diff --git a/AGENTS.md b/AGENTS.md
index 6bb06a1..9fcffd5 100644
--- a/AGENTS.md
+++ b/AGENTS.md
@@ -26,7 +26,7 @@ ollie/                          ← you are here
 ├── contrib/elisp (Elisp)       Emacs frontend (ellie.el)
 ├── data/agents/                Agent config JSONs (loaded at runtime)
 ├── data/prompts/               System prompt templates (markdown)
-├── data/tools/                 Tool executables + .meta sidecar files (installed to $OLLIE_TOOLS_PATH)
+├── data/tools/                 Tool executables + .meta sidecar files (installed to $XDG_CONFIG_HOME/ollie/tools)
 ├── data/skills/                Domain knowledge modules (markdown)
 ├── sandbox/                    Landlock sandbox config YAML
 ├── doc/                        Architecture docs, usage guide
@@ -94,7 +94,7 @@ just test-remote
 ## Architecture (key concepts)
 1. **One integration surface: 9P filesystem (sessions at `session/{sname}/agent/{aname}/`). Tools, skills, memory on physical filesystem via env vars.
 2. **Agent loop** (`agent/loop.go`): Streaming LLM call → parse tool calls → dispatch → loop until no more tool calls or max steps.
-3. **Tool dispatch** (`toolsrv/`): `shell` is built-in. All others are external scripts resolved from `OLLIE_TOOLS_PATH`.
+3. **Tool dispatch** (`toolsrv/`): `shell` is built-in. All others are external scripts resolved from `$XDG_CONFIG_HOME/ollie/tools`.
 4. **Sandbox** (`sandbox/`): Landlock-based. Config in `sandbox/*.yaml` defines filesystem access per profile.
 5. **Backends** (`backend/`): Ollama, OpenAI-compatible, Anthropic, Copilot, Kiro, Gemini, CodeWhisperer. Selectable per-session.
 6. **Prompts assembled at runtime**: Agent JSON `prompt` array specifies which prompt files to concatenate. Static prompt files can be included directly; the base system prompt is embedded in the binary and always prepended.
@@ -117,8 +117,8 @@ just test-remote
 Config lives in `~/.config/ollie/env`. Key variables:
 - `OLLIE_BACKEND` — default backend (ollama, openai, anthropic, copilot, kiro)
 - `OLLIE_MODEL` — default model
-- `OLLIE_TOOLS_PATH` — where tool scripts live (default: `~/.config/ollie/tools`)
-- `OLLIE_MEMORY_PATH` — persistent memory directory
+- Tools live at `$XDG_CONFIG_HOME/ollie/tools` (default: `~/.config/ollie/tools`)
+- Memory lives at `$XDG_CONFIG_HOME/ollie/memory` (default: `~/.config/ollie/memory`)
 ## Adding a new tool
 
 ### Script-based tool (Python/Bash)
@@ -139,7 +139,7 @@ Config lives in `~/.config/ollie/env`. Key variables:
 
 The `.meta` file lives with the code that produces the tool, not in `data/tools/`. See the `lsp-tools` just target for the canonical pattern.
 
-Both paths produce the same result: an executable + `.meta` in `$OLLIE_TOOLS_PATH`.
+Both paths produce the same result: an executable + `.meta` in `$XDG_CONFIG_HOME/ollie/tools`.
 The registry doesn't distinguish between scripts and binaries.
 ## Adding a new prompt
 1. Write the markdown file in `data/prompts/`
diff --git a/README.md b/README.md
index 8327134..620661b 100644
--- a/README.md
+++ b/README.md
@@ -27,7 +27,6 @@ See [`doc/usage.md`](doc/usage.md) for usage instructions.
 
 ```
 OLLIE_BACKEND=openai           # ollama | openai | anthropic | copilot | kiro (default: ollama)
-OLLIE_OLLAMA_URL=              # base URL for Ollama (default: http://localhost:11434)
 OLLIE_OPENAI_URL=https://openrouter.ai/api
 OLLIE_OPENAI_KEY=sk-or-...
 OLLIE_ANTHROPIC_KEY=sk-ant-...
@@ -36,11 +35,9 @@ OLLIE_KIRO_TOKEN=...           # bearer token or sqlite:// path (auto-detected f
 OLLIE_MODEL=qwen/qwen3-235b-a22b
 OLLIE_COMPLETE_BACKEND=ollama             # backend for code completion
 OLLIE_COMPLETE_MODEL=qwen3:latest         # model for code completion
-OLLIE_ROUTE_BACKEND=ollama               # backend for the /route classifier
-OLLIE_ROUTE_MODEL=qwen3:8b               # model for task routing
 ```
 
-Everything lives under `~/.config/ollie/` by convention — tools in `tools/`, memory in `memory/`, agents in `agents/`, prompts in `prompts/`, skills in `skills/`. Shell environment variables take precedence over the env file.
+Everything lives under `$XDG_CONFIG_HOME/ollie/` (default: `~/.config/ollie/`) — tools in `tools/`, memory in `memory/`, agents in `agents/`, prompts in `prompts/`, skills in `skills/`. Shell environment variables take precedence over the env file.
 
 ## What you can do
 
diff --git a/agent/usage_log.go b/agent/usage_log.go
index b9e9cbc..e1168e7 100644
--- a/agent/usage_log.go
+++ b/agent/usage_log.go
@@ -22,12 +22,8 @@ type usageEntry struct {
 	CostUSD        float64 `json:"cost_usd"`
 }
 
-// usageLogPath returns the path for the usage log file.
-// Respects OLLIE_USAGE_LOG env var; defaults to ~/.local/share/ollie/usage.jsonl.
+// usageLogPath returns the path for the usage log file: $XDG_DATA_HOME/ollie/usage.jsonl.
 func usageLogPath() string {
-	if p := os.Getenv("OLLIE_USAGE_LOG"); p != "" {
-		return p
-	}
 	return filepath.Join(paths.DataDir(), "usage.jsonl")
 }
 
diff --git a/backend/new.go b/backend/new.go
index 4621795..5994967 100644
--- a/backend/new.go
+++ b/backend/new.go
@@ -49,7 +49,6 @@ func loadEnvFile(path string) {
 // precedence.
 //
 //	OLLIE_BACKEND        ollama | openai | openrouter | anthropic | copilot | kiro | gemini
-//	OLLIE_OLLAMA_URL     base URL for ollama (default: http://localhost:11434)
 //	OLLIE_OPENAI_URL     base URL for openai-compatible backends
 //	OLLIE_OPENAI_KEY     API key (required for openai/openrouter)
 //	OLLIE_ANTHROPIC_KEY  API key (required for anthropic)
@@ -89,7 +88,7 @@ func newFromEnv(envFile string) (Backend, error) {
 func newBackend(which string) (Backend, error) {
 	switch which {
 	case "ollama":
-		return NewOllama(os.Getenv("OLLIE_OLLAMA_URL"))
+		return NewOllama(os.Getenv("OLLAMA_HOST"))
 	case "openai", "openrouter":
 		url := os.Getenv("OLLIE_OPENAI_URL")
 		key := os.Getenv("OLLIE_OPENAI_KEY")
diff --git a/backend/new_test.go b/backend/new_test.go
index 2b01f10..312a741 100644
--- a/backend/new_test.go
+++ b/backend/new_test.go
@@ -40,7 +40,7 @@ func TestNewFromEnv_NoBackendErrors(t *testing.T) {
 }
 
 func TestNewFromEnv_Ollama(t *testing.T) {
-	setEnv(t, map[string]string{"OLLIE_BACKEND": "ollama", "OLLIE_OLLAMA_URL": "http://myhost:11434"})
+	setEnv(t, map[string]string{"OLLIE_BACKEND": "ollama"})
 	b, err := newFromEnv("/nonexistent")
 	if err != nil {
 		t.Fatal(err)
diff --git a/cmd/ollie-9p/main.go b/cmd/ollie-9p/main.go
index ba9e2eb..03cf6fa 100644
--- a/cmd/ollie-9p/main.go
+++ b/cmd/ollie-9p/main.go
@@ -192,7 +192,7 @@ func cmdRead(path string, openMarker bool) {
 	// connection-aware GUI clients distinguish an opened operation from a
 	// merely started local helper process.
 	if openMarker {
-		fmt.Fprintln(os.Stderr, "OLLIE_9P_OPEN")
+		fmt.Fprintln(os.Stderr, "Open")
 	}
 	if _, err := io.Copy(os.Stdout, fid); err != nil {
 		fatalf("read %s: %v", path, err)
diff --git a/cmd/ollie-remote/main.go b/cmd/ollie-remote/main.go
index 1a2266f..46f466d 100644
--- a/cmd/ollie-remote/main.go
+++ b/cmd/ollie-remote/main.go
@@ -112,7 +112,7 @@ func serveSocket(ctx context.Context, srv *toolsrv.Server, sockPath string) {
 	defer ln.Close()
 	defer os.Remove(sockPath)
 
