diff --git a/apps/server/src/provider/Drivers/ClaudeHome.test.ts b/apps/server/src/provider/Drivers/ClaudeHome.test.ts
index 87298f80125..97a71fb6e89 100644
--- a/apps/server/src/provider/Drivers/ClaudeHome.test.ts
+++ b/apps/server/src/provider/Drivers/ClaudeHome.test.ts
@@ -31,7 +31,7 @@ it.layer(NodeServices.layer)("ClaudeHome", (it) => {
         const resolved = path.resolve(NodeOS.homedir(), ".claude-work");
 
         expect(yield* resolveClaudeHomePath({ homePath })).toBe(resolved);
-        expect((yield* makeClaudeEnvironment({ homePath })).HOME).toBe(resolved);
+        expect((yield* makeClaudeEnvironment({ homePath })).CLAUDE_CONFIG_DIR).toBe(resolved);
         expect(yield* makeClaudeContinuationGroupKey({ homePath })).toBe(`claude:home:${resolved}`);
         expect(yield* makeClaudeCapabilitiesCacheKey({ binaryPath: "claude", homePath })).toBe(
           `claude\0${resolved}`,
diff --git a/apps/server/src/provider/Drivers/ClaudeHome.ts b/apps/server/src/provider/Drivers/ClaudeHome.ts
index 65c74f9764a..f7d1ee539ac 100644
--- a/apps/server/src/provider/Drivers/ClaudeHome.ts
+++ b/apps/server/src/provider/Drivers/ClaudeHome.ts
@@ -24,7 +24,13 @@ export const makeClaudeEnvironment = Effect.fn("makeClaudeEnvironment")(function
   const resolvedHomePath = yield* resolveClaudeHomePath(config);
   return {
     ...resolvedBaseEnv,
-    HOME: resolvedHomePath,
+    // Isolate this instance's config via CLAUDE_CONFIG_DIR rather than HOME.
+    // Overriding HOME also relocates the macOS login keychain lookup
+    // ($HOME/Library/Keychains), so the spawned CLI can't find its stored
+    // OAuth credentials and reports "Not logged in". CLAUDE_CONFIG_DIR points
+    // Claude Code at its config dir directly while leaving HOME (and the
+    // keychain) intact.
+    CLAUDE_CONFIG_DIR: resolvedHomePath,
   };
 });
 
diff --git a/apps/server/src/provider/Layers/ClaudeAdapter.test.ts b/apps/server/src/provider/Layers/ClaudeAdapter.test.ts
index 191bf8e27db..17aeff2d0e3 100644
--- a/apps/server/src/provider/Layers/ClaudeAdapter.test.ts
+++ b/apps/server/src/provider/Layers/ClaudeAdapter.test.ts
@@ -418,7 +418,7 @@ describe("ClaudeAdapterLive", () => {
     );
   });
 
-  it.effect("runs Claude SDK sessions with the configured Claude HOME", () => {
+  it.effect("runs Claude SDK sessions with the configured CLAUDE_CONFIG_DIR", () => {
     const harness = makeHarness({ claudeConfig: { homePath: "~/.claude-work" } });
     return Effect.gen(function* () {
       const adapter = yield* ClaudeAdapter;
@@ -433,7 +433,10 @@ describe("ClaudeAdapterLive", () => {
       });
 
       const createInput = harness.getLastCreateQueryInput();
-      assert.equal(createInput?.options.env?.HOME, NodePath.join(NodeOS.homedir(), ".claude-work"));
+      assert.equal(
+        createInput?.options.env?.CLAUDE_CONFIG_DIR,
+        NodePath.join(NodeOS.homedir(), ".claude-work"),
+      );
     }).pipe(
       Effect.provideService(Random.Random, makeDeterministicRandomService()),
       Effect.provide(harness.layer),
diff --git a/apps/server/src/provider/Layers/ProviderRegistry.test.ts b/apps/server/src/provider/Layers/ProviderRegistry.test.ts
index b3ab1145495..05b1db20aad 100644
--- a/apps/server/src/provider/Layers/ProviderRegistry.test.ts
+++ b/apps/server/src/provider/Layers/ProviderRegistry.test.ts
@@ -1719,8 +1719,8 @@ it.layer(Layer.mergeAll(NodeServices.layer, ServerSettingsModule.layerTest(), Te
         ),
       );
 
