diff --git a/test/test-installation-components.js b/test/test-installation-components.js
index 8b6f505de..2d840f713 100644
--- a/test/test-installation-components.js
+++ b/test/test-installation-components.js
@@ -15,6 +15,7 @@ const path = require('node:path');
 const os = require('node:os');
 const fs = require('fs-extra');
 const { ConfigCollector } = require('../tools/cli/installers/lib/core/config-collector');
+const { applyDefaultCoreConfig, clearCoreConfigDefaultsCache, getDefaultCoreConfig } = require('../tools/cli/lib/core-config-defaults');
 const { ManifestGenerator } = require('../tools/cli/installers/lib/core/manifest-generator');
 const { IdeManager } = require('../tools/cli/installers/lib/ide/manager');
 const { clearCache, loadPlatformCodes } = require('../tools/cli/installers/lib/ide/platform-codes');
@@ -2028,6 +2029,38 @@ async function runTests() {
 
   console.log('');
 
+  // ============================================================
+  // Test Suite 34: Core Config Default Backfill
+  // ============================================================
+  console.log(`${colors.yellow}Test Suite 34: Core Config Default Backfill${colors.reset}\n`);
+
+  try {
+    clearCoreConfigDefaultsCache();
+    const defaults = await getDefaultCoreConfig();
+    const normalized = applyDefaultCoreConfig(
+      {
+        user_name: '{user_name}',
+        communication_language: 'Spanish',
+        document_output_language: '',
+        output_folder: '{output_folder}',
+      },
+      defaults,
+    );
+
+    assert(normalized.appliedDefaults === true, 'Core config backfill reports when defaults were applied');
+    assert(normalized.coreConfig.user_name === defaults.user_name, 'Core config backfill replaces unresolved user_name placeholder');
+    assert(normalized.coreConfig.communication_language === 'Spanish', 'Core config backfill preserves existing valid values');
+    assert(
+      normalized.coreConfig.document_output_language === defaults.document_output_language,
+      'Core config backfill replaces blank document output language',
+    );
+    assert(normalized.coreConfig.output_folder === defaults.output_folder, 'Core config backfill replaces unresolved output_folder');
+  } catch (error) {
+    assert(false, 'Core config default backfill test succeeds', error.message);
+  }
+
+  console.log('');
+
   // ============================================================
   // Summary
   // ============================================================
diff --git a/tools/cli/lib/core-config-defaults.js b/tools/cli/lib/core-config-defaults.js
new file mode 100644
index 000000000..931722b3f
--- /dev/null
+++ b/tools/cli/lib/core-config-defaults.js
@@ -0,0 +1,89 @@
+const os = require('node:os');
+const fs = require('fs-extra');
+const yaml = require('yaml');
+const prompts = require('./prompts');
+const { getModulePath } = require('./project-root');
+
+let cachedCoreConfigDefaults = null;
+
+function getFallbackUsername() {
+  let safeUsername;
+  try {
+    safeUsername = os.userInfo().username;
+  } catch {
+    safeUsername = process.env.USER || process.env.USERNAME || 'User';
+  }
+
+  if (typeof safeUsername !== 'string' || safeUsername.trim() === '') {
+    return 'User';
+  }
+
+  const normalizedUsername = safeUsername.trim();
+  return normalizedUsername.charAt(0).toUpperCase() + normalizedUsername.slice(1);
+}
+
+function normalizeDefaultString(value, fallback) {
+  return typeof value === 'string' && value.trim() !== '' ? value.trim() : fallback;
+}
+
+function isMissingOrUnresolvedCoreConfigValue(value) {
+  return value == null || (typeof value === 'string' && (value.trim() === '' || /^\{[^}]+\}$/.test(value.trim())));
+}
+
+function applyDefaultCoreConfig(coreConfig = {}, defaults = {}) {
+  const normalizedConfig = { ...coreConfig };
+  let appliedDefaults = false;
+
+  for (const [key, value] of Object.entries(defaults)) {
+    if (isMissingOrUnresolvedCoreConfigValue(normalizedConfig[key])) {
+      normalizedConfig[key] = value;
+      appliedDefaults = true;
+    }
+  }
+
+  return { coreConfig: normalizedConfig, appliedDefaults };
+}
+
+async function getDefaultCoreConfig() {
+  if (cachedCoreConfigDefaults) {
+    return { ...cachedCoreConfigDefaults };
+  }
+
+  const fallbackDefaults = {
+    user_name: getFallbackUsername(),
+    communication_language: 'English',
+    document_output_language: 'English',
+    output_folder: '_bmad-output',
+  };
+
+  try {
+    const moduleYamlPath = getModulePath('core', 'module.yaml');
+    const moduleConfig = yaml.parse(await fs.readFile(moduleYamlPath, 'utf8')) || {};
+
+    cachedCoreConfigDefaults = {
+      user_name: normalizeDefaultString(moduleConfig.user_name?.default, fallbackDefaults.user_name),
+      communication_language: normalizeDefaultString(moduleConfig.communication_language?.default, fallbackDefaults.communication_language),
+      document_output_language: normalizeDefaultString(
+        moduleConfig.document_output_language?.default,
+        fallbackDefaults.document_output_language,
+      ),
+      output_folder: normalizeDefaultString(moduleConfig.output_folder?.default, fallbackDefaults.output_folder),
+    };
+  } catch (error) {
+    await prompts.log.warn(`Failed to load module.yaml, falling back to defaults: ${error.message}`);
+    cachedCoreConfigDefaults = fallbackDefaults;
+  }
+
+  return { ...cachedCoreConfigDefaults };
+}
+
+function clearCoreConfigDefaultsCache() {
+  cachedCoreConfigDefaults = null;
+}
+
+module.exports = {
+  applyDefaultCoreConfig,
+  clearCoreConfigDefaultsCache,
+  getDefaultCoreConfig,
+  isMissingOrUnresolvedCoreConfigValue,
+};
diff --git a/tools/cli/lib/ui.js b/tools/cli/lib/ui.js
index 3f25dae03..d4805670a 100644
--- a/tools/cli/lib/ui.js
+++ b/tools/cli/lib/ui.js
@@ -2,6 +2,7 @@ const path = require('node:path');
 const os = require('node:os');
 const fs = require('fs-extra');
 const { CLIUtils } = require('./cli-utils');
+const { applyDefaultCoreConfig, getDefaultCoreConfig: loadDefaultCoreConfig } = require('./core-config-defaults');
 const { CustomHandler } = require('../installers/lib/custom/handler');
 const { ExternalModuleManager } = require('../installers/lib/modules/external-manager');
 const prompts = require('./prompts');
@@ -47,6 +48,21 @@ class UI {
       }
       confirmedDirectory = expandedDir;
       await prompts.log.info(`Using directory from command-line: ${confirmedDirectory}`);
+    } else if (options.yes) {
+      // Default to current directory when --yes flag is set
+      let cwd;
+      try {
+        cwd = process.cwd();
+      } catch (error) {
+        await prompts.log.error(`Failed to resolve current directory (--yes flag): ${error.message}`);
+        throw new Error(`Unable to determine current directory: ${error.message}`);
+      }
+      const validation = this.validateDirectorySync(cwd);
+      if (validation) {
+        throw new Error(`Invalid current directory: ${validation}`);
+      }
+      confirmedDirectory = cwd;
+      await prompts.log.info(`Using current directory (--yes flag): ${confirmedDirectory}`);
     } else {
       confirmedDirectory = await this.getConfirmedDirectory();
     }
@@ -823,6 +839,14 @@ class UI {
     return { existingInstall, installedModuleIds, bmadDir };
   }
 
