diff --git a/opal-task/cmd/root.go b/opal-task/cmd/root.go
index fb6be23..7551582 100644
--- a/opal-task/cmd/root.go
+++ b/opal-task/cmd/root.go
@@ -200,7 +200,10 @@ func init() {
 	rootCmd.PersistentFlags().StringVar(&dataDirFlag, "data-dir", "",
 		"Data directory (default: $XDG_DATA_HOME/opal or ~/.local/share/opal)")
 
-	cobra.OnInitialize(initializeApp)
+	// Use PersistentPreRun for initialization (runs for all subcommands unless overridden)
+	rootCmd.PersistentPreRun = func(cmd *cobra.Command, args []string) {
+		initializeApp()
+	}
 
 	// Add regular subcommands
 	rootCmd.AddCommand(addCmd)
@@ -224,11 +227,6 @@ func init() {
 }
 
 func initializeApp() {
-	// Skip initialization for commands that handle their own setup
-	if len(os.Args) > 1 && os.Args[1] == "setup" {
-		return
-	}
-
 	// Set directory overrides from flags if provided
 	if configDirFlag != "" {
 		engine.SetConfigDirOverride(configDirFlag)
diff --git a/opal-task/cmd/server.go b/opal-task/cmd/server.go
index b4ca70e..228df52 100644
--- a/opal-task/cmd/server.go
+++ b/opal-task/cmd/server.go
@@ -77,6 +77,16 @@ var serverCmd = &cobra.Command{
 	Use:   "server",
 	Short: "Server management commands",
 	Long:  `Commands for running and managing the opal API server`,
+	PersistentPreRun: func(cmd *cobra.Command, args []string) {
+		// Override root's PersistentPreRun - server handles its own initialization
+		// But still apply directory overrides from flags
+		if configDirFlag != "" {
+			engine.SetConfigDirOverride(configDirFlag)
+		}
+		if dataDirFlag != "" {
+			engine.SetDataDirOverride(dataDirFlag)
+		}
+	},
 }
 
 var serverStartCmd = &cobra.Command{
diff --git a/opal-task/cmd/setup.go b/opal-task/cmd/setup.go
index 4c57ffe..e02bf81 100644
--- a/opal-task/cmd/setup.go
+++ b/opal-task/cmd/setup.go
@@ -36,7 +36,14 @@ Examples:
   opal setup --show-systemd     # Show systemd service template
   opal setup --show-env         # Show environment file template`,
 	PersistentPreRun: func(cmd *cobra.Command, args []string) {
-		// Skip normal initialization - setup command handles its own init
+		// Override root's PersistentPreRun to skip initialization
+		// But still apply directory overrides from flags
+		if configDirFlag != "" {
+			engine.SetConfigDirOverride(configDirFlag)
+		}
+		if dataDirFlag != "" {
+			engine.SetDataDirOverride(dataDirFlag)
+		}
 	},
 	Run: runSetup,
 }
@@ -51,15 +58,7 @@ func init() {
 }
 
 func runSetup(cmd *cobra.Command, args []string) {
-	// Apply directory overrides from parent persistent flags
-	if cmd.Parent() != nil {
-		if configDir, _ := cmd.Parent().PersistentFlags().GetString("config-dir"); configDir != "" {
-			engine.SetConfigDirOverride(configDir)
-		}
-		if dataDir, _ := cmd.Parent().PersistentFlags().GetString("data-dir"); dataDir != "" {
-			engine.SetDataDirOverride(dataDir)
-		}
-	}
+	// Directory overrides are already applied in PersistentPreRun
 
 	// Handle template flags
 	if showSystemdFlag {