diff --git a/helix-stdx/src/env.rs b/helix-stdx/src/env.rs
index 51450d225..3bae5f1d3 100644
--- a/helix-stdx/src/env.rs
+++ b/helix-stdx/src/env.rs
@@ -33,11 +33,21 @@ pub fn current_working_dir() -> PathBuf {
     cwd
 }
 
-pub fn set_current_working_dir(path: impl AsRef<Path>) -> std::io::Result<()> {
+/// Updates the current working directory of the current thread
+///
+/// Should the given path be a file, it will fail **unless** `allow_file` is passed and its parent
+/// can be found.
+pub fn set_current_working_dir(path: impl AsRef<Path>, allow_file: bool) -> std::io::Result<()> {
     let path = crate::path::canonicalize(path);
-    std::env::set_current_dir(&path)?;
+    if path.is_file() && allow_file {
+        std::env::set_current_dir(path.parent().ok_or_else(|| {
+            std::io::Error::new(std::io::ErrorKind::NotFound, "File has no parent?")
+        })?)?;
+    } else {
+        std::env::set_current_dir(&path)?;
+    }
     let mut cwd = CWD.write().unwrap();
-    *cwd = Some(path);
+    *cwd = Some(std::env::current_dir()?);
     Ok(())
 }
 
@@ -83,7 +93,7 @@ mod tests {
         let cwd = current_working_dir();
         assert_ne!(cwd, new_path);
 
-        set_current_working_dir(&new_path).expect("Couldn't set new path");
+        set_current_working_dir(&new_path, false).expect("Couldn't set new path");
 
         let cwd = current_working_dir();
         assert_eq!(cwd, new_path);
diff --git a/helix-term/src/commands/typed.rs b/helix-term/src/commands/typed.rs
index 7ad0369fc..a267b01ce 100644
--- a/helix-term/src/commands/typed.rs
+++ b/helix-term/src/commands/typed.rs
@@ -1093,7 +1093,7 @@ fn change_current_directory(
         .as_ref();
     let dir = helix_stdx::path::expand_tilde(Path::new(dir));
 
-    helix_stdx::env::set_current_working_dir(dir)?;
+    helix_stdx::env::set_current_working_dir(dir, false)?;
 
     cx.editor.set_status(format!(
         "Current working directory is now {}",
diff --git a/helix-term/src/main.rs b/helix-term/src/main.rs
index a3a27a076..985511062 100644
--- a/helix-term/src/main.rs
+++ b/helix-term/src/main.rs
@@ -122,12 +122,17 @@ FLAGS:
     }
     // NOTE: Set the working directory early so the correct configuration is loaded. Be aware that
     // Application::new() depends on this logic so it must be updated if this changes.
-    if let Some(path) = &args.working_directory {
-        helix_stdx::env::set_current_working_dir(path)?;
-    } else if let Some((path, _)) = args.files.first().filter(|p| p.0.is_dir()) {
+    let first_arg = args.files.first();
+    let cwd_changed = if let Some(path) = &args.working_directory {
+        helix_stdx::env::set_current_working_dir(path, false)?;
+        true
+    } else if let Some((path, _)) = first_arg.filter(|p| p.0.is_dir()) {
         // If the first file is a directory, it will be the working directory unless -w was specified
-        helix_stdx::env::set_current_working_dir(path)?;
-    }
+        helix_stdx::env::set_current_working_dir(path, false)?;
+        true
+    } else {
+        false
+    };
 
     let config = match Config::load_default() {
         Ok(config) => config,
@@ -144,6 +149,12 @@ FLAGS:
         }
     };
 
+    if let Some((path, _)) = first_arg {
+        if !cwd_changed && config.editor.first_file_sets_work_dir {
+            helix_stdx::env::set_current_working_dir(path, true)?;
+        }
+    }
+
     let lang_loader = helix_core::config::user_lang_loader().unwrap_or_else(|err| {
         eprintln!("{}", err);
         eprintln!("Press <ENTER> to continue with default language config");
diff --git a/helix-view/src/editor.rs b/helix-view/src/editor.rs
index 1708b3b4e..c34ab3907 100644
--- a/helix-view/src/editor.rs
+++ b/helix-view/src/editor.rs
@@ -345,6 +345,8 @@ pub struct Config {
     /// Display diagnostic below the line they occur.
     pub inline_diagnostics: InlineDiagnosticsConfig,
     pub end_of_line_diagnostics: DiagnosticFilter,
+    /// Should the first CLI arg be a file, the working directory may be set to its parent
+    pub first_file_sets_work_dir: bool,
 }
 
 #[derive(Debug, Clone, PartialEq, Deserialize, Serialize, Eq, PartialOrd, Ord)]
@@ -979,6 +981,7 @@ impl Default for Config {
             jump_label_alphabet: ('a'..='z').collect(),
             inline_diagnostics: InlineDiagnosticsConfig::default(),
             end_of_line_diagnostics: DiagnosticFilter::Disable,
+            first_file_sets_work_dir: false,
         }
     }
 }