diff --git a/registry/coder/modules/vscode-web/README.md b/registry/coder/modules/vscode-web/README.md
index 474578577..09f265922 100644
--- a/registry/coder/modules/vscode-web/README.md
+++ b/registry/coder/modules/vscode-web/README.md
@@ -14,7 +14,7 @@ Automatically install [Visual Studio Code Server](https://code.visualstudio.com/
 module "vscode-web" {
   count          = data.coder_workspace.me.start_count
   source         = "registry.coder.com/coder/vscode-web/coder"
-  version        = "1.3.1"
+  version        = "1.4.0"
   agent_id       = coder_agent.example.id
   accept_license = true
 }
@@ -30,7 +30,7 @@ module "vscode-web" {
 module "vscode-web" {
   count          = data.coder_workspace.me.start_count
   source         = "registry.coder.com/coder/vscode-web/coder"
-  version        = "1.3.1"
+  version        = "1.4.0"
   agent_id       = coder_agent.example.id
   install_prefix = "/home/coder/.vscode-web"
   folder         = "/home/coder"
@@ -38,13 +38,26 @@ module "vscode-web" {
 }
 ```
 
+### Open a VS Code workspace file
+
+```tf
+module "vscode-web" {
+  count          = data.coder_workspace.me.start_count
+  source         = "registry.coder.com/coder/vscode-web/coder"
+  version        = "1.4.0"
+  agent_id       = coder_agent.example.id
+  workspace      = "/home/coder/project.code-workspace"
+  accept_license = true
+}
+```
+
 ### Install Extensions
 
 ```tf
 module "vscode-web" {
   count          = data.coder_workspace.me.start_count
   source         = "registry.coder.com/coder/vscode-web/coder"
-  version        = "1.3.1"
+  version        = "1.4.0"
   agent_id       = coder_agent.example.id
   extensions     = ["github.copilot", "ms-python.python", "ms-toolsai.jupyter"]
   accept_license = true
@@ -59,7 +72,7 @@ Configure VS Code's [settings.json](https://code.visualstudio.com/docs/getstarte
 module "vscode-web" {
   count      = data.coder_workspace.me.start_count
   source     = "registry.coder.com/coder/vscode-web/coder"
-  version    = "1.3.1"
+  version    = "1.4.0"
   agent_id   = coder_agent.example.id
   extensions = ["dracula-theme.theme-dracula"]
   settings = {
@@ -77,7 +90,7 @@ By default, this module installs the latest. To pin a specific version, retrieve
 module "vscode-web" {
   count          = data.coder_workspace.me.start_count
   source         = "registry.coder.com/coder/vscode-web/coder"
-  version        = "1.3.1"
+  version        = "1.4.0"
   agent_id       = coder_agent.example.id
   commit_id      = "e54c774e0add60467559eb0d1e229c6452cf8447"
   accept_license = true
diff --git a/registry/coder/modules/vscode-web/main.test.ts b/registry/coder/modules/vscode-web/main.test.ts
index 860fc176c..e415fa7dc 100644
--- a/registry/coder/modules/vscode-web/main.test.ts
+++ b/registry/coder/modules/vscode-web/main.test.ts
@@ -38,5 +38,17 @@ describe("vscode-web", async () => {
     expect(t).toThrow("Offline mode does not allow extensions to be installed");
   });
 
+  it("folder and workspace can not be used together", () => {
+    const t = async () => {
+      await runTerraformApply(import.meta.dir, {
+        agent_id: "foo",
+        accept_license: "true",
+        folder: "/home/coder",
+        workspace: "/home/coder/project.code-workspace",
+      });
+    };
+    expect(t).toThrow("Cannot specify both 'folder' and 'workspace'. Please use only one.");
+  });
+
   // More tests depend on shebang refactors
-});
+});
\ No newline at end of file
diff --git a/registry/coder/modules/vscode-web/main.tf b/registry/coder/modules/vscode-web/main.tf
index c00724544..eafbc5976 100644
--- a/registry/coder/modules/vscode-web/main.tf
+++ b/registry/coder/modules/vscode-web/main.tf
@@ -34,7 +34,13 @@ variable "slug" {
 
 variable "folder" {
   type        = string
-  description = "The folder to open in vscode-web."
+  description = "The folder to open in vscode-web. Cannot be used with 'workspace'."
+  default     = ""
+}
+
+variable "workspace" {
+  type        = string
+  description = "Path to a .code-workspace file to open on startup. Cannot be used with 'folder'."
   default     = ""
 }
 
