diff --git a/CHANGELOG.md b/CHANGELOG.md
index 8aed2f4a66368..99e54c9ab7e01 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -4,6 +4,10 @@
 
 - [Previous Changelogs](https://github.com/eclipse-theia/theia/tree/master/doc/changelogs/)
 
+## 1.55.0 - not yet release
+
+- [application-package] feat: provide an application prop to set the configuration area [#14319](https://github.com/eclipse-theia/theia/pull/14319) - Contributed on behalf of STMicroelectronics
+
 ## 1.54.0 - 09/26/2024
 
 - [ai] add Theia AI LLM Support [Experimental] [#14048](https://github.com/eclipse-theia/theia/pull/14048)
diff --git a/dev-packages/application-package/src/application-props.ts b/dev-packages/application-package/src/application-props.ts
index ca843a7e6729e..d1b9a97524ede 100644
--- a/dev-packages/application-package/src/application-props.ts
+++ b/dev-packages/application-package/src/application-props.ts
@@ -191,7 +191,8 @@ export type BackendApplicationConfig = RequiredRecursive<BackendApplicationConfi
 export namespace BackendApplicationConfig {
     export const DEFAULT: BackendApplicationConfig = {
         singleInstance: true,
-        frontendConnectionTimeout: 0
+        frontendConnectionTimeout: 0,
+        configurationFolder: '.theia'
     };
     export interface Partial extends ApplicationConfig {
 
@@ -206,6 +207,13 @@ export namespace BackendApplicationConfig {
          * The time in ms the connection context will be preserved for reconnection after a front end disconnects.
          */
         readonly frontendConnectionTimeout?: number;
+
+        /**
+         * Configuration folder within the home user folder
+         *
+         * Defaults to `.theia`
+         */
+        readonly configurationFolder?: string;
     }
 }
 
diff --git a/packages/core/src/node/env-variables/env-variables-server.ts b/packages/core/src/node/env-variables/env-variables-server.ts
index eae08768da14f..6487e05efa443 100644
--- a/packages/core/src/node/env-variables/env-variables-server.ts
+++ b/packages/core/src/node/env-variables/env-variables-server.ts
@@ -23,6 +23,7 @@ import { EnvVariable, EnvVariablesServer } from '../../common/env-variables';
 import { isWindows } from '../../common/os';
 import { FileUri } from '../../common/file-uri';
 import { BackendApplicationPath } from '../backend-application';
+import { BackendApplicationConfigProvider } from '../backend-application-config-provider';
 
 @injectable()
 export class EnvVariablesServerImpl implements EnvVariablesServer {
@@ -64,7 +65,7 @@ export class EnvVariablesServerImpl implements EnvVariablesServer {
                 this.pathExistenceCache[userDataPath] = true;
             }
         } else {
-            process.env.THEIA_CONFIG_DIR = join(homedir(), '.theia');
+            process.env.THEIA_CONFIG_DIR = join(homedir(), BackendApplicationConfigProvider.get().configurationFolder);
         }
         return FileUri.create(process.env.THEIA_CONFIG_DIR).toString();
     }