diff --git a/CHANGELOG.md b/CHANGELOG.md
index ad859aac4760..b24a57108a50 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -32,6 +32,7 @@
 ### Added
 
 - [#6012](https://github.com/ChainSafe/forest/issues/6012): Stricter validation of address arguments in `forest-wallet` subcommands.
+- [#6008](https://github.com/ChainSafe/forest/issues/6008): `FOREST_PATH` environment variable to override the data directory for `forest`, `forest-cli`, `forest-tool` and `forest-wallet`. Takes precedence over `client.data_dir` in the config file. The daemon also logs the resolved data directory on startup.
 
 ### Changed
 
diff --git a/docs/docs/users/reference/env_variables.md b/docs/docs/users/reference/env_variables.md
index eca507fb771b..c191638f2193 100644
--- a/docs/docs/users/reference/env_variables.md
+++ b/docs/docs/users/reference/env_variables.md
@@ -31,6 +31,7 @@ process.
 | `FOREST_MAX_FILTER_HEIGHT_RANGE`                                 | positive integer                 | 2880                                           | 2880                                                          | The maximum filter height range allowed, a conservative limit of one day                                                                                                                                                                                                       |
 | `FOREST_STATE_MIGRATION_THREADS`                                 | integer                          | Depends on the machine.                        | 3                                                             | The number of threads for state migration thread-pool. Advanced users only.                                                                                                                                                                                                    |
 | `FOREST_CONFIG_PATH`                                             | string                           | /$FOREST_HOME/com.ChainSafe.Forest/config.toml | `/path/to/config.toml`                                        | Forest configuration path. Alternatively supplied via `--config` cli parameter.                                                                                                                                                                                                |
+| `FOREST_PATH`                                                    | directory path                   | platform-specific (`directories::ProjectDirs`) | `/var/lib/forest`                                             | Override the Forest data directory. Honored by `forest`, `forest-cli`, `forest-tool` and `forest-wallet`. Takes precedence over the `client.data_dir` setting in the config file.                                                                                              |
 | `FOREST_TEST_RNG_FIXED_SEED`                                     | non-negative integer             | empty                                          | 0                                                             | Override RNG with a reproducible one seeded by the value. This should never be used out of test context for security.                                                                                                                                                          |
 | `RUST_LOG`                                                       | string                           | empty                                          | `debug,forest_libp2p::service=info`                           | Allows for log level customization.                                                                                                                                                                                                                                            |
 | `FOREST_IGNORE_DRAND`                                            | 1 or true                        | empty                                          | 1                                                             | Ignore Drand validation.                                                                                                                                                                                                                                                       |
diff --git a/src/cli_shared/mod.rs b/src/cli_shared/mod.rs
index 170c032f1b6d..0f63ee601263 100644
--- a/src/cli_shared/mod.rs
+++ b/src/cli_shared/mod.rs
@@ -9,6 +9,17 @@ use crate::networks::NetworkChain;
 use crate::utils::io::read_toml;
 use std::path::PathBuf;
 
+/// Environment variable that overrides the Forest data directory.
+pub const FOREST_PATH_ENV: &str = "FOREST_PATH";
+
+/// Returns the value of [`FOREST_PATH_ENV`] when set to a non-empty string.
+pub fn forest_path_from_env() -> Option<PathBuf> {
+    std::env::var(FOREST_PATH_ENV)
+        .ok()
+        .filter(|s| !s.is_empty())
+        .map(PathBuf::from)
+}
+
 cfg_if::cfg_if! {
     if #[cfg(feature = "rustalloc")] {
     } else if #[cfg(feature = "jemalloc")] {
@@ -37,6 +48,9 @@ pub fn read_config(
     if let Some(chain) = chain_opt {
         config.chain = chain;
     }
+    if let Some(data_dir) = forest_path_from_env() {
+        config.client.data_dir = data_dir;
+    }
     Ok((path, config))
 }
 
@@ -68,6 +82,22 @@ mod tests {
         assert_eq!(config.chain(), &NetworkChain::Butterflynet);
     }
 
+    #[test]
+    #[serial_test::serial]
+    fn read_config_forest_path_env_override() {
+        let temp_dir = tempfile::tempdir().expect("couldn't create temp dir");
+        // SAFETY: tests touching the process environment are gated by `#[serial]`.
+        unsafe {
+            std::env::set_var(FOREST_PATH_ENV, temp_dir.path());
+        }
+        let (_, config) = read_config(None, None).unwrap();
+        // SAFETY: tests touching the process environment are gated by `#[serial]`.
+        unsafe {
+            std::env::remove_var(FOREST_PATH_ENV);
+        }
+        assert_eq!(config.client.data_dir, temp_dir.path());
+    }
+
     #[test]
     fn read_config_with_path() {
         let default_config = Config::default();
diff --git a/src/daemon/mod.rs b/src/daemon/mod.rs
index b5a4ec866039..9a80644da766 100644
--- a/src/daemon/mod.rs
+++ b/src/daemon/mod.rs
@@ -113,6 +113,7 @@ fn startup_init(config: &Config) -> anyhow::Result<()> {
         "Starting Forest daemon, version {}",
         FOREST_VERSION_STRING.as_str()
     );
+    info!("Data directory: {}", config.client.data_dir.display());
     Ok(())
 }
 
diff --git a/src/wallet/subcommands/wallet_cmd.rs b/src/wallet/subcommands/wallet_cmd.rs
index 9796573a3c69..2a4a562012b2 100644
--- a/src/wallet/subcommands/wallet_cmd.rs
+++ b/src/wallet/subcommands/wallet_cmd.rs
@@ -62,12 +62,15 @@ impl WalletBackend {
     }
 
     fn new_local(client: rpc::Client, want_encryption: bool) -> anyhow::Result<Self> {
-        let Some(dir) = ProjectDirs::from("com", "ChainSafe", "Forest-Wallet") else {
-            bail!("Failed to find wallet directory");
+        let wallet_dir = if let Some(forest_path) = crate::cli_shared::forest_path_from_env() {
+            forest_path
+        } else {
+            let Some(dir) = ProjectDirs::from("com", "ChainSafe", "Forest-Wallet") else {
+                bail!("Failed to find wallet directory");
+            };
+            dir.data_dir().to_path_buf()
         };
 
-        let wallet_dir = dir.data_dir().to_path_buf();
-
         let is_encrypted = wallet_dir.join(ENCRYPTED_KEYSTORE_NAME).exists();
 
         // Always use the encrypted keystore if it exists. It it does not exist,