diff --git a/.gitignore b/.gitignore
index 7f106e9..4aa601a 100644
--- a/.gitignore
+++ b/.gitignore
@@ -1,4 +1,5 @@
 node_modules/
 build/
 *.log
-.env*
\ No newline at end of file
+.env*
+.kiro
\ No newline at end of file
diff --git a/README.md b/README.md
index 7b673d5..f127066 100644
--- a/README.md
+++ b/README.md
@@ -122,6 +122,49 @@ Or use NPX to not have to install it locally (recommended for macos):
   }
 }
 ```
+In case the MCP Client is not able to parse the Perplexity API Key from the
+environment using methods like `"${env:PERPLEXITY_API_KEY}"` common in modern
+AI Coding Agents (e.g. Kiro), there are two fallback solutions:
+
+**Command-Line Argument**: Pass the API key directly as a command-line argument, and you can even try to see whether "${env:PERPLEXITY_API_KEY}" works in there.
+
+```json
+{
+  "mcpServers": {
+    "perplexity": {
+      "command": "node",
+      "args": [
+        "/path/to/perplexity-server/build/index.js",
+        "--api-key",
+        "your_api_key_here"
+      ],
+      "disabled": false,
+      "autoApprove": []
+    }
+  }
+}
+```
+
+**Read an explicit `.env` File**: specify the location of the project `.env` file with the environment variables and API keys for your current project with the `--cwd` command-line argument, and the MCP Server will read the `.env` file from the directory finding the Perplexity API Key from there.
+
+```json
+{
+  "mcpServers": {
+    "perplexity": {
+      "command": "node",
+      "args": [
+        "/path/to/perplexity-server/build/index.js",
+        "--cwd",
+        "/path/to/your/project"
+      ],
+      "disabled": false,
+      "autoApprove": []
+    }
+  }
+}
+```
+**Priority Order**: Command-line argument > Environment variable > .env file with `--cwd` (path needed)
+
 ## Star History
 
 [![Star History Chart](https://api.star-history.com/svg?repos=DaInfernalCoder/perplexity-mcp&type=Timeline)](https://www.star-history.com/#DaInfernalCoder/perplexity-mcp&Timeline)
diff --git a/package-lock.json b/package-lock.json
index 7d27364..439388d 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -11,15 +11,19 @@
       "dependencies": {
         "@modelcontextprotocol/sdk": "0.6.0",
         "axios": "^1.7.9",
-        "better-sqlite3": "^11.8.1"
+        "dotenv": "^17.2.3",
+        "minimist": "^1.2.8"
       },
       "bin": {
         "perplexity-mcp": "build/index.js"
       },
       "devDependencies": {
-        "@types/better-sqlite3": "^7.6.12",
-        "@types/node": "^20.11.24",
+        "@types/minimist": "^1.2.5",
+        "@types/node": "^20.19.19",
         "typescript": "^5.3.3"
+      },
+      "engines": {
+        "node": ">=18.0.0"
       }
     },
     "node_modules/@modelcontextprotocol/sdk": {
@@ -33,24 +37,21 @@
         "zod": "^3.23.8"
       }
     },
-    "node_modules/@types/better-sqlite3": {
-      "version": "7.6.12",
-      "resolved": "https://registry.npmjs.org/@types/better-sqlite3/-/better-sqlite3-7.6.12.tgz",
-      "integrity": "sha512-fnQmj8lELIj7BSrZQAdBMHEHX8OZLYIHXqAKT1O7tDfLxaINzf00PMjw22r3N/xXh0w/sGHlO6SVaCQ2mj78lg==",
+    "node_modules/@types/minimist": {
+      "version": "1.2.5",
+      "resolved": "https://registry.npmjs.org/@types/minimist/-/minimist-1.2.5.tgz",
+      "integrity": "sha512-hov8bUuiLiyFPGyFPE1lwWhmzYbirOXQNNo40+y3zow8aFVTeyn3VWL0VFFfdNddA8S4Vf0Tc062rzyNr7Paag==",
