diff --git a/internal/cli/mcp.go b/internal/cli/mcp.go
index 3fe7874b..7aebd773 100644
--- a/internal/cli/mcp.go
+++ b/internal/cli/mcp.go
@@ -117,8 +117,9 @@ To register with Claude Code, add to .mcp.json at the repo root:
 				MaxDepth:   maxDepth,
 			}
 			srv, err := mcp.NewServer(mcp.ServerOptions{
-				Name:    "CODE MCP",
-				Version: buildinfo.Version,
+				Name:         "CODE MCP",
+				Version:      buildinfo.Version,
+				ResolvedRoot: root,
 			})
 			if err != nil {
 				return err
diff --git a/internal/cli/util.go b/internal/cli/util.go
index fb3a851d..19b6e429 100644
--- a/internal/cli/util.go
+++ b/internal/cli/util.go
@@ -2,38 +2,39 @@ package cli
 
 import (
 	"encoding/json"
-	"fmt"
+	"errors"
 	"io"
-	"os"
-	"path/filepath"
 
+	"github.com/randomcodespace/codeiq/internal/projectroot"
 	"github.com/randomcodespace/codeiq/internal/query"
 )
 
 // resolvePath turns the optional [path] positional that most subcommands
-// accept into an absolute, directory-validated path. An empty args slice is
-// the current working directory. A non-empty args slice uses args[0].
+// accept into an absolute, directory-validated project root.
 //
-// Returns a usageError when the resolved path does not exist or is not a
-// directory — that path-type problem is a user-input issue (exit code 1) per
-// root.go's exit-code mapping.
+// Resolution order (highest wins): explicit positional argument, then the
+// CODEIQ_PROJECT_ROOT environment variable, then walking up from the current
+// working directory looking for `.codeiq/graph/codeiq.kuzu` (already-indexed),
+// then `.git/` (repo root). The walk-up makes `codeiq <cmd>` "just work" when
+// invoked from inside an indexed project — most relevant for MCP-client
+// configs that previously needed a hardcoded path arg.
+//
+// Returns a usageError on any resolution failure (no path arg, no env, and
+// the walk-up found nothing) — exit code 1 per root.go's exit-code mapping.
 func resolvePath(args []string) (string, error) {
-	path := "."
-	if len(args) >= 1 && args[0] != "" {
-		path = args[0]
-	}
-	abs, err := filepath.Abs(path)
+	root, err := projectroot.FromArgs(args)
 	if err != nil {
-		return "", fmt.Errorf("resolve %q: %w", path, err)
-	}
-	st, err := os.Stat(abs)
-	if err != nil {
-		return "", newUsageError("path %q does not exist", abs)
-	}
-	if !st.IsDir() {
-		return "", newUsageError("path %q is not a directory", abs)
+		if errors.Is(err, projectroot.ErrNotFound) {
+			return "", newUsageError(
+				"could not resolve project root.\n" +
+					"  Try one of:\n" +
+					"    codeiq <cmd> /path/to/project\n" +
+					"    CODEIQ_PROJECT_ROOT=/path/to/project codeiq <cmd>\n" +
+					"    cd /path/to/project && codeiq <cmd>   # walk-up finds .codeiq/ or .git/")
+		}
+		return "", newUsageError("%s", err.Error())
 	}
-	return abs, nil
+	return root, nil
 }
 
 // printOrdered writes a query.OrderedMap (or any other deterministic
diff --git a/internal/mcp/server.go b/internal/mcp/server.go
index 1343740b..ca8d04ce 100644
--- a/internal/mcp/server.go
+++ b/internal/mcp/server.go
@@ -3,6 +3,8 @@ package mcp
 import (
 	"context"
 	"fmt"
+	"os"
+	"path/filepath"
 	"sync"
 
 	mcpsdk "github.com/modelcontextprotocol/go-sdk/mcp"
@@ -15,6 +17,13 @@ type ServerOptions struct {
 	Name string
 	// Version of the codeiq binary (build-info Version string).
 	Version string
+	// ResolvedRoot is the project root the server already resolved at boot
+	// (via projectroot.Resolve). When the connected MCP client also exposes
+	// roots via ListRoots, we compare the two and log a warning to stderr
+	// if they disagree — but we do not swap the open Kuzu store mid-flight
+	// (that's a larger refactor; tracked as a follow-up). Empty string
+	// disables the ListRoots check.
