diff --git a/.changeset/fix-zsh-mixed-command-completions.md b/.changeset/fix-zsh-mixed-command-completions.md
new file mode 100644
index 00000000000..67978c2bd0d
--- /dev/null
+++ b/.changeset/fix-zsh-mixed-command-completions.md
@@ -0,0 +1,5 @@
+---
+"effect": patch
+---
+
+Fix Zsh completions for CLI commands with both positional arguments and subcommands.
diff --git a/packages/effect/src/unstable/cli/internal/completions/zsh.ts b/packages/effect/src/unstable/cli/internal/completions/zsh.ts
index 84792df0a17..666be3f0048 100644
--- a/packages/effect/src/unstable/cli/internal/completions/zsh.ts
+++ b/packages/effect/src/unstable/cli/internal/completions/zsh.ts
@@ -133,8 +133,14 @@ const generateFunction = (
         lines.push(`    ${spec}`)
       }
     }
-    for (const arg of descriptor.arguments) {
-      lines.push(`    ${argSpec(arg)}`)
+    if (descriptor.arguments.length > 0) {
+      lines.push(`    -`)
+      lines.push(`    parent-arguments`)
+      for (const arg of descriptor.arguments) {
+        lines.push(`    ${argSpec(arg)}`)
+      }
+      lines.push(`    -`)
+      lines.push(`    subcommands`)
     }
     lines.push(`    '1:command:->command'`)
     lines.push(`    '*::arg:->args'`)
diff --git a/packages/effect/test/unstable/cli/completions/completions.test.ts b/packages/effect/test/unstable/cli/completions/completions.test.ts
index 474bd89a62f..88ff9158157 100644
--- a/packages/effect/test/unstable/cli/completions/completions.test.ts
+++ b/packages/effect/test/unstable/cli/completions/completions.test.ts
@@ -69,6 +69,17 @@ const withPaths = Command.make("process", {
   )
 }).pipe(Command.withDescription("Process files"))
 
+const withOptionalDirectoryAndSubcommands = Command.make("example", {
+  directory: Argument.directory("directory").pipe(
+    Argument.withDescription("Directory to start in"),
+    Argument.optional
+  )
+}).pipe(
+  Command.withSubcommands([
+    Command.make("serve").pipe(Command.withDescription("Start the server"))
+  ])
+)
+
 const nested3Levels = (() => {
   const leaf = Command.make("action", {
     dryRun: Flag.boolean("dry-run").pipe(Flag.withDescription("Dry run mode"))
@@ -341,6 +352,27 @@ describe("Zsh completions", () => {
     assert.include(script, "(us-east eu-west ap-south)")
   })
 
+  it("uses alternative argument sets for positional arguments and subcommands", () => {
+    const desc = fromCommand(withOptionalDirectoryAndSubcommands)
+    const script = Zsh.generate("example", desc)
+
+    assert.include(
+      script,
+      `    -
+    parent-arguments
+    ':Directory to start in:_directories'
+    -
+    subcommands
+    '1:command:->command'
+    '*::arg:->args'`
+    )
+    assert.notInclude(
+      script,
+      `    ':Directory to start in:_directories'
+    '1:command:->command'`
+    )
+  })
+
   it("starts with #compdef directive", () => {
     const desc = fromCommand(simpleCmd)
     const script = Zsh.generate("greet", desc)