diff --git a/electron/main/process-manager.ts b/electron/main/process-manager.ts
index fdacc31d..d1360aa3 100644
--- a/electron/main/process-manager.ts
+++ b/electron/main/process-manager.ts
@@ -57,15 +57,29 @@ class ProcessManager {
     environmentVariables?: Record<string, string>,
   ): Promise<ProcessInfo> {
     this.validateFolder(folder)
-    const actualBinaryPath = binaryPath ? this.validateCustomBinary(binaryPath) : this.validateOpenCodeBinary()
+    const actualBinaryPath =
+      binaryPath && binaryPath !== "opencode" ? this.validateCustomBinary(binaryPath) : this.validateOpenCodeBinary()
 
-    this.sendLog(instanceId, "info", `Starting OpenCode server for ${folder} using ${actualBinaryPath}...`)
+    this.sendLog(
+      instanceId,
+      "info",
+      `Starting OpenCode server for ${folder} using ${binaryPath || "opencode"} (${actualBinaryPath})...`,
+    )
 
     // Merge environment variables with process environment
     const env = { ...process.env }
     if (environmentVariables) {
       Object.assign(env, environmentVariables)
-      this.sendLog(instanceId, "info", `Using ${Object.keys(environmentVariables).length} custom environment variables`)
+      this.sendLog(
+        instanceId,
+        "info",
+        `Using ${Object.keys(environmentVariables).length} custom environment variables:`,
+      )
+
+      // Log each environment variable
+      for (const [key, value] of Object.entries(environmentVariables)) {
+        this.sendLog(instanceId, "info", `  ${key}=${value}`)
+      }
     }
 
     return new Promise((resolve, reject) => {
diff --git a/src/components/folder-selection-view.tsx b/src/components/folder-selection-view.tsx
index dbb00ee8..3689de06 100644
--- a/src/components/folder-selection-view.tsx
+++ b/src/components/folder-selection-view.tsx
@@ -1,6 +1,6 @@
-import { Component, createSignal, Show, For, onMount, onCleanup } from "solid-js"
+import { Component, createSignal, Show, For, onMount, onCleanup, createEffect } from "solid-js"
 import { Folder, Clock, Trash2, FolderPlus, Settings, ChevronDown, ChevronUp } from "lucide-solid"
-import { recentFolders, removeRecentFolder, preferences } from "../stores/preferences"
+import { recentFolders, removeRecentFolder, preferences, updateLastUsedBinary } from "../stores/preferences"
 import OpenCodeBinarySelector from "./opencode-binary-selector"
 import EnvironmentVariablesEditor from "./environment-variables-editor"
 
@@ -17,6 +17,14 @@ const FolderSelectionView: Component<FolderSelectionViewProps> = (props) => {
 
   const folders = () => recentFolders()
 
+  // Update selected binary when preferences change
+  createEffect(() => {
+    const lastUsed = preferences().lastUsedBinary
+    if (lastUsed && lastUsed !== selectedBinary()) {
+      setSelectedBinary(lastUsed)
+    }
+  })
+
   function scrollToIndex(index: number) {
     const element = document.querySelector(`[data-folder-index="${index}"]`)
     if (element) {
@@ -115,13 +123,19 @@ const FolderSelectionView: Component<FolderSelectionViewProps> = (props) => {
   }
 
   function handleFolderSelect(path: string) {
+    updateLastUsedBinary(selectedBinary())
     props.onSelectFolder(path, selectedBinary())
   }
 
   function handleBrowse() {
+    updateLastUsedBinary(selectedBinary())
     props.onSelectFolder(undefined, selectedBinary())
   }
 
+  function handleBinaryChange(binary: string) {
+    setSelectedBinary(binary)
+  }
+
   function handleRemove(path: string, e?: Event) {
     e?.stopPropagation()
     removeRecentFolder(path)
@@ -271,7 +285,7 @@ const FolderSelectionView: Component<FolderSelectionViewProps> = (props) => {
                     <div class="text-sm font-medium text-gray-700 dark:text-gray-300 mb-2">OpenCode Binary</div>
                     <OpenCodeBinarySelector
                       selectedBinary={selectedBinary()}
-                      onBinaryChange={setSelectedBinary}
+                      onBinaryChange={handleBinaryChange}
                       disabled={props.isLoading}
                     />
                   </div>
diff --git a/src/components/instance-info.tsx b/src/components/instance-info.tsx
index 196a2c4c..d6d44ac5 100644
--- a/src/components/instance-info.tsx
+++ b/src/components/instance-info.tsx
@@ -142,6 +142,28 @@ const InstanceInfo: Component<InstanceInfoProps> = (props) => {
           </div>
         </Show>
 
