3 files changed, 58 insertions, 1 deletions
diff --git a/packages/cli/src/config/config.integration.test.ts b/packages/cli/src/config/config.integration.test.ts
index 2cbe8c66..99745d29 100644
--- a/packages/cli/src/config/config.integration.test.ts
+++ b/packages/cli/src/config/config.integration.test.ts
@@ -53,6 +53,7 @@ describe('Configuration Integration Tests', () => {
   describe('File Filtering Configuration', () => {
     it('should load default file filtering settings', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
@@ -70,6 +71,7 @@ describe('Configuration Integration Tests', () => {
 
     it('should load custom file filtering settings from configuration', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
@@ -87,6 +89,7 @@ describe('Configuration Integration Tests', () => {
 
     it('should merge user and workspace file filtering settings', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
@@ -106,6 +109,7 @@ describe('Configuration Integration Tests', () => {
   describe('Configuration Integration', () => {
     it('should handle partial configuration objects gracefully', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
@@ -126,6 +130,7 @@ describe('Configuration Integration Tests', () => {
 
     it('should handle empty configuration objects gracefully', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
@@ -144,6 +149,7 @@ describe('Configuration Integration Tests', () => {
 
     it('should handle missing configuration sections gracefully', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
@@ -163,6 +169,7 @@ describe('Configuration Integration Tests', () => {
   describe('Real-world Configuration Scenarios', () => {
     it('should handle a security-focused configuration', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
@@ -180,6 +187,7 @@ describe('Configuration Integration Tests', () => {
 
     it('should handle a development-focused configuration', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
@@ -196,6 +204,7 @@ describe('Configuration Integration Tests', () => {
 
     it('should handle a CI/CD environment configuration', async () => {
       const configParams: ConfigParameters = {
+        cwd: '/tmp',
         contentGeneratorConfig: TEST_CONTENT_GENERATOR_CONFIG,
         embeddingModel: 'test-embedding-model',
         sandbox: false,
diff --git a/packages/cli/src/config/config.ts b/packages/cli/src/config/config.ts
index 2f989883..3ee03c82 100644
--- a/packages/cli/src/config/config.ts
+++ b/packages/cli/src/config/config.ts
@@ -9,16 +9,20 @@ import { hideBin } from 'yargs/helpers';
 import process from 'node:process';
 import {
   Config,
-  loadEnvironment,
   loadServerHierarchicalMemory,
   setGeminiMdFilename as setServerGeminiMdFilename,
   getCurrentGeminiMdFilename,
   ApprovalMode,
   ContentGeneratorConfig,
+  GEMINI_CONFIG_DIR as GEMINI_DIR,
 } from '@gemini-cli/core';
 import { Settings } from './settings.js';
 import { getEffectiveModel } from '../utils/modelCheck.js';
 import { ExtensionConfig } from './extension.js';
+import * as dotenv from 'dotenv';
+import * as fs from 'node:fs';
+import * as path from 'node:path';
+import * as os from 'node:os';
 
 // Simple console logger for now - replace with actual logger if available
 const logger = {
@@ -196,6 +200,13 @@ export async function loadCliConfig(
     fileFilteringAllowBuildArtifacts:
       settings.fileFiltering?.allowBuildArtifacts,
     checkpoint: argv.checkpoint,
+    proxy:
+      process.env.HTTPS_PROXY ||
+      process.env.https_proxy ||
+      process.env.HTTP_PROXY ||
+      process.env.http_proxy,
+    cwd: process.cwd(),
+    telemetryOtlpEndpoint: process.env.OTEL_EXPORTER_OTLP_ENDPOINT,
   });
 }
 
@@ -259,3 +270,39 @@ async function createContentGeneratorConfig(
 
   return config;
 }
+
+function findEnvFile(startDir: string): string | null {
+  let currentDir = path.resolve(startDir);
+  while (true) {
+    // prefer gemini-specific .env under GEMINI_DIR
+    const geminiEnvPath = path.join(currentDir, GEMINI_DIR, '.env');
+    if (fs.existsSync(geminiEnvPath)) {
+      return geminiEnvPath;
+    }
+    const envPath = path.join(currentDir, '.env');
+    if (fs.existsSync(envPath)) {
+      return envPath;
+    }
+    const parentDir = path.dirname(currentDir);
+    if (parentDir === currentDir || !parentDir) {
+      // check .env under home as fallback, again preferring gemini-specific .env
+      const homeGeminiEnvPath = path.join(os.homedir(), GEMINI_DIR, '.env');
+      if (fs.existsSync(homeGeminiEnvPath)) {
+        return homeGeminiEnvPath;
+      }
+      const homeEnvPath = path.join(os.homedir(), '.env');
+      if (fs.existsSync(homeEnvPath)) {
+        return homeEnvPath;
+      }
+      return null;
+    }
+    currentDir = parentDir;
+  }
+}
+
+export function loadEnvironment(): void {
+  const envFilePath = findEnvFile(process.cwd());
+  if (envFilePath) {
+    dotenv.config({ path: envFilePath });
+  }
+}
diff --git a/packages/cli/src/ui/App.test.tsx b/packages/cli/src/ui/App.test.tsx
index bfd2efaf..b8959bfb 100644
--- a/packages/cli/src/ui/App.test.tsx
+++ b/packages/cli/src/ui/App.test.tsx
@@ -194,6 +194,7 @@ describe('App UI', () => {
       geminiMdFileCount: 0,
       showMemoryUsage: false,
       sessionId: 'test-session-id',
+      cwd: '/tmp',
       // Provide other required fields for ConfigParameters if necessary
     }) as unknown as MockServerConfig;