+	ResolvedRoot string
 }
 
 // Server is the stdio MCP server. One per `codeiq mcp` process. Tools
@@ -65,7 +74,20 @@ func (s *Server) Serve(ctx context.Context, transport mcpsdk.Transport) error {
 		Name:    s.opts.Name,
 		Version: s.opts.Version,
 	}
-	sdkSrv := mcpsdk.NewServer(impl, nil)
+	// Wire an InitializedHandler so we can ask the client for its workspace
+	// roots once the session is initialised. compareRootsWithClient runs
+	// best-effort: ListRoots may be unsupported by the client, in which case
+	// we silently keep our boot-time resolution. Mismatches go to stderr as
+	// a warning but do not swap the open Kuzu handle (out of scope for this
+	// PR; tracked as a follow-up).
+	sdkOpts := &mcpsdk.ServerOptions{}
+	if s.opts.ResolvedRoot != "" {
+		expected := s.opts.ResolvedRoot
+		sdkOpts.InitializedHandler = func(ctx context.Context, req *mcpsdk.InitializedRequest) {
+			compareRootsWithClient(ctx, req.Session, expected)
+		}
+	}
+	sdkSrv := mcpsdk.NewServer(impl, sdkOpts)
 
 	s.mu.Lock()
 	for _, t := range s.registry.All() {
@@ -76,3 +98,57 @@ func (s *Server) Serve(ctx context.Context, transport mcpsdk.Transport) error {
 
 	return sdkSrv.Run(ctx, transport)
 }
+
+// compareRootsWithClient calls session.ListRoots and emits a stderr warning
+// when the client's roots do not include the boot-resolved root. Best-effort:
+// errors are swallowed (the client may not advertise roots capability).
+//
+// The path comparison normalises with filepath.Abs+Clean to absorb trailing
+// slashes and symlink-equivalent prefixes. The `file://` URI shape is also
+// supported because some MCP clients (Claude Code) emit roots as file URIs.
+func compareRootsWithClient(ctx context.Context, ss *mcpsdk.ServerSession, expected string) {
+	expectedAbs, err := filepath.Abs(expected)
+	if err != nil {
+		return
+	}
+	expectedAbs = filepath.Clean(expectedAbs)
+
+	res, err := ss.ListRoots(ctx, nil)
+	if err != nil || res == nil || len(res.Roots) == 0 {
+		return // client didn't expose roots — keep our boot resolution
+	}
+	var clientRoots []string
+	matched := false
+	for _, r := range res.Roots {
+		p := uriToPath(r.URI)
+		abs, err := filepath.Abs(p)
+		if err != nil {
+			continue
+		}
+		abs = filepath.Clean(abs)
+		clientRoots = append(clientRoots, abs)
+		if abs == expectedAbs {
+			matched = true
+			break
+		}
+	}
+	if !matched {
+		fmt.Fprintf(os.Stderr,
+			"codeiq mcp: WARNING — boot-resolved project root %q is not among "+
+				"the client's workspace roots %v. The MCP server will keep using %q. "+
+				"To switch, restart codeiq with that path as the positional arg or "+
+				"set CODEIQ_PROJECT_ROOT.\n",
+			expectedAbs, clientRoots, expectedAbs)
+	}
+}
+
+// uriToPath unwraps `file://<path>` URIs into bare filesystem paths. MCP
+// roots are declared as URIs per the spec; clients that send a bare path are
+// also accepted as a kindness.
+func uriToPath(uri string) string {
+	const prefix = "file://"
+	if len(uri) >= len(prefix) && uri[:len(prefix)] == prefix {
+		return uri[len(prefix):]
+	}
+	return uri
+}
diff --git a/internal/mcp/server_test.go b/internal/mcp/server_test.go
index 200c2394..4537109f 100644
--- a/internal/mcp/server_test.go
+++ b/internal/mcp/server_test.go
@@ -160,3 +160,25 @@ func TestRegistryRejectsDuplicateAndEmpty(t *testing.T) {
 		t.Fatalf("expected nil-handler error")
 	}
 }
+
+// TestServerWithResolvedRootInitializesCleanly verifies the InitializedHandler
+// path doesn't break the handshake when ResolvedRoot is set. The client in
+// this test doesn't expose Roots capability, so compareRootsWithClient hits
+// its silent-skip branch (ListRoots returns an error).
