diff --git a/registry/coder-labs/modules/copilot/main.tf b/registry/coder-labs/modules/copilot/main.tf
index fd93b048f..c6436f3e3 100644
--- a/registry/coder-labs/modules/copilot/main.tf
+++ b/registry/coder-labs/modules/copilot/main.tf
@@ -295,6 +295,7 @@ module "agentapi" {
     ARG_COPILOT_CONFIG='${base64encode(local.final_copilot_config)}' \
     ARG_EXTERNAL_AUTH_ID='${var.external_auth_id}' \
     ARG_COPILOT_VERSION='${var.copilot_version}' \
+    ARG_COPILOT_MODEL='${var.copilot_model}' \
     /tmp/install.sh
   EOT
 }
\ No newline at end of file
diff --git a/registry/coder-labs/modules/copilot/scripts/install.sh b/registry/coder-labs/modules/copilot/scripts/install.sh
index f44d50873..0651a8186 100644
--- a/registry/coder-labs/modules/copilot/scripts/install.sh
+++ b/registry/coder-labs/modules/copilot/scripts/install.sh
@@ -14,6 +14,7 @@ ARG_MCP_CONFIG=$(echo -n "${ARG_MCP_CONFIG:-}" | base64 -d 2> /dev/null || echo
 ARG_COPILOT_CONFIG=$(echo -n "${ARG_COPILOT_CONFIG:-}" | base64 -d 2> /dev/null || echo "")
 ARG_EXTERNAL_AUTH_ID=${ARG_EXTERNAL_AUTH_ID:-github}
 ARG_COPILOT_VERSION=${ARG_COPILOT_VERSION:-0.0.334}
+ARG_COPILOT_MODEL=${ARG_COPILOT_MODEL:-claude-sonnet-4.5}
 
 validate_prerequisites() {
   if ! command_exists node; then
@@ -84,7 +85,7 @@ setup_copilot_configurations() {
 
   local module_path="$HOME/.copilot-module"
   mkdir -p "$module_path"
-  mkdir -p "$HOME/.config"
+  mkdir -p "$HOME/.copilot"
 
   setup_copilot_config
 
@@ -201,7 +202,7 @@ add_custom_mcp_servers() {
 }
 
 configure_copilot_model() {
-  if [ -n "$ARG_COPILOT_MODEL" ] && [ "$ARG_COPILOT_MODEL" != "claude-sonnet-4.5" ]; then
+  if [ "$ARG_COPILOT_MODEL" != "claude-sonnet-4.5" ]; then
     echo "Setting Copilot model to: $ARG_COPILOT_MODEL"
     copilot config model "$ARG_COPILOT_MODEL" || {
       echo "WARNING: Failed to set model via copilot config, will use environment variable fallback"