       "dev": true,
-      "license": "MIT",
-      "dependencies": {
-        "@types/node": "*"
-      }
+      "license": "MIT"
     },
     "node_modules/@types/node": {
-      "version": "20.17.14",
-      "resolved": "https://registry.npmjs.org/@types/node/-/node-20.17.14.tgz",
-      "integrity": "sha512-w6qdYetNL5KRBiSClK/KWai+2IMEJuAj+EujKCumalFOwXtvOXaEan9AuwcRID2IcOIAWSIfR495hBtgKlx2zg==",
+      "version": "20.19.19",
+      "resolved": "https://registry.npmjs.org/@types/node/-/node-20.19.19.tgz",
+      "integrity": "sha512-pb1Uqj5WJP7wrcbLU7Ru4QtA0+3kAXrkutGiD26wUKzSMgNNaPARTUDQmElUXp64kh3cWdou3Q0C7qwwxqSFmg==",
       "dev": true,
       "license": "MIT",
       "dependencies": {
-        "undici-types": "~6.19.2"
+        "undici-types": "~6.21.0"
       }
     },
     "node_modules/asynckit": {
@@ -70,81 +71,6 @@
         "proxy-from-env": "^1.1.0"
       }
     },
-    "node_modules/base64-js": {
-      "version": "1.5.1",
-      "resolved": "https://registry.npmjs.org/base64-js/-/base64-js-1.5.1.tgz",
-      "integrity": "sha512-AKpaYlHn8t4SVbOHCy+b5+KKgvR4vrsD8vbvrbiQJps7fKDTkjkDry6ji0rUJjC0kzbNePLwzxq8iypo41qeWA==",
-      "funding": [
-        {
-          "type": "github",
-          "url": "https://github.com/sponsors/feross"
-        },
-        {
-          "type": "patreon",
-          "url": "https://www.patreon.com/feross"
-        },
-        {
-          "type": "consulting",
-          "url": "https://feross.org/support"
-        }
-      ],
-      "license": "MIT"
-    },
-    "node_modules/better-sqlite3": {
-      "version": "11.8.1",
-      "resolved": "https://registry.npmjs.org/better-sqlite3/-/better-sqlite3-11.8.1.tgz",
-      "integrity": "sha512-9BxNaBkblMjhJW8sMRZxnxVTRgbRmssZW0Oxc1MPBTfiR+WW21e2Mk4qu8CzrcZb1LwPCnFsfDEzq+SNcBU8eg==",
-      "hasInstallScript": true,
-      "license": "MIT",
-      "dependencies": {
-        "bindings": "^1.5.0",
-        "prebuild-install": "^7.1.1"
-      }
-    },
-    "node_modules/bindings": {
-      "version": "1.5.0",
-      "resolved": "https://registry.npmjs.org/bindings/-/bindings-1.5.0.tgz",
-      "integrity": "sha512-p2q/t/mhvuOj/UeLlV6566GD/guowlr0hHxClI0W9m7MWYkL1F0hLo+0Aexs9HSPCtR1SXQ0TD3MMKrXZajbiQ==",
-      "license": "MIT",
-      "dependencies": {
-        "file-uri-to-path": "1.0.0"
-      }
-    },
-    "node_modules/bl": {
-      "version": "4.1.0",
-      "resolved": "https://registry.npmjs.org/bl/-/bl-4.1.0.tgz",
-      "integrity": "sha512-1W07cM9gS6DcLperZfFSj+bWLtaPGSOHWhPiGzXmvVJbRLdG82sH/Kn8EtW1VqWVA54AKf2h5k5BbnIbwF3h6w==",
-      "license": "MIT",
-      "dependencies": {
-        "buffer": "^5.5.0",
-        "inherits": "^2.0.4",
-        "readable-stream": "^3.4.0"
-      }
-    },
-    "node_modules/buffer": {
-      "version": "5.7.1",
-      "resolved": "https://registry.npmjs.org/buffer/-/buffer-5.7.1.tgz",
-      "integrity": "sha512-EHcyIPBQ4BSGlvjB16k5KgAJ27CIsHY/2JBmCRReo48y9rQ3MaUzWX3KVlBa4U7MyX02HdVj0K7C3WaB3ju7FQ==",
-      "funding": [
-        {
-          "type": "github",
-          "url": "https://github.com/sponsors/feross"
-        },
-        {
-          "type": "patreon",
-          "url": "https://www.patreon.com/feross"
-        },
-        {
-          "type": "consulting",
-          "url": "https://feross.org/support"
-        }
-      ],
-      "license": "MIT",
-      "dependencies": {
