diff --git a/packages/opencode/test/config/paths.test.ts b/packages/opencode/test/config/paths.test.ts
new file mode 100644
index 0000000000..4febade1af
--- /dev/null
+++ b/packages/opencode/test/config/paths.test.ts
@@ -0,0 +1,144 @@
+import { describe, test, expect } from "bun:test"
+import { ConfigPaths } from "../../src/config/paths"
+import { tmpdir } from "../fixture/fixture"
+import * as fs from "fs/promises"
+import path from "path"
+
+describe("ConfigPaths.parseText: valid JSONC", () => {
+  test("parses valid JSONC with trailing comma", async () => {
+    const text = '{\n  "name": "test",\n  "value": 42,\n}'
+    const result = await ConfigPaths.parseText(text, "/fake/config.json")
+    expect(result).toEqual({ name: "test", value: 42 })
+  })
+
+  test("parses JSONC with line comments", async () => {
+    const text = '{\n  // a comment\n  "key": "val"\n}'
+    const result = await ConfigPaths.parseText(text, "/fake/config.json")
+    expect(result).toEqual({ key: "val" })
+  })
+})
+
+describe("ConfigPaths.parseText: JSONC error reporting", () => {
+  test("throws JsonError with line and column for missing comma", async () => {
+    // Missing comma between "name" and "value" properties
+    const text = '{\n  "name": "test"\n  "value": 42\n}'
+    await expect(ConfigPaths.parseText(text, "/fake/config.json")).rejects.toMatchObject({
+      name: "ConfigJsonError",
+      data: {
+        path: "/fake/config.json",
+      },
+    })
+    // Verify the error message includes position details
+    try {
+      await ConfigPaths.parseText(text, "/fake/config.json")
+    } catch (e: any) {
+      expect(e.data.message).toMatch(/line \d+/)
+      expect(e.data.message).toMatch(/column \d+/)
+    }
+  })
+
+  test("error message includes the offending line content", async () => {
+    const text = '{\n  "a": [1, 2\n  "b": 3\n}'
+    try {
+      await ConfigPaths.parseText(text, "/fake/config.json")
+      throw new Error("should have thrown")
+    } catch (e: any) {
+      if (e.message === "should have thrown") throw e
+      // The error message should include the JSONC input and a caret marker
+      expect(e.data.message).toContain("JSONC Input")
+      expect(e.data.message).toContain("^")
+    }
+  })
+})
+
+describe("ConfigPaths.parseText: {env:} substitution", () => {
+  test("replaces {env:VAR} with environment variable value", async () => {
+    const prev = process.env["TEST_PARSE_TEXT_VAR"]
+    process.env["TEST_PARSE_TEXT_VAR"] = "hello_world"
+    try {
+      const result = await ConfigPaths.parseText(
+        '{ "key": "{env:TEST_PARSE_TEXT_VAR}" }',
+        "/fake/config.json",
+      )
+      expect(result.key).toBe("hello_world")
+    } finally {
+      if (prev === undefined) delete process.env["TEST_PARSE_TEXT_VAR"]
+      else process.env["TEST_PARSE_TEXT_VAR"] = prev
+    }
+  })
+
+  test("replaces missing env var with empty string", async () => {
+    delete process.env["DEFINITELY_MISSING_PARSE_TEXT_VAR_98765"]
+    const result = await ConfigPaths.parseText(
+      '{ "key": "{env:DEFINITELY_MISSING_PARSE_TEXT_VAR_98765}" }',
+      "/fake/config.json",
+    )
+    expect(result.key).toBe("")
+  })
+})
+
+describe("ConfigPaths.parseText: {file:} comment skipping", () => {
+  test("skips {file:} tokens inside line comments", async () => {
+    // If the comment-skip logic is broken, this would throw ENOENT
+    const text = '{\n  // {file:nonexistent-file-that-does-not-exist.txt}\n  "key": "value"\n}'
+    const result = await ConfigPaths.parseText(text, "/fake/config.json")
+    expect(result.key).toBe("value")
+  })
+})
+
+describe("ConfigPaths.parseText: {file:} missing file error", () => {
+  test("throws InvalidError when referenced file does not exist", async () => {
+    const text = '{ "key": "{file:/tmp/definitely-nonexistent-parse-text-file-abc123.txt}" }'
+    await expect(ConfigPaths.parseText(text, "/fake/config.json")).rejects.toMatchObject({
+      name: "ConfigInvalidError",
+      data: {
+        path: "/fake/config.json",
+      },
+    })
+    // Verify specific error details
+    try {
+      await ConfigPaths.parseText(text, "/fake/config.json")
+    } catch (e: any) {
+      expect(e.data.message).toContain("does not exist")
+    }
+  })
+
+  test("returns empty string for missing file when missing='empty'", async () => {
+    const text = '{ "key": "{file:/tmp/definitely-nonexistent-parse-text-file-abc123.txt}" }'
+    const result = await ConfigPaths.parseText(text, "/fake/config.json", "empty")
+    expect(result.key).toBe("")
+  })
+})
+
+describe("ConfigPaths.parseText: {file:} real file substitution", () => {
+  test("substitutes {file:path} with actual file content", async () => {
+    await using tmp = await tmpdir()
+    const secretFile = path.join(tmp.path, "secret.txt")
+    await fs.writeFile(secretFile, "my-secret-value")
+
+    const text = `{ "apiKey": "{file:${secretFile}}" }`
+    const result = await ConfigPaths.parseText(text, "/fake/config.json")
+    expect(result.apiKey).toBe("my-secret-value")
+  })
+
+  test("trims whitespace from file content", async () => {
+    await using tmp = await tmpdir()
+    const secretFile = path.join(tmp.path, "secret.txt")
+    await fs.writeFile(secretFile, "  my-value  \n")
+
+    const text = `{ "apiKey": "{file:${secretFile}}" }`
+    const result = await ConfigPaths.parseText(text, "/fake/config.json")
+    expect(result.apiKey).toBe("my-value")
+  })
+
+  test("resolves relative {file:} paths against config directory", async () => {
+    await using tmp = await tmpdir()
+    const secretFile = path.join(tmp.path, "api-key.txt")
+    await fs.writeFile(secretFile, "relative-secret")
+
+    const configPath = path.join(tmp.path, "opencode.json")
+    const text = '{ "apiKey": "{file:api-key.txt}" }'
+    const result = await ConfigPaths.parseText(text, configPath)
+    expect(result.apiKey).toBe("relative-secret")
+  })
+})