diff --git a/src/apps/chat/components/message/fragments-attachment-doc/livefile-sync/LiveFileControlButton.tsx b/src/apps/chat/components/message/fragments-attachment-doc/livefile-sync/LiveFileControlButton.tsx
index fd60813fe..6306478ba 100644
--- a/src/apps/chat/components/message/fragments-attachment-doc/livefile-sync/LiveFileControlButton.tsx
+++ b/src/apps/chat/components/message/fragments-attachment-doc/livefile-sync/LiveFileControlButton.tsx
@@ -5,7 +5,7 @@ import { Box, Button, ColorPaletteProp, SvgIcon } from '@mui/joy';
 import UploadFileRoundedIcon from '@mui/icons-material/UploadFileRounded';
 
 import { TooltipOutlined } from '~/common/components/TooltipOutlined';
-import { getDataTransferFilesOrPromises } from '~/common/util/fileSystemUtils';
+import { getFirstFileSystemFileHandle } from '~/common/util/fileSystemUtils';
 import { useDragDropDataTransfer } from '~/common/components/useDragDropDataTransfer';
 
 import { LiveFileChooseIcon, LiveFileIcon } from '~/common/livefile/liveFile.icons';
@@ -41,19 +41,9 @@ export function LiveFileControlButton(props: {
   // state
 
   const handleDataTransfer = React.useCallback(async (dataTransfer: DataTransfer) => {
-    // get FileSystemFileHandle objects from the DataTransfer
-    const fileOrFSHandlePromises = getDataTransferFilesOrPromises(dataTransfer.items, false);
-    if (!fileOrFSHandlePromises.length)
-      return;
-
-    // resolve the promises to get the actual files/handles
-    const filesOrHandles = await Promise.all(fileOrFSHandlePromises);
-    for (let filesOrHandle of filesOrHandles) {
-      if (!(filesOrHandle instanceof File) && filesOrHandle?.kind === 'file' && filesOrHandle) {
-        await onPairWithFSFHandle(filesOrHandle);
-        break;
-      }
-    }
+    const fsfHandle = await getFirstFileSystemFileHandle(dataTransfer);
+    if (fsfHandle)
+      await onPairWithFSFHandle(fsfHandle);
   }, [onPairWithFSFHandle]);
 
   const { dragContainerSx, dropComponent, handleContainerDragEnter, handleContainerDragStart } =
diff --git a/src/common/stores/workspace/WorkspaceLiveFilePicker.tsx b/src/common/stores/workspace/WorkspaceLiveFilePicker.tsx
index d247b7f36..cc027a3de 100644
--- a/src/common/stores/workspace/WorkspaceLiveFilePicker.tsx
+++ b/src/common/stores/workspace/WorkspaceLiveFilePicker.tsx
@@ -1,6 +1,6 @@
 import * as React from 'react';
 
-import { Box, Button, IconButton, ListDivider, ListItem, ListItemDecorator, MenuItem, Typography } from '@mui/joy';
+import { Box, Button, IconButton, ListDivider, ListItem, ListItemDecorator, MenuItem, SvgIcon, Typography } from '@mui/joy';
 import ClearIcon from '@mui/icons-material/Clear';
 import CodeIcon from '@mui/icons-material/Code';
 
@@ -8,10 +8,13 @@ import type { LiveFileId, LiveFileMetadata } from '~/common/livefile/liveFile.ty
 import { CloseableMenu } from '~/common/components/CloseableMenu';
 import { LiveFileChooseIcon } from '~/common/livefile/liveFile.icons';
 import { LiveFilePatchIcon } from '~/common/components/icons/LiveFilePatchIcon';
+import { TooltipOutlined } from '~/common/components/TooltipOutlined';
+import { getFirstFileSystemFileHandle } from '~/common/util/fileSystemUtils';
+import { useDragDropDataTransfer } from '~/common/components/useDragDropDataTransfer';
 
 import type { DWorkspaceId } from './workspace.types';
+import { useContextWorkspaceId } from './WorkspaceIdProvider';
 import { useWorkspaceContentsMetadata } from './useWorkspaceContentsMetadata';
-import { useContextWorkspaceId } from '~/common/stores/workspace/WorkspaceIdProvider';
 
 
 // configuration
@@ -22,13 +25,14 @@ const ENABLE_AUTO_WORKSPACE_PICK = false;
  * Allows selection of LiveFiles in the current Workspace
  */
 export function WorkspaceLiveFilePicker(props: {
-  autoSelectName: string | null;
-  buttonLabel: string;
-  liveFileId: LiveFileId | null;
   allowRemove?: boolean;
+  autoSelectName: string | null;
+  labelButton: string;
+  labelTooltip?: string;
+  liveFileId: LiveFileId | null;
   onSelectLiveFile: (id: LiveFileId | null) => void;
-  onSelectNewFile?: (workspaceId: DWorkspaceId | null) => void;
-  // tooltipLabel?: string;
+  onSelectFileOpen?: (workspaceId: DWorkspaceId | null) => Promise<void>;
+  onSelectFileSystemFileHandle?: (workspaceId: DWorkspaceId | null, fsHandle: FileSystemFileHandle) => Promise<void>;
 }) {
 
