diff --git a/src/dashboard.mjs b/src/dashboard.mjs
index 3853d04..caeb578 100644
--- a/src/dashboard.mjs
+++ b/src/dashboard.mjs
@@ -5,7 +5,7 @@ import http from 'node:http';
 import crypto from 'node:crypto';
 import { fileURLToPath } from 'node:url';
 import { DEFAULT_DASHBOARD_PORT } from './constants.mjs';
-import { getDashboardAuth } from './torch-config.mjs';
+import { getDashboardAuth, parseTorchConfig } from './torch-config.mjs';
 
 function timingSafeCompare(a, b) {
   const bufA = Buffer.from(a);
@@ -73,17 +73,57 @@ export async function cmdDashboard(port = DEFAULT_DASHBOARD_PORT, host = '127.0.
     }
 
     // Special case: /torch-config.json
-    // Priority: User's CWD > Package default
+    // Priority: Env Var > User's CWD > Package default
     if (pathname === '/torch-config.json') {
-      const userConfigPath = path.resolve(process.cwd(), 'torch-config.json');
-      if (await statSafe(userConfigPath)) {
-        res.writeHead(200, { 'Content-Type': 'application/json' });
-        fs.createReadStream(userConfigPath).pipe(res);
+      let configContent = null;
+
+      if (process.env.TORCH_CONFIG_PATH) {
+        const envPath = path.resolve(process.cwd(), process.env.TORCH_CONFIG_PATH);
+        try {
+          configContent = await fsp.readFile(envPath, 'utf8');
+        } catch {
+          // Explicitly provided config path not found, do not fall back
+        }
+      } else {
+        const userConfigPath = path.resolve(process.cwd(), 'torch-config.json');
+        try {
+          configContent = await fsp.readFile(userConfigPath, 'utf8');
+        } catch {
+          // Try package default
+          const packageConfigPath = path.join(packageRoot, 'torch-config.json');
+          try {
+            configContent = await fsp.readFile(packageConfigPath, 'utf8');
+          } catch {
+            // Not found in either location
+          }
+        }
+      }
+
+      if (configContent) {
+        try {
+          const rawConfig = JSON.parse(configContent);
+          const safeConfig = parseTorchConfig(rawConfig);
+
+          // Security: Sanitize sensitive fields
+          if (safeConfig.dashboard) {
+            delete safeConfig.dashboard.auth;
+          }
+          delete safeConfig.configPath;
+
+          res.writeHead(200, { 'Content-Type': 'application/json' });
+          res.end(JSON.stringify(safeConfig, null, 2));
+          return;
+        } catch (err) {
+          console.error('Error parsing torch-config.json:', err);
+          res.writeHead(500);
+          res.end('Internal Server Error');
+          return;
+        }
+      } else {
+        res.writeHead(404);
+        res.end('Not Found');
         return;
       }
-      // If not found in CWD, fall through to serve from packageRoot (if it exists there)
-      // or return empty object if missing?
-      // Falling through means it looks for packageRoot/torch-config.json
     }
 
