diff --git a/packages/host/app/components/operator-mode/code-submode/playground-panel.gts b/packages/host/app/components/operator-mode/code-submode/playground-panel.gts
index 40ee51b881..f40f2f1076 100644
--- a/packages/host/app/components/operator-mode/code-submode/playground-panel.gts
+++ b/packages/host/app/components/operator-mode/code-submode/playground-panel.gts
@@ -4,7 +4,6 @@ import { action } from '@ember/object';
 import type Owner from '@ember/owner';
 import { service } from '@ember/service';
 import Component from '@glimmer/component';
-import { tracked } from '@glimmer/tracking';
 
 import Folder from '@cardstack/boxel-icons/folder';
 import { restartableTask, task } from 'ember-concurrency';
@@ -39,6 +38,8 @@ import type RealmService from '@cardstack/host/services/realm';
 import type RealmServerService from '@cardstack/host/services/realm-server';
 import type RecentFilesService from '@cardstack/host/services/recent-files-service';
 
+import { PlaygroundSelections } from '@cardstack/host/utils/local-storage-keys';
+
 import type { CardDef, Format } from 'https://cardstack.com/base/card-api';
 
 import PrerenderedCardSearch, {
@@ -248,11 +249,13 @@ class PlaygroundPanelContent extends Component<PlaygroundContentSignature> {
           {{/if}}
         {{/if}}
       </div>
-      <FormatChooser
-        class='format-chooser'
-        @format={{this.format}}
-        @setFormat={{this.setFormat}}
-      />
+      {{#if this.card}}
+        <FormatChooser
+          class='format-chooser'
+          @format={{this.format}}
+          @setFormat={{this.setFormat}}
+        />
+      {{/if}}
     </div>
     <style scoped>
       .playground-panel-content {
@@ -355,12 +358,14 @@ class PlaygroundPanelContent extends Component<PlaygroundContentSignature> {
   @service private declare realm: RealmService;
   @service private declare realmServer: RealmServerService;
   @service declare recentFilesService: RecentFilesService;
-  @tracked private format: Format = 'isolated';
-  private playgroundSelections: Record<string, string>;
+  private playgroundSelections: Record<
+    string, // moduleId
+    { cardId: string; format: Format }
+  >; // TrackedObject
 
   constructor(owner: Owner, args: PlaygroundContentSignature['Args']) {
     super(owner, args);
-    let selections = window.localStorage.getItem('playground-selections');
+    let selections = window.localStorage.getItem(PlaygroundSelections);
 
     this.playgroundSelections = new TrackedObject(
       selections?.length ? JSON.parse(selections) : {},
@@ -403,22 +408,27 @@ class PlaygroundPanelContent extends Component<PlaygroundContentSignature> {
     };
   }
 
-  private cardResource = getCard(this, () =>
-    this.playgroundSelections[this.args.moduleId]?.replace(/\.json$/, ''),
+  private cardResource = getCard(
+    this,
+    () => this.playgroundSelections[this.args.moduleId]?.cardId,
   );
 
   private get card(): CardDef | undefined {
     return this.cardResource.card;
   }
 
+  private get format(): Format {
+    return this.playgroundSelections[this.args.moduleId]?.format ?? 'isolated';
+  }
+
   private copyToClipboard = task(async (id: string) => {
     await navigator.clipboard.writeText(id);
   });
 
-  private openInInteractMode = task(async (id: string, format: Format) => {
+  private openInInteractMode = task(async (id: string) => {
     await this.operatorModeStateService.openCardInInteractMode(
       new URL(id),
-      format,
+      this.format === 'edit' ? 'edit' : 'isolated',
     );
   });
 
@@ -438,28 +448,31 @@ class PlaygroundPanelContent extends Component<PlaygroundContentSignature> {
         icon: IconCode,
       }),
       new MenuItem('Open in Interact Mode', 'action', {
-        action: () => this.openInInteractMode.perform(cardId, this.format),
+        action: () => this.openInInteractMode.perform(cardId),
         icon: Eye,
       }),
     ];
     return menuItems;
   }
 
