diff --git a/.gitignore b/.gitignore
index 71b732f..b5b7719 100644
--- a/.gitignore
+++ b/.gitignore
@@ -52,3 +52,6 @@ test_*.md
 
 # Generated diagrams (keep examples/diagrams/ for documentation)
 diagrams/
+
+# Documentation symlink (points to project-docs)
+docs
diff --git a/src/discussions/runner.py b/src/discussions/runner.py
index 5b76a7a..c799959 100644
--- a/src/discussions/runner.py
+++ b/src/discussions/runner.py
@@ -800,6 +800,9 @@ def run_turn(
     # Step 3: Call each participant
     responses_for_appender = []
 
+    # Determine diagrams directory relative to discussion file
+    diagrams_dir = discussion_path.parent / "diagrams"
+
     for alias in participants_to_call:
         tool_name = f"discussion-{alias}"
         log(f"Calling {alias}...")
@@ -809,6 +812,8 @@ def run_turn(
             args.extend(["--callout", callout])
         if provider:
             args.extend(["--provider", provider])
+        # Always pass diagrams-dir relative to discussion file
+        args.extend(["--diagrams-dir", str(diagrams_dir)])
 
         try:
             participant_result = _call_tool(tool_name, discussion_content, args)
diff --git a/src/discussions/ui/gui.py b/src/discussions/ui/gui.py
index 2eb643e..5ed17ec 100644
--- a/src/discussions/ui/gui.py
+++ b/src/discussions/ui/gui.py
@@ -2544,11 +2544,13 @@ class DiscussionGUI:
             except Exception as e:
                 self._show_error(f"Failed to create discussion: {e}")
 
-        # Determine initial output directory
+        # Determine initial output directory - default to discussions/ subdirectory
         if self.current_discussion:
             initial_dir = self.current_discussion.path.parent
         else:
-            initial_dir = self.discussions_dir if self.discussions_dir else Path.cwd()
+            base_dir = self.discussions_dir if self.discussions_dir else Path.cwd()
+            # Default to discussions/ subdirectory (like CLI does)
+            initial_dir = base_dir / "discussions"
 
         with dpg.window(label="New Discussion", tag=window_tag,
                        width=550, height=550, pos=[400, 150], no_collapse=True):