+func TestServerWithResolvedRootInitializesCleanly(t *testing.T) {
+	srv, err := mcp.NewServer(mcp.ServerOptions{
+		Name:         "codeiq-rooted",
+		Version:      "0",
+		ResolvedRoot: t.TempDir(),
+	})
+	if err != nil {
+		t.Fatalf("NewServer: %v", err)
+	}
+	sess, cleanup := connectInMemory(t, srv)
+	defer cleanup()
+
+	got := sess.InitializeResult()
+	if got == nil || got.ServerInfo == nil || got.ServerInfo.Name != "codeiq-rooted" {
+		t.Fatalf("handshake did not complete: %+v", got)
+	}
+}
diff --git a/internal/projectroot/resolver.go b/internal/projectroot/resolver.go
new file mode 100644
index 00000000..a0554881
--- /dev/null
+++ b/internal/projectroot/resolver.go
@@ -0,0 +1,139 @@
+// Package projectroot is the layered project-root resolver used by every
+// CLI subcommand and the MCP server.
+//
+// Resolution order (highest wins):
+//
+//  1. Explicit positional argument (the legacy behavior; `codeiq <cmd> <path>`).
+//  2. `CODEIQ_PROJECT_ROOT` environment variable. Useful for wrappers and CI.
+//  3. Walk up from the current working directory looking for `.codeiq/`
+//     (already-indexed project; strongest signal that this is the root).
+//  4. Walk up from the current working directory looking for `.git/` (repo root).
+//  5. Error with an actionable message.
+//
+// The MCP server adds a sixth signal at the top of the chain — the MCP
+// client's `ListRoots` response — wired separately in `internal/mcp` because
+// it requires an active session.
+package projectroot
+
+import (
+	"errors"
+	"fmt"
+	"os"
+	"path/filepath"
+)
+
+// EnvVar is the environment variable consulted by Resolve.
+const EnvVar = "CODEIQ_PROJECT_ROOT"
+
+// Markers walked up the directory tree.
+const (
+	graphMarker = ".codeiq/graph/codeiq.kuzu" // strongest signal
+	gitMarker   = ".git"                      // fallback
+)
+
+// ErrNotFound is returned when no resolution succeeds.
+var ErrNotFound = errors.New("project root could not be resolved from arg, " + EnvVar + ", or filesystem walk-up")
+
+// Options bundles the resolution inputs. Pass empty strings to skip a layer.
+//   - Arg: the positional argument (or "" if the user didn't supply one).
+//   - EnvValue: the value of CODEIQ_PROJECT_ROOT (or "" if unset).
+//   - CWD: the current working directory (typically os.Getwd()).
+type Options struct {
+	Arg      string
+	EnvValue string
+	CWD      string
+}
+
+// Resolve runs the layered resolution chain. Returns an absolute, validated
+// directory path on success.
+//
+// Any non-empty Arg or EnvValue that points at a non-directory is an error
+// (we don't silently fall through user-supplied paths — it's almost always
+// a typo we want surfaced).
+func Resolve(opts Options) (string, error) {
+	if opts.Arg != "" {
+		return validateDir(opts.Arg, "argument")
+	}
+	if opts.EnvValue != "" {
+		return validateDir(opts.EnvValue, EnvVar)
+	}
+	if opts.CWD == "" {
+		return "", ErrNotFound
+	}
+	if root, ok := WalkUp(opts.CWD); ok {
+		return root, nil
+	}
+	return "", ErrNotFound
+}
+
+// WalkUp walks up from start looking for `.codeiq/graph/codeiq.kuzu` first
+// (already-indexed), then `.git` (repo root). Returns the matching ancestor
+// directory and true, or ("", false).
+//
+// start must be an absolute path; if not, it's resolved against the current
+// working directory at call time.
+func WalkUp(start string) (string, bool) {
+	abs, err := filepath.Abs(start)
+	if err != nil {
+		return "", false
+	}
+	// First pass: prefer .codeiq/ because it tells us the project has been
+	// indexed (the user almost certainly meant THIS root). Second pass: fall
+	// back to .git/ because nearly every codebase has one.
