diff --git a/lib/kamal/configuration.rb b/lib/kamal/configuration.rb
index 605268005..2c3c354ae 100644
--- a/lib/kamal/configuration.rb
+++ b/lib/kamal/configuration.rb
@@ -39,7 +39,10 @@ def load_config_file(file)
       end
 
       def destination_config_file(base_config_file, destination)
-        base_config_file.sub_ext(".#{destination}.yml") if destination
+        if destination
+          base_extension = base_config_file.extname
+          base_config_file.sub_ext(".#{destination}#{base_extension}")
+        end
       end
   end
 
diff --git a/test/configuration_test.rb b/test/configuration_test.rb
index 7f631e27f..801f4fc8e 100644
--- a/test/configuration_test.rb
+++ b/test/configuration_test.rb
@@ -262,6 +262,25 @@ class ConfigurationTest < ActiveSupport::TestCase
     end
   end
 
+  test "destination yaml config preserves extension" do
+    dest_config_file = Pathname.new(File.expand_path("fixtures/deploy_for_dest.yaml", __dir__))
+
+    config = Kamal::Configuration.create_from config_file: dest_config_file, destination: "world"
+    assert_equal "2.1.1.1", config.all_hosts.first
+  end
+
+  test "destination file preserves base file extension" do
+    # Test with .yml extension (existing behavior should still work)
+    yml_config_file = Pathname.new(File.expand_path("fixtures/deploy_for_dest.yml", __dir__))
+    config = Kamal::Configuration.create_from config_file: yml_config_file, destination: "world"
+    assert_equal "1.1.1.1", config.all_hosts.first
+
+    # Test with .yaml extension (new behavior)
+    yaml_config_file = Pathname.new(File.expand_path("fixtures/deploy_for_dest.yaml", __dir__))
+    config = Kamal::Configuration.create_from config_file: yaml_config_file, destination: "world"
+    assert_equal "2.1.1.1", config.all_hosts.first
+  end
+
   test "destination required" do
     dest_config_file = Pathname.new(File.expand_path("fixtures/deploy_for_required_dest.yml", __dir__))
 
diff --git a/test/fixtures/deploy_for_dest.world.yaml b/test/fixtures/deploy_for_dest.world.yaml
new file mode 100644
index 000000000..66314f244
--- /dev/null
+++ b/test/fixtures/deploy_for_dest.world.yaml
@@ -0,0 +1,5 @@
+servers:
+  - 2.1.1.1
+  - 2.1.1.2
+env:
+  REDIS_URL: redis://x/y
diff --git a/test/fixtures/deploy_for_dest.yaml b/test/fixtures/deploy_for_dest.yaml
new file mode 100644
index 000000000..1784d95f9
--- /dev/null
+++ b/test/fixtures/deploy_for_dest.yaml
@@ -0,0 +1,8 @@
+service: app
+image: dhh/app
+registry:
+  server: registry.digitalocean.com
+  username: <%= "my-user" %>
+  password: <%= "my-password" %>
+builder:
+  arch: amd64