diff --git a/action.yml b/action.yml
index c7c75a1..2741e4b 100644
--- a/action.yml
+++ b/action.yml
@@ -43,13 +43,11 @@ inputs:
 
   # Build inputs (pass-through to docker/build-push-action)
   context:
-    description: 'Build context'
+    description: 'Build context. If set, overrides any value derived from service_name. Defaults to "." when neither is provided.'
     required: false
-    default: '.'
   dockerfile:
-    description: 'Path to Dockerfile (relative to context or absolute)'
+    description: 'Path to Dockerfile (relative to context or absolute). If set, overrides any value derived from service_name. Defaults to "Dockerfile" when neither is provided.'
     required: false
-    default: 'Dockerfile'
   platforms:
     description: 'Comma-separated platforms'
     required: false
@@ -196,74 +194,59 @@ runs:
 
     - name: Resolve build config from .skyhook/skyhook.yaml
       id: skyhook_config
+      if: ${{ inputs.service_name != '' && (inputs.context == '' || inputs.dockerfile == '') }}
       shell: bash
       working-directory: code
       run: |
         set -euo pipefail
 
-        # Use the input if it exists;
-        if [[ -n "${{ inputs.service_name }}" ]]; then
-          SERVICE_NAME="${{ inputs.service_name }}"
-        fi
+        SERVICE_NAME="${{ inputs.service_name }}"
 
-        # If no service_name provided, skip config resolution
-        if [[ -z "$SERVICE_NAME" ]]; then
-          echo "No service_name provided, skipping config resolution"
-          echo "resolved_context=code" >> "$GITHUB_OUTPUT"
-          exit 0
-        fi
-        
         # Find the config file
-        CONFIG_FILE=""
-        if [[ -f ".skyhook/skyhook.yaml" ]]; then
-          CONFIG_FILE=".skyhook/skyhook.yaml"
-        fi
-
-        if [[ -z "$CONFIG_FILE" ]]; then
+        if [[ ! -f ".skyhook/skyhook.yaml" ]]; then
           echo "::warning::service_name '$SERVICE_NAME' provided but .skyhook/skyhook.yaml not found. Falling back to input parameters."
-          echo "resolved_context=code" >> "$GITHUB_OUTPUT"
           exit 0
         fi
-
+        CONFIG_FILE=".skyhook/skyhook.yaml"
         echo "Found config file: $CONFIG_FILE"
 
         # Check if service exists
         SERVICE_EXISTS=$(yq ".services[] | select(.name == \"$SERVICE_NAME\") | .name" "$CONFIG_FILE")
         if [[ -z "$SERVICE_EXISTS" ]]; then
           echo "::warning::Service '$SERVICE_NAME' not found in $CONFIG_FILE. Falling back to input parameters."
-          echo "resolved_context=code" >> "$GITHUB_OUTPUT"
           exit 0
         fi
 
         echo "Found service '$SERVICE_NAME' in config"
 
         # Extract build config using yq
-        # Context: only use buildTool.docker.contextPath if explicitly set, otherwise empty (defaults to repo root)
         CONTEXT_PATH=$(yq ".services[] | select(.name == \"$SERVICE_NAME\") | .buildTool.docker.contextPath // \"\"" "$CONFIG_FILE")
         DOCKERFILE_PATH=$(yq ".services[] | select(.name == \"$SERVICE_NAME\") | .buildTool.docker.dockerfilePath // \"\"" "$CONFIG_FILE")
 
-        # Normalize outputs to repo root (this step runs in working-directory: code)
+        # Paths in skyhook.yaml are relative to repo root; this step runs in working-directory: code
         REPO_PREFIX="code"
 
-        # Context: if contextPath is set use code/{contextPath}, else use code
-        if [[ -n "$CONTEXT_PATH" ]]; then
-          RESOLVED_CONTEXT="$REPO_PREFIX/$CONTEXT_PATH"
-
-          # If dockerfile is not set, default to {context}/Dockerfile
-          if [[ -z "$DOCKERFILE_PATH" ]]; then
-            DOCKERFILE_PATH="${CONTEXT_PATH}/Dockerfile"
-            echo "Defaulting dockerfile to: $REPO_PREFIX/$DOCKERFILE_PATH"
+        # Only emit resolved_context if user did not provide inputs.context
+        if [[ -z "${{ inputs.context }}" ]]; then
+          if [[ -n "$CONTEXT_PATH" ]]; then
+            RESOLVED_CONTEXT="$REPO_PREFIX/$CONTEXT_PATH"
+          else
+            RESOLVED_CONTEXT="$REPO_PREFIX"
           fi
-        else
-          RESOLVED_CONTEXT="$REPO_PREFIX"
+          echo "Using context from config: $RESOLVED_CONTEXT"
+          echo "resolved_context=$RESOLVED_CONTEXT" >> "$GITHUB_OUTPUT"
         fi
-        echo "Using context: $RESOLVED_CONTEXT"
-        echo "resolved_context=$RESOLVED_CONTEXT" >> "$GITHUB_OUTPUT"
 