-  private persistSelections = (cardId: string) => {
-    this.playgroundSelections[this.args.moduleId] = cardId;
+  private persistSelections = (cardId: string, format = this.format) => {
+    this.playgroundSelections[this.args.moduleId] = { cardId, format };
     window.localStorage.setItem(
-      'playground-selections',
+      PlaygroundSelections,
       JSON.stringify(this.playgroundSelections),
     );
   };
 
   @action private onSelect(card: PrerenderedCard) {
-    this.persistSelections(card.url);
+    this.persistSelections(card.url.replace(/\.json$/, ''));
   }
 
   @action
   private setFormat(format: Format) {
-    this.format = format;
+    if (!this.card?.id) {
+      return;
+    }
+    this.persistSelections(this.card.id, format);
   }
 
   private chooseCard = restartableTask(async () => {
diff --git a/packages/host/app/utils/local-storage-keys.ts b/packages/host/app/utils/local-storage-keys.ts
index 3b5774928a..e377c6627c 100644
--- a/packages/host/app/utils/local-storage-keys.ts
+++ b/packages/host/app/utils/local-storage-keys.ts
@@ -4,3 +4,4 @@ export const CodeModePanelWidths = 'code-mode-panel-widths';
 export const CodeModePanelHeights = 'code-mode-panel-heights';
 export const CodeModePanelSelections = 'code-mode-panel-selections';
 export const SessionLocalStorageKey = 'boxel-session';
+export const PlaygroundSelections = 'playground-selections';
diff --git a/packages/host/tests/acceptance/code-submode/playground-test.gts b/packages/host/tests/acceptance/code-submode/playground-test.gts
index ad5bc159f2..529b3c5c21 100644
--- a/packages/host/tests/acceptance/code-submode/playground-test.gts
+++ b/packages/host/tests/acceptance/code-submode/playground-test.gts
@@ -5,6 +5,10 @@ import { module, test } from 'qunit';
 
 import type { Realm } from '@cardstack/runtime-common';
 
+import { PlaygroundSelections } from '@cardstack/host/utils/local-storage-keys';
+
+import type { Format } from 'https://cardstack.com/base/card-api';
+
 import {
   percySnapshot,
   setupAcceptanceTestRealm,
@@ -230,7 +234,7 @@ export class BlogPost extends CardDef {
         [testRealmURL, 'Author/jane-doe.json'],
       ]),
     );
-    window.localStorage.setItem('playground-selections', '');
+    window.localStorage.setItem(PlaygroundSelections, '');
   });
 
   test('can render playground panel when a card def is selected', async function (assert) {
@@ -262,7 +266,7 @@ export class BlogPost extends CardDef {
 
   test('can populate instance chooser dropdown options from recent files', async function (assert) {
     window.localStorage.setItem('recent-files', '');
-    window.localStorage.setItem('playground-selections', '');
+    window.localStorage.setItem(PlaygroundSelections, '');
 
     await visitOperatorMode({
       submode: 'code',
@@ -339,12 +343,18 @@ export class BlogPost extends CardDef {
 