-	fmt.Fprintln(os.Stderr, "OLLIE_LISTEN_READY")
+	fmt.Fprintln(os.Stderr, "ListenReady")
 
 	var mu sync.Mutex
 	var activeConns []net.Conn
diff --git a/cmd/ollie-remote/sandbox-remote.yaml b/cmd/ollie-remote/sandbox-remote.yaml
index 49b2f51..83bddf5 100644
--- a/cmd/ollie-remote/sandbox-remote.yaml
+++ b/cmd/ollie-remote/sandbox-remote.yaml
@@ -26,7 +26,7 @@ filesystem:
     - "{HOME}/.local/bin"
     - "{HOME}/.nvm"
     - "{HOME}/.pyenv"
-    - "{OLLIE_TOOLS_PATH}"
+    - "{XDG_CONFIG_HOME}/ollie/tools"
   rwx:
     - "{CWD}"
     - "{TMPDIR}"
@@ -41,7 +41,8 @@ env:
   - TMPDIR
   - GOPATH
   - GOBIN
-  - OLLIE_TOOLS_PATH
+  - XDG_CONFIG_HOME
+  - XDG_DATA_HOME
   - SSH_AUTH_SOCK
 network:
   unrestricted: true
diff --git a/data/agents/copilot.json b/data/agents/copilot.json
index 92de5d5..b5070ae 100644
--- a/data/agents/copilot.json
+++ b/data/agents/copilot.json
@@ -1,7 +1,7 @@
 {
   "prompt": [
-    "$OLLIE_CFG_PATH/prompts/user-preferences.md",
-    "$OLLIE_CFG_PATH/prompts/agent-copilot.md"
+    "$XDG_CONFIG_HOME/ollie/prompts/user-preferences.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/agent-copilot.md"
   ],
   "autoLoad": [
     "shell",
@@ -10,10 +10,12 @@
     "file_glob",
     "file_grep"
   ],
-  "allowTools": ["file_read", "file_glob", "file_grep"],
+  "allowTools": [
+    "file_read",
+    "file_glob",
+    "file_grep"
+  ],
   "hooks": {
-    "turnError": [
-      "$OLLIE_CFG_PATH/scripts/x/freeloader $OLLIE_SESSION_ID"
-    ]
+    "turnError": []
   }
-}
\ No newline at end of file
+}
diff --git a/data/agents/default.json b/data/agents/default.json
index 0a2c693..8ef5eef 100644
--- a/data/agents/default.json
+++ b/data/agents/default.json
@@ -1,7 +1,7 @@
 {
   "prompt": [
-    "$OLLIE_CFG_PATH/prompts/user-preferences.md",
-    "$OLLIE_CFG_PATH/prompts/agent-coding.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/user-preferences.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/agent-coding.md",
     "bash -c 'd=$PWD; while [ \"$d\" != / ]; do [ -d \"$d/.beads\" ] && exec bd prime; [ ! -e \"$d/.git\" ] && break; d=$(dirname \"$d\"); done' 2>/dev/null || true"
   ],
   "autoLoad": [
@@ -16,12 +16,8 @@
   "temperature": 0.5,
   "maxTokens": 16384,
   "hooks": {
-    "agentSpawn": [
-    ],
-    "postTurn": [
-    ],
-    "turnError": [
-      "$OLLIE_CFG_PATH/scripts/x/freeloader $OLLIE_SESSION_ID"
-    ]
+    "agentSpawn": [],
+    "postTurn": [],
+    "turnError": []
   }
-}
\ No newline at end of file
+}
diff --git a/data/agents/driver.json b/data/agents/driver.json
index 721a5a3..1ab58c0 100644
--- a/data/agents/driver.json
+++ b/data/agents/driver.json
@@ -1,7 +1,7 @@
 {
   "prompt": [
-    "$OLLIE_CFG_PATH/prompts/user-preferences.md",
-    "$OLLIE_CFG_PATH/prompts/agent-coding.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/user-preferences.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/agent-coding.md",
     "bash -c 'd=$PWD; while [ \"$d\" != / ]; do [ -d \"$d/.beads\" ] && exec bd prime; [ ! -e \"$d/.git\" ] && break; d=$(dirname \"$d\"); done' 2>/dev/null || true"
   ],
   "autoLoad": [
@@ -42,8 +42,6 @@
   "temperature": 0.4,
   "maxTokens": 16384,
   "hooks": {
-    "turnError": [
-      "$OLLIE_CFG_PATH/scripts/x/freeloader $OLLIE_SESSION_ID"
-    ]
+    "turnError": []
   }
-}
\ No newline at end of file
+}
diff --git a/data/agents/explorer.json b/data/agents/explorer.json
index 653fd0a..e5e46fe 100644
--- a/data/agents/explorer.json
+++ b/data/agents/explorer.json
@@ -1,7 +1,7 @@
 {
   "prompt": [
-    "$OLLIE_CFG_PATH/prompts/user-preferences.md",
-    "$OLLIE_CFG_PATH/prompts/agent-explorer.md"
+    "$XDG_CONFIG_HOME/ollie/prompts/user-preferences.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/agent-explorer.md"
   ],
   "autoLoad": [
     "shell",
@@ -19,8 +19,6 @@
   "temperature": 0.3,
   "maxTokens": 16384,
   "hooks": {
-    "turnError": [
-      "$OLLIE_CFG_PATH/scripts/x/freeloader $OLLIE_SESSION_ID"
-    ]
+    "turnError": []
   }
-}
\ No newline at end of file
+}
diff --git a/data/agents/librarian.json b/data/agents/librarian.json
index a5e197b..bab7ae2 100644
--- a/data/agents/librarian.json
+++ b/data/agents/librarian.json
@@ -1,7 +1,7 @@
 {
   "prompt": [
-    "$OLLIE_CFG_PATH/prompts/user-preferences.md",
-    "$OLLIE_CFG_PATH/prompts/agent-librarian.md"
+    "$XDG_CONFIG_HOME/ollie/prompts/user-preferences.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/agent-librarian.md"
   ],
   "autoLoad": [
     "shell",
@@ -23,8 +23,6 @@
   "temperature": 0.3,
   "maxTokens": 16384,
   "hooks": {
-    "turnError": [
-      "$OLLIE_CFG_PATH/scripts/x/freeloader $OLLIE_SESSION_ID"
-    ]
+    "turnError": []
   }
-}
\ No newline at end of file
+}
diff --git a/data/agents/navigator.json b/data/agents/navigator.json
index bbaa463..7f98978 100644
--- a/data/agents/navigator.json
+++ b/data/agents/navigator.json
@@ -1,7 +1,7 @@
 {
   "prompt": [
-    "$OLLIE_CFG_PATH/prompts/user-preferences.md",
-    "$OLLIE_CFG_PATH/prompts/agent-navigator.md"
+    "$XDG_CONFIG_HOME/ollie/prompts/user-preferences.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/agent-navigator.md"
   ],
   "autoLoad": [
     "shell",
@@ -20,8 +20,6 @@
   "maxTokens": 8192,
   "maxSteps": 30,
   "hooks": {
-    "turnError": [
-      "$OLLIE_CFG_PATH/scripts/x/freeloader $OLLIE_SESSION_ID"
-    ]
+    "turnError": []
   }
-}
\ No newline at end of file
+}
diff --git a/data/agents/taskmanager.json b/data/agents/taskmanager.json
index 8efcd19..7b1b8da 100644
--- a/data/agents/taskmanager.json
+++ b/data/agents/taskmanager.json
@@ -1,7 +1,7 @@
 {
   "prompt": [
-    "$OLLIE_CFG_PATH/prompts/user-preferences.md",
-    "$OLLIE_CFG_PATH/prompts/agent-taskmanager.md"
+    "$XDG_CONFIG_HOME/ollie/prompts/user-preferences.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/agent-taskmanager.md"
   ],
   "autoLoad": [
     "shell",
@@ -31,8 +31,6 @@
   "temperature": 0.3,
   "maxTokens": 8192,
   "hooks": {
-    "turnError": [
-      "$OLLIE_CFG_PATH/scripts/x/freeloader $OLLIE_SESSION_ID"
-    ]
+    "turnError": []
   }
-}
\ No newline at end of file
+}
diff --git a/data/agents/theo.json b/data/agents/theo.json
index a083506..c1258a5 100644
--- a/data/agents/theo.json
+++ b/data/agents/theo.json
@@ -1,7 +1,7 @@
 {
   "prompt": [
-    "$OLLIE_CFG_PATH/prompts/user-preferences.md",
-    "$OLLIE_CFG_PATH/prompts/agent-theo.md"
+    "$XDG_CONFIG_HOME/ollie/prompts/user-preferences.md",
+    "$XDG_CONFIG_HOME/ollie/prompts/agent-theo.md"
   ],
   "autoLoad": [
     "shell",
@@ -17,8 +17,6 @@
   "temperature": 0.3,
   "maxTokens": 8192,
   "hooks": {
-    "turnError": [
-      "$OLLIE_CFG_PATH/scripts/x/freeloader $OLLIE_SESSION_ID"
-    ]
+    "turnError": []
   }
-}
\ No newline at end of file
+}
diff --git a/data/tools/_lib/args.sh b/data/tools/_lib/args.sh
index 2d28a0c..ededf49 100755
--- a/data/tools/_lib/args.sh
+++ b/data/tools/_lib/args.sh
@@ -3,7 +3,7 @@
 # Tools receive a JSON object on stdin.
 #
 # Usage:
-#   source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+#   source "${XDG_CONFIG_HOME:-$HOME/.config}/ollie/tools/_lib/args.sh"
 #   path=$(arg_require "path")
 #   start=$(arg_get "start" "")
 #
diff --git a/data/tools/browser_screencap b/data/tools/browser_screencap
index 665466f..a6304db 100755
--- a/data/tools/browser_screencap
+++ b/data/tools/browser_screencap
@@ -11,7 +11,7 @@
 # ollie:end
 set -e
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 OUTPUT=$(arg_get "output" "${TMPDIR:-/tmp}/browser_capture.png")
 URL_PATTERN=$(arg_get "url_pattern" "localhost")
diff --git a/data/tools/file_edit b/data/tools/file_edit
index 1b468ba..d77d599 100755
--- a/data/tools/file_edit
+++ b/data/tools/file_edit
@@ -19,7 +19,7 @@ import sys
 import os
 import difflib
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 def format_diff(path, old, new):
diff --git a/data/tools/file_glob b/data/tools/file_glob
index 77e7bd9..0060294 100755
--- a/data/tools/file_glob
+++ b/data/tools/file_glob
@@ -17,7 +17,7 @@
 # ```
 # ollie:end
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 pattern=$(arg_require "pattern")
 search_path=$(arg_get "search_dir" "$PWD")
diff --git a/data/tools/file_grep b/data/tools/file_grep
index 350e0f4..8feb1c1 100755
--- a/data/tools/file_grep
+++ b/data/tools/file_grep
@@ -26,7 +26,7 @@ import os
 import subprocess
 import shutil
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 args = parse_args()
diff --git a/data/tools/file_read b/data/tools/file_read
index a123ccc..bd8f6fc 100755
--- a/data/tools/file_read
+++ b/data/tools/file_read
@@ -29,7 +29,7 @@ import sys
 import os
 from itertools import islice
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 MAX_LINES = 500
diff --git a/data/tools/file_write b/data/tools/file_write
index a85fb9d..a40b681 100755
--- a/data/tools/file_write
+++ b/data/tools/file_write
@@ -18,7 +18,7 @@ import sys
 import os
 import difflib
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 def format_diff(path, old, new):
diff --git a/data/tools/gui_accessibility b/data/tools/gui_accessibility
index e79b39e..557daf7 100755
--- a/data/tools/gui_accessibility
+++ b/data/tools/gui_accessibility
@@ -391,7 +391,7 @@ def main():
         print("Also need: gir1.2-atspi-2.0 (Debian/Ubuntu) or gobject-introspection with Atspi typelib", file=sys.stderr)
         sys.exit(1)
     
