diff --git a/__tests__/components/backends/add-backend-modal.test.tsx b/__tests__/components/backends/add-backend-modal.test.tsx
index 99bbb1a061..d318c829a9 100644
--- a/__tests__/components/backends/add-backend-modal.test.tsx
+++ b/__tests__/components/backends/add-backend-modal.test.tsx
@@ -118,7 +118,7 @@ describe("AddBackendModal – two-column layout", () => {
     expect(submit).not.toBeDisabled();
   });
 
-  it("saves the backend and closes WITHOUT switching the active selection", async () => {
+  it("saves the backend, switches to it, and closes", async () => {
     const onClose = vi.fn();
     renderWithProviders(<AddBackendModal onClose={onClose} />);
 
@@ -146,8 +146,11 @@ describe("AddBackendModal – two-column layout", () => {
       kind: "local",
     });
 
-    // Adding a backend must NOT change the active selection.
-    expect(window.localStorage.getItem("openhands-active-backend")).toBeNull();
+    // Active selection must point at the newly added backend.
+    const active = JSON.parse(
+      window.localStorage.getItem("openhands-active-backend") ?? "null",
+    );
+    expect(active).toEqual({ backendId: added.id, orgId: null });
   });
 
   it("shows the close button", () => {
diff --git a/__tests__/components/backends/backend-selector.test.tsx b/__tests__/components/backends/backend-selector.test.tsx
index 986b2f8c44..a455af97bf 100644
--- a/__tests__/components/backends/backend-selector.test.tsx
+++ b/__tests__/components/backends/backend-selector.test.tsx
@@ -39,6 +39,21 @@ vi.mock("@openhands/typescript-client/clients", () => ({
   ServerClient: vi.fn(),
 }));
 
+// Shared seed configs reused across tests.
+const SEED_LOCAL_1 = {
+  name: "Local 1",
+  host: "http://localhost:9000",
+  apiKey: "k",
+  kind: "local" as const,
+};
+
+const SEED_CLOUD_PRODUCTION = {
+  name: "Production",
+  host: "https://app.all-hands.dev",
+  apiKey: "bearer-key",
+  kind: "cloud" as const,
+};
+
 function renderWithProviders(ui: React.ReactElement) {
   const queryClient = new QueryClient({
     defaultOptions: { queries: { retry: false } },
@@ -141,12 +156,7 @@ describe("BackendSelector", () => {
     renderWithProviders(
       <TestSeed
         onMount={(ctx) => {
-          ctx.addBackend({
-            name: "Local 1",
-            host: "http://localhost:9000",
-            apiKey: "k",
-            kind: "local",
-          });
+          ctx.addBackend(SEED_LOCAL_1);
           ctx.addBackend({
             name: "Production",
             host: "https://app.all-hands.dev",
@@ -181,12 +191,11 @@ describe("BackendSelector", () => {
     renderWithProviders(
       <TestSeed
         onMount={(ctx) => {
-          cloudId = ctx.addBackend({
-            name: "Production",
-            host: "https://app.all-hands.dev",
-            apiKey: "bearer-key",
-            kind: "cloud",
-          }).id;
+          cloudId = ctx.addBackend(SEED_CLOUD_PRODUCTION).id;
+          // Add a second backend so auto-switch lands here, leaving the
+          // cloud backend unselected (the dropdown only expands org rows
+          // for non-active cloud backends).
+          ctx.addBackend(SEED_LOCAL_1);
         }}
       >
         <BackendSelector />
@@ -245,6 +254,9 @@ describe("BackendSelector", () => {
             apiKey: "key-acme",
             kind: "cloud",
           });
+          // Land on a local backend so both cloud backends are unselected
+          // and their org rows render in the dropdown.
+          ctx.addBackend(SEED_LOCAL_1);
         }}
       >
         <BackendSelector />
@@ -289,12 +301,10 @@ describe("BackendSelector", () => {
     renderWithProviders(
       <TestSeed
         onMount={(ctx) => {
-          ctx.addBackend({
-            name: "Production",
-            host: "https://app.all-hands.dev",
-            apiKey: "bearer-key",
-            kind: "cloud",
-          });
+          ctx.addBackend(SEED_CLOUD_PRODUCTION);
+          // Land on a local backend so the cloud backend is unselected
+          // and its org rows render in the dropdown.
+          ctx.addBackend(SEED_LOCAL_1);
         }}
       >
         <BackendSelector />
@@ -333,12 +343,7 @@ describe("BackendSelector", () => {
     renderWithProviders(
       <TestSeed
         onMount={(ctx) => {
-          cloudId = ctx.addBackend({
-            name: "Production",
-            host: "https://app.all-hands.dev",
-            apiKey: "bearer-key",
-            kind: "cloud",
-          }).id;
+          cloudId = ctx.addBackend(SEED_CLOUD_PRODUCTION).id;
           // Simulate the post-refresh malformed state: active backend is
           // the cloud one but no orgId is set yet.
           ctx.setActive(cloudId, null);
@@ -364,24 +369,20 @@ describe("BackendSelector", () => {
     renderWithProviders(
       <TestSeed
         onMount={(ctx) => {
-          ctx.addBackend({
-            name: "Local 1",
-            host: "http://localhost:9000",
-            apiKey: "k",
-            kind: "local",
-          });
+          ctx.addBackend(SEED_LOCAL_1);
         }}
       >
         <BackendSelector />
       </TestSeed>,
     );
 
