diff --git a/packages/cli/src/cli/cmd/i18n.ts b/packages/cli/src/cli/cmd/i18n.ts
index 96670f13b..d5e8fc1bd 100644
--- a/packages/cli/src/cli/cmd/i18n.ts
+++ b/packages/cli/src/cli/cmd/i18n.ts
@@ -8,7 +8,7 @@ import { Command } from "interactive-commander";
 import Z from "zod";
 import _ from "lodash";
 import * as path from "path";
-import { getConfig } from "../utils/config";
+import { getConfigOrThrow } from "../utils/config";
 import { getSettings } from "../utils/settings";
 import {
   ConfigError,
@@ -128,7 +128,7 @@ export default new Command()
     const errorDetails: ErrorDetail[] = [];
     try {
       ora.start("Loading configuration...");
-      const i18nConfig = getConfig();
+      const i18nConfig = getConfigOrThrow();
       const settings = getSettings(flags.apiKey);
       ora.succeed("Configuration loaded");
 
@@ -673,16 +673,10 @@ export async function validateAuth(settings: ReturnType<typeof getSettings>) {
 }
 
 function validateParams(
-  i18nConfig: I18nConfig | null,
+  i18nConfig: I18nConfig,
   flags: ReturnType<typeof parseFlags>,
 ) {
-  if (!i18nConfig) {
-    throw new ConfigError({
-      message:
-        "i18n.json not found. Please run `lingo.dev init` to initialize the project.",
-      docUrl: "i18nNotFound",
-    });
-  } else if (!i18nConfig.buckets || !Object.keys(i18nConfig.buckets).length) {
+  if (!i18nConfig.buckets || !Object.keys(i18nConfig.buckets).length) {
     throw new ConfigError({
       message:
         "No buckets found in i18n.json. Please add at least one bucket containing i18n content.",
diff --git a/packages/cli/src/cli/cmd/run/setup.ts b/packages/cli/src/cli/cmd/run/setup.ts
index ca6652109..0913db266 100644
--- a/packages/cli/src/cli/cmd/run/setup.ts
+++ b/packages/cli/src/cli/cmd/run/setup.ts
@@ -3,7 +3,7 @@ import { Listr } from "listr2";
 import { colors } from "../../constants";
 import { CmdRunContext, flagsSchema } from "./_types";
 import { commonTaskRendererOptions } from "./_const";
-import { getConfig } from "../../utils/config";
+import { getConfigOrThrow } from "../../utils/config";
 import createLocalizer from "../../localizer";
 
 export default async function setup(input: CmdRunContext) {
@@ -21,13 +21,9 @@ export default async function setup(input: CmdRunContext) {
       {
         title: "Loading i18n configuration",
         task: async (ctx, task) => {
-          ctx.config = getConfig(true);
+          ctx.config = getConfigOrThrow(true);
 
-          if (!ctx.config) {
-            throw new Error(
-              "i18n.json not found. Please run `lingo.dev init` to initialize the project.",
-            );
-          } else if (
+          if (
             !ctx.config.buckets ||
             !Object.keys(ctx.config.buckets).length
           ) {
diff --git a/packages/cli/src/cli/cmd/show/config.ts b/packages/cli/src/cli/cmd/show/config.ts
index 858323a2b..33b5d5b47 100644
--- a/packages/cli/src/cli/cmd/show/config.ts
+++ b/packages/cli/src/cli/cmd/show/config.ts
@@ -1,28 +1,15 @@
 import { Command } from "interactive-commander";
 import _ from "lodash";
-import fs from "fs";
-import path from "path";
 import { defaultConfig } from "@lingo.dev/_spec";
+import { getConfig } from "../../utils/config";
 
 export default new Command()
   .command("config")
   .description("Print effective i18n.json after merging with defaults")
   .helpOption("-h, --help", "Show help")
   .action(async (options) => {
-    const fileConfig = loadReplexicaFileConfig();
+    const fileConfig = getConfig(false);
     const config = _.merge({}, defaultConfig, fileConfig);
 