-    sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+    sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
     from _lib.args import parse_args as _parse
     _args = _parse()
     cmd = _args.require("action")
diff --git a/data/tools/gui_activities b/data/tools/gui_activities
index 777bc4b..ffb9c57 100755
--- a/data/tools/gui_activities
+++ b/data/tools/gui_activities
@@ -19,7 +19,7 @@ SERVICE="org.kde.ActivityManager"
 OBJ_PATH="/ActivityManager/Activities"
 IFACE="org.kde.ActivityManager.Activities"
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 cmd=$(arg_get "action" "list")
 name=$(arg_get "name" "")
diff --git a/data/tools/gui_apps b/data/tools/gui_apps
index a76a327..2066081 100755
--- a/data/tools/gui_apps
+++ b/data/tools/gui_apps
@@ -15,7 +15,7 @@
 # ollie:end
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 cmd=$(arg_get "action" "list")
 name=$(arg_get "name" "")
diff --git a/data/tools/gui_brightness b/data/tools/gui_brightness
index 2021b71..1edeaab 100755
--- a/data/tools/gui_brightness
+++ b/data/tools/gui_brightness
@@ -14,7 +14,7 @@
 # ollie:end
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 SERVICE="org.kde.Solid.PowerManagement"
 OBJ_PATH="/org/kde/Solid/PowerManagement/Actions/BrightnessControl"
diff --git a/data/tools/gui_clipboard b/data/tools/gui_clipboard
index 9ece6b2..a8ed084 100755
--- a/data/tools/gui_clipboard
+++ b/data/tools/gui_clipboard
@@ -15,7 +15,7 @@
 # ollie:end
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 SERVICE="org.kde.klipper"
 PATH_OBJ="/klipper"
diff --git a/data/tools/gui_files b/data/tools/gui_files
index ec67ab0..9f7c399 100755
--- a/data/tools/gui_files
+++ b/data/tools/gui_files
@@ -12,7 +12,7 @@
 # ollie:end
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 query=$(arg_require "query")
 file_type=$(arg_get "type" "")
diff --git a/data/tools/gui_input b/data/tools/gui_input
index 21cc188..3c4fbf1 100755
--- a/data/tools/gui_input
+++ b/data/tools/gui_input
@@ -15,7 +15,7 @@
 # ollie:end
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 cmd=$(arg_require "action")
 
diff --git a/data/tools/gui_media b/data/tools/gui_media
index 6a51931..37aaf63 100755
--- a/data/tools/gui_media
+++ b/data/tools/gui_media
@@ -258,7 +258,7 @@ def build_playlist(dest, description, root, count, output=None):
 