+  /**
+   * Get default core config values by reading from src/core/module.yaml
+   * @returns {Object} Default core config with user_name, communication_language, document_output_language, output_folder
+   */
+  async getDefaultCoreConfig() {
+    return loadDefaultCoreConfig();
+  }
+
   /**
    * Collect core configuration
    * @param {string} directory - Installation directory
@@ -866,27 +890,21 @@ class UI {
         (!options.userName || !options.communicationLanguage || !options.documentOutputLanguage || !options.outputFolder)
       ) {
         await configCollector.collectModuleConfig('core', directory, false, true);
+      } else if (options.yes) {
+        const defaults = await this.getDefaultCoreConfig();
+        const normalizedConfig = applyDefaultCoreConfig(configCollector.collectedConfig.core, defaults);
+        configCollector.collectedConfig.core = normalizedConfig.coreConfig;
+        if (normalizedConfig.appliedDefaults) {
+          await prompts.log.info('Using default configuration (--yes flag)');
+        }
       }
     } else if (options.yes) {
-      // Use all defaults when --yes flag is set
       await configCollector.loadExistingConfig(directory);
       const existingConfig = configCollector.collectedConfig.core || {};
-
-      // If no existing config, use defaults
-      if (Object.keys(existingConfig).length === 0) {
-        let safeUsername;
-        try {
-          safeUsername = os.userInfo().username;
-        } catch {
-          safeUsername = process.env.USER || process.env.USERNAME || 'User';
-        }
-        const defaultUsername = safeUsername.charAt(0).toUpperCase() + safeUsername.slice(1);
-        configCollector.collectedConfig.core = {
-          user_name: defaultUsername,
-          communication_language: 'English',
-          document_output_language: 'English',
-          output_folder: '_bmad-output',
-        };
+      const defaults = await this.getDefaultCoreConfig();
+      const normalizedConfig = applyDefaultCoreConfig(existingConfig, defaults);
+      configCollector.collectedConfig.core = normalizedConfig.coreConfig;
+      if (normalizedConfig.appliedDefaults) {
         await prompts.log.info('Using default configuration (--yes flag)');
       }
     } else {