     console.log(JSON.stringify(config, null, 2));
   });
-
-function loadReplexicaFileConfig(): any {
-  const replexicaConfigPath = path.resolve(process.cwd(), "i18n.json");
-  const fileExists = fs.existsSync(replexicaConfigPath);
-  if (!fileExists) {
-    return undefined;
-  }
-
-  const fileContent = fs.readFileSync(replexicaConfigPath, "utf-8");
-  const replexicaFileConfig = JSON.parse(fileContent);
-  return replexicaFileConfig;
-}
diff --git a/packages/cli/src/cli/cmd/status.ts b/packages/cli/src/cli/cmd/status.ts
index fb9d49e2b..7e8d24e70 100644
--- a/packages/cli/src/cli/cmd/status.ts
+++ b/packages/cli/src/cli/cmd/status.ts
@@ -8,7 +8,7 @@ import { Command } from "interactive-commander";
 import Z from "zod";
 import _ from "lodash";
 import * as path from "path";
-import { getConfig } from "../utils/config";
+import { getConfigOrThrow } from "../utils/config";
 import { getSettings } from "../utils/settings";
 import { CLIError } from "../utils/errors";
 import Ora from "ora";
@@ -67,7 +67,7 @@ export default new Command()
 
     try {
       ora.start("Loading configuration...");
-      const i18nConfig = getConfig();
+      const i18nConfig = getConfigOrThrow();
       const settings = getSettings(flags.apiKey);
       ora.succeed("Configuration loaded");
 
@@ -673,16 +673,10 @@ async function tryAuthenticate(settings: ReturnType<typeof getSettings>) {
 }
 
 function validateParams(
-  i18nConfig: I18nConfig | null,
+  i18nConfig: I18nConfig,
   flags: ReturnType<typeof parseFlags>,
 ) {
-  if (!i18nConfig) {
-    throw new CLIError({
-      message:
-        "i18n.json not found. Please run `lingo.dev init` to initialize the project.",
-      docUrl: "i18nNotFound",
-    });
-  } else if (!i18nConfig.buckets || !Object.keys(i18nConfig.buckets).length) {
+  if (!i18nConfig.buckets || !Object.keys(i18nConfig.buckets).length) {
     throw new CLIError({
       message:
         "No buckets found in i18n.json. Please add at least one bucket containing i18n content.",
diff --git a/packages/cli/src/cli/utils/buckets.ts b/packages/cli/src/cli/utils/buckets.ts
index 962030c09..cc03e61b2 100644
--- a/packages/cli/src/cli/utils/buckets.ts
+++ b/packages/cli/src/cli/utils/buckets.ts
@@ -10,6 +10,7 @@ import {
 } from "@lingo.dev/_spec";
 import { bucketTypeSchema } from "@lingo.dev/_spec";
 import Z from "zod";
+import { getConfigRoot } from "./config";
 
 type BucketConfig = {
   type: Z.infer<typeof bucketTypeSchema>;
@@ -99,13 +100,15 @@ function expandPlaceholderedGlob(
   _pathPattern: string,
   sourceLocale: string,
 ): string[] {
-  const absolutePathPattern = path.resolve(_pathPattern);
+  const configRoot = getConfigRoot() || process.cwd();
+
+  const absolutePathPattern = path.resolve(configRoot, _pathPattern);
   const pathPattern = normalizePath(
-    path.relative(process.cwd(), absolutePathPattern),
+    path.relative(configRoot, absolutePathPattern),
   );
   if (pathPattern.startsWith("..")) {
     throw new CLIError({
-      message: `Invalid path pattern: ${pathPattern}. Path pattern must be within the current working directory.`,
+      message: `Invalid path pattern: ${pathPattern}. Path pattern must be within the config root directory.`,
       docUrl: "invalidPathPattern",
     });
   }
@@ -141,10 +144,11 @@ function expandPlaceholderedGlob(
       follow: true,
       withFileTypes: true,
       windowsPathsNoEscape: true, // Windows path support
+      cwd: configRoot,
     })
     .filter((file) => file.isFile() || file.isSymbolicLink())
     .map((file) => file.fullpath())
-    .map((fullpath) => normalizePath(path.relative(process.cwd(), fullpath)));
+    .map((fullpath) => normalizePath(path.relative(configRoot, fullpath)));
 