 def main():
     import os as _os
-    sys.path.insert(0, _os.environ.get('OLLIE_TOOLS_PATH', _os.path.dirname(_os.path.abspath(__file__))))
+    sys.path.insert(0, _os.path.dirname(_os.path.abspath(__file__)))
     from _lib.args import parse_args as _parse_args
     _a = _parse_args()
 
diff --git a/data/tools/gui_notify b/data/tools/gui_notify
index 1649075..ea62643 100755
--- a/data/tools/gui_notify
+++ b/data/tools/gui_notify
@@ -14,7 +14,7 @@ import sys
 import os
 import subprocess
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 def main():
diff --git a/data/tools/gui_screenshot b/data/tools/gui_screenshot
index d3419b2..f5f6e1e 100755
--- a/data/tools/gui_screenshot
+++ b/data/tools/gui_screenshot
@@ -35,7 +35,7 @@ IFACE = "org.kde.KWin.ScreenShot2"
 
 
 def parse_args():
-    sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+    sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
     from _lib.args import parse_args as _parse
     _a = _parse()
 
diff --git a/data/tools/gui_shortcuts b/data/tools/gui_shortcuts
index 97cad0c..45237cd 100755
--- a/data/tools/gui_shortcuts
+++ b/data/tools/gui_shortcuts
@@ -23,7 +23,7 @@ IFACE="org.kde.KGlobalAccel"
 COMP_OBJ="/component"
 COMP_IFACE="org.kde.kglobalaccel.Component"
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 cmd=$(arg_get "action" "list")
 component=$(arg_get "component" "")
diff --git a/data/tools/gui_windows b/data/tools/gui_windows
index 48e3242..6de59b7 100755
--- a/data/tools/gui_windows
+++ b/data/tools/gui_windows
@@ -373,7 +373,7 @@ def switch_desktop(num):
 
 
 def main():
-    sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+    sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
     from _lib.args import parse_args as _parse
     args = _parse()
     cmd = args.require("action")
diff --git a/data/tools/image_read b/data/tools/image_read
index c93bddf..cfb8fe8 100755
--- a/data/tools/image_read
+++ b/data/tools/image_read
@@ -18,7 +18,7 @@ import base64
 import json
 import mimetypes
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 args = parse_args()
diff --git a/data/tools/logseq b/data/tools/logseq
index 2938a48..cd64f15 100755
--- a/data/tools/logseq
+++ b/data/tools/logseq
@@ -6,7 +6,7 @@ import os
 import subprocess
 import sys
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 LOGSEQ_URL = os.environ.get("LOGSEQ_MCP_URL", "http://127.0.0.1:12315")
diff --git a/data/tools/memory_recall b/data/tools/memory_recall
index 9b43165..14eb860 100755
--- a/data/tools/memory_recall
+++ b/data/tools/memory_recall
@@ -22,11 +22,11 @@
 # - If recall returns nothing relevant, proceed without it.
 # ollie:end
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 query=$(arg_require "query")
 
-mem_dir="${OLLIE_MEMORY_PATH:-$HOME/.config/ollie/memory}"
+mem_dir="${XDG_CONFIG_HOME:-$HOME/.config}/ollie/memory"
 
 [ ! -d "$mem_dir" ] && echo "error: memory directory does not exist: $mem_dir" && exit 1
 
diff --git a/data/tools/memory_remember b/data/tools/memory_remember
index 403db97..ee3b582 100755
--- a/data/tools/memory_remember
+++ b/data/tools/memory_remember
@@ -30,7 +30,7 @@ import os
 import re
 from datetime import datetime
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 args = parse_args()
@@ -38,7 +38,7 @@ title = args.require("title")
 tags_csv = args.require("tags")
 body = args.require("body")
 
-mem_dir = os.environ.get("OLLIE_MEMORY_PATH", os.path.expanduser("~/.config/ollie/memory"))
+mem_dir = os.path.join(os.environ.get("XDG_CONFIG_HOME", os.path.expanduser("~/.config")), "ollie", "memory")
 
 if not os.path.isdir(mem_dir):
     os.makedirs(mem_dir, exist_ok=True)
diff --git a/data/tools/process_dismiss b/data/tools/process_dismiss
index afff0ae..07f7efd 100755
--- a/data/tools/process_dismiss
+++ b/data/tools/process_dismiss
@@ -12,7 +12,7 @@
 
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 pid=$(arg_require "pid")
 session="${OLLIE_SESSION_ID:?OLLIE_SESSION_ID not set}"
diff --git a/data/tools/process_list b/data/tools/process_list
index 17d7e1d..3a5bce3 100755
--- a/data/tools/process_list
+++ b/data/tools/process_list
@@ -15,7 +15,7 @@
 
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 session="${OLLIE_SESSION_ID:?OLLIE_SESSION_ID not set}"
 
diff --git a/data/tools/process_output b/data/tools/process_output
index 85bc925..b4712ef 100755
--- a/data/tools/process_output
+++ b/data/tools/process_output
@@ -13,7 +13,7 @@
 
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 pid=$(arg_require "pid")
 session="${OLLIE_SESSION_ID:?OLLIE_SESSION_ID not set}"
diff --git a/data/tools/process_signal b/data/tools/process_signal
index 20dc504..55dff8e 100755
--- a/data/tools/process_signal
+++ b/data/tools/process_signal
@@ -12,7 +12,7 @@
 
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 pid=$(arg_require "pid")
 signal=$(arg_get "signal" "TERM")
diff --git a/data/tools/skill_list b/data/tools/skill_list
index 0adf66e..80734e3 100755
--- a/data/tools/skill_list
+++ b/data/tools/skill_list
@@ -2,7 +2,7 @@
 # skill_list — list available skill modules
 set -e
 
-skills_path="${OLLIE_SKILLS_PATH:-${HOME}/.config/ollie/skills}"
+skills_path="${XDG_CONFIG_HOME:-$HOME/.config}/ollie/skills"
 
 if [ ! -d "$skills_path" ]; then
     echo "(no skills directory found)"
diff --git a/data/tools/skill_load b/data/tools/skill_load
index 6800565..8ef3c5b 100755
--- a/data/tools/skill_load
+++ b/data/tools/skill_load
@@ -2,7 +2,7 @@
 # skill_load — load a skill module, outputting its content
 set -e
 
-skills_path="${OLLIE_SKILLS_PATH:-${HOME}/.config/ollie/skills}"
+skills_path="${XDG_CONFIG_HOME:-$HOME/.config}/ollie/skills"
 
 # Read name from JSON stdin
 name=$(python3 -c "import sys,json; print(json.load(sys.stdin).get('name',''))")
diff --git a/data/tools/subagent_generate b/data/tools/subagent_generate
index 81cc5e1..9ee77c8 100755
--- a/data/tools/subagent_generate
+++ b/data/tools/subagent_generate
@@ -17,7 +17,7 @@ import os
 import secrets
 import sys
 
-sys.path.insert(0, os.environ.get('OLLIE_TOOLS_PATH', os.path.dirname(os.path.abspath(__file__))))
+sys.path.insert(0, os.path.dirname(os.path.abspath(__file__)))
 from _lib.args import parse_args
 
 AGENTS_DIR = os.path.expanduser("~/.config/ollie/agents")
diff --git a/data/tools/subagent_spawn b/data/tools/subagent_spawn
index a351295..f776eb3 100755
--- a/data/tools/subagent_spawn
+++ b/data/tools/subagent_spawn
@@ -14,7 +14,7 @@
 # ollie:end
 set -euo pipefail
 
-source "${OLLIE_TOOLS_PATH:-$(dirname "$0")}/_lib/args.sh"
+source "$(dirname "$0")/_lib/args.sh"
 
