diff --git a/src/resources/extensions/gsd/tests/gsd-no-project-error.test.ts b/src/resources/extensions/gsd/tests/gsd-no-project-error.test.ts
new file mode 100644
index 000000000..1ceaa5f2d
--- /dev/null
+++ b/src/resources/extensions/gsd/tests/gsd-no-project-error.test.ts
@@ -0,0 +1,73 @@
+/**
+ * GSDNoProjectError — tests for friendly home-directory error handling.
+ *
+ * Verifies that GSDNoProjectError is thrown for blocked directories and
+ * that the dispatcher catches it with a user-friendly message.
+ */
+
+import test from "node:test";
+import assert from "node:assert/strict";
+import { readFileSync } from "node:fs";
+import { join, dirname } from "node:path";
+import { fileURLToPath } from "node:url";
+
+const __dirname = dirname(fileURLToPath(import.meta.url));
+
+const contextSrc = readFileSync(join(__dirname, "..", "commands", "context.ts"), "utf-8");
+const dispatcherSrc = readFileSync(join(__dirname, "..", "commands", "dispatcher.ts"), "utf-8");
+
+// ─── GSDNoProjectError class ──────────────────────────────────────────────
+
+test("GSDNoProjectError class is exported from context.ts", () => {
+  assert.ok(
+    contextSrc.includes("export class GSDNoProjectError extends Error"),
+    "GSDNoProjectError should be an exported Error subclass",
+  );
+});
+
+test("GSDNoProjectError sets name property", () => {
+  assert.ok(
+    contextSrc.includes('this.name = "GSDNoProjectError"'),
+    "GSDNoProjectError should set its name for instanceof checks",
+  );
+});
+
+// ─── projectRoot blocked directory handling ───────────────────────────────
+
+test("projectRoot uses validateDirectory and checks for blocked severity", () => {
+  assert.ok(
+    contextSrc.includes("validateDirectory(pathToCheck)"),
+    "projectRoot should call validateDirectory",
+  );
+  assert.ok(
+    contextSrc.includes('result.severity === "blocked"'),
+    "projectRoot should check for blocked severity",
+  );
+});
+
+test("projectRoot throws GSDNoProjectError on blocked directory", () => {
+  assert.ok(
+    contextSrc.includes("throw new GSDNoProjectError"),
+    "projectRoot should throw GSDNoProjectError when directory is blocked",
+  );
+});
+
+// ─── Dispatcher catch ─────────────────────────────────────────────────────
+
+test("dispatcher catches GSDNoProjectError with user-friendly message", () => {
+  assert.ok(
+    dispatcherSrc.includes("err instanceof GSDNoProjectError"),
+    "dispatcher should catch GSDNoProjectError specifically",
+  );
+  assert.ok(
+    dispatcherSrc.includes("cd"),
+    "error message should suggest cd-ing into a project directory",
+  );
+});
+
+test("dispatcher re-throws non-GSDNoProjectError exceptions", () => {
+  assert.ok(
+    dispatcherSrc.includes("throw err"),
+    "dispatcher should re-throw unexpected errors",
+  );
+});