diff --git a/backend/database.py b/backend/database.py
index 897a070..5412d1a 100644
--- a/backend/database.py
+++ b/backend/database.py
@@ -1,7 +1,9 @@
 
-from sqlalchemy import create_engine
-from sqlalchemy.orm import sessionmaker, DeclarativeBase
 from sqlalchemy import text
+from sqlalchemy import create_engine
+from sqlalchemy.orm import DeclarativeBase, sessionmaker
+
+from .paths import database_path, sqlite_database_url
 
 """
 Database utilities and configuration. This module defines the SQLAlchemy
@@ -15,7 +17,8 @@ only run once on startup. It is safe to call repeatedly: when a column
 already exists, the function will simply no-op.
 """
 
-DATABASE_URL = "sqlite:///./backend/app.db"
+DATABASE_PATH = database_path()
+DATABASE_URL = sqlite_database_url(DATABASE_PATH)
 
 engine = create_engine(
     DATABASE_URL, connect_args={"check_same_thread": False}
diff --git a/backend/local_rag.py b/backend/local_rag.py
index 362d6a2..336c214 100644
--- a/backend/local_rag.py
+++ b/backend/local_rag.py
@@ -24,11 +24,11 @@ from .app_settings import (
     get_embed_model_preference,
     get_ollama_api_url,
 )
+from .paths import library_root
 
 router = APIRouter(tags=["local-rag"])
 
-LIB_ROOT = Path(__file__).parent / "libraries"
-LIB_ROOT.mkdir(parents=True, exist_ok=True)
+LIB_ROOT = library_root()
 
 RAW_CORPUS_PROFILE = "per-file-default-v1"
 PREPARE_PROFILE = "selective-enrich-v2"
diff --git a/backend/paths.py b/backend/paths.py
new file mode 100644
index 0000000..0add315
--- /dev/null
+++ b/backend/paths.py
@@ -0,0 +1,92 @@
+from __future__ import annotations
+
+import os
+from pathlib import Path
+
+
+BACKEND_DIR = Path(__file__).resolve().parent
+DEFAULT_DB_PATH = BACKEND_DIR / "app.db"
+DEFAULT_LIB_ROOT = BACKEND_DIR / "libraries"
+
+
+def _clean_env(name: str) -> str:
+    return os.getenv(name, "").strip()
+
+
+def _path_from_env(name: str) -> Path | None:
+    value = _clean_env(name)
+    if not value:
+        return None
+    return Path(value).expanduser()
+
+
+def _ensure_parent(path: Path) -> Path:
+    path.parent.mkdir(parents=True, exist_ok=True)
+    return path
+
+
+def _ensure_dir(path: Path) -> Path:
+    path.mkdir(parents=True, exist_ok=True)
+    return path
+
+
+def data_dir() -> Path | None:
+    """
+    Optional app-managed data root for packaged deployments.
+
+    HEIMGEIST_DATA_DIR is internal sidecar plumbing. Normal users should not
+    need to configure it manually, and development intentionally leaves it
+    unset so data stays in backend/app.db and backend/libraries.
+    """
+
+    path = _path_from_env("HEIMGEIST_DATA_DIR")
+    if path is None:
+        return None
+    return _ensure_dir(path)
+
+
+def database_path() -> Path:
+    """
+    Resolve the SQLite database path.
+
+    Precedence:
+    1. HEIMGEIST_DB_PATH, for explicit packaged sidecar plumbing.
+    2. HEIMGEIST_DATA_DIR/app.db, for packaged app-managed data.
+    3. backend/app.db, for unchanged local development behavior.
+    """
+
+    explicit_path = _path_from_env("HEIMGEIST_DB_PATH")
+    if explicit_path is not None:
+        return _ensure_parent(explicit_path)
+
+    base_dir = data_dir()
+    if base_dir is not None:
+        return _ensure_parent(base_dir / "app.db")
+
+    return _ensure_parent(DEFAULT_DB_PATH)
+
+
+def library_root() -> Path:
+    """
+    Resolve the local RAG library root.
+
+    Precedence:
+    1. HEIMGEIST_LIB_ROOT, for explicit packaged sidecar plumbing.
+    2. HEIMGEIST_DATA_DIR/libraries, for packaged app-managed data.
+    3. backend/libraries, for unchanged local development behavior.
+    """
+
+    explicit_path = _path_from_env("HEIMGEIST_LIB_ROOT")
+    if explicit_path is not None:
+        return _ensure_dir(explicit_path)
+
+    base_dir = data_dir()
+    if base_dir is not None:
+        return _ensure_dir(base_dir / "libraries")
+
+    return _ensure_dir(DEFAULT_LIB_ROOT)
+
+
+def sqlite_database_url(path: Path | None = None) -> str:
+    target = path or database_path()
+    return f"sqlite:///{target.as_posix()}"