diff --git a/src/CodingWithCalvin.ProjectRenamifier/CodingWithCalvin.ProjectRenamifier.csproj b/src/CodingWithCalvin.ProjectRenamifier/CodingWithCalvin.ProjectRenamifier.csproj
index e5e3a35..6b11371 100644
--- a/src/CodingWithCalvin.ProjectRenamifier/CodingWithCalvin.ProjectRenamifier.csproj
+++ b/src/CodingWithCalvin.ProjectRenamifier/CodingWithCalvin.ProjectRenamifier.csproj
@@ -69,6 +69,9 @@
     <Compile Include="Dialogs\RenameProjectDialog.xaml.cs">
       <DependentUpon>RenameProjectDialog.xaml</DependentUpon>
     </Compile>
+    <Compile Include="Dialogs\RenameProgressDialog.xaml.cs">
+      <DependentUpon>RenameProgressDialog.xaml</DependentUpon>
+    </Compile>
     <Compile Include="ProjectRenamifierPackage.cs" />
     <Compile Include="Services\ProjectFileService.cs" />
     <Compile Include="Services\ProjectReferenceService.cs" />
@@ -90,6 +93,10 @@
       <SubType>Designer</SubType>
       <Generator>MSBuild:Compile</Generator>
     </Page>
+    <Page Include="Dialogs\RenameProgressDialog.xaml">
+      <SubType>Designer</SubType>
+      <Generator>MSBuild:Compile</Generator>
+    </Page>
   </ItemGroup>
   <ItemGroup>
     <None Include="Resources\extension.manifest.json" />
diff --git a/src/CodingWithCalvin.ProjectRenamifier/Commands/RenamifyProjectCommand.cs b/src/CodingWithCalvin.ProjectRenamifier/Commands/RenamifyProjectCommand.cs
index 9434166..3d59534 100644
--- a/src/CodingWithCalvin.ProjectRenamifier/Commands/RenamifyProjectCommand.cs
+++ b/src/CodingWithCalvin.ProjectRenamifier/Commands/RenamifyProjectCommand.cs
@@ -1,6 +1,7 @@
 using System.ComponentModel.Design;
 using System.IO;
 using System.Windows.Interop;
+using System.Windows.Threading;
 using CodingWithCalvin.ProjectRenamifier.Dialogs;
 using CodingWithCalvin.ProjectRenamifier.Services;
 using EnvDTE;
@@ -80,41 +81,116 @@ private void RenameProject(Project project, DTE2 dte)
             var newName = dialog.NewProjectName;
             var projectFilePath = project.FullName;
 
-            // Collect projects that reference this project before removal
-            var referencingProjects = ProjectReferenceService.FindProjectsReferencingTarget(dte.Solution, projectFilePath);
+            // Show progress dialog
+            var progressDialog = new RenameProgressDialog(currentName);
+            var progressHelper = new WindowInteropHelper(progressDialog)
+            {
+                Owner = dte.MainWindow.HWnd
+            };
+            progressDialog.Show();
+
+            var stepIndex = 0;
+
+            // Step 1: Collect projects that reference this project before removal
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                return ProjectReferenceService.FindProjectsReferencingTarget(dte.Solution, projectFilePath);
+            }, out var referencingProjects);
             var oldProjectFilePath = projectFilePath;
 
-            // Capture the parent solution folder before removal
-            var parentSolutionFolder = SolutionFolderService.GetParentSolutionFolder(project);
+            // Step 2: Capture the parent solution folder before removal
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                return SolutionFolderService.GetParentSolutionFolder(project);
+            }, out var parentSolutionFolder);
 
-            // Remove project from solution before file operations
-            dte.Solution.Remove(project);
+            // Step 3: Remove project from solution before file operations
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                dte.Solution.Remove(project);
+            });
+
+            // Step 4: Update RootNamespace and AssemblyName in .csproj
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                ProjectFileService.UpdateProjectFile(projectFilePath, currentName, newName);
+            });
 
-            // Update RootNamespace and AssemblyName in .csproj
-            ProjectFileService.UpdateProjectFile(projectFilePath, currentName, newName);
+            // Step 5: Update namespace declarations in source files
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                SourceFileService.UpdateNamespacesInProject(projectFilePath, currentName, newName);
+            });
 
-            // Update namespace declarations in source files
-            SourceFileService.UpdateNamespacesInProject(projectFilePath, currentName, newName);
+            // Step 6: Rename the project file on disk
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                return ProjectFileService.RenameProjectFile(projectFilePath, newName);
+            }, out projectFilePath);
 
-            // Rename the project file on disk
-            projectFilePath = ProjectFileService.RenameProjectFile(projectFilePath, newName);
+            // Step 7: Rename parent directory if it matches the old project name
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                return ProjectFileService.RenameParentDirectoryIfMatches(projectFilePath, currentName, newName);
+            }, out projectFilePath);
 