-        "base64-js": "^1.3.1",
-        "ieee754": "^1.1.13"
-      }
-    },
     "node_modules/bytes": {
       "version": "3.1.2",
       "resolved": "https://registry.npmjs.org/bytes/-/bytes-3.1.2.tgz",
@@ -154,12 +80,6 @@
         "node": ">= 0.8"
       }
     },
-    "node_modules/chownr": {
-      "version": "1.1.4",
-      "resolved": "https://registry.npmjs.org/chownr/-/chownr-1.1.4.tgz",
-      "integrity": "sha512-jJ0bqzaylmJtVnNgzTeSOs8DPavpbYgEr/b0YL8/2GO3xJEhInFmhKMUnEJQjZumK7KXGFhUy89PrsJWlakBVg==",
-      "license": "ISC"
-    },
     "node_modules/combined-stream": {
       "version": "1.0.8",
       "resolved": "https://registry.npmjs.org/combined-stream/-/combined-stream-1.0.8.tgz",
@@ -181,30 +101,6 @@
         "node": ">= 0.6"
       }
     },
-    "node_modules/decompress-response": {
-      "version": "6.0.0",
-      "resolved": "https://registry.npmjs.org/decompress-response/-/decompress-response-6.0.0.tgz",
-      "integrity": "sha512-aW35yZM6Bb/4oJlZncMH2LCoZtJXTRxES17vE3hoRiowU2kWHaJKFkSBDnDR+cm9J+9QhXmREyIfv0pji9ejCQ==",
-      "license": "MIT",
-      "dependencies": {
-        "mimic-response": "^3.1.0"
-      },
-      "engines": {
-        "node": ">=10"
-      },
-      "funding": {
-        "url": "https://github.com/sponsors/sindresorhus"
-      }
-    },
-    "node_modules/deep-extend": {
-      "version": "0.6.0",
-      "resolved": "https://registry.npmjs.org/deep-extend/-/deep-extend-0.6.0.tgz",
-      "integrity": "sha512-LOHxIOaPYdHlJRtCQfDIVZtfw/ufM8+rVj649RIHzcm/vGwQRXFt6OPqIFWsm2XEMrNIEtWR64sY1LEKD2vAOA==",
-      "license": "MIT",
-      "engines": {
-        "node": ">=4.0.0"
-      }
-    },
     "node_modules/delayed-stream": {
       "version": "1.0.0",
       "resolved": "https://registry.npmjs.org/delayed-stream/-/delayed-stream-1.0.0.tgz",
@@ -223,39 +119,18 @@
         "node": ">= 0.8"
       }
     },
-    "node_modules/detect-libc": {
-      "version": "2.0.3",
-      "resolved": "https://registry.npmjs.org/detect-libc/-/detect-libc-2.0.3.tgz",
-      "integrity": "sha512-bwy0MGW55bG41VqxxypOsdSdGqLwXPI/focwgTYCFMbdUiBAxLg9CFzG08sz2aqzknwiX7Hkl0bQENjg8iLByw==",
-      "license": "Apache-2.0",
-      "engines": {
-        "node": ">=8"
-      }
-    },
-    "node_modules/end-of-stream": {
-      "version": "1.4.4",
-      "resolved": "https://registry.npmjs.org/end-of-stream/-/end-of-stream-1.4.4.tgz",
-      "integrity": "sha512-+uw1inIHVPQoaVuHzRyXd21icM+cnt4CzD5rW+NC1wjOUSTOs+Te7FOv7AhN7vS9x/oIyhLP5PR1H+phQAHu5Q==",
-      "license": "MIT",
-      "dependencies": {
-        "once": "^1.4.0"
-      }
-    },
-    "node_modules/expand-template": {
-      "version": "2.0.3",
-      "resolved": "https://registry.npmjs.org/expand-template/-/expand-template-2.0.3.tgz",
-      "integrity": "sha512-XYfuKMvj4O35f/pOXLObndIRvyQ+/+6AhODh+OKWj9S9498pHHn/IMszH+gt0fBCRWMNfk1ZSp5x3AifmnI2vg==",
-      "license": "(MIT OR WTFPL)",
+    "node_modules/dotenv": {
+      "version": "17.2.3",
+      "resolved": "https://registry.npmjs.org/dotenv/-/dotenv-17.2.3.tgz",
+      "integrity": "sha512-JVUnt+DUIzu87TABbhPmNfVdBDt18BLOWjMUFJMSi/Qqg7NTYtabbvSNJGOJ7afbRuv9D/lngizHtP7QyLQ+9w==",
+      "license": "BSD-2-Clause",
       "engines": {
-        "node": ">=6"
+        "node": ">=12"
+      },
+      "funding": {
+        "url": "https://dotenvx.com"
       }
     },
