diff --git a/cli.py b/cli.py
index 750a7a14..a5ed551a 100644
--- a/cli.py
+++ b/cli.py
@@ -6103,7 +6103,7 @@ class HermesCLI:
             from honcho_integration.client import HonchoClientConfig
             from agent.display import honcho_session_line, write_tty
             hcfg = HonchoClientConfig.from_global_config()
-            if hcfg.enabled and hcfg.api_key and hcfg.explicitly_configured:
+            if hcfg.enabled and (hcfg.api_key or hcfg.base_url) and hcfg.explicitly_configured:
                 sname = hcfg.resolve_session_name(session_id=self.session_id)
                 if sname:
                     write_tty(honcho_session_line(hcfg.workspace_id, sname) + "\n")
diff --git a/gateway/run.py b/gateway/run.py
index 1cebf976..1eda6e3c 100644
--- a/gateway/run.py
+++ b/gateway/run.py
@@ -432,7 +432,7 @@ class GatewayRunner:
             from honcho_integration.session import HonchoSessionManager
 
             hcfg = HonchoClientConfig.from_global_config()
-            if not hcfg.enabled or not hcfg.api_key:
+            if not hcfg.enabled or not (hcfg.api_key or hcfg.base_url):
                 return None, hcfg
 
             client = get_honcho_client(hcfg)
diff --git a/hermes_cli/doctor.py b/hermes_cli/doctor.py
index 053f92a2..8facb1c7 100644
--- a/hermes_cli/doctor.py
+++ b/hermes_cli/doctor.py
@@ -56,7 +56,7 @@ def _honcho_is_configured_for_doctor() -> bool:
         from honcho_integration.client import HonchoClientConfig
 
         cfg = HonchoClientConfig.from_global_config()
-        return bool(cfg.enabled and cfg.api_key)
+        return bool(cfg.enabled and (cfg.api_key or cfg.base_url))
     except Exception:
         return False
 
@@ -708,8 +708,8 @@ def run_doctor(args):
             check_warn("Honcho config not found", "run: hermes honcho setup")
         elif not hcfg.enabled:
             check_info(f"Honcho disabled (set enabled: true in {_honcho_cfg_path} to activate)")
-        elif not hcfg.api_key:
-            check_fail("Honcho API key not set", "run: hermes honcho setup")
+        elif not (hcfg.api_key or hcfg.base_url):
+            check_fail("Honcho API key or base URL not set", "run: hermes honcho setup")
             issues.append("No Honcho API key — run 'hermes honcho setup'")
         else:
             from honcho_integration.client import get_honcho_client, reset_honcho_client
diff --git a/honcho_integration/cli.py b/honcho_integration/cli.py
index 78a0d4b7..ae09c371 100644
--- a/honcho_integration/cli.py
+++ b/honcho_integration/cli.py
@@ -270,7 +270,7 @@ def cmd_status(args) -> None:
             print(f"    {peer}: {mode}")
     print(f"  Write freq:     {hcfg.write_frequency}")
 
-    if hcfg.enabled and hcfg.api_key:
+    if hcfg.enabled and (hcfg.api_key or hcfg.base_url):
         print("\n  Connection... ", end="", flush=True)
         try:
             get_honcho_client(hcfg)
@@ -278,7 +278,7 @@ def cmd_status(args) -> None:
         except Exception as e:
             print(f"FAILED ({e})\n")
     else:
-        reason = "disabled" if not hcfg.enabled else "no API key"
+        reason = "disabled" if not hcfg.enabled else "no API key or base URL"
         print(f"\n  Not connected ({reason})\n")
 
 
diff --git a/honcho_integration/client.py b/honcho_integration/client.py
index 385974d1..50f7af30 100644
--- a/honcho_integration/client.py
+++ b/honcho_integration/client.py
@@ -417,9 +417,18 @@ def get_honcho_client(config: HonchoClientConfig | None = None) -> Honcho:
     else:
         logger.info("Initializing Honcho client (host: %s, workspace: %s)", config.host, config.workspace_id)
 
+    # Local Honcho instances don't require an API key, but the SDK
+    # expects a non-empty string.  Use a placeholder for local URLs.
+    _is_local = resolved_base_url and (
+        "localhost" in resolved_base_url
+        or "127.0.0.1" in resolved_base_url
+        or "::1" in resolved_base_url
+    )
+    effective_api_key = config.api_key or ("local" if _is_local else None)
+
     kwargs: dict = {
         "workspace_id": config.workspace_id,
-        "api_key": config.api_key,
+        "api_key": effective_api_key,
         "environment": config.environment,
     }
     if resolved_base_url:
diff --git a/run_agent.py b/run_agent.py
index 574cde7a..cac9f5ec 100644
--- a/run_agent.py
+++ b/run_agent.py
@@ -1084,8 +1084,8 @@ class AIAgent:
                     else:
                         if not hcfg.enabled:
                             logger.debug("Honcho disabled in global config")
-                        elif not hcfg.api_key:
-                            logger.debug("Honcho enabled but no API key configured")
+                        elif not (hcfg.api_key or hcfg.base_url):
+                            logger.debug("Honcho enabled but no API key or base URL configured")
                         else:
                             logger.debug("Honcho enabled but missing API key or disabled in config")
             except Exception as e:
@@ -2292,8 +2292,14 @@ class AIAgent:
     # ── Honcho integration helpers ──
 
     def _honcho_should_activate(self, hcfg) -> bool:
-        """Return True when remote Honcho should be active."""
-        if not hcfg or not hcfg.enabled or not hcfg.api_key:
+        """Return True when Honcho should be active.
+
+        Self-hosted Honcho may be configured with a base_url and no API key,
+        so activation should accept either credential style.
+        """
+        if not hcfg or not hcfg.enabled:
+            return False
+        if not (hcfg.api_key or hcfg.base_url):
             return False
         return True