-            // Rename parent directory if it matches the old project name
-            projectFilePath = ProjectFileService.RenameParentDirectoryIfMatches(projectFilePath, currentName, newName);
+            // Step 8: Update references in projects that referenced this project
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                ProjectReferenceService.UpdateProjectReferences(referencingProjects, oldProjectFilePath, projectFilePath);
+            });
 
-            // Update references in projects that referenced this project
-            ProjectReferenceService.UpdateProjectReferences(referencingProjects, oldProjectFilePath, projectFilePath);
+            // Step 9: Re-add project to solution, preserving solution folder location
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                SolutionFolderService.AddProjectToSolution(dte.Solution, projectFilePath, parentSolutionFolder);
+            });
 
-            // Re-add project to solution, preserving solution folder location
-            SolutionFolderService.AddProjectToSolution(dte.Solution, projectFilePath, parentSolutionFolder);
+            // Step 10: Update using statements across the entire solution
+            ExecuteStep(progressDialog, stepIndex++, () =>
+            {
+                SourceFileService.UpdateUsingStatementsInSolution(dte.Solution, currentName, newName);
+            });
 
-            // Update using statements across the entire solution
-            SourceFileService.UpdateUsingStatementsInSolution(dte.Solution, currentName, newName);
+            // Mark as complete and close after a brief delay
+            progressDialog.Complete();
+            DoEvents();
+            System.Threading.Thread.Sleep(500);
+            progressDialog.Close();
 