     // Security check: prevent directory traversal
diff --git a/test/dashboard-config-security.test.mjs b/test/dashboard-config-security.test.mjs
new file mode 100644
index 0000000..069c595
--- /dev/null
+++ b/test/dashboard-config-security.test.mjs
@@ -0,0 +1,121 @@
+
+import test from 'node:test';
+import assert from 'node:assert';
+import http from 'node:http';
+import fs from 'node:fs';
+import path from 'node:path';
+import { cmdDashboard } from '../src/dashboard.mjs';
+import { _resetTorchConfigCache } from '../src/torch-config.mjs';
+
+const CONFIG_FILE = 'torch-config-test.json';
+const TEST_PORT = 4176;
+
+// Helper to fetch JSON
+function fetchJson(url, auth) {
+  return new Promise((resolve, reject) => {
+    const options = {
+        headers: {}
+    };
+    if (auth) {
+        options.headers['Authorization'] = `Basic ${Buffer.from(auth).toString('base64')}`;
+    }
+    http.get(url, options, (res) => {
+      let data = '';
+      res.on('data', chunk => data += chunk);
+      res.on('end', () => resolve({ statusCode: res.statusCode, body: data }));
+    }).on('error', reject);
+  });
+}
+
+test('Dashboard Configuration Security', async (t) => {
+  process.env.TORCH_CONFIG_PATH = CONFIG_FILE;
+  const configPath = path.resolve(process.cwd(), CONFIG_FILE);
+
+  // Ensure clean state
+  if (fs.existsSync(configPath)) fs.unlinkSync(configPath);
+  _resetTorchConfigCache();
+
+  t.after(() => {
+    delete process.env.TORCH_CONFIG_PATH;
+    if (fs.existsSync(configPath)) fs.unlinkSync(configPath);
+  });
+
+  // Scenario 1: Unauthenticated access (no auth configured), sensitive fields in config
+  await t.test('sanitizes config when auth is disabled', async () => {
+    const sensitiveConfig = {
+      dashboard: {
+        relays: ["wss://public.relay.com"]
+      },
+      super_secret_key: "DO_NOT_LEAK",
+      nostrLock: {
+        relays: ["wss://lock.relay.com"]
+      }
+    };
+    fs.writeFileSync(configPath, JSON.stringify(sensitiveConfig, null, 2));
+    _resetTorchConfigCache();
+
+    const server = await cmdDashboard(TEST_PORT);
+
+    try {
+      const { statusCode, body } = await fetchJson(`http://127.0.0.1:${TEST_PORT}/torch-config.json`);
+
+      assert.strictEqual(statusCode, 200);
+      const json = JSON.parse(body);
+
+      // Check for leaks
+      // BEFORE FIX: This will likely FAIL because super_secret_key is present
+      if (json.super_secret_key) {
+          console.log('WARNING: super_secret_key leaked (Expected failure before fix)');
+      }
+      assert.strictEqual(json.super_secret_key, undefined, 'Unknown fields should be stripped');
+
+      // Check for valid fields
+      assert.deepStrictEqual(json.dashboard.relays, sensitiveConfig.dashboard.relays);
+      assert.deepStrictEqual(json.nostrLock.relays, sensitiveConfig.nostrLock.relays);
+
+      // Check that configPath is not leaked
+      assert.strictEqual(json.configPath, undefined, 'configPath should not be exposed');
+
+    } finally {
+      server.close();
+      // Wait for server close? cmdDashboard returns server.
+    }
+  });
+
+  // Scenario 2: Authenticated access, auth credentials in config
+  await t.test('sanitizes auth credentials even when authenticated', async () => {
+    const authConfig = {
+      dashboard: {
+        auth: "admin:password123",
+        relays: ["wss://secure.relay.com"]
+      }
+    };
+    fs.writeFileSync(configPath, JSON.stringify(authConfig, null, 2));
+    _resetTorchConfigCache();
+
+    const TEST_PORT_AUTH = TEST_PORT + 1;
+    const server = await cmdDashboard(TEST_PORT_AUTH);
+
+    try {
+      // 1. Verify 401 without auth
+      const res401 = await fetchJson(`http://127.0.0.1:${TEST_PORT_AUTH}/torch-config.json`);
+      assert.strictEqual(res401.statusCode, 401);
+
+      // 2. Verify 200 with auth
+      const { statusCode, body } = await fetchJson(`http://127.0.0.1:${TEST_PORT_AUTH}/torch-config.json`, "admin:password123");
+      assert.strictEqual(statusCode, 200);
+
+      const json = JSON.parse(body);
+
+      // Check for leaks
+      assert.strictEqual(json.dashboard.auth, undefined, 'Auth credentials should be stripped');
+
+      // Check for valid fields
+      assert.deepStrictEqual(json.dashboard.relays, authConfig.dashboard.relays);
+
+    } finally {
+      server.close();
+    }
+  });
+
+});