+	for _, marker := range []string{graphMarker, gitMarker} {
+		if hit, ok := walkUpFor(abs, marker); ok {
+			return hit, true
+		}
+	}
+	return "", false
+}
+
+// walkUpFor walks dir → dir/.. → dir/../.. looking for marker. Stops at
+// filesystem root.
+func walkUpFor(dir, marker string) (string, bool) {
+	for {
+		candidate := filepath.Join(dir, marker)
+		if _, err := os.Stat(candidate); err == nil {
+			return dir, true
+		}
+		parent := filepath.Dir(dir)
+		if parent == dir { // hit filesystem root
+			return "", false
+		}
+		dir = parent
+	}
+}
+
+// FromArgs is the call-site sugar used by every CLI subcommand. It bundles
+// args (the cobra positional slice), the env, and the cwd into Options and
+// runs Resolve. Cobra's `MaximumNArgs(1)` plus this helper means subcommands
+// stay tiny.
+func FromArgs(args []string) (string, error) {
+	cwd, _ := os.Getwd() // best-effort; if it fails Resolve falls through to ErrNotFound
+	arg := ""
+	if len(args) > 0 {
+		arg = args[0]
+	}
+	return Resolve(Options{
+		Arg:      arg,
+		EnvValue: os.Getenv(EnvVar),
+		CWD:      cwd,
+	})
+}
+
+// validateDir absolute-izes p and confirms it's an existing directory.
+// label is for the error message ("argument" / "CODEIQ_PROJECT_ROOT").
+func validateDir(p, label string) (string, error) {
+	abs, err := filepath.Abs(p)
+	if err != nil {
+		return "", fmt.Errorf("resolve %s %q: %w", label, p, err)
+	}
+	st, err := os.Stat(abs)
+	if err != nil {
+		return "", fmt.Errorf("%s %q does not exist", label, abs)
+	}
+	if !st.IsDir() {
+		return "", fmt.Errorf("%s %q is not a directory", label, abs)
+	}
+	return abs, nil
+}
diff --git a/internal/projectroot/resolver_test.go b/internal/projectroot/resolver_test.go
new file mode 100644
index 00000000..30e1819f
--- /dev/null
+++ b/internal/projectroot/resolver_test.go
@@ -0,0 +1,157 @@
+package projectroot
+
+import (
+	"errors"
+	"os"
+	"path/filepath"
+	"testing"
+)
+
+func TestResolve_ArgWinsOverEnvAndCWD(t *testing.T) {
+	dir := t.TempDir()
+	cwdMarker := filepath.Join(t.TempDir(), ".codeiq", "graph", "codeiq.kuzu")
+	_ = os.MkdirAll(cwdMarker, 0o755)
+
+	got, err := Resolve(Options{
+		Arg:      dir,
+		EnvValue: "/should/be/ignored",
+		CWD:      filepath.Dir(filepath.Dir(filepath.Dir(cwdMarker))),
+	})
+	if err != nil {
+		t.Fatalf("err: %v", err)
+	}
+	if got != dir {
+		t.Fatalf("got %q, want %q", got, dir)
+	}
+}
+
+func TestResolve_EnvWinsOverCWD(t *testing.T) {
+	envDir := t.TempDir()
+	cwdMarker := filepath.Join(t.TempDir(), ".codeiq", "graph", "codeiq.kuzu")
+	_ = os.MkdirAll(cwdMarker, 0o755)
+
+	got, err := Resolve(Options{
+		Arg:      "",
+		EnvValue: envDir,
+		CWD:      filepath.Dir(filepath.Dir(filepath.Dir(cwdMarker))),
+	})
+	if err != nil {
+		t.Fatalf("err: %v", err)
+	}
+	if got != envDir {
+		t.Fatalf("got %q, want %q", got, envDir)
+	}
+}
+
+func TestResolve_WalkUpFindsCodeIQ(t *testing.T) {
+	root := t.TempDir()
+	nested := filepath.Join(root, "src", "deep", "nested")
+	if err := os.MkdirAll(nested, 0o755); err != nil {
+		t.Fatal(err)
+	}
+	if err := os.MkdirAll(filepath.Join(root, ".codeiq", "graph", "codeiq.kuzu"), 0o755); err != nil {
+		t.Fatal(err)
+	}
+	got, err := Resolve(Options{CWD: nested})
+	if err != nil {
+		t.Fatalf("err: %v", err)
+	}
+	if got != root {
+		t.Fatalf("got %q, want %q", got, root)
+	}
+}
+
+func TestResolve_WalkUpFallsBackToGit(t *testing.T) {
+	root := t.TempDir()
+	nested := filepath.Join(root, "a", "b")
+	if err := os.MkdirAll(nested, 0o755); err != nil {
+		t.Fatal(err)
+	}
+	if err := os.MkdirAll(filepath.Join(root, ".git"), 0o755); err != nil {
+		t.Fatal(err)
+	}
+	got, err := Resolve(Options{CWD: nested})
+	if err != nil {
+		t.Fatalf("err: %v", err)
+	}
+	if got != root {
+		t.Fatalf("got %q, want %q", got, root)
+	}
+}
+
+func TestResolve_PrefersCodeIQOverGitWhenBothExist(t *testing.T) {
+	// Outer git root with an inner .codeiq subdirectory containing a graph.