-    "node_modules/file-uri-to-path": {
-      "version": "1.0.0",
-      "resolved": "https://registry.npmjs.org/file-uri-to-path/-/file-uri-to-path-1.0.0.tgz",
-      "integrity": "sha512-0Zt+s3L7Vf1biwWZ29aARiVYLx7iMGnEUl9x33fbB/j3jR81u/O2LbqK+Bm1CDSNDKVtJ/YjwY7TUd5SkeLQLw==",
-      "license": "MIT"
-    },
     "node_modules/follow-redirects": {
       "version": "1.15.9",
       "resolved": "https://registry.npmjs.org/follow-redirects/-/follow-redirects-1.15.9.tgz",
@@ -290,18 +165,6 @@
         "node": ">= 6"
       }
     },
-    "node_modules/fs-constants": {
-      "version": "1.0.0",
-      "resolved": "https://registry.npmjs.org/fs-constants/-/fs-constants-1.0.0.tgz",
-      "integrity": "sha512-y6OAwoSIf7FyjMIv94u+b5rdheZEjzR63GTyZJm5qh4Bi+2YgwLCcI/fPFZkL5PSixOt6ZNKm+w+Hfp/Bciwow==",
-      "license": "MIT"
-    },
-    "node_modules/github-from-package": {
-      "version": "0.0.0",
-      "resolved": "https://registry.npmjs.org/github-from-package/-/github-from-package-0.0.0.tgz",
-      "integrity": "sha512-SyHy3T1v2NUXn29OsWdxmK6RwHD+vkj3v8en8AOBZ1wBQ/hCAQ5bAQTD02kW4W9tUp/3Qh6J8r9EvntiyCmOOw==",
-      "license": "MIT"
-    },
     "node_modules/http-errors": {
       "version": "2.0.0",
       "resolved": "https://registry.npmjs.org/http-errors/-/http-errors-2.0.0.tgz",
@@ -330,38 +193,12 @@
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       }
     },
-    "node_modules/ieee754": {
-      "version": "1.2.1",
-      "resolved": "https://registry.npmjs.org/ieee754/-/ieee754-1.2.1.tgz",
-      "integrity": "sha512-dcyqhDvX1C46lXZcVqCpK+FtMRQVdIMN6/Df5js2zouUsqG7I6sFxitIC+7KYK29KdXOLHdu9zL4sFnoVQnqaA==",
-      "funding": [
-        {
-          "type": "github",
-          "url": "https://github.com/sponsors/feross"
-        },
-        {
-          "type": "patreon",
-          "url": "https://www.patreon.com/feross"
-        },
-        {
-          "type": "consulting",
-          "url": "https://feross.org/support"
-        }
-      ],
-      "license": "BSD-3-Clause"
-    },
     "node_modules/inherits": {
       "version": "2.0.4",
       "resolved": "https://registry.npmjs.org/inherits/-/inherits-2.0.4.tgz",
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       "license": "ISC"
     },
-    "node_modules/ini": {
-      "version": "1.3.8",
-      "resolved": "https://registry.npmjs.org/ini/-/ini-1.3.8.tgz",
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-      "license": "ISC"
-    },
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       "version": "1.52.0",
       "resolved": "https://registry.npmjs.org/mime-db/-/mime-db-1.52.0.tgz",
@@ -383,18 +220,6 @@
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     },
-    "node_modules/mimic-response": {
-      "version": "3.1.0",
-      "resolved": "https://registry.npmjs.org/mimic-response/-/mimic-response-3.1.0.tgz",
-      "integrity": "sha512-z0yWI+4FDrrweS8Zmt4Ej5HdJmky15+L2e6Wgn3+iK5fWzb6T3fhNFq2+MeTRb064c6Wr4N/wv0DzQTjNzHNGQ==",
-      "license": "MIT",
-      "engines": {
-        "node": ">=10"
-      },
-      "funding": {
-        "url": "https://github.com/sponsors/sindresorhus"
-      }
-    },
     "node_modules/minimist": {
       "version": "1.2.8",
       "resolved": "https://registry.npmjs.org/minimist/-/minimist-1.2.8.tgz",
@@ -404,81 +229,12 @@
         "url": "https://github.com/sponsors/ljharb"
       }
