diff --git a/codex-rs/cli/src/daemon_update_tests.rs b/codex-rs/cli/src/daemon_update_tests.rs
index be62c96496..5991829b9f 100644
--- a/codex-rs/cli/src/daemon_update_tests.rs
+++ b/codex-rs/cli/src/daemon_update_tests.rs
@@ -1,8 +1,40 @@
+#![cfg(test)]
+
 use super::*;
 use codex_tui::DaemonUpdateSource;
 use pretty_assertions::assert_eq;
 use std::os::unix::fs::PermissionsExt;
 
+#[test]
+fn package_update_runs_outside_the_project() -> anyhow::Result<()> {
+    const CHILD: &str = "CODEX_TEST_PACKAGE_UPDATE_CHILD";
+    if std::env::var_os(CHILD).is_some() {
+        return run_update_action(UpdateAction::PnpmGlobalLatest, /*cli_executable*/ None);
+    }
+
+    let project = tempfile::tempdir()?;
+    let bin = tempfile::tempdir()?;
+    codex_utils_cargo_bin::write_executable(
+        &bin.path().join("pnpm"),
+        "#!/bin/sh\npwd -P > \"$0.cwd\"\n",
+    )?;
+    assert_cmd::Command::new(std::env::current_exe()?)
+        .args([
+            "--exact",
+            "daemon_update_tests::package_update_runs_outside_the_project",
+        ])
+        .current_dir(project.path())
+        .env("TMPDIR", project.path())
+        .env("PATH", bin.path())
+        .env(CHILD, "1")
+        .assert()
+        .success();
+
+    let cwd = std::fs::read_to_string(bin.path().join("pnpm.cwd"))?;
+    assert!(!std::path::Path::new(cwd.trim_end()).starts_with(project.path().canonicalize()?));
+    Ok(())
+}
+
 #[test]
 fn daemon_handoff_uses_selected_executable_and_propagates_failure() -> anyhow::Result<()> {
     let dir = tempfile::tempdir()?;
diff --git a/codex-rs/cli/src/main.rs b/codex-rs/cli/src/main.rs
index f3eb880312..1c3fe17c1c 100644
--- a/codex-rs/cli/src/main.rs
+++ b/codex-rs/cli/src/main.rs
@@ -848,6 +848,8 @@ fn run_update_action(
                 .collect();
             std::process::Command::new(&command_path)
                 .args(&normalized_args)
+                // Package managers search parent directories for project config and hooks.
+                .current_dir("/")
                 .status()?
         }
     };