diff --git a/src/agent/client.ts b/src/agent/client.ts
index 6b0c331..5d6d34f 100644
--- a/src/agent/client.ts
+++ b/src/agent/client.ts
@@ -1,5 +1,5 @@
 import Letta from "@letta-ai/letta-client";
-import { refreshAccessToken } from "../auth/oauth";
+import { LETTA_CLOUD_API_URL, refreshAccessToken } from "../auth/oauth";
 import { settingsManager } from "../settings-manager";
 
 export async function getClient() {
@@ -40,14 +40,17 @@ export async function getClient() {
     }
   }
 
+  // Check if refresh token is missing for Letta Cloud
   const baseURL =
     process.env.LETTA_BASE_URL ||
     settings.env?.LETTA_BASE_URL ||
-    "https://api.letta.com";
+    LETTA_CLOUD_API_URL;
 
-  if (!apiKey && baseURL === "https://api.letta.com") {
+  if (!apiKey && baseURL === LETTA_CLOUD_API_URL) {
     console.error("Missing LETTA_API_KEY");
-    console.error("Run 'letta setup' to configure authentication");
+    console.error(
+      "Run 'letta setup' to configure authentication or set your LETTA_API_KEY environment variable",
+    );
     process.exit(1);
   }
 
diff --git a/src/auth/oauth.ts b/src/auth/oauth.ts
index 606f064..a23871a 100644
--- a/src/auth/oauth.ts
+++ b/src/auth/oauth.ts
@@ -5,11 +5,13 @@
 
 import Letta from "@letta-ai/letta-client";
 
+export const LETTA_CLOUD_API_URL = "https://api.letta.com";
+
 export const OAUTH_CONFIG = {
   clientId: "ci-let-724dea7e98f4af6f8f370f4b1466200c",
   clientSecret: "", // Not needed for device code flow
   authBaseUrl: "https://app.letta.com",
-  apiBaseUrl: "https://api.letta.com",
+  apiBaseUrl: LETTA_CLOUD_API_URL,
 } as const;
 
 export interface DeviceCodeResponse {
diff --git a/src/auth/setup-ui.tsx b/src/auth/setup-ui.tsx
index 26f5c11..9eca704 100644
--- a/src/auth/setup-ui.tsx
+++ b/src/auth/setup-ui.tsx
@@ -148,7 +148,7 @@ export function SetupUI({ onComplete }: SetupUIProps) {
       <Text>{asciiLogo}</Text>
       <Text bold>Welcome to Letta Code!</Text>
       <Text> </Text>
-      <Text>Please choose how you'd like to authenticate:</Text>
+      <Text>Let's get you authenticated:</Text>
       <Text> </Text>
       <Box>
         <Text color={selectedOption === 0 ? "cyan" : undefined}>
diff --git a/src/cli/components/InputRich.tsx b/src/cli/components/InputRich.tsx
index b9678a6..abfa6bd 100644
--- a/src/cli/components/InputRich.tsx
+++ b/src/cli/components/InputRich.tsx
@@ -3,6 +3,7 @@ import { Box, Text, useInput } from "ink";
 import SpinnerLib from "ink-spinner";
 import type { ComponentType } from "react";
 import { useEffect, useRef, useState } from "react";
+import { LETTA_CLOUD_API_URL } from "../../auth/oauth";
 import type { PermissionMode } from "../../permissions/mode";
 import { permissionMode } from "../../permissions/mode";
 import { settingsManager } from "../../settings-manager";
@@ -113,7 +114,7 @@ export function Input({
   const serverUrl =
     process.env.LETTA_BASE_URL ||
     settings.env?.LETTA_BASE_URL ||
-    "https://api.letta.com";
+    LETTA_CLOUD_API_URL;
 
   // Handle escape key for interrupt (when streaming) or double-escape-to-clear (when not)
   useInput((_input, key) => {
diff --git a/src/index.ts b/src/index.ts
index 815a55d..2168f03 100755
--- a/src/index.ts
+++ b/src/index.ts
@@ -5,6 +5,7 @@ import { getResumeData, type ResumeData } from "./agent/check-approval";
 import { getClient } from "./agent/client";
 import { initializeLoadedSkillsFlag, setAgentContext } from "./agent/context";
 import type { AgentProvenance } from "./agent/create";
+import { LETTA_CLOUD_API_URL } from "./auth/oauth";
 import { permissionMode } from "./permissions/mode";
 import { settingsManager } from "./settings-manager";
 import { loadTools, upsertToolsToServer } from "./tools/manager";
@@ -46,15 +47,15 @@ OPTIONS
 
 BEHAVIOR
   By default, letta auto-resumes the last agent used in the current directory
-  (stored in .letta/settings.local.json). 
-  
+  (stored in .letta/settings.local.json).
+
   Memory blocks (persona, human, project, skills) are shared between agents:
   - Global blocks (persona, human) are shared across all agents
   - Local blocks (project, skills) are shared within the current directory
-  
+
   Use --new to create a new agent that reuses your global persona/human blocks.
   Use --fresh-blocks to create a completely isolated agent with new blocks.
-  
+
   If no credentials are configured, you'll be prompted to authenticate via
   Letta Cloud OAuth on first run.
 
@@ -64,10 +65,10 @@ EXAMPLES
   letta --new              # New agent, keeps your persona/human blocks
   letta --fresh-blocks     # New agent, all blocks fresh (full isolation)
   letta --agent agent_123
-  
+
   # inside the interactive session
   /logout               # Clear credentials and exit
-  
+
   # headless with JSON output (includes stats)
   letta -p "hello" --output-format json
 
@@ -265,13 +266,28 @@ async function main() {
   const baseURL =
     process.env.LETTA_BASE_URL ||
     settings.env?.LETTA_BASE_URL ||
-    "https://api.letta.com";
+    LETTA_CLOUD_API_URL;
 
-  if (!apiKey && baseURL === "https://api.letta.com") {
+  // Check if refresh token is missing for Letta Cloud (only when not using env var)
+  if (
+    !isHeadless &&
+    baseURL === LETTA_CLOUD_API_URL &&
+    !settings.refreshToken
+  ) {
+    // For interactive mode, show setup flow
+    const { runSetup } = await import("./auth/setup");
+    await runSetup();
+    // After setup, restart main flow
+    return main();
+  }
+
+  if (!apiKey && baseURL === LETTA_CLOUD_API_URL) {
     // For headless mode, error out (assume automation context)
     if (isHeadless) {
       console.error("Missing LETTA_API_KEY");
-      console.error("Run 'letta' in interactive mode to authenticate");
+      console.error(
+        "Run 'letta' in interactive mode to authenticate or export the missing environment variable",
+      );
       process.exit(1);
     }