prometheus-md-only/index.ts b/src/hooks/prometheus-md-only/index.ts
index 5a0d7f99..d5839e81 100644
--- a/src/hooks/prometheus-md-only/index.ts
+++ b/src/hooks/prometheus-md-only/index.ts
@@ -14,6 +14,7 @@ export * from "./constants"
  * - Mixed separators (e.g., .sisyphus\\plans/x.md)
  * - Case-insensitive directory/extension matching
  * - Workspace confinement (blocks paths outside root or via traversal)
+ * - Nested project paths (e.g., parent/.sisyphus/... when ctx.directory is parent)
  */
 function isAllowedFile(filePath: string, workspaceRoot: string): boolean {
   // 1. Resolve to absolute path
@@ -27,10 +28,9 @@ function isAllowedFile(filePath: string, workspaceRoot: string): boolean {
     return false
   }
 
-  // 4. Split by both separators and check first segment matches ALLOWED_PATH_PREFIX (case-insensitive)
-  // Guard: if rel is empty (filePath === workspaceRoot), segments[0] would be "" — reject
-  const segments = rel.split(/[/\\]/)
-  if (!segments[0] || segments[0].toLowerCase() !== ALLOWED_PATH_PREFIX.toLowerCase()) {
+  // 4. Check if .sisyphus/ or .sisyphus\ exists anywhere in the path (case-insensitive)
+  // This handles both direct paths (.sisyphus/x.md) and nested paths (project/.sisyphus/x.md)
+  if (!/\.sisyphus[/\\]/i.test(rel)) {
     return false
   }