             // TODO: Implement remaining rename operations
             // See open issues for requirements:
-            // - #12: Progress indication
             // - #13: Error handling and rollback
         }
+
+        private void ExecuteStep(RenameProgressDialog dialog, int stepIndex, Action action)
+        {
+            dialog.StartStep(stepIndex);
+            DoEvents();
+            action();
+            dialog.CompleteStep(stepIndex);
+            DoEvents();
+        }
+
+        private void ExecuteStep<T>(RenameProgressDialog dialog, int stepIndex, Func<T> func, out T result)
+        {
+            dialog.StartStep(stepIndex);
+            DoEvents();
+            result = func();
+            dialog.CompleteStep(stepIndex);
+            DoEvents();
+        }
+
+        private void DoEvents()
+        {
+            var frame = new DispatcherFrame();
+            Dispatcher.CurrentDispatcher.BeginInvoke(DispatcherPriority.Background,
+                new DispatcherOperationCallback(obj =>
+                {
+                    ((DispatcherFrame)obj).Continue = false;
+                    return null;
+                }), frame);
+            Dispatcher.PushFrame(frame);
+        }
     }
 }
diff --git a/src/CodingWithCalvin.ProjectRenamifier/Dialogs/RenameProgressDialog.xaml b/src/CodingWithCalvin.ProjectRenamifier/Dialogs/RenameProgressDialog.xaml
new file mode 100644
index 0000000..7c94dc3
--- /dev/null
+++ b/src/CodingWithCalvin.ProjectRenamifier/Dialogs/RenameProgressDialog.xaml
@@ -0,0 +1,54 @@
+<Window x:Class="CodingWithCalvin.ProjectRenamifier.Dialogs.RenameProgressDialog"
+        xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"
+        xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"
+        Title="Renaming Project"
+        Width="400"
+        Height="340"
+        ResizeMode="NoResize"
+        WindowStartupLocation="CenterOwner"
+        ShowInTaskbar="False">
+    <Grid Margin="16">
+        <Grid.RowDefinitions>
+            <RowDefinition Height="Auto"/>
+            <RowDefinition Height="*"/>
+            <RowDefinition Height="Auto"/>
+        </Grid.RowDefinitions>
+
+        <TextBlock Grid.Row="0"
+                   x:Name="HeaderText"
+                   Text="Renaming project..."
+                   FontWeight="SemiBold"
+                   FontSize="14"
+                   Margin="0,0,0,16"/>
+
+        <ItemsControl Grid.Row="1"
+                      x:Name="StepsList"
+                      Margin="0,0,0,16">
+            <ItemsControl.ItemTemplate>
+                <DataTemplate>
+                    <Grid Margin="0,4">
+                        <Grid.ColumnDefinitions>
+                            <ColumnDefinition Width="24"/>
+                            <ColumnDefinition Width="*"/>
+                        </Grid.ColumnDefinitions>
+                        <TextBlock Grid.Column="0"
+                                   Text="{Binding StatusIcon}"
+                                   FontFamily="Segoe UI Symbol"
+                                   VerticalAlignment="Center"/>
+                        <TextBlock Grid.Column="1"
+                                   Text="{Binding Description}"
+                                   Foreground="{Binding TextColor}"
+                                   VerticalAlignment="Center"/>
+                    </Grid>
+                </DataTemplate>
+            </ItemsControl.ItemTemplate>
+        </ItemsControl>
+
+        <ProgressBar Grid.Row="2"
+                     x:Name="ProgressBar"
+                     Height="8"
+                     IsIndeterminate="False"
+                     Minimum="0"
+                     Maximum="100"/>
+    </Grid>
+</Window>
diff --git a/src/CodingWithCalvin.ProjectRenamifier/Dialogs/RenameProgressDialog.xaml.cs b/src/CodingWithCalvin.ProjectRenamifier/Dialogs/RenameProgressDialog.xaml.cs
new file mode 100644
index 0000000..3613c3e
--- /dev/null
+++ b/src/CodingWithCalvin.ProjectRenamifier/Dialogs/RenameProgressDialog.xaml.cs
@@ -0,0 +1,140 @@
+using System.Collections.ObjectModel;
+using System.ComponentModel;
+using System.Windows;
+using System.Windows.Media;
+
+namespace CodingWithCalvin.ProjectRenamifier.Dialogs
+{
+    public partial class RenameProgressDialog : Window
+    {
+        public ObservableCollection<ProgressStep> Steps { get; }
+
+        public RenameProgressDialog(string projectName)
+        {
+            InitializeComponent();
+
+            HeaderText.Text = $"Renaming '{projectName}'...";
+
+            Steps = new ObservableCollection<ProgressStep>
+            {
+                new ProgressStep("Analyzing project references"),
+                new ProgressStep("Capturing solution structure"),
+                new ProgressStep("Removing project from solution"),
+                new ProgressStep("Updating project file"),
+                new ProgressStep("Updating namespace declarations"),
+                new ProgressStep("Renaming project file"),
+                new ProgressStep("Renaming project directory"),
+                new ProgressStep("Updating project references"),
+                new ProgressStep("Re-adding project to solution"),
+                new ProgressStep("Updating using statements")
+            };
+
+            StepsList.ItemsSource = Steps;
+        }
+
+        public void StartStep(int stepIndex)
+        {
+            if (stepIndex >= 0 && stepIndex < Steps.Count)
+            {
+                Steps[stepIndex].Status = StepStatus.InProgress;
+                UpdateProgress(stepIndex);
+            }
+        }
+
+        public void CompleteStep(int stepIndex)
+        {
+            if (stepIndex >= 0 && stepIndex < Steps.Count)
+            {
+                Steps[stepIndex].Status = StepStatus.Completed;
+                UpdateProgress(stepIndex + 1);
+            }
+        }
+
+        public void FailStep(int stepIndex, string error)
+        {
+            if (stepIndex >= 0 && stepIndex < Steps.Count)
+            {
+                Steps[stepIndex].Status = StepStatus.Failed;
+                Steps[stepIndex].Description += $" - {error}";
+            }
+        }
+
+        public void Complete()
+        {
+            HeaderText.Text = "Rename completed successfully!";
+            ProgressBar.Value = 100;
+        }
+
+        private void UpdateProgress(int completedSteps)
+        {
+            ProgressBar.Value = (completedSteps * 100.0) / Steps.Count;
+        }
+    }
+
+    public enum StepStatus
+    {
+        Pending,
+        InProgress,
+        Completed,
+        Failed
+    }
+
+    public class ProgressStep : INotifyPropertyChanged
+    {
+        private string _description;
+        private StepStatus _status;
+
+        public ProgressStep(string description)
+        {
+            _description = description;
+            _status = StepStatus.Pending;
+        }
+
+        public string Description
+        {
+            get => _description;
+            set
+            {
+                _description = value;
+                OnPropertyChanged(nameof(Description));
+            }
+        }
+
+        public StepStatus Status
+        {
+            get => _status;
+            set
+            {
+                _status = value;
+                OnPropertyChanged(nameof(Status));
+                OnPropertyChanged(nameof(StatusIcon));
+                OnPropertyChanged(nameof(TextColor));
+            }
+        }
+
+        public string StatusIcon => _status switch
+        {
+            StepStatus.Pending => "\u2022",      // Bullet
+            StepStatus.InProgress => "\u25B6",   // Play arrow
+            StepStatus.Completed => "\u2714",    // Check mark
+            StepStatus.Failed => "\u2716",       // X mark
+            _ => "\u2022"
+        };
+
+        public Brush TextColor => _status switch
+        {
+            StepStatus.Pending => Brushes.Gray,
+            StepStatus.InProgress => Brushes.Black,
+            StepStatus.Completed => Brushes.Green,
+            StepStatus.Failed => Brushes.Red,
+            _ => Brushes.Gray
+        };
+
+        public event PropertyChangedEventHandler PropertyChanged;
+
+        protected void OnPropertyChanged(string propertyName)
+        {
+            PropertyChanged?.Invoke(this, new PropertyChangedEventArgs(propertyName));
+        }
+    }
+}