diff --git a/crates/config/Cargo.toml b/crates/config/Cargo.toml
index edb1c06..8855b88 100644
--- a/crates/config/Cargo.toml
+++ b/crates/config/Cargo.toml
@@ -7,7 +7,6 @@ rust-version.workspace = true
 
 [dependencies]
 serde = { version = "1", features = ["derive"] }
-serde_json = "1"
 directories = "5"
 figment = { version = "0.10", features = ["toml", "env"] }
-toml = "0.8"
+tempfile = "3.23.0"
diff --git a/crates/config/src/lib.rs b/crates/config/src/lib.rs
index 299d03e..aed4988 100644
--- a/crates/config/src/lib.rs
+++ b/crates/config/src/lib.rs
@@ -37,8 +37,7 @@ impl Default for Settings {
 }
 
 pub fn load_settings(project_root: Option<&str>) -> Result<Settings, figment::Error> {
-    let mut fig = Figment::from(Serialized::defaults(Settings::default()))
-        .merge(Env::prefixed("CODE_").split("__"));
+    let mut fig = Figment::from(Serialized::defaults(Settings::default()));
 
     // User file: ~/.config/owlen/config.toml
     if let Some(pd) = ProjectDirs::from("dev", "owlibou", "owlen") {
@@ -51,5 +50,8 @@ pub fn load_settings(project_root: Option<&str>) -> Result<Settings, figment::Er
         fig = fig.merge(Toml::file(PathBuf::from(root).join(".owlen.toml")));
     }
 
+    // Environment variables have highest precedence
+    fig = fig.merge(Env::prefixed("OWLEN_").split("__"));
+
     fig.extract()
 }
diff --git a/crates/config/tests/precedence.rs b/crates/config/tests/precedence.rs
new file mode 100644
index 0000000..6857b2f
--- /dev/null
+++ b/crates/config/tests/precedence.rs
@@ -0,0 +1,19 @@
+use config_agent::{load_settings, Settings};
+use std::{env, fs};
+
+#[test]
+fn precedence_env_overrides_files() {
+    let tmp = tempfile::tempdir().unwrap();
+    let project_file = tmp.path().join(".owlen.toml");
+    fs::write(&project_file, r#"model="local-model""#).unwrap();
+
+    unsafe { env::set_var("OWLEN_MODEL", "env-model"); }
+    let s = load_settings(Some(tmp.path().to_str().unwrap())).unwrap();
+    assert_eq!(s.model, "env-model");
+}
+
+#[test]
+fn default_mode_is_plan() {
+    let s = Settings::default();
+    assert_eq!(s.mode, "plan");
+}
\ No newline at end of file