diff --git a/internal/config/load.go b/internal/config/load.go
index 4858b423903f9898a3d0b74e610b8689d41fc84c..b644eb3f2b35253c310dd899dbb06fcfe65e6b2e 100644
--- a/internal/config/load.go
+++ b/internal/config/load.go
@@ -310,17 +310,15 @@ func (c *Config) setDefaults(workingDir, dataDir string) {
 	if c.Options.ContextPaths == nil {
 		c.Options.ContextPaths = []string{}
 	}
-	if c.Options.DataDirectory == "" {
+	if dataDir != "" {
+		c.Options.DataDirectory = dataDir
+	} else if c.Options.DataDirectory == "" {
 		if path, ok := fsext.SearchParent(workingDir, defaultDataDirectory); ok {
 			c.Options.DataDirectory = path
 		} else {
 			c.Options.DataDirectory = filepath.Join(workingDir, defaultDataDirectory)
 		}
 	}
-	// explicit dataDir flag always takes precedence
-	if dataDir != "" {
-		c.Options.DataDirectory = dataDir
-	}
 	if c.Providers == nil {
 		c.Providers = csync.NewMap[string, ProviderConfig]()
 	}