diff --git a/README.md b/README.md
index 2337b7c..8b00cf1 100644
--- a/README.md
+++ b/README.md
@@ -35,7 +35,7 @@ The package expects React 19 and Tailwind CSS 4. Install an exact release so a
 consumer upgrades deliberately:
 
 ```bash
-pnpm add --save-exact @nextide/ui@2.1.0
+pnpm add --save-exact @nextide/ui@2.2.0
 pnpm add --save-dev --save-exact tailwindcss@4.3.1 @tailwindcss/vite@4.3.1
 ```
 
diff --git a/apps/playground/src/App.tsx b/apps/playground/src/App.tsx
index cf5a162..1ee0841 100644
--- a/apps/playground/src/App.tsx
+++ b/apps/playground/src/App.tsx
@@ -14,12 +14,14 @@ import {
   BriefcaseBusiness,
   CalendarClock,
   Check,
+  Circle,
   Database,
   FileJson,
   FileText,
   Filter,
   Gauge,
   Layers3,
+  LoaderCircle,
   PanelRightClose,
   PanelRightOpen,
   PanelLeft,
@@ -31,6 +33,7 @@ import {
   Sparkles,
   ServerCog,
   Video,
+  X,
 } from "lucide-react"
 
 import { AppShell } from "@nextide/ui/blocks/app-shell"
@@ -2976,8 +2979,34 @@ function BlockPreview({ motionScale }: { motionScale: number }) {
             expanded: campaignsExpanded,
             action: { label: "Create campaign", icon: <Plus /> },
             children: [
-              { id: "summer-launch", label: "Summer launch" },
-              { id: "partner-rollout", label: "Partner rollout" },
+              {
+                id: "summer-launch",
+                label: "Summer launch",
+                status: "Completed",
+                tone: "success" as const,
+                statusIcon: <Check />,
+              },
+              {
+                id: "partner-rollout",
+                label: "Partner rollout",
+                status: "Processing",
+                tone: "processing" as const,
+                statusIcon: <LoaderCircle className="motion-safe:animate-spin" />,
+              },
+              {
+                id: "creative-review",
+                label: "Creative review",
+                status: "Degraded",
+                tone: "neutral" as const,
+                statusIcon: <Circle className="fill-current" />,
+              },
+              {
+                id: "failed-sync",
+                label: "Failed sync",
+                status: "Failed",
+                tone: "danger" as const,
+                statusIcon: <X />,
+              },
             ],
           }
         : item
diff --git a/packages/ui/README.md b/packages/ui/README.md
index 8866db7..72fa738 100644
--- a/packages/ui/README.md
+++ b/packages/ui/README.md
@@ -8,7 +8,7 @@ shadcn/ui, Base UI, Tailwind CSS 4, and React 19.
 Pin an exact release so upgrades remain deliberate:
 
 ```bash
-pnpm add --save-exact @nextide/ui@2.1.0
+pnpm add --save-exact @nextide/ui@2.2.0
 pnpm add --save-dev --save-exact tailwindcss@4.3.1 @tailwindcss/vite@4.3.1
 ```
 
diff --git a/packages/ui/package.json b/packages/ui/package.json
index 3f325a7..de64f7a 100644
--- a/packages/ui/package.json
+++ b/packages/ui/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@nextide/ui",
-  "version": "2.1.0",
+  "version": "2.2.0",
   "description": "Shared Nextide React components and product interface patterns.",
   "type": "module",
   "license": "UNLICENSED",
diff --git a/packages/ui/src/blocks/navigation-panel.tsx b/packages/ui/src/blocks/navigation-panel.tsx
index b53746a..eb956f5 100644
--- a/packages/ui/src/blocks/navigation-panel.tsx
+++ b/packages/ui/src/blocks/navigation-panel.tsx
@@ -27,7 +27,10 @@ import {
   AutocompletePositioner,
 } from "@nextide/ui/components/autocomplete"
 import { Kbd } from "@nextide/ui/components/kbd"
-import { StatusBadge } from "@nextide/ui/components/status-badge"
+import {
+  StatusBadge,
+  type StatusBadgeIndicator,
+} from "@nextide/ui/components/status-badge"
 import { Surface } from "@nextide/ui/components/surface"
 import { useContainedScroll } from "@nextide/ui/hooks/use-contained-scroll"
 import { cn } from "@nextide/ui/lib/utils"
@@ -45,6 +48,8 @@ type NavigationPanelItem = {
   meta?: string
   status?: string
   tone?: NavigationPanelStatusTone
+  statusIcon?: React.ReactNode
+  statusIndicator?: StatusBadgeIndicator
   icon?: React.ReactNode
   children?: NavigationPanelItem[]
   expanded?: boolean
@@ -870,14 +875,7 @@ function NavigationPanelNav({
                                     {item.meta}
                                   </small>
                                 ) : null}
-                                {item.status ? (
-                                  <StatusBadge
-                                    tone={item.tone ?? "neutral"}
-                                    className="relative z-20 px-1.5 py-0.5"
-                                  >
-                                    {item.status}
-                                  </StatusBadge>
-                                ) : null}
+                                <NavigationPanelStatus item={item} />
                               </span>
                             ) : null}
                           </span>
@@ -938,7 +936,7 @@ function NavigationPanelNav({
                               }}
                               data-slot="navigation-panel-child"
                               className={cn(
-                                "group grid min-h-11 w-full grid-cols-[2rem_minmax(0,1fr)] items-center rounded-lg border border-transparent pr-2 text-left text-sm transition-colors max-lg:w-auto max-lg:min-w-max",
+                                "group relative grid min-h-11 w-full grid-cols-[2rem_minmax(0,1fr)] items-center rounded-lg border border-transparent pr-8 text-left text-sm transition-colors max-lg:w-auto max-lg:min-w-max",
                                 childActive
                                   ? "bg-nextide-tide/[0.07] text-foreground"
                                   : "text-muted-foreground hover:bg-nextide-panel-strong/70 hover:text-foreground"
@@ -966,14 +964,13 @@ function NavigationPanelNav({
                                 <span className="truncate font-medium">
                                   {child.label}
                                 </span>
-                                {child.meta || child.status ? (
+                                {child.meta ? (
                                   <small className="truncate text-xs text-muted-foreground max-lg:hidden">
-                                    {[child.meta, child.status]
-                                      .filter(Boolean)
-                                      .join(" · ")}
+                                    {child.meta}
                                   </small>
                                 ) : null}
                               </span>
+                              <NavigationPanelStatus item={child} iconOnly />
                             </button>
                           )
                         })}
@@ -999,6 +996,32 @@ function NavigationPanelNav({
   )
 }
 