@@ -178,6 +184,8 @@ resource "coder_script" "vscode-web" {
     DISABLE_TRUST : var.disable_trust,
     EXTENSIONS_DIR : var.extensions_dir,
     FOLDER : var.folder,
+    WORKSPACE : var.workspace,
+    WORKSPACE_ARG : coalesce(var.workspace, var.folder),
     AUTO_INSTALL_EXTENSIONS : var.auto_install_extensions,
     SERVER_BASE_PATH : local.server_base_path,
     COMMIT_ID : var.commit_id,
@@ -186,6 +194,11 @@ resource "coder_script" "vscode-web" {
   run_on_start = true
 
   lifecycle {
+    precondition {
+      condition     = !(var.folder != "" && var.workspace != "")
+      error_message = "Cannot specify both 'folder' and 'workspace'. Please use only one."
+    }
+
     precondition {
       condition     = !var.offline || length(var.extensions) == 0
       error_message = "Offline mode does not allow extensions to be installed"
@@ -218,6 +231,11 @@ resource "coder_app" "vscode-web" {
 
 locals {
   server_base_path = var.subdomain ? "" : format("/@%s/%s/apps/%s/", data.coder_workspace_owner.me.name, data.coder_workspace.me.name, var.slug)
-  url              = var.folder == "" ? "http://localhost:${var.port}${local.server_base_path}" : "http://localhost:${var.port}${local.server_base_path}?folder=${var.folder}"
-  healthcheck_url  = var.subdomain ? "http://localhost:${var.port}/healthz" : "http://localhost:${var.port}${local.server_base_path}/healthz"
-}
+
+  # Mutually exclusive: workspace takes precedence over folder
+  query_param = var.workspace != "" ? "workspace=${urlencode(var.workspace)}" : (var.folder != "" ? "folder=${urlencode(var.folder)}" : "")
+
+  url = local.query_param != "" ? "http://localhost:${var.port}${local.server_base_path}?${local.query_param}" : "http://localhost:${var.port}${local.server_base_path}"
+
+  healthcheck_url = var.subdomain ? "http://localhost:${var.port}/healthz" : "http://localhost:${var.port}${local.server_base_path}/healthz"
+}
\ No newline at end of file
diff --git a/registry/coder/modules/vscode-web/run.sh b/registry/coder/modules/vscode-web/run.sh
index 9346b4bdb..ddfcfe2a1 100644
--- a/registry/coder/modules/vscode-web/run.sh
+++ b/registry/coder/modules/vscode-web/run.sh
@@ -23,9 +23,9 @@ if [ "${DISABLE_TRUST}" = true ]; then
 fi
 
 run_vscode_web() {
-  echo "👷 Running $VSCODE_WEB serve-local $EXTENSION_ARG $SERVER_BASE_PATH_ARG $DISABLE_TRUST_ARG --port ${PORT} --host 127.0.0.1 --accept-server-license-terms --without-connection-token --telemetry-level ${TELEMETRY_LEVEL} in the background..."
+  echo "👷 Running $VSCODE_WEB serve-local with workspace: ${WORKSPACE_ARG}"
   echo "Check logs at ${LOG_PATH}!"
-  "$VSCODE_WEB" serve-local "$EXTENSION_ARG" "$SERVER_BASE_PATH_ARG" "$DISABLE_TRUST_ARG" --port "${PORT}" --host 127.0.0.1 --accept-server-license-terms --without-connection-token --telemetry-level "${TELEMETRY_LEVEL}" > "${LOG_PATH}" 2>&1 &
+  "$VSCODE_WEB" serve-local "$EXTENSION_ARG" "$SERVER_BASE_PATH_ARG" "$DISABLE_TRUST_ARG" --port "${PORT}" --host 127.0.0.1 --accept-server-license-terms --without-connection-token --telemetry-level "${TELEMETRY_LEVEL}" "${WORKSPACE_ARG}" > "${LOG_PATH}" 2>&1 &
 }
 
 # Check if the settings file exists...
diff --git a/terraform.zip b/terraform.zip
new file mode 100644
index 000000000..ba065fef3
Binary files /dev/null and b/terraform.zip differ