diff --git a/packages/jupyter-ai/jupyter_ai/extension.py b/packages/jupyter-ai/jupyter_ai/extension.py
index f9d0fee56..dbea84009 100644
--- a/packages/jupyter-ai/jupyter_ai/extension.py
+++ b/packages/jupyter-ai/jupyter_ai/extension.py
@@ -1,3 +1,4 @@
+import os
 import time
 
 from dask.distributed import Client as DaskClient
@@ -71,6 +72,13 @@ def initialize_settings(self):
         # consumers a Future that resolves to the Dask client when awaited.
         dask_client_future = loop.create_task(self._get_dask_client())
 
+        # get root directory for read and writing
+        save_dir = os.environ.get("JUPYTERAI_SAVEDIR")
+        if not save_dir:
+            save_dir = self.serverapp.root_dir
+            if not os.access(save_dir, os.W_OK):
+                save_dir = os.getcwd()
+
         # initialize chat handlers
         chat_handler_kwargs = {
             "log": self.log,
@@ -85,11 +93,11 @@ def initialize_settings(self):
         )
         generate_chat_handler = GenerateChatHandler(
             **chat_handler_kwargs,
-            root_dir=self.serverapp.root_dir,
+            root_dir=save_dir,
         )
         learn_chat_handler = LearnChatHandler(
             **chat_handler_kwargs,
-            root_dir=self.serverapp.root_dir,
+            root_dir=save_dir,
             dask_client_future=dask_client_future,
         )
         help_chat_handler = HelpChatHandler(**chat_handler_kwargs)