     },
-    "node_modules/mkdirp-classic": {
-      "version": "0.5.3",
-      "resolved": "https://registry.npmjs.org/mkdirp-classic/-/mkdirp-classic-0.5.3.tgz",
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-    },
-    "node_modules/napi-build-utils": {
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-      },
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-      "dependencies": {
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-        "node-abi": "^3.3.0",
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-        "rc": "^1.2.7",
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-        "prebuild-install": "bin.js"
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-      "engines": {
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-      "license": "MIT",
-      "dependencies": {
-        "inherits": "^2.0.3",
-        "string_decoder": "^1.1.1",
-        "util-deprecate": "^1.0.1"
-      },
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-    "node_modules/safe-buffer": {
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-      "funding": [
-        {
-          "type": "github",
-          "url": "https://github.com/sponsors/feross"
-        },
-        {
-          "type": "patreon",
-          "url": "https://www.patreon.com/feross"
-        },
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-          "type": "consulting",
-          "url": "https://feross.org/support"
-        }
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-      "license": "MIT"
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       "version": "2.1.2",
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       "license": "MIT"
     },
-    "node_modules/semver": {
-      "version": "7.7.1",
-      "resolved": "https://registry.npmjs.org/semver/-/semver-7.7.1.tgz",
-      "integrity": "sha512-hlq8tAfn0m/61p4BVRcPzIGr6LKiMwo4VM6dGi6pt4qcRkmNzTcWq6eCEjEh+qXjkMDvPlOFFSGwQjoEa6gyMA==",
-      "license": "ISC",
-      "bin": {
-        "semver": "bin/semver.js"
-      },
-      "engines": {
-        "node": ">=10"
-      }
-    },
     "node_modules/setprototypeof": {
       "version": "1.2.0",
       "resolved": "https://registry.npmjs.org/setprototypeof/-/setprototypeof-1.2.0.tgz",
       "integrity": "sha512-E5LDX7Wrp85Kil5bhZv46j8jOeboKq5JMmYM3gVGdGH8xFpPWXUMsNrlODCrkoxMEeNi/XZIwuRvY4XNwYMJpw==",
       "license": "ISC"
     },
-    "node_modules/simple-concat": {
-      "version": "1.0.1",
-      "resolved": "https://registry.npmjs.org/simple-concat/-/simple-concat-1.0.1.tgz",
-      "integrity": "sha512-cSFtAPtRhljv69IK0hTVZQ+OfE9nePi/rtJmw5UjHeVyVroEqJXP1sFztKUy1qU+xvz3u/sfYJLa947b7nAN2Q==",
-      "funding": [
-        {
-          "type": "github",
-          "url": "https://github.com/sponsors/feross"
-        },
-        {
-          "type": "patreon",
-          "url": "https://www.patreon.com/feross"
-        },
-        {
-          "type": "consulting",
-          "url": "https://feross.org/support"
-        }
-      ],
-      "license": "MIT"
-    },
-    "node_modules/simple-get": {
-      "version": "4.0.1",
-      "resolved": "https://registry.npmjs.org/simple-get/-/simple-get-4.0.1.tgz",
-      "integrity": "sha512-brv7p5WgH0jmQJr1ZDDfKDOSeWWg+OVypG99A/5vYGPqJ6pxiaHLy8nxtFjBA7oMa01ebA9gfh1uMCFqOuXxvA==",
-      "funding": [
-        {
-          "type": "github",