+        <Show when={props.instance.environmentVariables && Object.keys(props.instance.environmentVariables).length > 0}>
+          <div>
+            <div class="text-xs font-medium text-gray-500 dark:text-gray-400 uppercase tracking-wide mb-1.5">
+              Environment Variables ({Object.keys(props.instance.environmentVariables!).length})
+            </div>
+            <div class="space-y-1">
+              <For each={Object.entries(props.instance.environmentVariables!)}>
+                {([key, value]) => (
+                  <div class="flex items-center gap-2 px-2 py-1.5 bg-gray-50 dark:bg-gray-900 rounded border border-gray-200 dark:border-gray-700">
+                    <span class="text-xs text-gray-900 dark:text-gray-100 font-mono font-medium flex-1" title={key}>
+                      {key}
+                    </span>
+                    <span class="text-xs text-gray-600 dark:text-gray-400 font-mono flex-1" title={value}>
+                      {value}
+                    </span>
+                  </div>
+                )}
+              </For>
+            </div>
+          </div>
+        </Show>
+
         <Show when={!isLoadingMetadata() && mcpServers().length > 0}>
           <div>
             <div class="text-xs font-medium text-gray-500 dark:text-gray-400 uppercase tracking-wide mb-1.5">
diff --git a/src/components/logs-view.tsx b/src/components/logs-view.tsx
index d0917856..795469de 100644
--- a/src/components/logs-view.tsx
+++ b/src/components/logs-view.tsx
@@ -82,6 +82,27 @@ const LogsView: Component<LogsViewProps> = (props) => {
         <h3 class="text-sm font-medium text-gray-700 dark:text-gray-300">Server Logs</h3>
       </div>
 
+      <Show when={instance()?.environmentVariables && Object.keys(instance()?.environmentVariables!).length > 0}>
+        <div class="px-4 py-3 bg-blue-50 dark:bg-blue-900/20 border-b border-blue-200 dark:border-blue-800">
+          <div class="text-xs font-medium text-blue-800 dark:text-blue-200 mb-2">
+            Environment Variables ({Object.keys(instance()?.environmentVariables!).length})
+          </div>
+          <div class="space-y-1">
+            <For each={Object.entries(instance()?.environmentVariables!)}>
+              {([key, value]) => (
+                <div class="flex items-center gap-2 text-xs">
+                  <span class="font-mono font-medium text-blue-800 dark:text-blue-200 min-w-0 flex-1">{key}</span>
+                  <span class="text-blue-600 dark:text-blue-400">=</span>
+                  <span class="font-mono text-blue-700 dark:text-blue-300 min-w-0 flex-1" title={value}>
+                    {value}
+                  </span>
+                </div>
+              )}
+            </For>
+          </div>
+        </div>
+      </Show>
+
       <div
         ref={scrollRef}
         onScroll={handleScroll}
diff --git a/src/stores/instances.ts b/src/stores/instances.ts
index d31df2ef..20686c79 100644
--- a/src/stores/instances.ts
+++ b/src/stores/instances.ts
@@ -3,7 +3,7 @@ import type { Instance, LogEntry } from "../types/instance"
 import { sdkManager } from "../lib/sdk-manager"
 import { sseManager } from "../lib/sse-manager"
 import { fetchSessions, fetchAgents, fetchProviders } from "./sessions"
-import { preferences } from "./preferences"
+import { preferences, updateLastUsedBinary } from "./preferences"
 
 const [instances, setInstances] = createSignal<Map<string, Instance>>(new Map())
 const [activeInstanceId, setActiveInstanceId] = createSignal<string | null>(null)
@@ -52,10 +52,16 @@ async function createInstance(folder: string, binaryPath?: string): Promise<stri
     status: "starting",
     client: null,
     logs: [],
+    environmentVariables: preferences().environmentVariables,
   }
 
   addInstance(instance)
 
+  // Update last used binary
+  if (binaryPath) {
+    updateLastUsedBinary(binaryPath)
+  }
+
   try {
     const {
       id: returnedId,
diff --git a/src/stores/preferences.ts b/src/stores/preferences.ts
index 88e286fd..0b586af1 100644
--- a/src/stores/preferences.ts
+++ b/src/stores/preferences.ts
@@ -96,8 +96,13 @@ function updateLastUsedBinary(path: string): void {
   updatePreferences({ lastUsedBinary: path })
 
   const binaries = opencodeBinaries()
-  const binary = binaries.find((b) => b.path === path)
-  if (binary) {
+  let binary = binaries.find((b) => b.path === path)
+
+  // If binary not found in list, add it (for system PATH "opencode")
+  if (!binary) {
+    addOpenCodeBinary(path)
+    binary = { path, lastUsed: Date.now() }
+  } else {
     binary.lastUsed = Date.now()
     // Move to front
     const sorted = [binary, ...binaries.filter((b) => b.path !== path)]
diff --git a/src/types/instance.ts b/src/types/instance.ts
index 446ccaf7..3bb21457 100644
--- a/src/types/instance.ts
+++ b/src/types/instance.ts
@@ -38,4 +38,5 @@ export interface Instance {
   logs: LogEntry[]
   metadata?: InstanceMetadata
   binaryPath?: string
+  environmentVariables?: Record<string, string>
 }