diff --git a/CHANGELOG.adoc b/CHANGELOG.adoc
index 8cb546e92..3e2023a64 100644
--- a/CHANGELOG.adoc
+++ b/CHANGELOG.adoc
@@ -21,6 +21,7 @@ Release with new features and bugfixes:
 * https://github.com/devonfw/IDEasy/issues/637[#637]: Added option to disable updates
 * https://github.com/devonfw/IDEasy/issues/764[#764]: IDEasy not working properly in CMD
 * https://github.com/devonfw/IDEasy/issues/81[#81]: Implement Toolcommandlet for Kubernetes
+* https://github.com/devonfw/IDEasy/issues/737[#737]: Adds cd command to ide shell
 * https://github.com/devonfw/IDEasy/issues/758[#758]: Create status commandlet
 * https://github.com/devonfw/IDEasy/issues/754[#754]: Again messages break processable command output
 
@@ -33,7 +34,8 @@ Release with new features and bugfixes:
 * https://github.com/devonfw/IDEasy/issues/632[#632]: Add .editorconfig to settings workspaces
 * https://github.com/devonfw/IDEasy/issues/415[#415]: Added a message that will inform the user for what process he will need to enter his sudo-password
 * https://github.com/devonfw/IDEasy/issues/708[#708]: Open vscode in workspace path
-* https://github.com/devonfw/IDEasy/issues/608[#608]: Enhanced error messages. Now logs missing command output and error messages
+* https://github.com/devonfw/IDEasy/issues/608[#608]: Enhanced error messages.
+Now logs missing command output and error messages
 * https://github.com/devonfw/IDEasy/issues/715[#715]: Show "cygwin is not supported" message for cygwin users
 * https://github.com/devonfw/IDEasy/issues/745[#745]: Maven install fails with NPE
 
diff --git a/cli/src/main/java/com/devonfw/tools/ide/commandlet/ShellCommandlet.java b/cli/src/main/java/com/devonfw/tools/ide/commandlet/ShellCommandlet.java
index 6d4307297..a86301d52 100644
--- a/cli/src/main/java/com/devonfw/tools/ide/commandlet/ShellCommandlet.java
+++ b/cli/src/main/java/com/devonfw/tools/ide/commandlet/ShellCommandlet.java
@@ -1,6 +1,8 @@
 package com.devonfw.tools.ide.commandlet;
 
 import java.io.IOException;
+import java.nio.file.Path;
+import java.nio.file.Paths;
 import java.util.Iterator;
 
 import org.fusesource.jansi.AnsiConsole;
@@ -79,13 +81,13 @@ public void run() {
 
         // TODO: implement TailTipWidgets, see: https://github.com/devonfw/IDEasy/issues/169
 
-        String prompt = "ide> ";
         String rightPrompt = null;
         String line;
 
         AnsiConsole.systemInstall();
         while (true) {
           try {
+            String prompt = context.getCwd() + "$ ide ";
             line = reader.readLine(prompt, rightPrompt, (MaskingCallback) null, null);
             line = line.trim();
             if (line.equals("exit")) {
@@ -129,9 +131,37 @@ private int runCommand(String args) {
     String[] arguments = args.split(" ", 0);
     CliArguments cliArgs = new CliArguments(arguments);
     cliArgs.next();
+
+    if ("cd".equals(arguments[0])) {
+      return changeDirectory(cliArgs);
+    }
+
     return ((AbstractIdeContext) this.context).run(cliArgs);
   }
 
+  private int changeDirectory(CliArguments cliArgs) {
+    if (!cliArgs.hasNext()) {
+      Path homeDir = this.context.getUserHome();
+      context.setCwd(homeDir, context.getWorkspaceName(), context.getIdeHome());
+      return 0;
+    }
+
+    String targetDir = String.valueOf(cliArgs.next());
+    Path path = Paths.get(targetDir);
+
+    // If the given path is relative, resolve it relative to the current directory
+    if (!path.isAbsolute()) {
+      path = context.getCwd().resolve(targetDir).normalize();
+    }
+
+    if (context.getFileAccess().isExpectedFolder(path)) {
+      context.setCwd(path, context.getWorkspaceName(), context.getIdeHome());
+      return 0;
+    } else {
+      return 1;
+    }
+  }
+
   /**
    * @param argument the current {@link CliArgument} (position) to match.
    * @param commandlet the potential {@link Commandlet} to match.