+function NavigationPanelStatus({
+  item,
+  iconOnly = false,
+}: {
+  item: NavigationPanelItem
+  iconOnly?: boolean
+}) {
+  if (!item.status) return null
+
+  return (
+    <StatusBadge
+      title={iconOnly ? item.status : undefined}
+      tone={item.tone ?? "neutral"}
+      size="compact"
+      icon={item.statusIcon}
+      indicator={item.statusIndicator}
+      className={cn(
+        "relative z-20",
+        iconOnly && "absolute top-2 right-2 size-5 justify-center p-0"
+      )}
+    >
+      {iconOnly ? <span className="sr-only">{item.status}</span> : item.status}
+    </StatusBadge>
+  )
+}
+
 function NavigationPanelFooter({
   collapsed,
   drawerCollapsed,
diff --git a/packages/ui/src/components/status-badge.tsx b/packages/ui/src/components/status-badge.tsx
index a2b02af..6563c81 100644
--- a/packages/ui/src/components/status-badge.tsx
+++ b/packages/ui/src/components/status-badge.tsx
@@ -38,10 +38,12 @@ function StatusBadge({
   tone,
   size,
   children,
+  icon,
   indicator = "dot",
   ...props
 }: React.ComponentProps<"span"> &
   VariantProps<typeof statusBadgeVariants> & {
+    icon?: React.ReactNode
     indicator?: StatusBadgeIndicator
   }) {
   const pulse = indicator === "pulse"
@@ -51,11 +53,22 @@ function StatusBadge({
       data-slot="status-badge"
       data-tone={tone}
       data-size={size ?? "default"}
-      data-indicator={indicator}
+      data-indicator={icon ? "icon" : indicator}
       className={cn(statusBadgeVariants({ tone, size }), className)}
       {...props}
     >
-      {indicator !== "none" ? (
+      {icon ? (
+        <span
+          aria-hidden="true"
+          data-slot="status-badge-icon"
+          className={cn(
+            "grid shrink-0 place-items-center [&_svg]:block",
+            size === "compact" ? "[&_svg]:size-2.5" : "[&_svg]:size-3"
+          )}
+        >
+          {icon}
+        </span>
+      ) : indicator !== "none" ? (
         <span
           data-slot="status-badge-dot"
           data-pulse={pulse ? "true" : undefined}
diff --git a/tests/e2e/qualification.spec.ts b/tests/e2e/qualification.spec.ts
index 11c1502..c2ea856 100644
--- a/tests/e2e/qualification.spec.ts
+++ b/tests/e2e/qualification.spec.ts
@@ -489,6 +489,43 @@ test("navigation branches keep destinations and create actions distinct", async
   await expand.click()
 
   const report = navigation.getByRole("button", { name: "Summer launch" })
+  const completedBadge = report.locator('[data-slot="status-badge"]')
+  await expect(completedBadge).toHaveAttribute("data-tone", "success")
+  await expect(completedBadge.getByText("Completed")).toHaveClass("sr-only")
+  await expect(
+    completedBadge.locator('[data-slot="status-badge-icon"]')
+  ).toBeVisible()
+  const [reportBox, completedBadgeBox] = await Promise.all([
+    report.boundingBox(),
+    completedBadge.boundingBox(),
+  ])
+  expect(completedBadgeBox?.x).toBeGreaterThan(
+    (reportBox?.x ?? 0) + (reportBox?.width ?? 0) / 2
+  )
+  expect(completedBadgeBox?.y).toBeLessThan(
+    (reportBox?.y ?? 0) + (reportBox?.height ?? 0) / 2
+  )
+  await expect(
+    navigation
+      .getByRole("button", { name: "Creative review" })
+      .locator('[data-slot="status-badge"]')
+  ).toHaveAttribute("data-tone", "neutral")
+  await expect(
+    navigation
+      .getByRole("button", { name: "Failed sync" })
+      .locator('[data-slot="status-badge"]')
+  ).toHaveAttribute("data-tone", "danger")
+  const processingIcon = navigation
+    .getByRole("button", { name: "Partner rollout" })
+    .locator('[data-slot="status-badge-icon"] svg')
+  await expect
+    .poll(() => processingIcon.evaluate((icon) => getComputedStyle(icon).animationName))
+    .not.toBe("none")
+  await page.emulateMedia({ reducedMotion: "reduce" })
+  await expect
+    .poll(() => processingIcon.evaluate((icon) => getComputedStyle(icon).animationName))
+    .toBe("none")
+  await page.emulateMedia({ reducedMotion: "no-preference" })
   await expect(
     navigation.getByRole("button", { name: "Collapse Campaigns" })
   ).toBeVisible()