diff --git a/src/api/system.rs b/src/api/system.rs
index f915e7f..76e8831 100644
--- a/src/api/system.rs
+++ b/src/api/system.rs
@@ -26,6 +26,23 @@ use super::routes::AppState;
 /// Default repo path for Open Agent source
 const OPEN_AGENT_REPO_PATH: &str = "/opt/open_agent/vaduz-v1";
 
+fn resolve_open_agent_install_dir() -> PathBuf {
+    if let Ok(dir) = std::env::var("OPEN_AGENT_BIN_DIR") {
+        let trimmed = dir.trim();
+        if !trimmed.is_empty() {
+            return PathBuf::from(trimmed);
+        }
+    }
+
+    if let Ok(exe) = std::env::current_exe() {
+        if let Some(parent) = exe.parent() {
+            return parent.to_path_buf();
+        }
+    }
+
+    PathBuf::from("/usr/local/bin")
+}
+
 fn resolve_opencode_binary_path() -> PathBuf {
     if let Ok(path) = std::env::var("OPENCODE_BIN_PATH") {
         if !path.trim().is_empty() {
@@ -822,16 +839,18 @@ fn stream_open_agent_update() -> impl Stream<Item = Result<Event, std::convert::
             progress: Some(75),
         }).unwrap()));
 
+        let install_dir = resolve_open_agent_install_dir();
         let binaries = [
-            ("open_agent", "/usr/local/bin/open_agent"),
-            ("workspace-mcp", "/usr/local/bin/workspace-mcp"),
-            ("desktop-mcp", "/usr/local/bin/desktop-mcp"),
+            ("open_agent", install_dir.join("open_agent")),
+            ("workspace-mcp", install_dir.join("workspace-mcp")),
+            ("desktop-mcp", install_dir.join("desktop-mcp")),
         ];
 
-        for (name, dest) in binaries {
+        for (name, dest_path) in binaries {
             let src = format!("{}/target/debug/{}", OPEN_AGENT_REPO_PATH, name);
+            let dest = dest_path.to_string_lossy();
             let install_result = Command::new("install")
-                .args(["-m", "0755", &src, dest])
+                .args(["-m", "0755", &src, dest.as_ref()])
                 .output()
                 .await;
 
@@ -839,6 +858,40 @@ fn stream_open_agent_update() -> impl Stream<Item = Result<Event, std::convert::
                 Ok(output) if output.status.success() => {}
                 Ok(output) => {
                     let stderr = String::from_utf8_lossy(&output.stderr);
+                    if stderr.contains("Permission denied") {
+                        let sudo_result = Command::new("sudo")
+                            .args(["-n", "install", "-m", "0755", &src, dest.as_ref()])
+                            .output()
+                            .await;
+                        match sudo_result {
+                            Ok(sudo_output) if sudo_output.status.success() => {
+                                continue;
+                            }
+                            Ok(sudo_output) => {
+                                let sudo_stderr = String::from_utf8_lossy(&sudo_output.stderr);
+                                yield Ok(Event::default().data(serde_json::to_string(&UpdateProgressEvent {
+                                    event_type: "error".to_string(),
+                                    message: format!(
+                                        "Failed to install {} with sudo: {}. Set OPEN_AGENT_BIN_DIR to a writable path or grant passwordless sudo for install.",
+                                        name, sudo_stderr
+                                    ),
+                                    progress: None,
+                                }).unwrap()));
+                                return;
+                            }
+                            Err(e) => {
+                                yield Ok(Event::default().data(serde_json::to_string(&UpdateProgressEvent {
+                                    event_type: "error".to_string(),
+                                    message: format!(
+                                        "Failed to run sudo install for {}: {}. Set OPEN_AGENT_BIN_DIR to a writable path or grant passwordless sudo for install.",
+                                        name, e
+                                    ),
+                                    progress: None,
+                                }).unwrap()));
+                                return;
+                            }
+                        }
+                    }
                     yield Ok(Event::default().data(serde_json::to_string(&UpdateProgressEvent {
                         event_type: "error".to_string(),
                         message: format!("Failed to install {}: {}", name, stderr),