diff --git a/packages/cli/src/commands/mcp/add.test.ts b/packages/cli/src/commands/mcp/add.test.ts
index d24db1a260a..5bcf833d0c1 100644
--- a/packages/cli/src/commands/mcp/add.test.ts
+++ b/packages/cli/src/commands/mcp/add.test.ts
@@ -63,7 +63,7 @@ describe('mcp add command', () => {
     mockSetValue = vi.fn();
     mockWriteStderrLine.mockClear();
     mockedLoadSettings.mockReturnValue({
-      forScope: () => ({ settings: {} }),
+      forScope: () => ({ settings: {}, originalSettings: {} }),
       setValue: mockSetValue,
       workspace: { path: '/path/to/project' },
       user: { path: '/home/user' },
@@ -175,7 +175,7 @@ describe('mcp add command', () => {
     const setupMocks = (cwd: string, workspacePath: string) => {
       vi.spyOn(process, 'cwd').mockReturnValue(cwd);
       mockedLoadSettings.mockReturnValue({
-        forScope: () => ({ settings: {} }),
+        forScope: () => ({ settings: {}, originalSettings: {} }),
         setValue: mockSetValue,
         workspace: { path: workspacePath },
         user: { path: '/home/user' },
@@ -325,15 +325,17 @@ describe('mcp add command', () => {
     const updatedArgs = ['new'];
 
     beforeEach(() => {
+      const serverData = {
+        mcpServers: {
+          [serverName]: {
+            command: initialCommand,
+          },
+        },
+      };
       mockedLoadSettings.mockReturnValue({
         forScope: () => ({
-          settings: {
-            mcpServers: {
-              [serverName]: {
-                command: initialCommand,
-              },
-            },
-          },
+          settings: serverData,
+          originalSettings: serverData,
         }),
         setValue: mockSetValue,
         workspace: { path: '/path/to/project' },
diff --git a/packages/cli/src/commands/mcp/add.ts b/packages/cli/src/commands/mcp/add.ts
index 3ecb3384b45..9b8327b6c48 100644
--- a/packages/cli/src/commands/mcp/add.ts
+++ b/packages/cli/src/commands/mcp/add.ts
@@ -166,8 +166,11 @@ async function addMcpServer(
       break;
   }
 
-  const existingSettings = settings.forScope(settingsScope).settings;
-  const mcpServers = existingSettings.mcpServers || {};
+  const existingSettings = settings.forScope(settingsScope).originalSettings;
+  const mcpServers = (existingSettings.mcpServers || {}) as Record<
+    string,
+    MCPServerConfig
+  >;
 
   const isExistingServer = !!mcpServers[name];
   if (isExistingServer) {
diff --git a/packages/cli/src/commands/mcp/remove.test.ts b/packages/cli/src/commands/mcp/remove.test.ts
index e2fb6d6d213..09a3562048c 100644
--- a/packages/cli/src/commands/mcp/remove.test.ts
+++ b/packages/cli/src/commands/mcp/remove.test.ts
@@ -67,7 +67,12 @@ describe('mcp remove command', () => {
       },
     };
     mockedLoadSettings.mockReturnValue({
-      forScope: () => ({ settings: mockSettings }),
+      workspace: { path: '/home/user/project' },
+      user: { path: '/home/user' },
+      forScope: () => ({
+        settings: mockSettings,
+        originalSettings: mockSettings,
+      }),
       setValue: mockSetValue,
     });
     mockWriteStdoutLine.mockClear();
diff --git a/packages/cli/src/commands/mcp/remove.ts b/packages/cli/src/commands/mcp/remove.ts
index 3de482d8d0d..69b0bb7109c 100644
--- a/packages/cli/src/commands/mcp/remove.ts
+++ b/packages/cli/src/commands/mcp/remove.ts
@@ -7,7 +7,7 @@
 // File for 'qwen mcp remove' command
 import type { CommandModule } from 'yargs';
 import { loadSettings, SettingScope } from '../../config/settings.js';
-import { writeStdoutLine } from '../../utils/stdioHelpers.js';
+import { writeStdoutLine, writeStderrLine } from '../../utils/stdioHelpers.js';
 import { MCPOAuthTokenStorage } from '@qwen-code/qwen-code-core';
 
 async function removeMcpServer(
@@ -20,9 +20,20 @@ async function removeMcpServer(
   const settingsScope =
     scope === 'user' ? SettingScope.User : SettingScope.Workspace;
   const settings = loadSettings();
+  const inHome = settings.workspace.path === settings.user.path;
 
-  const existingSettings = settings.forScope(settingsScope).settings;
-  const mcpServers = existingSettings.mcpServers || {};
+  if (scope === 'project' && inHome) {
+    writeStderrLine(
+      'Error: Please use --scope user to edit settings in the home directory.',
+    );
+    process.exit(1);
+  }
+
+  const existingSettings = settings.forScope(settingsScope).originalSettings;
+  const mcpServers = (existingSettings.mcpServers || {}) as Record<
+    string,
+    Record<string, unknown>
+  >;
 
   if (!mcpServers[name]) {
     writeStdoutLine(`Server "${name}" not found in ${scope} settings.`);
diff --git a/packages/cli/src/config/settings.ts b/packages/cli/src/config/settings.ts
index 2459b7df683..20dbefb85b4 100644
--- a/packages/cli/src/config/settings.ts
+++ b/packages/cli/src/config/settings.ts
@@ -470,8 +470,20 @@ export class LoadedSettings {
       value = stripRuntimeSnapshotPrefix(value);
     }
     const settingsFile = this.forScope(scope);
-    setNestedPropertySafe(settingsFile.settings, key, value);
+    // Write the raw value to originalSettings (preserves ${VAR} tokens for
+    // settings like mcpServers that may contain env-var references).
     setNestedPropertySafe(settingsFile.originalSettings, key, value);
+    // Write the env-resolved version to .settings so that consumers of
+    // settings.merged see actual values, not literal ${VAR} strings.
+    const resolved = resolveEnvVarsInObject(
+      { [key]: value } as Settings,
+      getHomeEnvFallbackVars(),
+    );
+    setNestedPropertySafe(
+      settingsFile.settings,
+      key,
+      (resolved as Record<string, unknown>)[key],
+    );
     this._merged = this.computeMergedSettings();
     const replacePath = key === 'mcpServers' ? key.split('.') : [];
     saveSettings(settingsFile, createSettingsUpdate(key, value), replacePath);