   // state for anchor
@@ -40,7 +44,7 @@ export function WorkspaceLiveFilePicker(props: {
 
   // set as disabled when empty
   const haveLiveFiles = wLiveFiles.length > 0;
-  const { autoSelectName, liveFileId, onSelectLiveFile, onSelectNewFile } = props;
+  const { autoSelectName, liveFileId, onSelectLiveFile, onSelectFileOpen, onSelectFileSystemFileHandle } = props;
 
 
   // [effect] auto-select a LiveFileId
@@ -72,16 +76,29 @@ export function WorkspaceLiveFilePicker(props: {
   }, []);
 
   const handleSelectLiveFile = React.useCallback((id: LiveFileId | null) => {
-    onSelectLiveFile(id);
     setMenuAnchor(null);
+    onSelectLiveFile(id);
   }, [onSelectLiveFile]);
 
-  const handleSelectNewFile = React.useCallback(() => {
-    if (onSelectNewFile) {
-      onSelectNewFile(workspaceId);
+  const handleSelectNewFile = React.useCallback(async () => {
+    if (onSelectFileOpen) {
       setMenuAnchor(null);
+      await onSelectFileOpen(workspaceId);
     }
-  }, [onSelectNewFile, workspaceId]);
+  }, [onSelectFileOpen, workspaceId]);
+
+  const handleDataTransferDrop = React.useCallback(async (dataTransfer: DataTransfer) => {
+    if (onSelectFileSystemFileHandle) {
+      const fsfHandle = await getFirstFileSystemFileHandle(dataTransfer);
+      if (fsfHandle) {
+        setMenuAnchor(null);
+        await onSelectFileSystemFileHandle(workspaceId, fsfHandle);
+      }
+    }
+  }, [onSelectFileSystemFileHandle, workspaceId]);
+
+  const { dragContainerSx, dropComponent, handleContainerDragEnter, handleContainerDragStart } =
+    useDragDropDataTransfer(true, 'Select', LiveFileChooseIcon as typeof SvgIcon, 'startDecorator', true, handleDataTransferDrop);
 
 
   // Note: in the future let this be, we can show a file picker that adds LiveFiles to the workspace
@@ -92,35 +109,42 @@ export function WorkspaceLiveFilePicker(props: {
 
   return <>
 
-    {/*<TooltipOutlined*/}
-    {/*  title={tooltipLabel} */}
-    {/*  color='success'*/}
-    {/*  placement='top-end'*/}
-    {/*>*/}
-    {liveFileId ? (
-      <IconButton
-        color='success'
-        size='sm'
-        onClick={handleToggleMenu}
-      >
-        <LiveFilePatchIcon color='success' />
-      </IconButton>
-    ) : (
-      <Button
-        variant='plain'
-        color='neutral'
-        size='sm'
-        onClick={handleToggleMenu}
-        endDecorator={<LiveFileChooseIcon color='success' />}
-        // endDecorator={<LiveFilePatchIcon color='success' />}
-      >
-        {props.buttonLabel}
-      </Button>
-    )}
-    {/*</TooltipOutlined>*/}
+    {/* Main Button, also a drop target */}
+    <Box
+      onDragEnter={handleContainerDragEnter}
+      onDragStart={handleContainerDragStart}
+      sx={dragContainerSx}
+    >
+      {liveFileId && (
+        <IconButton
+          color='success'
+          size='sm'
+          onClick={handleToggleMenu}
+        >
+          <LiveFilePatchIcon color='success' />
+        </IconButton>
+      )}
+
+      {!liveFileId && (
+        <TooltipOutlined title={props.labelTooltip} color='success' placement='top-end'>
+          <Button
+            variant='plain'
+            color='neutral'
+            size='sm'
+            onClick={handleToggleMenu}
+            endDecorator={<LiveFileChooseIcon />}
+            // endDecorator={<LiveFilePatchIcon color='success' />}
+          >
+            {props.labelButton}
+          </Button>
+        </TooltipOutlined>
+      )}
+
+      {dropComponent}
+    </Box>
 
 
-    {/* Menu: list of workspace files */}
+    {/* Select/Upload file menu */}
     {!!menuAnchor && (
       <CloseableMenu
         open
@@ -155,7 +179,7 @@ export function WorkspaceLiveFilePicker(props: {
         ))}
 
