diff --git a/apps/claude-trace/README.md b/apps/claude-trace/README.md
index c07ac93..9f8e84c 100644
--- a/apps/claude-trace/README.md
+++ b/apps/claude-trace/README.md
@@ -20,6 +20,12 @@ claude-trace --include-all-requests
 # Run Claude with specific arguments
 claude-trace --run-with chat --model sonnet-3.5
 
+# Use custom output directory (default: .claude-trace)
+claude-trace --output-dir /path/to/logs
+
+# Combine custom output directory with custom log name
+claude-trace --output-dir ~/my-traces --log my-session
+
 # Show help
 claude-trace --help
 
@@ -36,7 +42,7 @@ claude-trace --generate-html logs.jsonl --include-all-requests
 claude-trace --index
 ```
 
-Logs are saved to `.claude-trace/log-YYYY-MM-DD-HH-MM-SS.{jsonl,html}` in your current directory. The HTML file is self-contained and opens in any browser without needing a server.
+Logs are saved to `.claude-trace/log-YYYY-MM-DD-HH-MM-SS.{jsonl,html}` in your current directory (or the directory specified by `--output-dir`). The HTML file is self-contained and opens in any browser without needing a server.
 
 ## Request Filtering
 
diff --git a/apps/claude-trace/src/cli.ts b/apps/claude-trace/src/cli.ts
index ad13e33..59f8069 100644
--- a/apps/claude-trace/src/cli.ts
+++ b/apps/claude-trace/src/cli.ts
@@ -36,6 +36,7 @@ ${colors.yellow}OPTIONS:${colors.reset}
   --include-all-requests Include all requests made through fetch, otherwise only requests to v1/messages with more than 2 messages in the context
   --no-open          Don't open generated HTML file in browser
   --log              Specify custom log file base name (without extension)
+  --output-dir       Specify custom output directory (default: .claude-trace)
   --claude-path      Specify custom path to Claude binary
   --help, -h         Show this help message
 
@@ -92,9 +93,16 @@ ${colors.yellow}EXAMPLES:${colors.reset}
   # Use custom Claude binary path
   claude-trace --claude-path /usr/local/bin/claude
 
+  # Use custom output directory
+  claude-trace --output-dir /path/to/logs
+
+  # Combine custom output directory with custom log name
+  claude-trace --output-dir ~/my-traces --log my-session
+
 ${colors.yellow}OUTPUT:${colors.reset}
   Logs are saved to: ${colors.green}.claude-trace/log-YYYY-MM-DD-HH-MM-SS.{jsonl,html}${colors.reset}
   With --log NAME:   ${colors.green}.claude-trace/NAME.{jsonl,html}${colors.reset}
+  With --output-dir: ${colors.green}<output-dir>/log-YYYY-MM-DD-HH-MM-SS.{jsonl,html}${colors.reset}
 
 ${colors.yellow}MIGRATION:${colors.reset}
   This tool replaces Python-based claude-logger and claude-token.py scripts
@@ -234,6 +242,7 @@ async function runClaudeWithInterception(
 	openInBrowser: boolean = false,
 	customClaudePath?: string,
 	logBaseName?: string,
+	outputDir?: string,
 ): Promise<void> {
 	log("Claude Trace", "blue");
 	log("Starting Claude with traffic logging", "yellow");
@@ -258,6 +267,7 @@ async function runClaudeWithInterception(
 			CLAUDE_TRACE_INCLUDE_ALL_REQUESTS: includeAllRequests ? "true" : "false",
 			CLAUDE_TRACE_OPEN_BROWSER: openInBrowser ? "true" : "false",
 			...(logBaseName ? { CLAUDE_TRACE_LOG_NAME: logBaseName } : {}),
+			...(outputDir ? { CLAUDE_TRACE_OUTPUT_DIR: outputDir } : {}),
 		},
 		stdio: "inherit",
 		cwd: process.cwd(),
@@ -487,6 +497,13 @@ async function main(): Promise<void> {
 		logBaseName = claudeTraceArgs[logIndex + 1];
 	}
 
+	// Check for custom output directory
+	let outputDir: string | undefined;
+	const outputDirIndex = claudeTraceArgs.indexOf("--output-dir");
+	if (outputDirIndex !== -1 && claudeTraceArgs[outputDirIndex + 1]) {
+		outputDir = claudeTraceArgs[outputDirIndex + 1];
+	}
+
 	// Scenario 2: --extract-token
 	if (claudeTraceArgs.includes("--extract-token")) {
 		await extractToken(customClaudePath);
@@ -525,7 +542,7 @@ async function main(): Promise<void> {
 	}
 
 	// Scenario 1: No args (or claude with args) -> launch claude with interception
-	await runClaudeWithInterception(claudeArgs, includeAllRequests, openInBrowser, customClaudePath, logBaseName);
+	await runClaudeWithInterception(claudeArgs, includeAllRequests, openInBrowser, customClaudePath, logBaseName, outputDir);
 }
 
 main().catch((error) => {
diff --git a/apps/claude-trace/src/interceptor-loader.js b/apps/claude-trace/src/interceptor-loader.js
index 7e1f898..019609a 100644
--- a/apps/claude-trace/src/interceptor-loader.js
+++ b/apps/claude-trace/src/interceptor-loader.js
@@ -7,15 +7,21 @@ try {
 	const jsPath = path.join(__dirname, "interceptor.js");
 	const tsPath = path.join(__dirname, "interceptor.ts");
 
+	// Build config from environment variables
+	const config = {};
+	if (process.env.CLAUDE_TRACE_OUTPUT_DIR) {
+		config.logDirectory = process.env.CLAUDE_TRACE_OUTPUT_DIR;
+	}
+
 	if (fs.existsSync(jsPath)) {
 		// Use compiled JavaScript
 		const { initializeInterceptor } = require("./interceptor.js");
-		initializeInterceptor();
+		initializeInterceptor(config);
 	} else if (fs.existsSync(tsPath)) {
 		// Use TypeScript via tsx
 		require("tsx/cjs/api").register();
 		const { initializeInterceptor } = require("./interceptor.ts");
-		initializeInterceptor();
+		initializeInterceptor(config);
 	} else {
 		console.error("Could not find interceptor file");
 		process.exit(1);