+    // Auto-switch lands on "Local 1"; click the seeded default to switch.
     const user = await openDropdown();
-    await user.click(screen.getByText("Local 1"));
+    await user.click(screen.getByText("Local"));
 
     const wrapper = screen.getByTestId("backend-selector");
     const input = wrapper.querySelector("input") as HTMLInputElement;
-    expect(input.value).toBe("Local 1");
+    expect(input.value).toBe("Local");
   });
 
   it("redirects to home when switching backends from a conversation route", async () => {
@@ -389,12 +390,7 @@ describe("BackendSelector", () => {
       return (
         <TestSeed
           onMount={(ctx) => {
-            ctx.addBackend({
-              name: "Local 1",
-              host: "http://localhost:9000",
-              apiKey: "k",
-              kind: "local",
-            });
+            ctx.addBackend(SEED_LOCAL_1);
           }}
         >
           <BackendSelector />
@@ -419,8 +415,9 @@ describe("BackendSelector", () => {
       </QueryClientProvider>,
     );
 
+    // Auto-switch lands on "Local 1"; click the seeded default to switch.
     const user = await openDropdown();
-    await user.click(screen.getByText("Local 1"));
+    await user.click(screen.getByText("Local"));
 
     expect(await screen.findByTestId("home")).toBeInTheDocument();
   });
@@ -430,12 +427,7 @@ describe("BackendSelector", () => {
       return (
         <TestSeed
           onMount={(ctx) => {
-            ctx.addBackend({
-              name: "Local 1",
-              host: "http://localhost:9000",
-              apiKey: "k",
-              kind: "local",
-            });
+            ctx.addBackend(SEED_LOCAL_1);
           }}
         >
           <div data-testid="settings-route" />
@@ -461,8 +453,9 @@ describe("BackendSelector", () => {
       </QueryClientProvider>,
     );
 
+    // Auto-switch lands on "Local 1"; click the seeded default to switch.
     const user = await openDropdown();
-    await user.click(screen.getByText("Local 1"));
+    await user.click(screen.getByText("Local"));
 
     // The settings route is still in the DOM after the switch — no
     // redirect to /conversations or anywhere else.
@@ -495,17 +488,17 @@ describe("BackendSelector", () => {
     );
     render(<EnvironmentSwitchOverlay />);
 
-    // Act — select a different backend, then immediately unmount the
-    // selector (the click itself would do this in production via the
-    // outside-click handler).
+    // Act — auto-switch lands on "Acme Local"; click the seeded default
+    // to trigger a switch, then immediately unmount the selector (the
+    // click itself would do this in production via the outside-click handler).
     const user = await openDropdown();
-    await user.click(screen.getByText("Acme Local"));
+    await user.click(screen.getByText("Local"));
     selectorRender.unmount();
 
     // Assert — the overlay is still in the DOM with the chosen target
     expect(screen.getByTestId("environment-switch-overlay")).toHaveAttribute(
       "data-target",
-      "Acme Local",
+      "Local",
     );
   });
 
@@ -560,12 +553,7 @@ describe("BackendSelector", () => {
     renderWithProviders(
       <TestSeed
         onMount={(ctx) => {
-          ctx.addBackend({
-            name: "Local 1",
-            host: "http://localhost:9000",
-            apiKey: "k",
-            kind: "local",
-          });
+          ctx.addBackend(SEED_LOCAL_1);
         }}
       >
         <BackendSelector />
@@ -661,12 +649,7 @@ describe("BackendSelector", () => {
       return (
         <TestSeed
           onMount={(ctx) => {
-            ctx.addBackend({
-              name: "Local 1",
-              host: "http://localhost:9000",
-              apiKey: "k",
-              kind: "local",
-            });
+            ctx.addBackend(SEED_LOCAL_1);
           }}
         >
           <BackendSelector />
@@ -691,8 +674,9 @@ describe("BackendSelector", () => {
       </QueryClientProvider>,
     );
 
