diff --git a/codeflash/code_utils/config_parser.py b/codeflash/code_utils/config_parser.py
index ef21ce051..da454a40f 100644
--- a/codeflash/code_utils/config_parser.py
+++ b/codeflash/code_utils/config_parser.py
@@ -100,9 +100,15 @@ def parse_config_file(
 
     # Pick the closest toml config (pyproject.toml or codeflash.toml).
     # Java projects use codeflash.toml; Python projects use pyproject.toml.
+    # When both exist at the same depth, prefer codeflash.toml (dedicated config).
     closest_toml_path = None
     if pyproject_toml_path and codeflash_toml_path:
-        closest_toml_path = max(pyproject_toml_path, codeflash_toml_path, key=lambda p: len(p.parent.parts))
+        pyproject_depth = len(pyproject_toml_path.parent.parts)
+        codeflash_depth = len(codeflash_toml_path.parent.parts)
+        if codeflash_depth >= pyproject_depth:
+            closest_toml_path = codeflash_toml_path
+        else:
+            closest_toml_path = pyproject_toml_path
     else:
         closest_toml_path = pyproject_toml_path or codeflash_toml_path
 
@@ -134,8 +140,13 @@ def parse_config_file(
                     )
             return config, path
 
-    # Fall back to pyproject.toml
-    config_file_path = find_pyproject_toml(config_file_path)
+    # Fall back to the closest toml config file (pyproject.toml or codeflash.toml).
+    # Use closest_toml_path when available to respect codeflash.toml over pyproject.toml
+    # when codeflash.toml is closer to CWD (e.g., Java projects in a Python repo).
+    if config_file_path is None and closest_toml_path is not None:
+        config_file_path = closest_toml_path
+    else:
+        config_file_path = find_pyproject_toml(config_file_path)
     try:
         with config_file_path.open("rb") as f:
             data = tomlkit.parse(f.read())
diff --git a/tests/code_utils/test_config_parser.py b/tests/code_utils/test_config_parser.py
new file mode 100644
index 000000000..a0db5a881
--- /dev/null
+++ b/tests/code_utils/test_config_parser.py
@@ -0,0 +1,115 @@
+from __future__ import annotations
+
+from pathlib import Path
+
+import pytest
+
+from codeflash.code_utils.config_parser import ALL_CONFIG_FILES, PYPROJECT_TOML_CACHE, parse_config_file
+
+
+@pytest.fixture(autouse=True)
+def clear_caches() -> None:
+    PYPROJECT_TOML_CACHE.clear()
+    ALL_CONFIG_FILES.clear()
+
+
+PYPROJECT_TOML_CONTENT = """\
+[tool.codeflash]
+module-root = "src/python"
+tests-root = "tests"
+"""
+
+CODEFLASH_TOML_CONTENT = """\
+[tool.codeflash]
+module-root = "src/main/java"
+tests-root = "src/test/java"
+"""
+
+
+class TestParseConfigFileTomlPriority:
+    def test_codeflash_toml_preferred_over_pyproject_when_same_dir(self, tmp_path: Path, monkeypatch: pytest.MonkeyPatch) -> None:
+        (tmp_path / "pyproject.toml").write_text(PYPROJECT_TOML_CONTENT, encoding="utf-8")
+        (tmp_path / "codeflash.toml").write_text(CODEFLASH_TOML_CONTENT, encoding="utf-8")
+        (tmp_path / "src" / "main" / "java").mkdir(parents=True)
+        (tmp_path / "src" / "test" / "java").mkdir(parents=True)
+        (tmp_path / "src" / "python").mkdir(parents=True)
+        (tmp_path / "tests").mkdir(parents=True)
+        monkeypatch.chdir(tmp_path)
+
+        config, config_path = parse_config_file()
+
+        assert config_path == tmp_path / "codeflash.toml"
+        assert config["module_root"] == str((tmp_path / "src" / "main" / "java").resolve())
+        assert config["tests_root"] == str((tmp_path / "src" / "test" / "java").resolve())
+
+    def test_only_pyproject_toml_still_works(self, tmp_path: Path, monkeypatch: pytest.MonkeyPatch) -> None:
+        (tmp_path / "pyproject.toml").write_text(PYPROJECT_TOML_CONTENT, encoding="utf-8")
+        (tmp_path / "src" / "python").mkdir(parents=True)
+        (tmp_path / "tests").mkdir(parents=True)
+        monkeypatch.chdir(tmp_path)
+
+        config, config_path = parse_config_file()
+
+        assert config_path == tmp_path / "pyproject.toml"
+        assert config["module_root"] == str((tmp_path / "src" / "python").resolve())
+
+    def test_only_codeflash_toml_still_works(self, tmp_path: Path, monkeypatch: pytest.MonkeyPatch) -> None:
+        (tmp_path / "codeflash.toml").write_text(CODEFLASH_TOML_CONTENT, encoding="utf-8")
+        (tmp_path / "src" / "main" / "java").mkdir(parents=True)
+        (tmp_path / "src" / "test" / "java").mkdir(parents=True)
+        monkeypatch.chdir(tmp_path)
+
+        config, config_path = parse_config_file()
+
+        assert config_path == tmp_path / "codeflash.toml"
+        assert config["module_root"] == str((tmp_path / "src" / "main" / "java").resolve())
+
+    def test_closer_codeflash_toml_preferred_over_parent_pyproject(self, tmp_path: Path, monkeypatch: pytest.MonkeyPatch) -> None:
+        # pyproject.toml in parent, codeflash.toml in child (closer to CWD)
+        (tmp_path / "pyproject.toml").write_text(PYPROJECT_TOML_CONTENT, encoding="utf-8")
+        (tmp_path / "src" / "python").mkdir(parents=True)
+        (tmp_path / "tests").mkdir(parents=True)
+
+        child = tmp_path / "subproject"
+        child.mkdir()
+        (child / "codeflash.toml").write_text(CODEFLASH_TOML_CONTENT, encoding="utf-8")
+        (child / "src" / "main" / "java").mkdir(parents=True)
+        (child / "src" / "test" / "java").mkdir(parents=True)
+        monkeypatch.chdir(child)
+
+        config, config_path = parse_config_file()
+
+        assert config_path == child / "codeflash.toml"
+        assert config["module_root"] == str((child / "src" / "main" / "java").resolve())
+
+    def test_closer_pyproject_preferred_over_parent_codeflash_toml(self, tmp_path: Path, monkeypatch: pytest.MonkeyPatch) -> None:
+        # codeflash.toml in parent, pyproject.toml in child (closer to CWD)
+        (tmp_path / "codeflash.toml").write_text(CODEFLASH_TOML_CONTENT, encoding="utf-8")
+        (tmp_path / "src" / "main" / "java").mkdir(parents=True)
+        (tmp_path / "src" / "test" / "java").mkdir(parents=True)
+
+        child = tmp_path / "subproject"
+        child.mkdir()
+        (child / "pyproject.toml").write_text(PYPROJECT_TOML_CONTENT, encoding="utf-8")
+        (child / "src" / "python").mkdir(parents=True)
+        (child / "tests").mkdir(parents=True)
+        monkeypatch.chdir(child)
+
+        config, config_path = parse_config_file()
+
+        assert config_path == child / "pyproject.toml"
+        assert config["module_root"] == str((child / "src" / "python").resolve())
+
+    def test_explicit_config_file_path_bypasses_discovery(self, tmp_path: Path, monkeypatch: pytest.MonkeyPatch) -> None:
+        (tmp_path / "pyproject.toml").write_text(PYPROJECT_TOML_CONTENT, encoding="utf-8")
+        (tmp_path / "codeflash.toml").write_text(CODEFLASH_TOML_CONTENT, encoding="utf-8")
+        (tmp_path / "src" / "main" / "java").mkdir(parents=True)
+        (tmp_path / "src" / "test" / "java").mkdir(parents=True)
+        (tmp_path / "src" / "python").mkdir(parents=True)
+        (tmp_path / "tests").mkdir(parents=True)
+        monkeypatch.chdir(tmp_path)
+
+        config, config_path = parse_config_file(config_file_path=tmp_path / "pyproject.toml")
+
+        assert config_path == tmp_path / "pyproject.toml"
+        assert config["module_root"] == str((tmp_path / "src" / "python").resolve())