diff --git a/src/commands/run.ts b/src/commands/run.ts
index 1b0c1dda8..f1e68413a 100644
--- a/src/commands/run.ts
+++ b/src/commands/run.ts
@@ -15,7 +15,7 @@
  */
 
 import { access, readFile, unlink, writeFile } from "node:fs/promises";
-import { resolve } from "node:path";
+import { dirname, resolve } from "node:path";
 
 import { AvmLoglevel, FluencePeer, KeyPair } from "@fluencelabs/fluence";
 import { callFunctionImpl } from "@fluencelabs/fluence/dist/internal/compilerSupport/v3impl/callFunction";
@@ -64,6 +64,8 @@ import { getRandomRelayAddr } from "../lib/multiaddr";
 import {
   ensureFluenceTmpAppServiceJsonPath,
   projectRootDirPromise,
+  recursivelyFindProjectRootDir,
+  setProjectRootDir,
 } from "../lib/paths";
 import { input, list } from "../lib/prompt";
 
@@ -156,8 +158,21 @@ export default class Run extends BaseCommand<typeof Run> {
     ...KEY_PAIR_FLAG,
   };
   async run(): Promise<void> {
+    const parseResult = await this.parse(Run);
+    const inputFlag = parseResult.flags[INPUT_FLAG_NAME];
+
+    if (typeof inputFlag === "string") {
+      const resolvedInputDirName = resolve(dirname(inputFlag));
+
+      const projectRootDir = await recursivelyFindProjectRootDir(
+        resolvedInputDirName
+      );
+
+      setProjectRootDir(projectRootDir);
+    }
+
     const { commandObj, flags, isInteractive, maybeFluenceConfig } =
-      await initCli(this, await this.parse(Run));
+      await initCli(this, parseResult);
 
     const logLevelAVM: AvmLoglevel | undefined = await resolveAVMLogLevel({
       commandObj: this,
diff --git a/src/lib/paths.ts b/src/lib/paths.ts
index 51d8b153f..6953eaf5d 100644
--- a/src/lib/paths.ts
+++ b/src/lib/paths.ts
@@ -128,10 +128,13 @@ export const ensureUserFluenceCargoDir = async (
 // cwd is cached in order for paths to be correct even if cwd changes during the
 // execution (e.g. Marince CLI has to change cwd in order to work correctly)
 const initialCwd = process.cwd();
-export let projectRootDirPromise = (async (): Promise<string> => {
+
+export const recursivelyFindProjectRootDir = async (
+  initialPath: string
+): Promise<string> => {
   const fluenceConfigPath = await recursivelyFindFile(
     FLUENCE_CONFIG_FILE_NAME,
-    initialCwd
+    initialPath
   );
 
   if (fluenceConfigPath === null) {
@@ -140,7 +143,11 @@ export let projectRootDirPromise = (async (): Promise<string> => {
 
   const newProjectRootDir = path.dirname(fluenceConfigPath);
   return newProjectRootDir;
-})().catch((error): never => {
+};
+
+export let projectRootDirPromise = recursivelyFindProjectRootDir(
+  initialCwd
+).catch((error): never => {
   throw error;
 });