diff --git a/netengine/api/app.py b/netengine/api/app.py
index adc4935..f915449 100644
--- a/netengine/api/app.py
+++ b/netengine/api/app.py
@@ -3,8 +3,11 @@
 from fastapi import FastAPI
 
 from netengine.api.routes import router
+from netengine.config.runtime import load_runtime_config
 from netengine.logs.middleware import StructuredLoggingMiddleware
 
+load_runtime_config()
+
 app = FastAPI(
     title="NetEngine Operator API",
     version="0.1",
diff --git a/netengine/cli/main.py b/netengine/cli/main.py
index e6dac25..986c791 100644
--- a/netengine/cli/main.py
+++ b/netengine/cli/main.py
@@ -19,6 +19,7 @@
 )
 from netengine.cli.env import db_url_from_env
 from netengine.config.loader import ConfigOverrideError, parse_dotted_overrides
+from netengine.config.runtime import load_runtime_config
 from netengine.core.migrations import MigrationService, MigrationStatus
 from netengine.core.orchestrator import Orchestrator
 from netengine.core.state import RuntimeState, get_state_file
@@ -404,8 +405,16 @@ def _wait_for_postgres_health(timeout_seconds: float = 120.0, interval: float =
 
 
 @click.group()
-def cli() -> None:
+@click.option(
+    "--config",
+    "config_file",
+    type=click.Path(exists=True, dir_okay=False, path_type=Path),
+    envvar="NETENGINE_CONFIG",
+    help="Runtime app config file (or NETENGINE_CONFIG). Spec files still control world topology.",
+)
+def cli(config_file: Path | None) -> None:
     """NetEngine — spin up, reload, and tear down authority-autonomous worlds."""
+    load_runtime_config(config_file)
 
 
 cli.add_command(doctor)
diff --git a/netengine/config/runtime.py b/netengine/config/runtime.py
new file mode 100644
index 0000000..5e55b3e
--- /dev/null
+++ b/netengine/config/runtime.py
@@ -0,0 +1,63 @@
+"""Runtime application configuration helpers."""
+
+import os
+from pathlib import Path
+from typing import Type
+
+from netengine.config.loader import ConfigLoader
+from netengine.config.schemas import AppConfig, LoggingConfig
+from netengine.logs import LogConfig, LoggerFactory
+
+NETENGINE_CONFIG_ENV = "NETENGINE_CONFIG"
+_RUNTIME_DEFAULTS = {"spec": {"name": "runtime"}}
+
+
+def _runtime_log_config(logging_config: LoggingConfig) -> Type[LogConfig]:
+    """Convert AppConfig logging settings into a LoggerFactory-compatible config class."""
+
+    class RuntimeLogConfig(LogConfig):
+        ENV = logging_config.environment
+        DEBUG = logging_config.debug
+        LOG_DIR = Path(logging_config.log_dir)
+        LOG_LEVEL = logging_config.log_level
+        RETENTION_DAYS = logging_config.retention_days
+        MAX_SIZE_BYTES = logging_config.max_size_bytes
+        SAMPLING_ENABLED = logging_config.sampling_enabled
+        SAMPLING_RATE = logging_config.sampling_rate
+        SERIALIZE_JSON = logging_config.serialize_json
+        INCLUDE_TRACEBACK = logging_config.include_traceback
+        BUFFER_SIZE = logging_config.buffer_size
+
+    RuntimeLogConfig.LOG_DIR.mkdir(parents=True, exist_ok=True)
+    return RuntimeLogConfig
+
+
+def load_app_config(config_file: str | Path | None = None) -> AppConfig:
+    """Load AppConfig from an explicit path or NETENGINE_CONFIG."""
+    selected_file = config_file if config_file is not None else os.environ.get(NETENGINE_CONFIG_ENV)
+    return ConfigLoader.load_config(
+        AppConfig,
+        defaults=_RUNTIME_DEFAULTS,
+        config_file=selected_file,
+    )
+
+
+def configure_logging(app_config: AppConfig, *, force: bool = True) -> Type[LogConfig]:
+    """Apply AppConfig logging settings to the shared logger factory."""
+    log_config = _runtime_log_config(app_config.logging)
+    if force:
+        LoggerFactory.shutdown()
+    LoggerFactory.initialize(log_config)
+    return log_config
+
+
+def load_runtime_config(config_file: str | Path | None = None) -> AppConfig:
+    """Load runtime config and apply runtime-only settings.
+
+    AppConfig controls process/runtime concerns such as logging. World topology
+    remains controlled by NetEngineSpec files passed to commands such as
+    ``netengine up``.
+    """
+    app_config = load_app_config(config_file)
+    configure_logging(app_config)
+    return app_config
diff --git a/tests/test_config.py b/tests/test_config.py
index aaed14d..cdbb594 100644
--- a/tests/test_config.py
+++ b/tests/test_config.py
@@ -621,3 +621,49 @@ def test_unknown_profile_in_and_instance_rejected(self, temp_spec_dir: Path) ->
         path = self._write_spec(temp_spec_dir, data)
         with pytest.raises(SpecLoadError, match="unknown profile"):
             load_spec(path)
+
+
+def test_runtime_config_file_applies_logging_defaults(tmp_path):
+    from netengine.config.runtime import load_runtime_config
+    from netengine.logs import LoggerFactory
+
+    config_file = tmp_path / "app.yaml"
+    log_dir = tmp_path / "configured-logs"
+    config_file.write_text(
+        "logging:\n"
+        "  environment: test\n"
+        "  debug: false\n"
+        f"  log_dir: {log_dir}\n"
+        "  log_level: WARNING\n"
+        "  serialize_json: true\n"
+    )
+
+    app_config = load_runtime_config(config_file)
+
+    assert app_config.logging.environment == "test"
+    assert app_config.logging.log_level == "WARNING"
+    assert app_config.logging.serialize_json is True
+    assert log_dir.exists()
+    assert LoggerFactory._initialized is True
+    LoggerFactory.shutdown()
+
+
+def test_cli_config_option_passes_runtime_config_to_logging(tmp_path):
+    from unittest.mock import patch
+
+    from click.testing import CliRunner
+
+    from netengine.cli import main as cli_main
+
+    config_file = tmp_path / "app.yaml"
+    config_file.write_text("logging:\n  log_level: ERROR\n  environment: ci\n")
+
+    with patch("netengine.config.runtime.LoggerFactory.initialize") as initialize, patch(
+        "netengine.config.runtime.LoggerFactory.shutdown"
+    ):
+        result = CliRunner().invoke(cli_main.cli, ["--config", str(config_file), "status"])
+
+    assert result.exit_code == 0
+    runtime_log_config = initialize.call_args.args[0]
+    assert runtime_log_config.LOG_LEVEL == "ERROR"
+    assert runtime_log_config.ENV == "ci"