diff --git a/cli.py b/cli.py
index 6c44ef61b..05ed260df 100755
--- a/cli.py
+++ b/cli.py
@@ -297,6 +297,7 @@ def load_cli_config() -> Dict[str, Any]:
         "container_disk": "TERMINAL_CONTAINER_DISK",
         "container_persistent": "TERMINAL_CONTAINER_PERSISTENT",
         "docker_volumes": "TERMINAL_DOCKER_VOLUMES",
+        "sandbox_dir": "TERMINAL_SANDBOX_DIR",
         # Sudo support (works with all backends)
         "sudo_password": "SUDO_PASSWORD",
     }
diff --git a/gateway/run.py b/gateway/run.py
index 8a89e0fbe..e4e56936d 100644
--- a/gateway/run.py
+++ b/gateway/run.py
@@ -75,6 +75,7 @@ if _config_path.exists():
                 "container_memory": "TERMINAL_CONTAINER_MEMORY",
                 "container_disk": "TERMINAL_CONTAINER_DISK",
                 "container_persistent": "TERMINAL_CONTAINER_PERSISTENT",
+                "sandbox_dir": "TERMINAL_SANDBOX_DIR",
             }
             for _cfg_key, _env_var in _terminal_env_map.items():
                 if _cfg_key in _terminal_cfg:
@@ -107,11 +108,13 @@ os.environ["HERMES_QUIET"] = "1"
 # Enable interactive exec approval for dangerous commands on messaging platforms
 os.environ["HERMES_EXEC_ASK"] = "1"
 
-# Set terminal working directory for messaging platforms
-# Uses MESSAGING_CWD if set, otherwise defaults to home directory
-# This is separate from CLI which uses the directory where `hermes` is run
-messaging_cwd = os.getenv("MESSAGING_CWD") or str(Path.home())
-os.environ["TERMINAL_CWD"] = messaging_cwd
+# Set terminal working directory for messaging platforms.
+# If the user set an explicit path in config.yaml (not "." or "auto"),
+# respect it. Otherwise use MESSAGING_CWD or default to home directory.
+_configured_cwd = os.environ.get("TERMINAL_CWD", "")
+if not _configured_cwd or _configured_cwd in (".", "auto", "cwd"):
+    messaging_cwd = os.getenv("MESSAGING_CWD") or str(Path.home())
+    os.environ["TERMINAL_CWD"] = messaging_cwd
 
 from gateway.config import (
     Platform,
diff --git a/hermes_cli/config.py b/hermes_cli/config.py
index 6724c1d7d..67b02b992 100644
--- a/hermes_cli/config.py
+++ b/hermes_cli/config.py
@@ -1004,6 +1004,7 @@ def set_config_value(key: str, value: str):
         "terminal.daytona_image": "TERMINAL_DAYTONA_IMAGE",
         "terminal.cwd": "TERMINAL_CWD",
         "terminal.timeout": "TERMINAL_TIMEOUT",
+        "terminal.sandbox_dir": "TERMINAL_SANDBOX_DIR",
     }
     if key in _config_to_env_sync:
         save_env_value(_config_to_env_sync[key], str(value))