   test('can populate playground preview with previous choices saved in local storage', async function (assert) {
     let selections = {
-      [`${testRealmURL}author/Author`]: `${testRealmURL}Author/jane-doe.json`,
-      [`${testRealmURL}blog-post/BlogPost`]: `${testRealmURL}BlogPost/remote-work.json`,
-      [`${testRealmURL}blog-post/Category`]: `${testRealmURL}Category/city-design.json`,
+      [`${testRealmURL}author/Author`]: {
+        cardId: `${testRealmURL}Author/jane-doe`,
+      },
+      [`${testRealmURL}blog-post/BlogPost`]: {
+        cardId: `${testRealmURL}BlogPost/remote-work`,
+      },
+      [`${testRealmURL}blog-post/Category`]: {
+        cardId: `${testRealmURL}Category/city-design`,
+      },
     };
     window.localStorage.setItem(
-      'playground-selections',
+      PlaygroundSelections,
       JSON.stringify(selections),
     );
     const assertCardExists = (fileName: string) => {
@@ -719,4 +729,114 @@ export class BlogPost extends CardDef {
     });
     assert.dom('[data-test-post-title]').includesText('Hello Mad As a Hatter');
   });
+
+  test('can remember format choice via local storage', async function (assert) {
+    const authorModuleId = `${testRealmURL}author/Author`;
+    const categoryModuleId = `${testRealmURL}blog-post/Category`;
+    const blogPostModuleId = `${testRealmURL}blog-post/BlogPost`;
+    const authorId = `${testRealmURL}Author/jane-doe`;
+    const categoryId1 = `${testRealmURL}Category/city-design`;
+    const categoryId2 = `${testRealmURL}Category/future-tech`;
+    const blogPostId1 = `${testRealmURL}BlogPost/mad-hatter`;
+    const blogPostId2 = `${testRealmURL}BlogPost/remote-work`;
+
+    window.localStorage.setItem(
+      PlaygroundSelections,
+      JSON.stringify({
+        [`${authorModuleId}`]: {
+          cardId: authorId,
+          format: 'edit',
+        },
+        [`${categoryModuleId}`]: {
+          cardId: categoryId1,
+          format: 'embedded',
+        },
+        [`${blogPostModuleId}`]: {
+          cardId: blogPostId1,
+        },
+      }),
+    );
+    const getSelection = (moduleId: string) => {
+      let selections = window.localStorage.getItem(PlaygroundSelections);
+      if (!selections) {
+        throw new Error('No selections found in mock local storage');
+      }
+      return JSON.parse(selections)[moduleId];
+    };
+    const assertCorrectFormat = (
+      cardId: string,
+      format: Format,
+      message?: string,
+    ) => {
+      const dataAttr = `[data-test-playground-panel] [data-test-card="${cardId}"][data-test-card-format="${format}"]`;
+      assert.dom(dataAttr).exists(message);
+    };
+    await visitOperatorMode({
+      stacks: [],
+      submode: 'code',
+      codePath: `${testRealmURL}author.gts`,
+    });
+    assertCorrectFormat(authorId, 'edit');
+    await click('[data-test-format-chooser-atom]'); // change selected format
+    assertCorrectFormat(authorId, 'atom');
+    assert.deepEqual(
+      getSelection(authorModuleId),
+      {
+        cardId: authorId,
+        format: 'atom',
+      },
+      'local storage is updated',
+    );
+
+    await click('[data-test-file-browser-toggle]');
+    await click('[data-test-file="blog-post.gts"]'); // change open file
+    assertCorrectFormat(categoryId1, 'embedded');
+
+    await click('[data-test-instance-chooser]');
+    await click('[data-option-index="1"]'); // change selected instance
+    assertCorrectFormat(categoryId2, 'embedded');
+    assert.deepEqual(
+      getSelection(categoryModuleId),
+      {
+        cardId: categoryId2,
+        format: 'embedded',
+      },
+      'local storage is updated',
+    );
+
+    await click('[data-test-inspector-toggle]');
+    await click('[data-test-boxel-selector-item-text="BlogPost"]'); // change selected module
+    assertCorrectFormat(blogPostId1, 'isolated', 'default format is correct');
+    await click('[data-test-format-chooser-fitted]'); // change selected format
+    assert.deepEqual(getSelection(blogPostModuleId), {
+      cardId: blogPostId1,
+      format: 'fitted',
+    });
+    await click('[data-test-instance-chooser]');
+    await click('[data-option-index="1"]'); // change selected instance
+    assertCorrectFormat(blogPostId2, 'fitted');
+    assert.deepEqual(getSelection(blogPostModuleId), {
+      cardId: blogPostId2,
+      format: 'fitted',
+    });
+
+    let selections = window.localStorage.getItem(PlaygroundSelections);
+    assert.strictEqual(
+      selections,
+      JSON.stringify({
+        [`${authorModuleId}`]: {
+          cardId: authorId,
+          format: 'atom',
+        },
+        [`${categoryModuleId}`]: {
+          cardId: categoryId2,
+          format: 'embedded',
+        },
+        [`${blogPostModuleId}`]: {
+          cardId: blogPostId2,
+          format: 'fitted',
+        },
+      }),
+    );
+  });
 });