-        if [[ -n "$DOCKERFILE_PATH" ]]; then
-          FULL_DOCKERFILE_PATH="$REPO_PREFIX/$DOCKERFILE_PATH"
-          echo "Using dockerfile from config: $FULL_DOCKERFILE_PATH"
-          echo "resolved_dockerfile=$FULL_DOCKERFILE_PATH" >> "$GITHUB_OUTPUT"
+        # Only emit resolved_dockerfile if user did not provide inputs.dockerfile
+        if [[ -z "${{ inputs.dockerfile }}" ]]; then
+          if [[ -z "$DOCKERFILE_PATH" && -n "$CONTEXT_PATH" ]]; then
+            DOCKERFILE_PATH="${CONTEXT_PATH}/Dockerfile"
+          fi
+          if [[ -n "$DOCKERFILE_PATH" ]]; then
+            FULL_DOCKERFILE_PATH="$REPO_PREFIX/$DOCKERFILE_PATH"
+            echo "Using dockerfile from config: $FULL_DOCKERFILE_PATH"
+            echo "resolved_dockerfile=$FULL_DOCKERFILE_PATH" >> "$GITHUB_OUTPUT"
+          fi
         fi
 
         echo "config_file=$CONFIG_FILE" >> "$GITHUB_OUTPUT"
@@ -362,8 +345,8 @@ runs:
       id: build
       uses: docker/build-push-action@v6
       with:
-        context: ${{ steps.skyhook_config.outputs.resolved_context || inputs.context }}
-        file: ${{ steps.skyhook_config.outputs.resolved_dockerfile || inputs.dockerfile }}
+        context: ${{ inputs.context || steps.skyhook_config.outputs.resolved_context || '.' }}
+        file: ${{ inputs.dockerfile || steps.skyhook_config.outputs.resolved_dockerfile || 'Dockerfile' }}
         platforms: ${{ inputs.platforms }}
         build-args: ${{ inputs.build_args }}
         labels: ${{ steps.meta.outputs.labels }}
@@ -414,9 +397,9 @@ runs:
           fi
           echo "### ⚙️ Build Configuration" >> $GITHUB_STEP_SUMMARY
 
-          # Determine effective values and sources
-          EFFECTIVE_CONTEXT="${{ steps.skyhook_config.outputs.resolved_context || inputs.context }}"
-          EFFECTIVE_DOCKERFILE="${{ steps.skyhook_config.outputs.resolved_dockerfile || inputs.dockerfile }}"
+          # Determine effective values and sources (input wins over config, fallback to default)
+          EFFECTIVE_CONTEXT="${{ inputs.context || steps.skyhook_config.outputs.resolved_context || '.' }}"
+          EFFECTIVE_DOCKERFILE="${{ inputs.dockerfile || steps.skyhook_config.outputs.resolved_dockerfile || 'Dockerfile' }}"
 
           if [[ -n "${{ steps.skyhook_config.outputs.config_file }}" ]]; then
             echo "> 📄 Config source: \`${{ steps.skyhook_config.outputs.config_file }}\` (service: \`${{ steps.skyhook_config.outputs.service_name }}\`)" >> $GITHUB_STEP_SUMMARY
@@ -424,12 +407,16 @@ runs:
           fi
 
           CONTEXT_SOURCE=""
-          if [[ -n "${{ steps.skyhook_config.outputs.resolved_context }}" ]]; then
+          if [[ -n "${{ inputs.context }}" ]]; then
+            CONTEXT_SOURCE=" _(from input)_"
+          elif [[ -n "${{ steps.skyhook_config.outputs.resolved_context }}" ]]; then
             CONTEXT_SOURCE=" _(from config)_"
           fi
 
           DOCKERFILE_SOURCE=""
-          if [[ -n "${{ steps.skyhook_config.outputs.resolved_dockerfile }}" ]]; then
+          if [[ -n "${{ inputs.dockerfile }}" ]]; then
+            DOCKERFILE_SOURCE=" _(from input)_"
+          elif [[ -n "${{ steps.skyhook_config.outputs.resolved_dockerfile }}" ]]; then
             DOCKERFILE_SOURCE=" _(from config)_"
           fi