diff --git a/frontend/src/components/dashboard/Dashboard.tsx b/frontend/src/components/dashboard/Dashboard.tsx
index 5c130ab..6c166cf 100644
--- a/frontend/src/components/dashboard/Dashboard.tsx
+++ b/frontend/src/components/dashboard/Dashboard.tsx
@@ -31,8 +31,6 @@ import { PendingApprovals } from './PendingApprovals';
 import { EmptyState } from './EmptyState';
 import { useDashboard, type PendingApproval } from '@/lib/api/hooks/useDashboard';
 import { useAuth } from '@/lib/auth/AuthContext';
-import { useProjectEvents } from '@/lib/hooks/useProjectEvents';
-import { useProjectEventsFromStore } from '@/lib/stores/eventStore';
 
 export interface DashboardProps {
   /** Additional CSS classes */
@@ -43,13 +41,6 @@ export function Dashboard({ className }: DashboardProps) {
   const { user } = useAuth();
   const { data, isLoading, error } = useDashboard();
 
-  // Real-time events - using a generic project ID for dashboard-wide events
-  // In production, this would be a dedicated dashboard events endpoint
-  const { connectionState } = useProjectEvents('dashboard', {
-    autoConnect: true,
-  });
-  const events = useProjectEventsFromStore('dashboard');
-
   // Get user's first name for empty state
   const firstName = user?.first_name || user?.email?.split('@')[0] || 'there';
 
@@ -108,11 +99,13 @@ export function Dashboard({ className }: DashboardProps) {
             </div>
 
             {/* Activity Feed Sidebar */}
+            {/* TODO: Enable when global activity SSE endpoint is implemented */}
+            {/* Currently disabled - there's no dashboard-wide SSE endpoint */}
             <div className="hidden lg:block">
               <Card className="sticky top-4">
                 <ActivityFeed
-                  events={events}
-                  connectionState={connectionState}
+                  events={[]}
+                  connectionState="disconnected"
                   isLoading={isLoading}
                   maxHeight={600}
                   showHeader
diff --git a/frontend/src/lib/hooks/useProjectEvents.ts b/frontend/src/lib/hooks/useProjectEvents.ts
index 5f2cd15..b57e951 100644
--- a/frontend/src/lib/hooks/useProjectEvents.ts
+++ b/frontend/src/lib/hooks/useProjectEvents.ts
@@ -247,6 +247,15 @@ export function useProjectEvents(
    * Connect to SSE endpoint
    */
   const connect = useCallback(() => {
+    // In frontend demo mode (MSW), SSE is not supported - skip connection
+    if (config.demo.enabled) {
+      if (config.debug.api) {
+        console.log('[SSE] Demo mode enabled - SSE connections disabled');
+      }
+      updateConnectionState('disconnected');
+      return;
+    }
+
     // Prevent connection if not authenticated or no project ID
     /* istanbul ignore next -- early return guard, tested via connection state */
     if (!isAuthenticated || !accessToken || !projectId) {