-      it.effect("runs Claude status probes with the configured Claude HOME", () => {
-        const claudeHome = "/tmp/t3code-claude-home";
+      it.effect("runs Claude status probes with the configured CLAUDE_CONFIG_DIR", () => {
+        const claudeConfigDir = "/tmp/t3code-claude-home";
         const recorded = recordingMockSpawnerLayer((args) => {
           const joined = args.join(" ");
           if (joined === "--version") return { stdout: "1.0.0\n", stderr: "", code: 0 };
@@ -1737,14 +1737,14 @@ it.layer(Layer.mergeAll(NodeServices.layer, ServerSettingsModule.layerTest(), Te
           const status = yield* checkClaudeProviderStatus(
             {
               ...defaultClaudeSettings,
-              homePath: claudeHome,
+              homePath: claudeConfigDir,
             },
             claudeCapabilities(),
           );
           assert.strictEqual(status.status, "ready");
           assert.deepStrictEqual(
-            recorded.commands.map((command) => command.env?.HOME),
-            [claudeHome],
+            recorded.commands.map((command) => command.env?.CLAUDE_CONFIG_DIR),
+            [claudeConfigDir],
           );
         }).pipe(Effect.provide(recorded.layer));
       });
diff --git a/apps/server/src/textGeneration/ClaudeTextGeneration.test.ts b/apps/server/src/textGeneration/ClaudeTextGeneration.test.ts
index c8fe4ead3be..0f3905a0cb1 100644
--- a/apps/server/src/textGeneration/ClaudeTextGeneration.test.ts
+++ b/apps/server/src/textGeneration/ClaudeTextGeneration.test.ts
@@ -51,8 +51,8 @@ function makeFakeClaudeBinary(dir: string) {
         "    exit 4",
         "  }",
         "fi",
-        'if [ -n "$T3_FAKE_CLAUDE_HOME_MUST_BE" ] && [ "$HOME" != "$T3_FAKE_CLAUDE_HOME_MUST_BE" ]; then',
-        '  printf "%s\\n" "HOME was $HOME" >&2',
+        'if [ -n "$T3_FAKE_CLAUDE_CONFIG_DIR_MUST_BE" ] && [ "$CLAUDE_CONFIG_DIR" != "$T3_FAKE_CLAUDE_CONFIG_DIR_MUST_BE" ]; then',
+        '  printf "%s\\n" "CLAUDE_CONFIG_DIR was $CLAUDE_CONFIG_DIR" >&2',
         "  exit 5",
         "fi",
         'if [ -n "$T3_FAKE_CLAUDE_STDERR" ]; then',
@@ -76,7 +76,7 @@ function withFakeClaudeEnv<A, E, R>(
     argsMustContain?: string;
     argsMustNotContain?: string;
     stdinMustContain?: string;
-    homeMustBe?: string;
+    configDirMustBe?: string;
     claudeConfig?: Partial<ClaudeSettings>;
   },
   effectFn: (textGeneration: TextGeneration.TextGeneration["Service"]) => Effect.Effect<A, E, R>,
@@ -92,7 +92,7 @@ function withFakeClaudeEnv<A, E, R>(
     const previousArgsMustContain = process.env.T3_FAKE_CLAUDE_ARGS_MUST_CONTAIN;
     const previousArgsMustNotContain = process.env.T3_FAKE_CLAUDE_ARGS_MUST_NOT_CONTAIN;
     const previousStdinMustContain = process.env.T3_FAKE_CLAUDE_STDIN_MUST_CONTAIN;
-    const previousHomeMustBe = process.env.T3_FAKE_CLAUDE_HOME_MUST_BE;
+    const previousConfigDirMustBe = process.env.T3_FAKE_CLAUDE_CONFIG_DIR_MUST_BE;
 
     yield* Effect.acquireRelease(
       Effect.sync(() => {
@@ -129,10 +129,10 @@ function withFakeClaudeEnv<A, E, R>(
           delete process.env.T3_FAKE_CLAUDE_STDIN_MUST_CONTAIN;
         }
 
