diff --git a/CHANGELOG.md b/CHANGELOG.md
index 0eeefbe51..22e72939f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -63,6 +63,7 @@
 ### Improvements
 
 - `devenv shell` now registers zsh completions from packages in the devenv profile. A generated `.zshenv` prepends `$DEVENV_PROFILE/share/zsh/site-functions` to `fpath` before `/etc/zshrc` runs, so the system `compinit` picks up the new directory.
+- `devenv` now walks up parent directories to find `devenv.nix`, so commands like `devenv shell` work from any subdirectory of a project ([#2232](https://github.com/cachix/devenv/issues/2232)).
 - Bumped `secretspec` to `v0.10.1`. The new `bws` (Bitwarden Secrets Manager) feature is not enabled because its transitive `bitwarden` crate conflicts with `sqlx` 0.8 on `libsqlite3-sys` and pins `typenum` to 1.18.
 - Bumped `iocraft` to `0.8.2` and switched the `[patch.crates-io]` entry from the `cachix/iocraft` fork to upstream `ccbrown/iocraft` `main`, now that the row-level diff and stderr rendering patches are merged upstream.
 - `devenv.yaml` options are now documented in `snake_case` (e.g. `allow_unfree`, `clean_env`). The previous `camelCase` spellings remain supported for backward compatibility.
diff --git a/devenv-core/src/paths.rs b/devenv-core/src/paths.rs
index dd1d0b52a..151117afd 100644
--- a/devenv-core/src/paths.rs
+++ b/devenv-core/src/paths.rs
@@ -1,6 +1,6 @@
 //! On-disk layout for a devenv project.
 
-use std::path::PathBuf;
+use std::path::{Path, PathBuf};
 
 #[derive(Debug, Clone)]
 pub struct DevenvPaths {
@@ -13,3 +13,40 @@ pub struct DevenvPaths {
     pub state: Option<PathBuf>,
     pub git_root: Option<PathBuf>,
 }
+
+/// Walk up from `start` looking for a directory containing `devenv.nix`.
+/// Returns the first ancestor (including `start` itself) that contains it,
+/// or `None` if none is found before reaching the filesystem root.
+pub fn find_project_root(start: &Path) -> Option<PathBuf> {
+    start
+        .ancestors()
+        .find(|d| d.join("devenv.nix").exists())
+        .map(PathBuf::from)
+}
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+
+    #[test]
+    fn finds_marker_in_start_dir() {
+        let tmp = tempfile::tempdir().unwrap();
+        std::fs::write(tmp.path().join("devenv.nix"), "").unwrap();
+        assert_eq!(find_project_root(tmp.path()).as_deref(), Some(tmp.path()));
+    }
+
+    #[test]
+    fn walks_up_to_parent() {
+        let tmp = tempfile::tempdir().unwrap();
+        std::fs::write(tmp.path().join("devenv.nix"), "").unwrap();
+        let nested = tmp.path().join("a/b/c");
+        std::fs::create_dir_all(&nested).unwrap();
+        assert_eq!(find_project_root(&nested).as_deref(), Some(tmp.path()));
+    }
+
+    #[test]
+    fn returns_none_when_no_marker() {
+        let tmp = tempfile::tempdir().unwrap();
+        assert!(find_project_root(tmp.path()).is_none());
+    }
+}
diff --git a/devenv/src/main.rs b/devenv/src/main.rs
index 07b111f0a..6bb3e5c5e 100644
--- a/devenv/src/main.rs
+++ b/devenv/src/main.rs
@@ -117,6 +117,7 @@ struct UiOptions {
     log_level: devenv_tracing::Level,
     tracing_specs: Vec<TraceOutputSpec>,
     verbosity: VerbosityLevel,
+    discovered_root: Option<PathBuf>,
 }
 
 /// Options for the backend thread: resolved devenv config plus what to run.
@@ -208,6 +209,33 @@ impl TestDirs {
 fn resolve(cli: Cli, shutdown: Arc<Shutdown>) -> Result<(UiOptions, BackendOptions)> {
     let command = cli.command;
 