-          "url": "https://github.com/sponsors/feross"
-        },
-        {
-          "type": "patreon",
-          "url": "https://www.patreon.com/feross"
-        },
-        {
-          "type": "consulting",
-          "url": "https://feross.org/support"
-        }
-      ],
-      "license": "MIT",
-      "dependencies": {
-        "decompress-response": "^6.0.0",
-        "once": "^1.3.1",
-        "simple-concat": "^1.0.0"
-      }
-    },
     "node_modules/statuses": {
       "version": "2.0.1",
       "resolved": "https://registry.npmjs.org/statuses/-/statuses-2.0.1.tgz",
@@ -621,52 +271,6 @@
         "node": ">= 0.8"
       }
     },
-    "node_modules/string_decoder": {
-      "version": "1.3.0",
-      "resolved": "https://registry.npmjs.org/string_decoder/-/string_decoder-1.3.0.tgz",
-      "integrity": "sha512-hkRX8U1WjJFd8LsDJ2yQ/wWWxaopEsABU1XfkM8A+j0+85JAGppt16cr1Whg6KIbb4okU6Mql6BOj+uup/wKeA==",
-      "license": "MIT",
-      "dependencies": {
-        "safe-buffer": "~5.2.0"
-      }
-    },
-    "node_modules/strip-json-comments": {
-      "version": "2.0.1",
-      "resolved": "https://registry.npmjs.org/strip-json-comments/-/strip-json-comments-2.0.1.tgz",
-      "integrity": "sha512-4gB8na07fecVVkOI6Rs4e7T6NOTki5EmL7TUduTs6bu3EdnSycntVJ4re8kgZA+wx9IueI2Y11bfbgwtzuE0KQ==",
-      "license": "MIT",
-      "engines": {
-        "node": ">=0.10.0"
-      }
-    },
-    "node_modules/tar-fs": {
-      "version": "2.1.2",
-      "resolved": "https://registry.npmjs.org/tar-fs/-/tar-fs-2.1.2.tgz",
-      "integrity": "sha512-EsaAXwxmx8UB7FRKqeozqEPop69DXcmYwTQwXvyAPF352HJsPdkVhvTaDPYqfNgruveJIJy3TA2l+2zj8LJIJA==",
-      "license": "MIT",
-      "dependencies": {
-        "chownr": "^1.1.1",
-        "mkdirp-classic": "^0.5.2",
-        "pump": "^3.0.0",
-        "tar-stream": "^2.1.4"
-      }
-    },
-    "node_modules/tar-stream": {
-      "version": "2.2.0",
-      "resolved": "https://registry.npmjs.org/tar-stream/-/tar-stream-2.2.0.tgz",
-      "integrity": "sha512-ujeqbceABgwMZxEJnk2HDY2DlnUZ+9oEcb1KzTVfYHio0UE6dG71n60d8D2I4qNvleWrrXpmjpt7vZeF1LnMZQ==",
-      "license": "MIT",
-      "dependencies": {
-        "bl": "^4.0.3",
-        "end-of-stream": "^1.4.1",
-        "fs-constants": "^1.0.0",
-        "inherits": "^2.0.3",
-        "readable-stream": "^3.1.1"
-      },
-      "engines": {
-        "node": ">=6"
-      }
-    },
     "node_modules/toidentifier": {
       "version": "1.0.1",
       "resolved": "https://registry.npmjs.org/toidentifier/-/toidentifier-1.0.1.tgz",
@@ -676,18 +280,6 @@
         "node": ">=0.6"
       }
     },
-    "node_modules/tunnel-agent": {
-      "version": "0.6.0",
-      "resolved": "https://registry.npmjs.org/tunnel-agent/-/tunnel-agent-0.6.0.tgz",
-      "integrity": "sha512-McnNiV1l8RYeY8tBgEpuodCC1mLUdbSN+CYBL7kJsJNInOP8UjDDEwdk6Mw60vdLLrr5NHKZhMAOSrR2NZuQ+w==",
-      "license": "Apache-2.0",
-      "dependencies": {
-        "safe-buffer": "^5.0.1"
-      },
-      "engines": {
-        "node": "*"
-      }
-    },
     "node_modules/typescript": {
       "version": "5.7.3",
       "resolved": "https://registry.npmjs.org/typescript/-/typescript-5.7.3.tgz",
@@ -703,9 +295,9 @@
       }
     },
     "node_modules/undici-types": {
-      "version": "6.19.8",
-      "resolved": "https://registry.npmjs.org/undici-types/-/undici-types-6.19.8.tgz",