+    // Auto-switch lands on "Local 1"; click the seeded default to switch.
     const user = await openDropdown();
-    await user.click(screen.getByText("Local 1"));
+    await user.click(screen.getByText("Local"));
 
     expect(await screen.findByTestId("automations-list")).toBeInTheDocument();
   });
@@ -702,12 +686,7 @@ describe("BackendSelector", () => {
       return (
         <TestSeed
           onMount={(ctx) => {
-            ctx.addBackend({
-              name: "Local 1",
-              host: "http://localhost:9000",
-              apiKey: "k",
-              kind: "local",
-            });
+            ctx.addBackend(SEED_LOCAL_1);
           }}
         >
           <BackendSelector />
@@ -735,12 +714,13 @@ describe("BackendSelector", () => {
     const settingsButton = screen.getByTestId("backend-selector-settings-link");
     expect(settingsButton).toHaveAttribute("data-active", "true");
 
+    // Auto-switch lands on "Local 1"; click the seeded default to switch.
     const user = await openDropdown();
-    await user.click(screen.getByText("Local 1"));
+    await user.click(screen.getByText("Local"));
 
     const wrapper = screen.getByTestId("backend-selector");
     const input = wrapper.querySelector("input") as HTMLInputElement;
-    expect(input.value).toBe("Local 1");
+    expect(input.value).toBe("Local");
     expect(screen.queryByTestId("home")).not.toBeInTheDocument();
   });
 
@@ -755,12 +735,7 @@ describe("BackendSelector", () => {
       renderWithProviders(
         <TestSeed
           onMount={(ctx) => {
-            ctx.addBackend({
-              name: "Local 1",
-              host: "http://localhost:9000",
-              apiKey: "k",
-              kind: "local",
-            });
+            ctx.addBackend(SEED_LOCAL_1);
           }}
         >
           <BackendSelector />
diff --git a/__tests__/contexts/active-backend-context.test.tsx b/__tests__/contexts/active-backend-context.test.tsx
index 4f3fc11c3b..2b93e5232d 100644
--- a/__tests__/contexts/active-backend-context.test.tsx
+++ b/__tests__/contexts/active-backend-context.test.tsx
@@ -76,6 +76,30 @@ describe("ActiveBackendProvider", () => {
     });
   });
 
+  // @spec BM-001 — Auto-switch to newly connected backend
+  it("addBackend automatically switches the active backend to the newly added one", () => {
+    const { result } = renderHook(() => useActiveBackendContext(), {
+      wrapper: makeWrapper(),
+    });
+
+    expect(result.current.active.backend.id).toBe(DEFAULT_LOCAL_BACKEND_ID);
+
+    let added: { id: string } | null = null;
+    act(() => {
+      added = result.current.addBackend({
+        name: "OpenHands Cloud",
+        host: "https://app.all-hands.dev",
+        apiKey: "bearer-token",
+        kind: "cloud",
+      });
+    });
+
+    expect(result.current.active.backend.id).toBe(added!.id);
+    // Previous backends remain in the registry.
+    expect(result.current.backends).toHaveLength(2);
+    expect(result.current.backends.find((b) => b.id === DEFAULT_LOCAL_BACKEND_ID)).toBeDefined();
+  });
+
   it("setActive switches the active backend without touching unrelated React Query cache entries", () => {
     const queryClient = new QueryClient();
     queryClient.setQueryData(["dummy"], { value: 1 });
diff --git a/specs/backend-management.md b/specs/backend-management.md
new file mode 100644
index 0000000000..98e41b079b
--- /dev/null
+++ b/specs/backend-management.md
@@ -0,0 +1,4 @@
+# Backend Management Specs
+
+## BM-001: Auto-switch on connect
+- [x] Adding a backend shall automatically switch the active selection to it.
diff --git a/src/contexts/active-backend-context.tsx b/src/contexts/active-backend-context.tsx
index 26077df427..bfee8baf69 100644
--- a/src/contexts/active-backend-context.tsx
+++ b/src/contexts/active-backend-context.tsx
@@ -73,11 +73,13 @@ export function ActiveBackendProvider({
     [],
   );
 
+  // @spec BM-001 — Auto-switch to newly connected backend
   const addBackend = React.useCallback(
     (backend: Omit<Backend, "id">): Backend => {
       const next: Backend = { ...backend, id: generateId() };
       const list = [...getRegisteredBackends(), next];
       setRegisteredBackends(list);
+      setActiveSelection({ backendId: next.id });
       return next;
     },
     [],