+    // Walk up parent directories to find devenv.nix. Skip when the user has
+    // explicitly chosen a source (`--from`) or is constructing a project via
+    // module-option overrides (`-O`). Has to run before Config::load() reads
+    // "./devenv.yaml".
+    let discovered_root =
+        if cli.from.is_none() && cli.input_overrides.nix_module_options.is_empty() {
+            env::current_dir()
+                .ok()
+                .and_then(|cwd| devenv_core::paths::find_project_root(&cwd).filter(|r| r != &cwd))
+        } else {
+            None
+        };
+    if let Some(root) = &discovered_root {
+        env::set_current_dir(root)
+            .into_diagnostic()
+            .wrap_err_with(|| {
+                format!(
+                    "Failed to chdir to discovered project root: {}",
+                    root.display()
+                )
+            })?;
+        // Safety: resolve() runs single-threaded before tokio starts.
+        unsafe {
+            env::set_var("PWD", root);
+        }
+    }
+
     // UI options: verbosity, log level, tracing, TUI. Pure CLI + env, no config.
     let verbosity = resolve_verbosity(&cli.cli_options);
     let quiet = matches!(verbosity, VerbosityLevel::Quiet);
@@ -244,6 +272,7 @@ fn resolve(cli: Cli, shutdown: Arc<Shutdown>) -> Result<(UiOptions, BackendOptio
         log_level,
         tracing_specs,
         verbosity,
+        discovered_root,
     };
 
     // Backend options. Read before the `From` conversions consume `cli.nix_args`.
@@ -471,6 +500,10 @@ fn run(ui: UiOptions, backend: BackendOptions, shutdown: Arc<Shutdown>) -> Resul
 
     let _tracing_guard = devenv_tracing::init_tracing(ui.log_level, &ui.tracing_specs);
 
+    if let Some(root) = &ui.discovered_root {
+        tracing::info!("Discovered devenv.nix in {}", root.display());
+    }
+
     let tui = ui.tui;
     let verbosity = ui.verbosity;
 
diff --git a/tests/cli-subdir-discovery/.test-config.yml b/tests/cli-subdir-discovery/.test-config.yml
new file mode 100644
index 000000000..13c16cea3
--- /dev/null
+++ b/tests/cli-subdir-discovery/.test-config.yml
@@ -0,0 +1 @@
+use_shell: false
diff --git a/tests/cli-subdir-discovery/.test.sh b/tests/cli-subdir-discovery/.test.sh
new file mode 100755
index 000000000..5447c09d0
--- /dev/null
+++ b/tests/cli-subdir-discovery/.test.sh
@@ -0,0 +1,24 @@
+#!/usr/bin/env bash
+set -xe
+set -o pipefail
+
+proj_root="$(pwd)"
+mkdir -p sub/nested
+
+# Discovery from one level deep
+(cd sub && devenv print-paths | grep -Fxq "DEVENV_ROOT=\"$proj_root\"")
+
+# Discovery from two levels deep
+(cd sub/nested && devenv print-paths | grep -Fxq "DEVENV_ROOT=\"$proj_root\"")
+
+# Negative case: outside any project, original error preserved
+outside="$(mktemp -d)"
+trap 'rm -rf "$outside"' EXIT
+output="$(cd "$outside" && devenv print-paths 2>&1 || true)"
+if echo "$output" | grep -q "devenv.nix does not exist"; then
+  echo "✓ negative case: error preserved outside any project"
+else
+  echo "expected 'devenv.nix does not exist' outside any project, got:"
+  echo "$output"
+  exit 1
+fi
diff --git a/tests/cli-subdir-discovery/devenv.nix b/tests/cli-subdir-discovery/devenv.nix
new file mode 100644
index 000000000..54d65c0af
--- /dev/null
+++ b/tests/cli-subdir-discovery/devenv.nix
@@ -0,0 +1,3 @@
+{ pkgs, ... }: {
+  packages = [ pkgs.hello ];
+}