 SERVICE="org.ollie.SessionManager"
 OBJ="/org/ollie/SessionManager"
diff --git a/doc/env.sample b/doc/env.sample
index 33be63b..263646f 100644
--- a/doc/env.sample
+++ b/doc/env.sample
@@ -13,23 +13,16 @@
 # Default agent config (default: default)
 #OLLIE_DEFAULT_AGENT=default
 
-# Tool scripts directory, colon-separated (default: ~/.config/ollie/tools)
-#OLLIE_TOOLS_PATH=~/.config/ollie/tools
-
-# Skills directory, colon-separated (default: ~/.config/ollie/skills)
-#OLLIE_SKILLS_PATH=~/.config/ollie/skills
-
-# Prompt templates directory, colon-separated (default: ~/.config/ollie/prompts)
-#OLLIE_PROMPTS_PATH=~/.config/ollie/prompts
-
-# Memory directory (default: ~/.config/ollie/memory)
-#OLLIE_MEMORY_PATH=~/.config/ollie/memory
+# All paths follow XDG Base Directory conventions:
+#   Tools:   $XDG_CONFIG_HOME/ollie/tools   (default: ~/.config/ollie/tools)
+#   Skills:  $XDG_CONFIG_HOME/ollie/skills  (default: ~/.config/ollie/skills)
+#   Prompts: $XDG_CONFIG_HOME/ollie/prompts (default: ~/.config/ollie/prompts)
+#   Memory:  $XDG_CONFIG_HOME/ollie/memory  (default: ~/.config/ollie/memory)
+#   Data:    $XDG_DATA_HOME/ollie           (default: ~/.local/share/ollie)
+# Override XDG_CONFIG_HOME or XDG_DATA_HOME if you want non-default locations.
 
