diff --git a/src/commands/launch/functions.test.ts b/src/commands/launch/functions.test.ts
index 9d27cff..846c348 100755
--- a/src/commands/launch/functions.test.ts
+++ b/src/commands/launch/functions.test.ts
@@ -40,6 +40,21 @@ describe('Functions Command', () => {
       });
     });
 
+    it('should fall back to process.cwd() when data-dir flag is not provided', async () => {
+      Functions.prototype['parse'] = jest
+        .fn()
+        .mockResolvedValueOnce({ flags: { 'data-dir': undefined, port: '3000' } });
+      const functionsCommand = new Functions([], {} as any);
+
+      await functionsCommand.init();
+
+      expect(Functions.prototype['parse']).toHaveBeenCalledWith(Functions);
+      expect(functionsCommand['sharedConfig']).toEqual({
+        projectBasePath: process.cwd(),
+        port: 3000,
+      });
+    });
+
     it.each([{ portFlagInput: 'invalidPortInput' }, { portFlagInput: '999999' }, { portFlagInput: '-200' }])(
       'should log an error and exit if the "port" flag input is invalid -> $portFlagInput',
       async ({ portFlagInput }) => {
diff --git a/src/commands/launch/functions.ts b/src/commands/launch/functions.ts
index 6f9fbf5..1251491 100755
--- a/src/commands/launch/functions.ts
+++ b/src/commands/launch/functions.ts
@@ -22,7 +22,6 @@ export default class Functions extends Command {
     }),
     'data-dir': Flags.string({
       char: 'd',
-      default: process.cwd(),
       description: 'Current working directory',
     }),
   };
@@ -34,7 +33,8 @@ export default class Functions extends Command {
 
   async init(): Promise<void> {
     const { flags } = await this.parse(Functions);
-    const projectBasePath = flags['data-dir'];
+    const currentWorkingDirectory = process.cwd();
+    const projectBasePath = flags['data-dir'] || currentWorkingDirectory;
     
     const logger = new Logger({ projectBasePath });
     this.log = logger.log.bind(logger);