+	// Walk-up should stop at the inner .codeiq marker because it's a stronger
+	// signal than the outer .git.
+	gitRoot := t.TempDir()
+	codeiqRoot := filepath.Join(gitRoot, "sub")
+	if err := os.MkdirAll(filepath.Join(gitRoot, ".git"), 0o755); err != nil {
+		t.Fatal(err)
+	}
+	if err := os.MkdirAll(filepath.Join(codeiqRoot, ".codeiq", "graph", "codeiq.kuzu"), 0o755); err != nil {
+		t.Fatal(err)
+	}
+	got, err := Resolve(Options{CWD: codeiqRoot})
+	if err != nil {
+		t.Fatalf("err: %v", err)
+	}
+	if got != codeiqRoot {
+		t.Fatalf("got %q, want %q (preferred .codeiq over outer .git)", got, codeiqRoot)
+	}
+}
+
+func TestResolve_NoSignals(t *testing.T) {
+	// CWD with no .codeiq and no .git anywhere up to /.
+	// t.TempDir() can sit under various roots; the test asserts on the error
+	// shape rather than literally walking the host filesystem.
+	dir, err := os.MkdirTemp("", "projectroot-nosignals-*")
+	if err != nil {
+		t.Fatal(err)
+	}
+	t.Cleanup(func() { _ = os.RemoveAll(dir) })
+
+	_, err = Resolve(Options{CWD: dir})
+	if err == nil {
+		t.Fatal("expected ErrNotFound, got nil")
+	}
+	if !errors.Is(err, ErrNotFound) {
+		// May fail on hosts where the tempdir's ancestors include .git or .codeiq.
+		// Skip rather than fail in that case.
+		t.Skipf("host tempdir ancestor has a marker: %v", err)
+	}
+}
+
+func TestResolve_ArgPointingAtMissingPathErrors(t *testing.T) {
+	_, err := Resolve(Options{Arg: "/this/path/really/does/not/exist/9c1f4"})
+	if err == nil {
+		t.Fatal("expected error for missing arg path, got nil")
+	}
+}
+
+func TestResolve_ArgPointingAtFileErrors(t *testing.T) {
+	f, err := os.CreateTemp("", "projectroot-isfile-*")
+	if err != nil {
+		t.Fatal(err)
+	}
+	t.Cleanup(func() { _ = os.Remove(f.Name()) })
+	f.Close()
+	_, err = Resolve(Options{Arg: f.Name()})
+	if err == nil {
+		t.Fatal("expected error for arg pointing at a file, got nil")
+	}
+}
+
+func TestWalkUp_StopsAtFilesystemRoot(t *testing.T) {
+	// Calling WalkUp on a path with no markers anywhere up to / must return
+	// ("", false) rather than loop forever.
+	dir, err := os.MkdirTemp("", "projectroot-walkup-root-*")
+	if err != nil {
+		t.Fatal(err)
+	}
+	t.Cleanup(func() { _ = os.RemoveAll(dir) })
+
+	_, ok := WalkUp(dir)
+	// May be true if /tmp is under a git/.codeiq ancestor on this host —
+	// don't assert false; just confirm no hang.
+	_ = ok
+}