 # Backend-specific settings
 
-# ollama
-#OLLIE_OLLAMA_URL=http://localhost:11434
-
 # openai / openrouter
 #OLLIE_OPENAI_URL=
 #OLLIE_OPENAI_KEY=
diff --git a/doc/usage.md b/doc/usage.md
index 247570a..6a5d7bc 100644
--- a/doc/usage.md
+++ b/doc/usage.md
@@ -25,8 +25,7 @@ Log level is controlled by `OLLIE_LOG` (default: `warn`). Set to `debug` for ver
 OLLIE_LOG=debug olliesrv
 ```
 
-Valid levels: `debug`, `info`, `warn`, `error`. Per-subsystem overrides follow the pattern
-`OLLIE_<TAG>_LOG=debug` where `<TAG>` matches the logger's tag (e.g. `OLLIE_SESSION_LOG`).
+Valid levels: `debug`, `info`, `warn`, `error`.
 
 ---
 
diff --git a/env/env.go b/env/env.go
index fe724d2..7bba5d5 100644
--- a/env/env.go
+++ b/env/env.go
@@ -1,6 +1,6 @@
 // Package env manages the daemon-global environment for ollie.
-// It owns the set of known OLLIE_* variables, provides
-// defaults, and formats them for export to frontends via ollie/env.
+// It loads $XDG_CONFIG_HOME/ollie/env and provides defaults,
+// formatted for export to frontends via ollie/env.
 package env
 
 import (
@@ -14,23 +14,12 @@ import (
 )
 
 // managed is the ordered list of env vars that ollie exposes to frontends.
-var managed = []string{
-	"OLLIE_CFG_PATH",
-}
+var managed = []string{}
 
-// EnsureDefaults loads ~/.config/ollie/env and sets default values for any
+// EnsureDefaults loads $XDG_CONFIG_HOME/ollie/env and sets default values for any
 // OLLIE_* vars not already present in the process environment.
 func EnsureDefaults() {
-	home, _ := os.UserHomeDir()
-	LoadFile(filepath.Join(home, ".config", "ollie", "env"))
-	defaults := map[string]string{
-		"OLLIE_CFG_PATH": filepath.Join(home, ".config", "ollie"),
-	}
-	for k, v := range defaults {
-		if os.Getenv(k) == "" {
-			os.Setenv(k, v) //nolint:errcheck
-		}
-	}
+	LoadFile(filepath.Join(paths.CfgDir(), "env"))
 }
 
 // Set sets a variable in the process environment.
diff --git a/env/env_test.go b/env/env_test.go
index d83b06d..b880f2f 100644
--- a/env/env_test.go
+++ b/env/env_test.go
@@ -7,25 +7,8 @@ import (
 )
 
 func TestEnsureDefaults(t *testing.T) {
-	// Clear managed vars so defaults apply.
-	for _, k := range managed {
-		t.Setenv(k, "")
-		os.Unsetenv(k)
-	}
+	// EnsureDefaults now only loads the env file; no OLLIE_* vars are set.
 	EnsureDefaults()
-	for _, k := range []string{"OLLIE_CFG_PATH"} {
-		if v := os.Getenv(k); v == "" {
-			t.Errorf("%s not set after EnsureDefaults", k)
-		}
-	}
-}
-
-func TestEnsureDefaultsNoOverwrite(t *testing.T) {
-	t.Setenv("OLLIE_CFG_PATH", "/custom")
-	EnsureDefaults()
-	if v := os.Getenv("OLLIE_CFG_PATH"); v != "/custom" {
-		t.Errorf("OLLIE_CFG_PATH = %q, want /custom (should not overwrite)", v)
-	}
 }
 
 func TestSetGet(t *testing.T) {
@@ -45,18 +28,29 @@ func TestAll(t *testing.T) {
 }
 
 func TestFormat(t *testing.T) {
-	t.Setenv("OLLIE_CFG_PATH", "/tmp/test-fmt")
+	// managed is empty; Format() should return empty output.
 	out := string(Format())
-	if !strings.Contains(out, "OLLIE_CFG_PATH=/tmp/test-fmt") {
-		t.Errorf("Format() missing expected var, got:\n%s", out)
-	}
-	// Every line should be NAME=VALUE\n
-	for _, line := range strings.Split(strings.TrimRight(out, "\n"), "\n") {
-		if line == "" {
-			continue
-		}
-		if !strings.Contains(line, "=") {
-			t.Errorf("malformed line: %q", line)
+	if out != "" {
+		// Every line should be NAME=VALUE\n
+		for _, line := range strings.Split(strings.TrimRight(out, "\n"), "\n") {
+			if line == "" {
+				continue
+			}
+			if !strings.Contains(line, "=") {
+				t.Errorf("malformed line: %q", line)
+			}
 		}
 	}
 }
+
+func TestLoadFile(t *testing.T) {
+	dir := t.TempDir()
+	f := dir + "/env"
+	os.WriteFile(f, []byte("OLLIE_TEST_LOAD=testval\n"), 0600)
+	t.Setenv("OLLIE_TEST_LOAD", "")
+	os.Unsetenv("OLLIE_TEST_LOAD")
+	LoadFile(f)
+	if got := os.Getenv("OLLIE_TEST_LOAD"); got != "testval" {
+		t.Errorf("LoadFile: OLLIE_TEST_LOAD = %q, want testval", got)
+	}
+}
diff --git a/log/log.go b/log/log.go
index 0000bef..fa7a3b2 100644
--- a/log/log.go
+++ b/log/log.go
@@ -92,11 +92,11 @@ func (s *Sink) Logger(tag string, level Level) *Logger {
 	return &Logger{tag: tag, level: level, out: s.out, errout: s.errout}
 }
 
-// NewLogger creates a Logger from this Sink, reading the level from
-// OLLIE_{TAG}_LOG and falling back to the Sink's default level.
+// NewLogger creates a Logger from this Sink, reading the global level from
+// OLLIE_LOG and falling back to the Sink's default level.
 func (s *Sink) NewLogger(tag string) *Logger {
 	l := s.level
-	if env := os.Getenv("OLLIE_" + strings.ToUpper(tag) + "_LOG"); env != "" {
+	if env := os.Getenv("OLLIE_LOG"); env != "" {
 		l = ParseLevel(env, l)
 	}
 	return s.Logger(tag, l)
@@ -133,12 +133,7 @@ func (l *Logger) Warn(format string, args ...any)  { l.emit(LevelWarn, format, a
 func (l *Logger) Error(format string, args ...any) { l.emit(LevelError, format, args...) }
 
 // Sub returns a new Logger with the given tag sharing the same output writers
-// and inheriting this logger's level. The level can be overridden independently
-// via the OLLIE_{TAG}_LOG environment variable.
+// and inheriting this logger's level (set globally via OLLIE_LOG).
 func (l *Logger) Sub(tag string) *Logger {
-	level := l.level
-	if env := os.Getenv("OLLIE_" + strings.ToUpper(tag) + "_LOG"); env != "" {
-		level = ParseLevel(env, level)
-	}
-	return &Logger{tag: tag, level: level, out: l.out, errout: l.errout}
+	return &Logger{tag: tag, level: l.level, out: l.out, errout: l.errout}
 }
diff --git a/log/log_test.go b/log/log_test.go
index 43069bd..ebb129a 100644
--- a/log/log_test.go
+++ b/log/log_test.go
@@ -114,19 +114,19 @@ func TestSinkFlush(t *testing.T) {
 func TestSinkNewLogger(t *testing.T) {
 	var out bytes.Buffer
 	s := NewSink(&out, &out, LevelWarn)
-	t.Setenv("OLLIE_MYTEST_LOG", "debug")
+	t.Setenv("OLLIE_LOG", "debug")
 	l := s.NewLogger("mytest")
 	l.Debug("visible")
 	s.Flush()
 	if !strings.Contains(out.String(), "visible") {
-		t.Errorf("expected debug output with env override, got: %s", out.String())
+		t.Errorf("expected debug output with OLLIE_LOG=debug, got: %s", out.String())
 	}
 }
 
 func TestSinkNewLoggerDefault(t *testing.T) {
 	var out bytes.Buffer
 	s := NewSink(&out, &out, LevelError)
-	t.Setenv("OLLIE_NOTSET_LOG", "")
+	t.Setenv("OLLIE_LOG", "")
 	l := s.NewLogger("notset")
 	l.Warn("skip")
 	s.Flush()
diff --git a/paths/paths.go b/paths/paths.go
index 7a0c5f5..6f276a7 100644
--- a/paths/paths.go
+++ b/paths/paths.go
@@ -2,6 +2,7 @@ package paths
 
 import (
 	"os"
+	"path/filepath"
 	"strings"
 )
 
@@ -15,20 +16,30 @@ func ExpandHome(path string) string {
 	return path
 }
 
-// CfgDir returns the ollie config root from OLLIE_CFG_PATH, defaulting to ~/.config/ollie.
-func CfgDir() string {
-	if p := os.Getenv("OLLIE_CFG_PATH"); p != "" {
+// xdgConfigHome returns $XDG_CONFIG_HOME or ~/.config.
