diff --git a/.changeset/node-sdk-config-file-env-path.md b/.changeset/node-sdk-config-file-env-path.md
new file mode 100644
index 00000000..09269542
--- /dev/null
+++ b/.changeset/node-sdk-config-file-env-path.md
@@ -0,0 +1,5 @@
+---
+"@reflag/node-sdk": patch
+---
+
+Fix `REFLAG_CONFIG_FILE` handling so the SDK loads the config file from the path provided by the environment variable.
diff --git a/packages/node-sdk/src/client.ts b/packages/node-sdk/src/client.ts
index 89735ba2..1bcfbe71 100644
--- a/packages/node-sdk/src/client.ts
+++ b/packages/node-sdk/src/client.ts
@@ -387,12 +387,18 @@ export class ReflagClient {
       "flagsPushUrl must be a non-empty string",
     );
 
+    const envConfigFile =
+      typeof process.env.REFLAG_CONFIG_FILE === "string" &&
+      process.env.REFLAG_CONFIG_FILE.length > 0
+        ? process.env.REFLAG_CONFIG_FILE
+        : undefined;
+
     if (!options.configFile) {
       options.configFile =
-        (process.env.REFLAG_CONFIG_FILE ??
-        fs.existsSync(reflagConfigDefaultFile))
+        envConfigFile ??
+        (fs.existsSync(reflagConfigDefaultFile)
           ? reflagConfigDefaultFile
-          : undefined;
+          : undefined);
     }
 
     const externalConfig = loadConfig(options.configFile);
diff --git a/packages/node-sdk/test/client.test.ts b/packages/node-sdk/test/client.test.ts
index e2cf65cb..98ab44fc 100644
--- a/packages/node-sdk/test/client.test.ts
+++ b/packages/node-sdk/test/client.test.ts
@@ -1,3 +1,7 @@
+import { mkdtempSync, rmSync, writeFileSync } from "fs";
+import os from "os";
+import path from "path";
+
 import flushPromises from "flush-promises";
 import {
   afterEach,
@@ -261,6 +265,36 @@ describe("ReflagClient", () => {
       });
     });
 
+    it("should use the REFLAG_CONFIG_FILE path when set", () => {
+      const tempDir = mkdtempSync(path.join(os.tmpdir(), "reflag-node-sdk-"));
+      const originalConfigFile = process.env.REFLAG_CONFIG_FILE;
+      const customConfigFile = path.join(tempDir, "custom.reflag.config.json");
+
+      writeFileSync(
+        customConfigFile,
+        JSON.stringify({ apiBaseUrl: "https://custom-config.example/" }),
+      );
+
+      process.env.REFLAG_CONFIG_FILE = customConfigFile;
+
+      try {
+        const client = new ReflagClient({
+          offline: true,
+        });
+
+        expect(client["_config"].apiBaseUrl).toBe(
+          "https://custom-config.example/",
+        );
+      } finally {
+        if (originalConfigFile === undefined) {
+          delete process.env.REFLAG_CONFIG_FILE;
+        } else {
+          process.env.REFLAG_CONFIG_FILE = originalConfigFile;
+        }
+        rmSync(tempDir, { recursive: true, force: true });
+      }
+    });
+
     it("should create a client instance with valid options", () => {
       const client = new ReflagClient(validOptions);