-      "integrity": "sha512-ve2KP6f/JnbPBFyobGHuerC9g1FYGn/F8n1LWTwNxCEzd6IfqTwUQcNXgEtmmQ6DlRrC1hrSrBnCZPokRrDHjw==",
+      "version": "6.21.0",
+      "resolved": "https://registry.npmjs.org/undici-types/-/undici-types-6.21.0.tgz",
+      "integrity": "sha512-iwDZqg0QAGrg9Rav5H4n0M64c3mkR59cJ6wQp+7C4nI0gsmExaedaYLNO44eT4AtBBwjbTiGPMlt2Md0T9H9JQ==",
       "dev": true,
       "license": "MIT"
     },
@@ -718,18 +310,6 @@
         "node": ">= 0.8"
       }
     },
-    "node_modules/util-deprecate": {
-      "version": "1.0.2",
-      "resolved": "https://registry.npmjs.org/util-deprecate/-/util-deprecate-1.0.2.tgz",
-      "integrity": "sha512-EPD5q1uXyFxJpCrLnCc1nHnq3gOa6DZBocAIiI2TaSCA7VCJ1UJDMagCzIkXNsUYfD1daK//LTEQ8xiIbrHtcw==",
-      "license": "MIT"
-    },
-    "node_modules/wrappy": {
-      "version": "1.0.2",
-      "resolved": "https://registry.npmjs.org/wrappy/-/wrappy-1.0.2.tgz",
-      "integrity": "sha512-l4Sp/DRseor9wL6EvV2+TuQn63dMkPjZ/sp9XkghTEbV9KlPS1xUsZ3u7/IQO4wxtcFB4bgpQPRcR3QCvezPcQ==",
-      "license": "ISC"
-    },
     "node_modules/zod": {
       "version": "3.24.1",
       "resolved": "https://registry.npmjs.org/zod/-/zod-3.24.1.tgz",
diff --git a/package.json b/package.json
index ee77597..7f2a345 100644
--- a/package.json
+++ b/package.json
@@ -19,10 +19,13 @@
   },
   "dependencies": {
     "@modelcontextprotocol/sdk": "0.6.0",
-    "axios": "^1.7.9"
+    "axios": "^1.7.9",
+    "dotenv": "^17.2.3",
+    "minimist": "^1.2.8"
   },
   "devDependencies": {
-    "@types/node": "^20.11.24",
+    "@types/minimist": "^1.2.5",
+    "@types/node": "^20.19.19",
     "typescript": "^5.3.3"
   },
   "keywords": [
diff --git a/src/index.ts b/src/index.ts
index 867ca4d..cf79574 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -9,15 +9,123 @@ import {
   ErrorCode,
 } from "@modelcontextprotocol/sdk/types.js";
 import axios from "axios";
-import { existsSync, mkdirSync } from "fs";
-import { dirname, join } from "path";
-import { homedir } from "os";
+import minimist from "minimist";
+import * as fs from "fs";
+import * as path from "path";
 
-const PERPLEXITY_API_KEY = process.env.PERPLEXITY_API_KEY;
-if (!PERPLEXITY_API_KEY) {
-  throw new Error("PERPLEXITY_API_KEY environment variable is required");
+// Parse command-line arguments
+const args = minimist(process.argv.slice(2), {
+  string: ['api-key', 'cwd'],
+  alias: {
+    'api-key': 'apiKey'
+  }
+});
+
+// Extracts PERPLEXITY_API_KEY from an .env file content
+function extractApiKey(content: string): string | null {
+  const lines = content.split('\n');
+
+  for (const line of lines) {
+    const trimmed = line.trim();
+
+    // Skip empty lines and comments
+    if (!trimmed || trimmed.startsWith('#')) {
+      continue;
+    }
+
+    // Look specifically for PERPLEXITY_API_KEY
+    if (trimmed.startsWith('PERPLEXITY_API_KEY=')) {
+      const value = trimmed.substring('PERPLEXITY_API_KEY='.length).trim();
+
+      // Remove surrounding quotes if present
+      let clean = value;
+      if ((clean.startsWith('"') && clean.endsWith('"')) ||
+        (clean.startsWith("'") && clean.endsWith("'"))) {
+        clean = clean.slice(1, -1);
+      }
+
+      if (clean && clean.length > 0) {
+        return clean;
+      }
+    }
+  }
+
+  return null;
+}
+
+// Read .env file from specified directory and extract PERPLEXITY_API_KEY.