-        if (input.homeMustBe !== undefined) {
-          process.env.T3_FAKE_CLAUDE_HOME_MUST_BE = input.homeMustBe;
+        if (input.configDirMustBe !== undefined) {
+          process.env.T3_FAKE_CLAUDE_CONFIG_DIR_MUST_BE = input.configDirMustBe;
         } else {
-          delete process.env.T3_FAKE_CLAUDE_HOME_MUST_BE;
+          delete process.env.T3_FAKE_CLAUDE_CONFIG_DIR_MUST_BE;
         }
       }),
       () =>
@@ -175,10 +175,10 @@ function withFakeClaudeEnv<A, E, R>(
             process.env.T3_FAKE_CLAUDE_STDIN_MUST_CONTAIN = previousStdinMustContain;
           }
 
-          if (previousHomeMustBe === undefined) {
-            delete process.env.T3_FAKE_CLAUDE_HOME_MUST_BE;
+          if (previousConfigDirMustBe === undefined) {
+            delete process.env.T3_FAKE_CLAUDE_CONFIG_DIR_MUST_BE;
           } else {
-            process.env.T3_FAKE_CLAUDE_HOME_MUST_BE = previousHomeMustBe;
+            process.env.T3_FAKE_CLAUDE_CONFIG_DIR_MUST_BE = previousConfigDirMustBe;
           }
         }),
     );
@@ -286,10 +286,10 @@ it.layer(ClaudeTextGenerationTestLayer)("ClaudeTextGeneration", (it) => {
     ),
   );
 
-  it.effect("runs Claude text generation with the configured Claude HOME", () =>
+  it.effect("runs Claude text generation with the configured CLAUDE_CONFIG_DIR", () =>
     Effect.gen(function* () {
       const path = yield* Path.Path;
-      const claudeHome = path.join(process.cwd(), ".claude-work-test");
+      const claudeConfigDir = path.join(process.cwd(), ".claude-work-test");
       return yield* withFakeClaudeEnv(
         {
           // @effect-diagnostics-next-line preferSchemaOverJson:off
@@ -298,8 +298,8 @@ it.layer(ClaudeTextGenerationTestLayer)("ClaudeTextGeneration", (it) => {
               title: "Use Claude home",
             },
           }),
-          homeMustBe: claudeHome,
-          claudeConfig: { homePath: claudeHome },
+          configDirMustBe: claudeConfigDir,
+          claudeConfig: { homePath: claudeConfigDir },
         },
         (textGeneration) =>
           Effect.gen(function* () {
diff --git a/packages/contracts/src/settings.ts b/packages/contracts/src/settings.ts
index 6ccd65533dd..773b4481844 100644
--- a/packages/contracts/src/settings.ts
+++ b/packages/contracts/src/settings.ts
@@ -218,10 +218,10 @@ export const ClaudeSettings = makeProviderSettingsSchema(
     homePath: TrimmedString.pipe(
       Schema.withDecodingDefault(Effect.succeed("")),
       Schema.annotateKey({
-        title: "Claude HOME path",
+        title: "CLAUDE_CONFIG_DIR path",
         description:
-          "Custom HOME used when running this Claude instance. Keeps .claude.json and .claude separate.",
-        providerSettingsForm: { placeholder: "~", clearWhenEmpty: "omit" },
+          "Custom Claude home and config directory. Keeps .claude.json and .claude separate.",
+        providerSettingsForm: { placeholder: "~/.claude", clearWhenEmpty: "omit" },
       }),
     ),
     customModels: Schema.Array(Schema.String).pipe(