diff --git a/apps/api/src/api/tool_instances.py b/apps/api/src/api/tool_instances.py
index 92a0cf1..7aa4908 100644
--- a/apps/api/src/api/tool_instances.py
+++ b/apps/api/src/api/tool_instances.py
@@ -427,6 +427,9 @@ class CreateInstanceRequest(BaseModel):
     display_name: str | None = Field(
         default=None, description="Optional display name for the instance"
     )
+    workspace_id: str | None = Field(
+        default=None, description="UUID of workspace to mount (replaces clone_mode)"
+    )
     clone_mode: str = Field(
         default="mount", description="Repository access mode: 'mount' or 'clone'"
     )
@@ -849,9 +852,34 @@ async def create_instance(
         session, data.config_profile_id, user_id, project_id, tool_type_id
     )
 
+    # Resolve workspace if provided
+    workspace = None
+    workspace_id = None
+    if data.workspace_id:
+        from src.models.workspace import Workspace as WorkspaceModel
+
+        try:
+            workspace_id = uuid.UUID(data.workspace_id)
+        except ValueError:
+            raise HTTPException(
+                status_code=status.HTTP_400_BAD_REQUEST,
+                detail="Invalid workspace_id format",
+            )
+        workspace = await session.get(WorkspaceModel, workspace_id)
+        if workspace is None:
+            raise HTTPException(
+                status_code=status.HTTP_404_NOT_FOUND,
+                detail="workspace not found",
+            )
+        if workspace.repo_id != repo_id:
+            raise HTTPException(
+                status_code=status.HTTP_400_BAD_REQUEST,
+                detail="workspace does not belong to this repository",
+            )
+
     try:
-        # Validate clone mode requirements
-        if data.clone_mode == "clone":
+        # Validate clone mode requirements (legacy path)
+        if data.clone_mode == "clone" and not workspace:
             if not repo.remote_url:
                 raise HTTPException(
                     status_code=status.HTTP_400_BAD_REQUEST,
@@ -876,8 +904,10 @@ async def create_instance(
         # Find free port
         tool_port = find_free_port()
 
-        # Determine repo path based on clone mode
-        if data.clone_mode == "clone":
+        # Determine repo path based on workspace or clone mode
+        if workspace:
+            repo_path = workspace.path
+        elif data.clone_mode == "clone":
             # Get SSH key for cloning
             ssh_key = await session.get(SSHKey, repo.ssh_key_id)
             if ssh_key is None:
@@ -1143,6 +1173,7 @@ services:
             status="pending",
             compose_path=compose_path,
             port=tool_port,
+            workspace_id=workspace_id,
             clone_mode=data.clone_mode,
             branch=data.new_branch
             if data.new_branch
@@ -1649,11 +1680,18 @@ async def start_instance(
     if tool_type and tool_type.definition_type == "manifest" and tool_type.manifest_id:
         logger.info("Using manifest-based startup for instance %s", instance.id)
 
-        # Determine repo path
-        repo = await session.get(GitRepository, instance.repository_id)
-        repo_path = repo.path if repo else ""
-        if instance.clone_mode == "clone":
-            repo_path = os.path.join(instance_dir, "repo-clone")
+        # Determine repo path (workspace takes precedence)
+        repo_path = ""
+        if instance.workspace_id:
+            from src.models.workspace import Workspace as WorkspaceModel
+            workspace = await session.get(WorkspaceModel, instance.workspace_id)
+            if workspace:
+                repo_path = workspace.path
+        else:
+            repo = await session.get(GitRepository, instance.repository_id)
+            repo_path = repo.path if repo else ""
+            if instance.clone_mode == "clone":
+                repo_path = os.path.join(instance_dir, "repo-clone")
 
         try:
             (
@@ -1686,8 +1724,8 @@ async def start_instance(
             )
     else:
         # ── LEGACY FLOW ──────────────────────────────────────────
-        # Mount SSH key for clone-mode instances
-        if instance.clone_mode == "clone":
+        # Mount SSH key for clone-mode instances (skip for workspace-based)
+        if instance.clone_mode == "clone" and not instance.workspace_id:
             repo = await session.get(GitRepository, instance.repository_id)
             if repo and repo.ssh_key_id:
                 ssh_key = await session.get(SSHKey, repo.ssh_key_id)