+// Returns null if file does not exist or does not contain PERPLEXITY_API_KEY.
+function readEnvFile(dir: string): string | null {
+  const envPath = path.join(dir, '.env');
+
+  if (!fs.existsSync(envPath)) {
+    return null;
+  }
+
+  try {
+    const content = fs.readFileSync(envPath, 'utf8');
+    return extractApiKey(content);
+  } catch (error) {
+    return null;
+  }
 }
 
+/**
+ * Resolves API key using simple three-step logic. Priority:
+ * 1. Command-line argument (--api-key),
+ * 2. Environment variable (PERPLEXITY_API_KEY),
+ * 3. .env file with --cwd (fallback option)
+ */
+function getApiKey(): string {
+  // 1. Command-line argument (highest priority)
+  if (args['api-key']) {
+    sanitizeArgs();
+    return args['api-key'];
+  }
+
+  // 2. Environment variable
+  if (process.env.PERPLEXITY_API_KEY) {
+    return process.env.PERPLEXITY_API_KEY;
+  }
+
+  // 3. .env file (with --cwd PROJECT_DIR specified)
+  if (args.cwd) {
+    const key = readEnvFile(args.cwd);
+    if (key) return key;
+  }
+
+  // Error if none found
+  throw new Error(`
+Perplexity API key is required. Please provide it using one of these three methods (in priority order):
+
+1. Environment variable (PREFERRED): PERPLEXITY_API_KEY=your-api-key
+2. Command-line argument: --api-key your-api-key  
+3. .env file with --cwd: Create .env file with PERPLEXITY_API_KEY=your-api-key and specify directory
+
+Examples:
+• Environment variable: export PERPLEXITY_API_KEY="your-key-here" && npx perplexity-mcp
+• Command-line: npx perplexity-mcp --api-key "your-key-here"
+• .env file: npx perplexity-mcp --cwd /path/to/project
+
+The environment variable method is preferred and most secure for production use.
+Note: Automatic .env file discovery has been removed - you must use --cwd to specify the directory.
+  `.trim());
+}
+
+// Overwrites API key arguments in process.argv to minimize exposure in process list
+// This reduces the window where the API key is visible to other processes
+function sanitizeArgs(): void {
+  for (let i = 0; i < process.argv.length; i++) {
+    if (process.argv[i] === '--api-key' && i + 1 < process.argv.length) {
+      process.argv[i + 1] = '***REDACTED***';
+    } else if (process.argv[i].startsWith('--api-key=')) {
+      process.argv[i] = '--api-key=***REDACTED***';
+    }
+  }
+}
+
+const PERPLEXITY_API_KEY = getApiKey();
+
 class PerplexityServer {
   private server: Server;
   private axiosInstance;
@@ -44,7 +152,7 @@ class PerplexityServer {
     });
 
     this.setupToolHandlers();
-    
+
     // Error handling
     this.server.onerror = (error) => console.error("[MCP Error]", error);
     process.on("SIGINT", async () => {
@@ -63,7 +171,7 @@ class PerplexityServer {
       "comprehensive", "detailed", "in-depth", "thorough",
       "compare and contrast", "evaluate", "assess"
     ];
-    
+
     // Check for complex reasoning indicators
     const complexIndicators = [
       "how", "why", "what if", "explain", "solve", "steps to",
@@ -199,9 +307,9 @@ class PerplexityServer {
           case "deep_research": {
             model = "sonar-deep-research";
             const { focus_areas = [] } = request.params.arguments as { focus_areas?: string[] };
-            
+
             prompt = `Conduct comprehensive research on: ${query}`;
-            
+
             if (focus_areas.length > 0) {
               prompt += `\n\nFocus areas:\n${focus_areas.map((area, i) => `${i + 1}. ${area}`).join('\n')}`;
             }
@@ -236,8 +344,8 @@ class PerplexityServer {
         // these are referred to in the return text as numbered citations e.g. [1]
         const sourcesText = response.data.citations
           ? `\n\n## Sources\nPlease keep the numbered citations inline.\n${response.data.citations
-              .map((c: string, i: number) => `${i + 1}: ${c}`)
-              .join("\n")}`
+            .map((c: string, i: number) => `${i + 1}: ${c}`)
+            .join("\n")}`
           : "";
 
         return {