   // transform each source file path back to [locale] placeholder paths
   const placeholderedPaths = sourcePaths.map((sourcePath) => {
diff --git a/packages/cli/src/cli/utils/cache.ts b/packages/cli/src/cli/utils/cache.ts
index 790168a3d..81ce2a732 100644
--- a/packages/cli/src/cli/utils/cache.ts
+++ b/packages/cli/src/cli/utils/cache.ts
@@ -1,5 +1,6 @@
 import path from "path";
 import fs from "fs";
+import { getConfigRoot } from "./config";
 
 interface CacheRow {
   targetLocale: string;
@@ -81,7 +82,8 @@ function _appendToCache(rows: CacheRow[]) {
 }
 
 function _getCacheFilePath() {
-  return path.join(process.cwd(), "i18n.cache");
+  const configRoot = getConfigRoot() || process.cwd();
+  return path.join(configRoot, "i18n.cache");
 }
 
 function _buildJSONLines(rows: CacheRow[]) {
diff --git a/packages/cli/src/cli/utils/config.ts b/packages/cli/src/cli/utils/config.ts
index b56aa60cc..be18f6018 100644
--- a/packages/cli/src/cli/utils/config.ts
+++ b/packages/cli/src/cli/utils/config.ts
@@ -3,15 +3,18 @@ import fs from "fs";
 import path from "path";
 import { I18nConfig, parseI18nConfig } from "@lingo.dev/_spec";
 
-export function getConfig(resave = true): I18nConfig | null {
-  const configFilePath = _getConfigFilePath();
+let _cachedConfigPath: string | null = null;
+let _cachedConfigRoot: string | null = null;
 
-  const configFileExists = fs.existsSync(configFilePath);
-  if (!configFileExists) {
+export function getConfig(resave = true): I18nConfig | null {
+  const configInfo = _findConfigPath();
+  if (!configInfo) {
     return null;
   }
 
-  const fileContents = fs.readFileSync(configFilePath, "utf8");
+  const { configPath, configRoot } = configInfo;
+
+  const fileContents = fs.readFileSync(configPath, "utf8");
   const rawConfig = JSON.parse(fileContents);
 
   const result = parseI18nConfig(rawConfig);
@@ -25,17 +28,140 @@ export function getConfig(resave = true): I18nConfig | null {
   return result;
 }
 
+export function getConfigOrThrow(resave = true): I18nConfig {
+  const config = getConfig(resave);
+
+  if (!config) {
+    // Try to find configs in subdirectories to provide helpful error message
+    const foundBelow = findConfigsDownwards();
+    if (foundBelow.length > 0) {
+      const configList = foundBelow
+        .slice(0, 5) // Limit to 5 to avoid overwhelming output
+        .map((p) => `  - ${p}`)
+        .join("\n");
+      const moreText =
+        foundBelow.length > 5
+          ? `\n  ... and ${foundBelow.length - 5} more`
+          : "";
+      throw new Error(
+        `i18n.json not found in current directory or parent directories.\n\n` +
+          `Found ${foundBelow.length} config file(s) in subdirectories:\n` +
+          configList +
+          moreText +
+          `\n\nPlease cd into one of these directories, or run \`lingo.dev init\` to initialize a new project.`,
+      );
+    } else {
+      throw new Error(
+        `i18n.json not found. Please run \`lingo.dev init\` to initialize the project.`,
+      );
+    }
+  }
+
+  return config;
+}
+
 export function saveConfig(config: I18nConfig) {
-  const configFilePath = _getConfigFilePath();
+  const configInfo = _findConfigPath();
+  if (!configInfo) {
+    throw new Error("Cannot save config: i18n.json not found");
+  }
 
   const serialized = JSON.stringify(config, null, 2);
-  fs.writeFileSync(configFilePath, serialized);
+  fs.writeFileSync(configInfo.configPath, serialized);
 
