diff --git a/.changeset/eager-ibex-bark.md b/.changeset/eager-ibex-bark.md
new file mode 100644
index 000000000..467e97c0e
--- /dev/null
+++ b/.changeset/eager-ibex-bark.md
@@ -0,0 +1,5 @@
+---
+type: Fixed
+pr: 1844
+---
+**`init milestone-op` now counts project_code-prefixed phase directories correctly** — fully shipped milestones using the standard prefixed directory layout no longer report `completed_phases: 0` or stay falsely incomplete. (#1844)
diff --git a/src/init.cts b/src/init.cts
index 6c12e0a18..52f2a576f 100644
--- a/src/init.cts
+++ b/src/init.cts
@@ -64,7 +64,7 @@ const {
   extractCurrentMilestone,
 } = roadmapParser;
 const { pathExistsInternal, generateSlugInternal, toPosixPath } = coreUtils;
-const { normalizePhaseName, phaseTokenMatches } = phaseId;
+const { normalizePhaseName, phaseTokenMatches, stripProjectCodePrefix } = phaseId;
 const { pruneOrphanedWorktrees } = worktreeSafety;
 
 const {
@@ -1204,7 +1204,7 @@ function cmdInitMilestoneOp(cwd: string, raw: boolean): void {
     const entries = fs.readdirSync(phasesDir, { withFileTypes: true });
     for (const e of entries) {
       if (!e.isDirectory()) continue;
-      const m = e.name.match(/^(\d+[A-Z]?(?:\.\d+)*)/);
+      const m = stripProjectCodePrefix(e.name).match(/^(\d+[A-Z]?(?:\.\d+)*)/);
       if (!m) continue;
       diskPhaseDirs.set(canonicalizePhase(m[1]), e.name);
     }
diff --git a/tests/init.test.cjs b/tests/init.test.cjs
index 924c7f5a2..e665e0281 100644
--- a/tests/init.test.cjs
+++ b/tests/init.test.cjs
@@ -967,6 +967,47 @@ describe('cmdInitMilestoneOp', () => {
     assert.strictEqual(output.all_phases_complete, true);
   });
 
+  test('project_code-prefixed phase directories count as completed milestone phases (#1836)', () => {
+    seedPhase(tmpDir, 'PROJ-01-setup', {
+      'PROJ-01-01-PLAN.md': '# Plan',
+      'PROJ-01-01-SUMMARY.md': '# Summary',
+    });
+    fs.writeFileSync(
+      path.join(tmpDir, '.planning', 'config.json'),
+      JSON.stringify({ project_code: 'PROJ' }, null, 2)
+    );
+    fs.writeFileSync(
+      path.join(tmpDir, '.planning', 'STATE.md'),
+      [
+        '---',
+        'gsd_state_version: 1.0',
+        'milestone: v1.0.0',
+        'milestone_name: Test Milestone',
+        'status: executing',
+        '---',
+        '',
+      ].join('\n')
+    );
+    fs.writeFileSync(
+      path.join(tmpDir, '.planning', 'ROADMAP.md'),
+      [
+        '# Roadmap',
+        '',
+        '## 🚧 v1.0.0 Test Milestone',
+        '### Phase 1: Setup',
+        '',
+      ].join('\n')
+    );
+
+    const result = runGsdTools('init milestone-op', tmpDir);
+    assert.ok(result.success, `Command failed: ${result.error}`);
+
+    const output = JSON.parse(result.output);
+    assert.strictEqual(output.phase_count, 1);
+    assert.strictEqual(output.completed_phases, 1);
+    assert.strictEqual(output.all_phases_complete, true);
+  });
+
   test('archive directory scanning', () => {
     fs.mkdirSync(path.join(tmpDir, '.planning', 'archive', 'v1.0'), { recursive: true });
     fs.mkdirSync(path.join(tmpDir, '.planning', 'archive', 'v0.9'), { recursive: true });