diff --git a/shellgenius/config.py b/shellgenius/config.py
index 6394af2..55a48b6 100644
--- a/shellgenius/config.py
+++ b/shellgenius/config.py
@@ -1,133 +1,142 @@
-"""Configuration management for ShellGenius."""
+"""Configuration loader for ShellGenius."""
 
 import os
 from pathlib import Path
-from typing import Any
+from typing import Any, Dict, Optional
 
 import yaml
 
-CONFIG_DIR = Path(os.environ.get("XDG_CONFIG_HOME", Path.home() / ".config")) / "shellgenius"
-CONFIG_FILE = CONFIG_DIR / "config.yaml"
-
 
 class Config:
-    """Configuration class for ShellGenius."""
+    """Configuration management for ShellGenius."""
 
-    def __init__(self, config_path: str | None = None):
+    def __init__(self, config_path: Optional[str] = None):
         """Initialize configuration.
 
         Args:
-            config_path: Path to config file
+            config_path: Path to config.yaml file
         """
-        if config_path is None:
-            config_path = str(CONFIG_FILE)
+        self.config_path = config_path or os.environ.get(
+            "SHELLGENIUS_CONFIG", "config.yaml"
+        )
+        self.config: Dict[str, Any] = self._load_config()
 
-        self._config_path = config_path
-        self._config = self._load_config()
-
-    def _load_config(self) -> dict[str, Any]:
-        """Load configuration from file.
+    def _load_config(self) -> Dict[str, Any]:
+        """Load configuration from YAML file.
 
         Returns:
-            Configuration dictionary
+            Dictionary containing configuration
         """
-        defaults = {
+        default_config = {
             "ollama": {
                 "host": "localhost:11434",
-                "model": "llama3",
+                "model": "codellama",
+                "timeout": 120,
             },
             "safety": {
                 "level": "moderate",
+                "warn_on_destructive": True,
+                "allow_dangerous": False,
+                "blocked_patterns": [
+                    "rm -rf /",
+                    ":(){:|:&};:",
+                    "chmod 777",
+                    "sudo su",
+                    "dd if=/dev/zero",
+                ],
+            },
+            "ui": {
+                "theme": "default",
+                "show_syntax_highlighting": True,
+                "auto_suggest": True,
+                "max_history": 100,
+            },
+            "shell": {
+                "default": "bash",
+                "prefer_shebang": True,
+            },
+            "history": {
+                "enabled": True,
+                "storage_path": "~/.config/shellgenius/history.yaml",
+                "similarity_threshold": 0.7,
             },
-            "default_shell": "bash",
         }
 
-        try:
-            with open(self._config_path) as f:
-                config = yaml.safe_load(f) or {}
-        except FileNotFoundError:
-            config = {}
+        if self.config_path and Path(self.config_path).exists():
+            try:
+                with open(self.config_path, "r") as f:
+                    user_config = yaml.safe_load(f) or {}
+                return self._merge_configs(default_config, user_config)
+            except Exception:
+                return default_config
+        return default_config
 
-        if isinstance(config, dict):
-            defaults.update(config)
+    def _merge_configs(
+        self, default: Dict[str, Any], user: Dict[str, Any]
+    ) -> Dict[str, Any]:
+        """Merge user config with defaults.
 
-        return defaults
+        Args:
+            default: Default configuration
+            user: User-provided configuration
+
+        Returns:
+            Merged configuration
+        """
+        result = default.copy()
+        for key, value in user.items():
+            if key in result and isinstance(result[key], dict) and isinstance(value, dict):
+                result[key] = self._merge_configs(result[key], value)
+            else:
+                result[key] = value
+        return result
 
     def get(self, key: str, default: Any = None) -> Any:
         """Get configuration value by key.
 
         Args:
-            key: Dot-separated key (e.g., "ollama.host")
+            key: Dot-separated key path (e.g., "ollama.host")
             default: Default value if key not found
 
         Returns:
             Configuration value
         """
         keys = key.split(".")
-        value: Any = self._config
-
+        value = self.config
         for k in keys:
-            if isinstance(value, dict):
-                value = value.get(k) if k in value else None
+            if isinstance(value, dict) and k in value:
+                value = value[k]
             else:
                 return default
-
-        return value if value is not None else default
-
-    def save(self) -> None:
-        """Save configuration to file."""
-        Path(self._config_path).parent.mkdir(parents=True, exist_ok=True)
-        with open(self._config_path, "w") as f:
-            yaml.dump(self._config, f)
+        return value
 
     @property
     def ollama_host(self) -> str:
-        """Get Ollama host URL."""
-        return self.get("ollama.host", "localhost:11434")
+        """Get Ollama host."""
+        return os.environ.get("OLLAMA_HOST", self.get("ollama.host", "localhost:11434"))
 
     @property
     def ollama_model(self) -> str:
-        """Get Ollama model name."""
-        return self.get("ollama.model", "llama3")
+        """Get Ollama model."""
+        return os.environ.get("OLLAMA_MODEL", self.get("ollama.model", "codellama"))
 
     @property
     def safety_level(self) -> str:
         """Get safety level."""
-        return self.get("safety.level", "moderate")
+        return os.environ.get("SHELLGENIUS_SAFETY", self.get("safety.level", "moderate"))
 
-    @property
-    def default_shell(self) -> str:
-        """Get default shell type."""
-        return self.get("default_shell", "bash")
+    def reload(self) -> None:
+        """Reload configuration from file."""
+        self.config = self._load_config()
 
 
-def get_config(config_path: str | None = None) -> dict[str, Any]:
-    """Load configuration from file or return defaults."""
-    if config_path is None:
-        config_path = str(CONFIG_FILE)
+def get_config(config_path: Optional[str] = None) -> Config:
+    """Get configuration instance.
 
-    defaults = {
-        "ollama_host": "http://localhost:11434",
-        "ollama_model": "llama3",
-        "default_shell": "bash",
-    }
+    Args:
+        config_path: Optional path to config file
 
-    try:
-        with open(config_path) as f:
-            config = yaml.safe_load(f) or {}
-    except FileNotFoundError:
-        config = {}
-
-    merged = defaults.copy()
-    merged.update(config)
-    return merged
-
-
-def save_config(config: dict[str, Any], config_path: str | None = None) -> None:
-    """Save configuration to file."""
-    if config_path is None:
-        config_path = str(CONFIG_FILE)
-
-    Path(config_path).parent.mkdir(parents=True, exist_ok=True)
-    with open(config_path, "w") as f:
-        yaml.dump(config, f)
+    Returns:
+        Config instance
+    """
+    return Config(config_path)