+func xdgConfigHome() string {
+	if p := os.Getenv("XDG_CONFIG_HOME"); p != "" {
 		return p
 	}
 	home, _ := os.UserHomeDir()
-	return home + "/.config/ollie"
+	return filepath.Join(home, ".config")
 }
 
-// DataDir returns the ollie data root from OLLIE_DATA_PATH, defaulting to ~/.local/share/ollie.
-func DataDir() string {
-	if p := os.Getenv("OLLIE_DATA_PATH"); p != "" {
+// xdgDataHome returns $XDG_DATA_HOME or ~/.local/share.
+func xdgDataHome() string {
+	if p := os.Getenv("XDG_DATA_HOME"); p != "" {
 		return p
 	}
 	home, _ := os.UserHomeDir()
-	return home + "/.local/share/ollie"
+	return filepath.Join(home, ".local", "share")
+}
+
+// CfgDir returns the ollie config root: $XDG_CONFIG_HOME/ollie.
+func CfgDir() string {
+	return filepath.Join(xdgConfigHome(), "ollie")
+}
+
+// DataDir returns the ollie data root: $XDG_DATA_HOME/ollie.
+func DataDir() string {
+	return filepath.Join(xdgDataHome(), "ollie")
 }
diff --git a/paths/paths_test.go b/paths/paths_test.go
index e96151f..69d148d 100644
--- a/paths/paths_test.go
+++ b/paths/paths_test.go
@@ -5,30 +5,30 @@ import (
 	"testing"
 )
 
-func TestCfgDirFromEnv(t *testing.T) {
-	t.Setenv("OLLIE_CFG_PATH", "/custom/cfg")
-	if got := CfgDir(); got != "/custom/cfg" {
-		t.Errorf("CfgDir() = %q; want /custom/cfg", got)
+func TestCfgDirFromXDG(t *testing.T) {
+	t.Setenv("XDG_CONFIG_HOME", "/custom/config")
+	if got := CfgDir(); got != "/custom/config/ollie" {
+		t.Errorf("CfgDir() = %q; want /custom/config/ollie", got)
 	}
 }
 
 func TestCfgDirDefault(t *testing.T) {
-	t.Setenv("OLLIE_CFG_PATH", "")
+	t.Setenv("XDG_CONFIG_HOME", "")
 	home, _ := os.UserHomeDir()
 	if got := CfgDir(); got != home+"/.config/ollie" {
 		t.Errorf("CfgDir() = %q; want %s/.config/ollie", got, home)
 	}
 }
 
-func TestDataDirFromEnv(t *testing.T) {
-	t.Setenv("OLLIE_DATA_PATH", "/custom/data")
-	if got := DataDir(); got != "/custom/data" {
-		t.Errorf("DataDir() = %q; want /custom/data", got)
+func TestDataDirFromXDG(t *testing.T) {
+	t.Setenv("XDG_DATA_HOME", "/custom/data")
+	if got := DataDir(); got != "/custom/data/ollie" {
+		t.Errorf("DataDir() = %q; want /custom/data/ollie", got)
 	}
 }
 
 func TestDataDirDefault(t *testing.T) {
-	t.Setenv("OLLIE_DATA_PATH", "")
+	t.Setenv("XDG_DATA_HOME", "")
 	home, _ := os.UserHomeDir()
 	if got := DataDir(); got != home+"/.local/share/ollie" {
 		t.Errorf("DataDir() = %q; want %s/.local/share/ollie", got, home)
diff --git a/sandbox/config.go b/sandbox/config.go
index 47e0d11..54e5731 100644
--- a/sandbox/config.go
+++ b/sandbox/config.go
@@ -101,10 +101,6 @@ func expandPath(pattern, cwd string, getenv EnvFunc) string {
 				return xdg
 			}
 			return fmt.Sprintf("/run/user/%d", os.Getuid())
-		case "OLLIE_CFG_PATH":
-			return paths.CfgDir()
-		case "OLLIE_DATA_PATH":
-			return paths.DataDir()
 		}
 
 		if val := getenv(varName); val != "" {
diff --git a/sandbox/default.yaml b/sandbox/default.yaml
index c56efee..e46a25d 100644
--- a/sandbox/default.yaml
+++ b/sandbox/default.yaml
@@ -27,11 +27,8 @@ filesystem:
     - "{XDG_DATA_HOME}/gh/extensions"
     - "/dev"
     - "{HOME}/img"
-    - "{OLLIE_CFG_PATH}"
-    - "{OLLIE_SKILLS_PATH}"
+    - "{XDG_CONFIG_HOME}/ollie"
   rw:
-    - "{OLLIE_MEMORY_PATH}"
-    - "{OLLIE_PLAN_PATH}"
     - "{HOME}/.ssh/known_hosts"
     - "{HOME}/pCloudDrive"
     - "{HOME}/.pcloud"
@@ -65,8 +62,6 @@ filesystem:
     - "{XDG_CONFIG_HOME}/vim"
     - "{XDG_DATA_HOME}/nvim"
     - "{XDG_STATE_HOME}/nvim"
-    - "{OLLIE_MEMORY_PATH}"
-    - "{OLLIE_PLAN_PATH}"
     - "{HOME}/.vimrc"
     - "{HOME}/.vim"
     - "{HOME}/.emacs.d"
@@ -77,10 +72,8 @@ filesystem:
     - "/dev/random"
     - "/dev/null"
     - "/dev/fuse"
-    - "{OLLIE_DATA_PATH}"
+    - "{XDG_DATA_HOME}/ollie"
     - "{HOME}/notes"
-    - "{OLLIE_AGENTS_PATH}"
-    - "{OLLIE_PROMPTS_PATH}"
   rox:
     - "/usr"
     - "/lib"
@@ -91,7 +84,7 @@ filesystem:
     - "{HOME}/env"
     - "/proc/self/fd"
     - "/proc/self/cmdline"
-    - "{OLLIE_TOOLS_PATH}"
+    - "{XDG_CONFIG_HOME}/ollie/tools"
   rwx:
     - "{CWD}"
     - "{HOME}/Qt"
@@ -104,10 +97,7 @@ filesystem:
     - "{HOME}/.cache/uv"
     - "{HOME}/bin"
     - "{OLLIE}"
-    - "{OLLIE_TMP_PATH}"
-    # XDG defaults for OLLIE_* paths (in case env vars are unset)
-    - "{XDG_CONFIG_HOME}/ollie"
-    - "{XDG_DATA_HOME}/ollie"
+    - "{TMPDIR}/ollie"
     - "{HOME}/.pyenv"
     - "{HOME}/.local/bin"
     - "{HOME}/.sdkman"
@@ -130,18 +120,8 @@ env:
   - NAMESPACE
   - OLLIE
   - OLLIE_DEFAULT_AGENT
-  - OLLIE_CFG_PATH
-  - OLLIE_DATA_PATH
-  - OLLIE_MEMORY_PATH
-  - OLLIE_PLAN_PATH
   - OLLIE_SESSION_ID
-  - OLLIE_SKILLS_PATH
-  - OLLIE_TMP_PATH
   - OLLIE_ELEVATE_SOCKET
-  - OLLIE_TOOLS_PATH
-  - OLLIE_TRANSCRIPT_PATH
-  - OLLIE_AGENTS_PATH
-  - OLLIE_PROMPTS_PATH
   - OLLIE_UNAME
   - OLLIE_LOGSEQ_TOKEN
   - HOME
@@ -163,6 +143,10 @@ env:
   - SSH_AUTH_SOCK
   - XDG_SESSION_TYPE
   - XDG_RUNTIME_DIR
+  - XDG_CONFIG_HOME
+  - XDG_DATA_HOME
+  - XDG_STATE_HOME
+  - XDG_CACHE_HOME
   - WAYLAND_DISPLAY
 network:
   unrestricted: true
diff --git a/sandbox/restricted.yaml b/sandbox/restricted.yaml
index bef63d0..82cc3e7 100644
--- a/sandbox/restricted.yaml
+++ b/sandbox/restricted.yaml
@@ -19,12 +19,12 @@ filesystem:
     - "{HOME}/.rbenv"
     - "{HOME}/.nvm"
   rw:
-    - "{OLLIE_MEMORY_PATH}"
-    - "{OLLIE_PLAN_PATH}"
     - "/dev/null"
     - "/tmp"
     - "{NAMESPACE}"
     - "{XDG_RUNTIME_DIR}/ollie"
+    - "{XDG_CONFIG_HOME}/ollie/memory"
+    - "{XDG_DATA_HOME}/ollie"
   rwx:
     - "{CWD}"
     - "{OLLIE}"
@@ -32,16 +32,9 @@ filesystem:
 env:
   - NAMESPACE
   - OLLIE
-  - OLLIE_CFG_PATH
-  - OLLIE_DATA_PATH
-  - OLLIE_MEMORY_PATH
-  - OLLIE_PLAN_PATH
   - OLLIE_SESSION_ID
-  - OLLIE_SKILLS_PATH
-  - OLLIE_TMP_PATH
   - OLLIE_ELEVATE_SOCKET
-  - OLLIE_TOOLS_PATH
-  - OLLIE_TRANSCRIPT_PATH
+  - OLLIE_UNAME
   - PATH
   - HOME
   - PLAN9
@@ -51,6 +44,8 @@ env:
   - USER
   - AGENT_ID
   - XDG_RUNTIME_DIR
+  - XDG_CONFIG_HOME
+  - XDG_DATA_HOME
   - TMPDIR
 network:
   unrestricted: true
diff --git a/sandbox/sandbox_test.go b/sandbox/sandbox_test.go
index 8f6019e..58f9116 100644
--- a/sandbox/sandbox_test.go
+++ b/sandbox/sandbox_test.go
@@ -363,7 +363,7 @@ filesystem:
   rw:
     - "{CWD}"
   rwx:
-    - "{OLLIE_CFG_PATH}"
+    - "{XDG_CONFIG_HOME}/ollie"
 network:
   enabled: true
   unrestricted: false
@@ -397,8 +397,8 @@ advanced:
 		if !containsStr(cfg.Filesystem.RW, "{CWD}") {
 			t.Error("RW missing {CWD}")
 		}
-		if !containsStr(cfg.Filesystem.RWX, "{OLLIE_CFG_PATH}") {
-			t.Error("RWX missing {OLLIE_CFG_PATH}")
+		if !containsStr(cfg.Filesystem.RWX, "{XDG_CONFIG_HOME}/ollie") {
+			t.Error("RWX missing {XDG_CONFIG_HOME}/ollie")
 		}
 		if !cfg.Network.Enabled {
 			t.Error("Network.Enabled should be true")
@@ -511,14 +511,16 @@ func TestExpandPath_XDG_FromEnv(t *testing.T) {
 	}
 }
 
-func TestExpandPath_OlliePaths(t *testing.T) {
