diff --git a/src/vs/workbench/contrib/chat/common/promptSyntax/service/promptsServiceImpl.ts b/src/vs/workbench/contrib/chat/common/promptSyntax/service/promptsServiceImpl.ts
index 10f09d2e435bd..aed42571afcc5 100644
--- a/src/vs/workbench/contrib/chat/common/promptSyntax/service/promptsServiceImpl.ts
+++ b/src/vs/workbench/contrib/chat/common/promptSyntax/service/promptsServiceImpl.ts
@@ -366,7 +366,14 @@ export class PromptsService extends Disposable implements IPromptsService {
 			this._pluginPromptFilesByType.get(type) ?? [],
 		]);
 
-		return prompts.flat();
+		const seen = new ResourceSet();
+		return prompts.flat().filter(p => {
+			if (seen.has(p.uri)) {
+				return false;
+			}
+			seen.add(p.uri);
+			return true;
+		});
 	}
 
 	/**
@@ -1532,6 +1539,7 @@ export class PromptsService extends Disposable implements IPromptsService {
 	private async computeSkillDiscoveryInfo(token: CancellationToken): Promise<IPromptFileDiscoveryResult[]> {
 		const files: IPromptFileDiscoveryResult[] = [];
 		const seenNames = new Set<string>();
+		const seenUris = new ResourceSet();
 		const nameToUri = new Map<string, URI>();
 
 		// Collect all skills with their metadata for sorting
@@ -1566,6 +1574,11 @@ export class PromptsService extends Disposable implements IPromptsService {
 			const uri = skill.uri;
 			const promptPath = skill;
 
+			if (seenUris.has(uri)) {
+				continue;
+			}
+			seenUris.add(uri);
+
 			try {
 				const parsedFile = await this.parseNew(uri, token);
 				const folderName = getSkillFolderName(uri);
diff --git a/src/vs/workbench/contrib/chat/test/common/promptSyntax/service/promptsService.test.ts b/src/vs/workbench/contrib/chat/test/common/promptSyntax/service/promptsService.test.ts
index 44dda985f4900..b82846072b3b8 100644
--- a/src/vs/workbench/contrib/chat/test/common/promptSyntax/service/promptsService.test.ts
+++ b/src/vs/workbench/contrib/chat/test/common/promptSyntax/service/promptsService.test.ts
@@ -2927,6 +2927,65 @@ suite('PromptsService', () => {
 			registered.dispose();
 		});
 
+		test('should deduplicate skills by URI when Agent Skills Location overlaps with Plugin Locations', async () => {
+			testConfigService.setUserConfiguration(PromptsConfig.USE_AGENT_SKILLS, true);
+
+			// Workspace contains the plugin, so a relative SKILLS_LOCATION_KEY path
+			// resolves to the same directory the plugin registers its skills from.
+			const rootFolder = '/workspace';
+			const rootFolderUri = URI.file(rootFolder);
+			workspaceContextService.setWorkspace(testWorkspace(rootFolderUri));
+
+			const pluginPath = `${rootFolder}/my-plugin`;
+			const skillUri = URI.file(`${pluginPath}/skills/sdd-init/SKILL.md`);
+
+			// 'my-plugin/skills' is a workspace-relative path that resolves to the
+			// same directory as the plugin's skill URIs → overlap scenario.
+			testConfigService.setUserConfiguration(PromptsConfig.SKILLS_LOCATION_KEY, { 'my-plugin/skills': true });
+
+			await mockFiles(fileService, [
+				{
+					path: skillUri.path,
+					contents: [
+						'---',
+						'name: "sdd-init"',
+						'description: "Initialize Spec-Driven Development"',
+						'---',
+						'Skill content',
+					],
+				},
+			]);
+
+			const enablement = observableValue('testPluginEnablement', 2 /* ContributionEnablementState.EnabledProfile */);
+			const plugin: IAgentPlugin = {
+				uri: URI.file(pluginPath),
+				label: 'my-plugin',
+				enablement,
+				remove: () => { },
+				hooks: observableValue('testPluginHooks', []),
+				commands: observableValue('testPluginCommands', []),
+				skills: observableValue<readonly IAgentPluginSkill[]>('testPluginSkills', [{ uri: skillUri, name: 'sdd-init' }]),
+				agents: observableValue('testPluginAgents', []),
+				instructions: observableValue('testPluginInstructions', []),
+				mcpServerDefinitions: observableValue('testPluginMcpServerDefinitions', []),
+			};
+
+			testPluginsObservable.set([plugin], undefined);
+
+			// Check deduplication via findAgentSkills
+			const allResult = await service.findAgentSkills(CancellationToken.None);
+			assert.ok(allResult, 'Should return results');
+			assert.strictEqual(allResult.length, 1, 'Should find exactly 1 skill (not duplicated) when Agent Skills Location overlaps with Plugin Locations');
+			assert.strictEqual(allResult[0].name, 'sdd-init');
+
+			// Check deduplication via getPromptSlashCommands (the user-facing slash command list)
+			const slashCommands = await service.getPromptSlashCommands(CancellationToken.None);
+			const skillCommands = slashCommands.filter(cmd => cmd.type === PromptsType.skill && cmd.name === 'sdd-init');
+			assert.strictEqual(skillCommands.length, 1, 'Should have exactly 1 slash command for the skill (not duplicated) when Agent Skills Location overlaps with Plugin Locations');
+
+			testPluginsObservable.set([], undefined);
+		});
+
 		test('should include contributed skill files in findAgentSkills', async () => {
 			testConfigService.setUserConfiguration(PromptsConfig.USE_AGENT_SKILLS, true);
 			testConfigService.setUserConfiguration(PromptsConfig.SKILLS_LOCATION_KEY, {});