diff --git a/hermes_cli/nous_subscription.py b/hermes_cli/nous_subscription.py
index a4883b056..78181aab2 100644
--- a/hermes_cli/nous_subscription.py
+++ b/hermes_cli/nous_subscription.py
@@ -10,6 +10,7 @@ from hermes_cli.auth import get_nous_auth_status
 from hermes_cli.config import get_env_value, load_config
 from tools.managed_tool_gateway import is_managed_tool_gateway_ready
 from tools.tool_backend_helpers import (
+    fal_key_is_configured,
     has_direct_modal_credentials,
     managed_nous_tools_enabled,
     normalize_browser_cloud_provider,
@@ -271,7 +272,7 @@ def get_nous_subscription_features(
     direct_firecrawl = bool(get_env_value("FIRECRAWL_API_KEY") or get_env_value("FIRECRAWL_API_URL"))
     direct_parallel = bool(get_env_value("PARALLEL_API_KEY"))
     direct_tavily = bool(get_env_value("TAVILY_API_KEY"))
-    direct_fal = bool(get_env_value("FAL_KEY"))
+    direct_fal = fal_key_is_configured()
     direct_openai_tts = bool(resolve_openai_audio_api_key())
     direct_elevenlabs = bool(get_env_value("ELEVENLABS_API_KEY"))
     direct_camofox = bool(get_env_value("CAMOFOX_URL"))
@@ -520,7 +521,7 @@ def apply_nous_managed_defaults(
         browser_cfg["cloud_provider"] = "browser-use"
         changed.add("browser")
 
-    if "image_gen" in selected_toolsets and not get_env_value("FAL_KEY"):
+    if "image_gen" in selected_toolsets and not fal_key_is_configured():
         changed.add("image_gen")
 
     return changed
@@ -548,7 +549,7 @@ def _get_gateway_direct_credentials() -> Dict[str, bool]:
             or get_env_value("TAVILY_API_KEY")
             or get_env_value("EXA_API_KEY")
         ),
-        "image_gen": bool(get_env_value("FAL_KEY")),
+        "image_gen": fal_key_is_configured(),
         "tts": bool(
             resolve_openai_audio_api_key()
             or get_env_value("ELEVENLABS_API_KEY")
diff --git a/hermes_cli/tools_config.py b/hermes_cli/tools_config.py
index 24c5fde5f..36b3c7f3f 100644
--- a/hermes_cli/tools_config.py
+++ b/hermes_cli/tools_config.py
@@ -24,7 +24,7 @@ from hermes_cli.nous_subscription import (
     apply_nous_managed_defaults,
     get_nous_subscription_features,
 )
-from tools.tool_backend_helpers import managed_nous_tools_enabled
+from tools.tool_backend_helpers import fal_key_is_configured, managed_nous_tools_enabled
 from utils import base_url_hostname
 
 logger = logging.getLogger(__name__)
@@ -876,7 +876,7 @@ def _toolset_needs_configuration_prompt(ts_key: str, config: dict) -> bool:
         browser_cfg = config.get("browser", {})
         return not isinstance(browser_cfg, dict) or "cloud_provider" not in browser_cfg
     if ts_key == "image_gen":
-        return not get_env_value("FAL_KEY")
+        return not fal_key_is_configured()
 
     return not _toolset_has_keys(ts_key, config)
 
diff --git a/tools/image_generation_tool.py b/tools/image_generation_tool.py
index e10b8453c..13e95ef2d 100644
--- a/tools/image_generation_tool.py
+++ b/tools/image_generation_tool.py
@@ -33,7 +33,11 @@ import fal_client
 
 from tools.debug_helpers import DebugSession
 from tools.managed_tool_gateway import resolve_managed_tool_gateway
-from tools.tool_backend_helpers import managed_nous_tools_enabled, prefers_gateway
+from tools.tool_backend_helpers import (
+    fal_key_is_configured,
+    managed_nous_tools_enabled,
+    prefers_gateway,
+)
 
 logger = logging.getLogger(__name__)
 
@@ -286,7 +290,7 @@ _managed_fal_client_lock = threading.Lock()
 def _resolve_managed_fal_gateway():
     """Return managed fal-queue gateway config when the user prefers the gateway
     or direct FAL credentials are absent."""
-    if os.getenv("FAL_KEY") and not prefers_gateway("image_gen"):
+    if fal_key_is_configured() and not prefers_gateway("image_gen"):
         return None
     return resolve_managed_tool_gateway("fal-queue")
 
@@ -623,9 +627,7 @@ def image_generate_tool(
         if not prompt or not isinstance(prompt, str) or len(prompt.strip()) == 0:
             raise ValueError("Prompt is required and must be a non-empty string")
 
-        fal_key_value = os.getenv("FAL_KEY")
-        fal_key_set = bool(fal_key_value and fal_key_value.strip())
-        if not (fal_key_set or _resolve_managed_fal_gateway()):
+        if not (fal_key_is_configured() or _resolve_managed_fal_gateway()):
             message = "FAL_KEY environment variable not set"
             if managed_nous_tools_enabled():
                 message += " and managed FAL gateway is unavailable"
@@ -736,9 +738,7 @@ def image_generate_tool(
 
 def check_fal_api_key() -> bool:
     """True if the FAL.ai API key (direct or managed gateway) is available."""
-    fal_key_value = os.getenv("FAL_KEY")
-    fal_key_set = bool(fal_key_value and fal_key_value.strip())
-    return bool(fal_key_set or _resolve_managed_fal_gateway())
+    return bool(fal_key_is_configured() or _resolve_managed_fal_gateway())
 
 
 def check_image_generation_requirements() -> bool:
diff --git a/tools/tool_backend_helpers.py b/tools/tool_backend_helpers.py
index a770fe747..810a51c63 100644
--- a/tools/tool_backend_helpers.py
+++ b/tools/tool_backend_helpers.py
@@ -119,3 +119,24 @@ def prefers_gateway(config_section: str) -> bool:
     except Exception:
         pass
     return False
+
+
+def fal_key_is_configured() -> bool:
+    """Return True when FAL_KEY is set to a non-whitespace value.
+
+    Consults both ``os.environ`` and ``~/.hermes/.env`` (via
+    ``hermes_cli.config.get_env_value`` when available) so tool-side
+    checks and CLI setup-time checks agree.  A whitespace-only value
+    is treated as unset everywhere.
+    """
+    value = os.getenv("FAL_KEY")
+    if value is None:
+        # Fall back to the .env file for CLI paths that may run before
+        # dotenv is loaded into os.environ.
+        try:
+            from hermes_cli.config import get_env_value
+
+            value = get_env_value("FAL_KEY")
+        except Exception:
+            value = None
+    return bool(value and value.strip())