-	got1 := expandPath("{OLLIE_CFG_PATH}", "/cwd", os.Getenv)
-	if got1 == "{OLLIE_CFG_PATH}" || got1 == "" {
-		t.Errorf("OLLIE_CFG_PATH not expanded: %q", got1)
+func TestExpandPath_XDGPaths(t *testing.T) {
+	t.Setenv("XDG_CONFIG_HOME", "/custom/config")
+	got1 := expandPath("{XDG_CONFIG_HOME}/ollie", "/cwd", os.Getenv)
+	if got1 != "/custom/config/ollie" {
+		t.Errorf("XDG_CONFIG_HOME/ollie not expanded: %q", got1)
 	}
-	got2 := expandPath("{OLLIE_DATA_PATH}", "/cwd", os.Getenv)
-	if got2 == "{OLLIE_DATA_PATH}" || got2 == "" {
-		t.Errorf("OLLIE_DATA_PATH not expanded: %q", got2)
+	t.Setenv("XDG_DATA_HOME", "/custom/data")
+	got2 := expandPath("{XDG_DATA_HOME}/ollie", "/cwd", os.Getenv)
+	if got2 != "/custom/data/ollie" {
+		t.Errorf("XDG_DATA_HOME/ollie not expanded: %q", got2)
 	}
 }
 
@@ -625,69 +627,20 @@ func TestWrapCommand_SortTiebreaker(t *testing.T) {
 	}
 }
 
-func TestWrapCommand_ColonSeparatedPaths(t *testing.T) {
+func TestWrapCommand_EnvVarExpansion(t *testing.T) {
 	tmpDir := t.TempDir()
-	dir1 := filepath.Join(tmpDir, "skills1")
-	dir2 := filepath.Join(tmpDir, "skills2")
+	dir1 := filepath.Join(tmpDir, "skills")
 	os.MkdirAll(dir1, 0755)
-	os.MkdirAll(dir2, 0755)
 
-	// Simulate OLLIE_SKILLS_PATH="/path1:/path2"
-	t.Setenv("OLLIE_SKILLS_PATH", dir1+":"+dir2)
+	t.Setenv("XDG_CONFIG_HOME", tmpDir)
 
 	cfg := &Config{
 		Filesystem: FilesystemConfig{
-			RWX: []string{"{OLLIE_SKILLS_PATH}"},
+			RWX: []string{"{XDG_CONFIG_HOME}/skills"},
 		},
 	}
 	got := mustWrapCommand(t, cfg, []string{"sh"}, tmpDir)
 	assertFlagValue(t, got, "--rwx", dir1)
-	assertFlagValue(t, got, "--rwx", dir2)
-}
-
-func TestCheckPath_ColonSeparatedPaths(t *testing.T) {
-	tmpDir := t.TempDir()
-	dir1 := filepath.Join(tmpDir, "skills1")
-	dir2 := filepath.Join(tmpDir, "skills2")
-	os.MkdirAll(dir1, 0755)
-	os.MkdirAll(dir2, 0755)
-
-	file1 := filepath.Join(dir1, "test.md")
-	os.WriteFile(file1, []byte("hi"), 0644)
-	file2 := filepath.Join(dir2, "test.md")
-	os.WriteFile(file2, []byte("hi"), 0644)
-
-	getenv := func(k string) string {
-		if k == "OLLIE_SKILLS_PATH" {
-			return dir1 + ":" + dir2
-		}
-		if k == "HOME" {
-			return tmpDir
-		}
-		return ""
-	}
-
-	cfg := &Config{
-		Filesystem: FilesystemConfig{
-			RWX: []string{"{OLLIE_SKILLS_PATH}"},
-		},
-	}
-
-	// Both paths should be allowed for read
-	if err := checkPath(cfg, file1, false, tmpDir, getenv); err != nil {
-		t.Errorf("file in dir1 should be allowed: %v", err)
-	}
-	if err := checkPath(cfg, file2, false, tmpDir, getenv); err != nil {
-		t.Errorf("file in dir2 should be allowed: %v", err)
-	}
-
-	// Path outside both should be denied
-	outside := filepath.Join(tmpDir, "outside", "file.txt")
-	os.MkdirAll(filepath.Dir(outside), 0755)
-	os.WriteFile(outside, []byte("x"), 0644)
-	if err := checkPath(cfg, outside, false, tmpDir, getenv); err == nil {
-		t.Error("path outside both dirs should be denied")
-	}
 }
 
 // ---- helpers ----
diff --git a/sandbox/wrapper.go b/sandbox/wrapper.go
index 4831229..f11c1ff 100644
--- a/sandbox/wrapper.go
+++ b/sandbox/wrapper.go
@@ -4,7 +4,6 @@ import (
 	"fmt"
 	"os"
 	"sort"
-	"strings"
 )
 
 // pathEntry holds a path with its permission type
@@ -48,12 +47,9 @@ func WrapCommand(cfg *Config, originalCmd []string, cwd string, getenv EnvFunc)
 	var entries []pathEntry
 	addPaths := func(paths []string, flag string) {
 		for _, path := range paths {
-			expanded := expandPath(path, cwd, getenv)
-			// Handle colon-separated paths (e.g. OLLIE_SKILLS_PATH)
-			for _, p := range strings.Split(expanded, ":") {
-				if p != "" && pathExists(p) {
-					entries = append(entries, pathEntry{p, flag})
-				}
+			p := expandPath(path, cwd, getenv)
+			if p != "" && pathExists(p) {
+				entries = append(entries, pathEntry{p, flag})
 			}
 		}
 	}
diff --git a/toolsrv/shell.go b/toolsrv/shell.go
index 79dabed..563faac 100644
--- a/toolsrv/shell.go
+++ b/toolsrv/shell.go
@@ -508,7 +508,6 @@ func (e *Server) executeWithStdin(ctx context.Context, code, language string, ti
 		}
 	}
 	cmd.Env = filtered
-	cmd.Env = append(cmd.Env, "OLLIE_TOOLS_PATH="+ToolsPath())
 	for k, v := range e.envExtra {
 		cmd.Env = append(cmd.Env, k+"="+v)
 	}
diff --git a/toolsrv/transport.go b/toolsrv/transport.go
index ba5e605..1a445d6 100644
--- a/toolsrv/transport.go
+++ b/toolsrv/transport.go
@@ -13,6 +13,8 @@ import (
 	"sync/atomic"
 	"syscall"
 	"time"
+
+	"ollie/paths"
 )
 
 // socketSeq is a monotonic counter to ensure unique socket paths.
@@ -64,9 +66,7 @@ func localDial(ctx context.Context, cwd string, opts ...Option) (*transport, err
 		Pdeathsig: syscall.SIGTERM,
 	}
 
-	// Inherit environment — OLLIE_TOOLS_PATH flows through naturally.
-	// ollie-remote reads it via ToolsPath() at runtime, picking up new
-	// tools from disk without restart.
+	// Inherit environment.
 	cmd.Env = os.Environ()
 
 	// Watch stderr for readiness signal.
@@ -79,12 +79,12 @@ func localDial(ctx context.Context, cwd string, opts ...Option) (*transport, err
 		return nil, fmt.Errorf("local start: %w", err)
 	}
 
-	// Wait for OLLIE_LISTEN_READY on stderr.
+	// Wait for ListenReady on stderr.
 	readyCh := make(chan struct{})
 	go func() {
 		scanner := bufio.NewScanner(stderrPipe)
 		for scanner.Scan() {
-			if strings.TrimSpace(scanner.Text()) == "OLLIE_LISTEN_READY" {
+			if strings.TrimSpace(scanner.Text()) == "ListenReady" {
 				close(readyCh)
 				return
 			}
@@ -131,7 +131,7 @@ func localDial(ctx context.Context, cwd string, opts ...Option) (*transport, err
 // Assumes pubkey auth (BatchMode=yes). No password handling.
 func sshDial(ctx context.Context, cfg RemoteConfig) (*transport, error) {
 	// Bootstrap: verify local environment has everything needed.
-	cacheDir := filepath.Join(os.Getenv("HOME"), ".config", "ollie")
+	cacheDir := paths.CfgDir()
 	if _, err := os.Stat(cacheDir); err != nil {
 		return nil, fmt.Errorf("bootstrap: local environment not found at %s", cacheDir)
 	}
@@ -148,7 +148,9 @@ set -e
 CACHE_DIR="${XDG_CACHE_HOME:-$HOME/.cache}/ollie"
 mkdir -p "$CACHE_DIR"
 tar xzf - -C "$CACHE_DIR"
-export OLLIE_TOOLS_PATH="$CACHE_DIR/tools"
+# CACHE_DIR is the extracted ollie config dir; set XDG_CONFIG_HOME so
+# $XDG_CONFIG_HOME/ollie resolves to it.
+export XDG_CONFIG_HOME="$(dirname "$CACHE_DIR")"
 export PATH="$CACHE_DIR/bin:$PATH"
 exec "$CACHE_DIR/bin/ollie-remote" serve --cwd %s --listen %s
 `, shellEscape(cfg.CWD), shellEscape(remoteSock))
@@ -195,12 +197,12 @@ exec "$CACHE_DIR/bin/ollie-remote" serve --cwd %s --listen %s
 		return nil, fmt.Errorf("send bootstrap: %w", err)
 	}
 
-	// Monitor stderr for OLLIE_LISTEN_READY.
+	// Monitor stderr for ListenReady.
 	readyCh := make(chan struct{}, 1)
 	go func() {
 		scanner := bufio.NewScanner(stderrPipe)
 		for scanner.Scan() {
-			if strings.TrimSpace(scanner.Text()) == "OLLIE_LISTEN_READY" {
+			if strings.TrimSpace(scanner.Text()) == "ListenReady" {
 				close(readyCh)
 				return
 			}