diff --git a/NEWS.md b/NEWS.md
index 59888de6..2c3d9d65 100644
--- a/NEWS.md
+++ b/NEWS.md
@@ -1,5 +1,9 @@
 # btw (development version)
 
+## Bug fixes
+
+* `btw_tool_agent_subagent()` now correctly uses the options from your `btw.md` file when called directly rather than through `btw_client()` or `btw_app()` (#185).
+
 # btw 1.2.1
 
 ## Bug fixes
diff --git a/R/tool-agent-subagent.R b/R/tool-agent-subagent.R
index 1d31b298..d410f158 100644
--- a/R/tool-agent-subagent.R
+++ b/R/tool-agent-subagent.R
@@ -410,20 +410,35 @@ subagent_client <- function(
     ))
   }
 
+  # We may need to read btw.md directly to determine client settings
+  config <- NULL
+
   subagent_client_resolved <-
     client %||%
     getOption("btw.subagent.client") %||%
     getOption("btw.client")
 
+  if (is.null(subagent_client_resolved)) {
+    config <- read_btw_file()
+
+    subagent_client_resolved <-
+      config$options$btw.subagent.client %||%
+      btw_client_config(config = config, tools = FALSE)$client
+  }
+
   tools_default <-
     tools_default %||%
     getOption("btw.subagent.tools_default") %||%
-    getOption("btw.tools")
+    getOption("btw.tools") %||%
+    config$options$btw.subagent.tools_default %||%
+    config$tools
+
   tools_default <- subagent_disallow_recursion(tools_default)
 
   tools_allowed <-
     tools_allowed %||%
-    getOption("btw.subagent.tools_allowed")
+    getOption("btw.subagent.tools_allowed") %||%
+    config$options$btw.subagent.tools_allowed
   # Note: Don't filter subagent from tools_allowed here.
   # The allowed list should be used as-is for validation.
   # The final subagent_disallow_recursion() at the end handles the actual filtering.
diff --git a/tests/testthat/helpers.R b/tests/testthat/helpers.R
index 0c040aa9..c0b1e1d9 100644
--- a/tests/testthat/helpers.R
+++ b/tests/testthat/helpers.R
@@ -1,4 +1,11 @@
 use_latest_pandoc <- function(.envir = parent.frame()) {
+  has_internet <- asNamespace("testthat")[["has_internet"]]
+
+  if (!is.null(has_internet) && !has_internet("captive.apple.com")) {
+    # No internet, skip
+    return()
+  }
+
   if (!identical(Sys.getenv("NOT_CRAN"), "true")) {
     # On CRAN, don't attempt to do anything with pandoc
     return()
@@ -151,3 +158,15 @@ local_skip_pandoc_convert <- function(.env = caller_env()) {
     .env = .env
   )
 }
+
+local_btw_md <- function(project = NULL, user = NULL, .env = caller_env()) {
+  local_mocked_bindings(
+    find_btw_context_file = function(...) {
+      project
+    },
+    path_find_user = function(...) {
+      user
+    },
+    .env = .env
+  )
+}
diff --git a/tests/testthat/test-tool-agent-subagent.R b/tests/testthat/test-tool-agent-subagent.R
index 0eefd4cd..dd593f0a 100644
--- a/tests/testthat/test-tool-agent-subagent.R
+++ b/tests/testthat/test-tool-agent-subagent.R
@@ -62,6 +62,37 @@ test_that("subagent_client() clones clients from options", {
   expect_false(identical(chat1, chat_obj))
 })
 
+test_that("subagent_client() consults btw.md if options are unset", {
+  # i.e. btw_tool_agent_subagent() uses btw.md settings when called directly
+  tmp_btw_md <- withr::local_tempfile(
+    lines = c(
+      "---",
+      "options:",
+      "  subagent:",
+      "    client: openrouter/super-cool-model",
+      "    tools_allowed: docs",
+      "    tools_default: docs_help_page",
+      "---"
+    )
+  )
+
+  local_btw_md(project = tmp_btw_md)
+
+  agent_client <- subagent_client()
+  expect_equal(agent_client$get_provider()@name, "OpenRouter")
+  expect_equal(agent_client$get_provider()@model, "super-cool-model")
+
+  expect_equal(
+    names(agent_client$get_tools()),
+    "btw_tool_docs_help_page"
+  )
+
+  expect_error(
+    subagent_client(tools = "btw_tool_skill"),
+    "disallowed tools"
+  )
+})
+
 # subagent_build_description() is internal - description content is tested
 # through btw_tool_agent_subagent registration tests below
 
@@ -314,6 +345,8 @@ test_that("btw_tool_agent_subagent is filtered out from default tools", {
 })
 
 test_that("btw_tool_agent_subagent is silently filtered out from 'agent' tool group", {
+  local_btw_md()
+
   # Request the 'agent' tool group which includes btw_tool_agent_subagent
   # The subagent tool is silently filtered via can_register (no warning)
   chat <- subagent_client(tools = c("agent"))
@@ -343,6 +376,8 @@ test_that("btw_tool_agent_subagent is silently filtered out even when in tools_a
 })
 
 test_that("btw_tool_agent_subagent never appears in chat$get_tools() for subagent", {
+  local_btw_md()
+
   # Test multiple scenarios to ensure subagent tool never appears
 
   # Scenario 1: Explicit request → throws error
@@ -377,6 +412,8 @@ test_that("btw_tool_agent_subagent never appears in chat$get_tools() for subagen
 })
 
 test_that("subagent tool errors even when in tools_allowed", {
+  local_btw_md()
+
   withr::local_options(
     btw.subagent.tools_allowed = c("btw_tool_agent_subagent", "docs")
   )
@@ -401,6 +438,8 @@ test_that("subagent tool errors even when in tools_allowed", {
 # ---- Chat Client Configuration ----------------------------------------------
 
 test_that("subagent_client creates chat with filtered tools", {
+  local_btw_md()
+
   chat <- subagent_client(tools = "files")
 
   expect_true(inherits(chat, "Chat"))
diff --git a/tests/testthat/test-tool-session-package-installed.R b/tests/testthat/test-tool-session-package-installed.R
index eddadc99..b6eb4e38 100644
--- a/tests/testthat/test-tool-session-package-installed.R
+++ b/tests/testthat/test-tool-session-package-installed.R
@@ -13,6 +13,9 @@ test_that("btw_tool_sessioninfo_is_package_installed()", {
   expect_equal(res_installed@extra$package, "dplyr")
   expect_equal(res_installed@extra$version, "1.0.0")
 
+  # Listing available packages requires an internet connection
+  skip_if_offline()
+
   expect_error(
     btw_tool_sessioninfo_is_package_installed("skibidi")
   )