         {/* Pair a new file */}
-        {!!props.onSelectNewFile && (
+        {!!props.onSelectFileOpen && (
           <MenuItem onClick={handleSelectNewFile} sx={haveLiveFiles ? { minHeight: '3rem' } : undefined}>
             <ListItemDecorator>
               <LiveFileChooseIcon />
diff --git a/src/common/util/fileSystemUtils.ts b/src/common/util/fileSystemUtils.ts
index 76ba9227e..d187689e1 100644
--- a/src/common/util/fileSystemUtils.ts
+++ b/src/common/util/fileSystemUtils.ts
@@ -96,3 +96,25 @@ export function getDataTransferFilesOrPromises(items: DataTransferItemList, fall
 
   return results;
 }
+
+
+/**
+ * Utility function to get the first file system handle from a DataTransfer object.
+ * Note that a DataTransfer object can contain multiple files, but we assume the first is the one.
+ */
+export async function getFirstFileSystemFileHandle(dataTransfer: DataTransfer): Promise<FileSystemFileHandle | null> {
+
+  // get FileSystemFileHandle objects from the DataTransfer
+  const fileOrFSHandlePromises = getDataTransferFilesOrPromises(dataTransfer.items, false);
+  if (!fileOrFSHandlePromises.length)
+    return null;
+
+  // resolve the promises to get the actual files/handles
+  const filesOrHandles = await Promise.all(fileOrFSHandlePromises);
+  for (let filesOrHandle of filesOrHandles)
+    if (!(filesOrHandle instanceof File) && filesOrHandle?.kind === 'file' && filesOrHandle)
+      return filesOrHandle;
+
+  // no file system handle found
+  return null;
+}
diff --git a/src/modules/blocks/enhanced-code/livefile-patch/useLiveFilePatch.tsx b/src/modules/blocks/enhanced-code/livefile-patch/useLiveFilePatch.tsx
index 01982fbde..e50bbcf3c 100644
--- a/src/modules/blocks/enhanced-code/livefile-patch/useLiveFilePatch.tsx
+++ b/src/modules/blocks/enhanced-code/livefile-patch/useLiveFilePatch.tsx
@@ -28,23 +28,15 @@ export function useLiveFilePatch(title: string, code: string, isPartial: boolean
 
 
   // handlers
-  const handleLiveFileSelected = React.useCallback((id: LiveFileId | null) => {
+
+  const handleSelectLiveFile = React.useCallback((id: LiveFileId | null) => {
     setLiveFileId(id);
   }, []);
 
-  const handleSelectNewFile = React.useCallback(async (workspaceId: DWorkspaceId | null) => {
-    // pick a file
-    const fileWithHandle = await fileOpen({ description: 'Insert into file...' }).catch(() => null /* The User closed the files picker */);
-    if (!fileWithHandle)
-      return;
-    const fileSystemFileHandle = fileWithHandle.handle;
-    if (!fileSystemFileHandle) {
-      // setStatus({ message: `Browser does not support LiveFile operations. ${isLiveFileSupported() ? 'No filesystem handles.' : ''}`, mtype: 'error' });
-      return;
-    }
-
+  const handleSelectFileSystemFileHandle = React.useCallback(async (workspaceId: DWorkspaceId | null, fsfHandle: FileSystemFileHandle) => {
+    // Create a new LiveFile and attach it to the workspace
     try {
-      const newLiveFileId = await liveFileCreateOrThrow(fileSystemFileHandle);
+      const newLiveFileId = await liveFileCreateOrThrow(fsfHandle);
       setLiveFileId(newLiveFileId);
 
       // Pair the file with the workspace
@@ -59,9 +51,24 @@ export function useLiveFilePatch(title: string, code: string, isPartial: boolean
 
     } catch (error) {
       console.error('Error creating new file:', error);
+      // setStatus({ message: `Error pairing the file: ${error?.message || typeof error === 'string' ? error : 'Unknown error'}`, mtype: 'error' });
     }
   }, []);
 
+  const handleSelectFilePicker = React.useCallback(async (workspaceId: DWorkspaceId | null) => {
+    // pick a file
+    const fileWithHandle = await fileOpen({ description: 'Insert into file...' }).catch(() => null /* The User closed the files picker */);
+    if (!fileWithHandle)
+      return;
+    const fileSystemFileHandle = fileWithHandle.handle;
+    if (!fileSystemFileHandle) {
+      // setStatus({ message: `Browser does not support LiveFile operations. ${isLiveFileSupported() ? 'No filesystem handles.' : ''}`, mtype: 'error' });
+      return;
+    }
+    // proceed
+    await handleSelectFileSystemFileHandle(workspaceId, fileSystemFileHandle);
+  }, [handleSelectFileSystemFileHandle]);
+
 
   // components
 
@@ -88,14 +95,16 @@ export function useLiveFilePatch(title: string, code: string, isPartial: boolean
       {/* Pick LiveFile */}
       <WorkspaceLiveFilePicker
         autoSelectName={title}
-        buttonLabel='Insert...'
+        labelButton='Insert...'
+        labelTooltip='Insert this code into a file'
         liveFileId={liveFileId}
-        onSelectLiveFile={handleLiveFileSelected}
-        onSelectNewFile={handleSelectNewFile}
+        onSelectFileOpen={handleSelectFilePicker}
+        onSelectFileSystemFileHandle={handleSelectFileSystemFileHandle}
+        onSelectLiveFile={handleSelectLiveFile}
       />
 
     </Box>
-  ), [handleLiveFileSelected, handleSelectNewFile, isEnabled, liveFileId, title]);
+  ), [handleSelectLiveFile, handleSelectFilePicker, handleSelectFileSystemFileHandle, isEnabled, liveFileId, title]);
 
 
   const actionBar = React.useMemo(() => (!isEnabled || !liveFileId || true) ? null : (