   return config;
 }
 
+export function getConfigRoot(): string | null {
+  const configInfo = _findConfigPath();
+  return configInfo?.configRoot || null;
+}
+
+export function findConfigsDownwards(
+  startDir: string = process.cwd(),
+  maxDepth: number = 3,
+): string[] {
+  const found: string[] = [];
+
+  function search(dir: string, depth: number) {
+    if (depth > maxDepth) return;
+
+    try {
+      const entries = fs.readdirSync(dir, { withFileTypes: true });
+
+      for (const entry of entries) {
+        if (entry.isDirectory()) {
+          // Skip common directories that shouldn't contain configs
+          if (
+            entry.name === "node_modules" ||
+            entry.name === ".git" ||
+            entry.name === "dist" ||
+            entry.name === "build" ||
+            entry.name.startsWith(".")
+          ) {
+            continue;
+          }
+
+          const subDir = path.join(dir, entry.name);
+          const configPath = path.join(subDir, "i18n.json");
+
+          if (fs.existsSync(configPath)) {
+            found.push(path.relative(startDir, configPath));
+          }
+
+          search(subDir, depth + 1);
+        }
+      }
+    } catch (error) {
+      // Ignore permission errors, etc.
+    }
+  }
+
+  search(startDir, 0);
+  return found;
+}
+
 // Private
 
-function _getConfigFilePath() {
-  return path.join(process.cwd(), "i18n.json");
+function _findConfigPath(): { configPath: string; configRoot: string } | null {
+  // Use cached path if available
+  if (_cachedConfigPath && _cachedConfigRoot) {
+    return { configPath: _cachedConfigPath, configRoot: _cachedConfigRoot };
+  }
+
+  const result = _findConfigUpwards(process.cwd());
+  if (result) {
+    _cachedConfigPath = result.configPath;
+    _cachedConfigRoot = result.configRoot;
+  }
+
+  return result;
+}
+
+function _findConfigUpwards(
+  startDir: string,
+): { configPath: string; configRoot: string } | null {
+  let currentDir = path.resolve(startDir);
+  const root = path.parse(currentDir).root;
+
+  while (true) {
+    const configPath = path.join(currentDir, "i18n.json");
+
+    if (fs.existsSync(configPath)) {
+      return {
+        configPath,
+        configRoot: currentDir,
+      };
+    }
+
+    // Check if we've reached the filesystem root
+    if (currentDir === root) {
+      break;
+    }
+
+    // Move up one directory
+    currentDir = path.dirname(currentDir);
+  }
+
+  return null;
 }
diff --git a/packages/cli/src/cli/utils/delta.ts b/packages/cli/src/cli/utils/delta.ts
index 4950a70b6..b42716fd3 100644
--- a/packages/cli/src/cli/utils/delta.ts
+++ b/packages/cli/src/cli/utils/delta.ts
@@ -4,6 +4,7 @@ import { md5 } from "./md5";
 import { tryReadFile, writeFile, checkIfFileExists } from "../utils/fs";
 import * as path from "path";
 import YAML from "yaml";
+import { getConfigRoot } from "./config";
 
 const LockSchema = z.object({
   version: z.literal(1).default(1),
@@ -33,7 +34,8 @@ export type Delta = {
 };
 
 export function createDeltaProcessor(fileKey: string) {
-  const lockfilePath = path.join(process.cwd(), "i18n.lock");
+  const configRoot = getConfigRoot() || process.cwd();
+  const lockfilePath = path.join(configRoot, "i18n.lock");
   return {
     async checkIfLockExists() {
       return checkIfFileExists(lockfilePath);
diff --git a/packages/cli/src/cli/utils/lockfile.ts b/packages/cli/src/cli/utils/lockfile.ts
index f1e7dee6e..800abad16 100644
--- a/packages/cli/src/cli/utils/lockfile.ts
+++ b/packages/cli/src/cli/utils/lockfile.ts
@@ -4,6 +4,7 @@ import Z from "zod";
 import YAML from "yaml";
 import { MD5 } from "object-hash";
 import _ from "lodash";
+import { getConfigRoot } from "./config";
 
 export function createLockfileHelper() {
   return {
@@ -79,7 +80,8 @@ export function createLockfileHelper() {
   }
 
   function _getLockfilePath() {
-    return path.join(process.cwd(), "i18n.lock");
+    const configRoot = getConfigRoot() || process.cwd();
+    return path.join(configRoot, "i18n.lock");
   }
 }