diff --git a/tests/unit/test_runtime_config.py b/tests/unit/test_runtime_config.py
new file mode 100644
index 0000000..299beac
--- /dev/null
+++ b/tests/unit/test_runtime_config.py
@@ -0,0 +1,156 @@
+from __future__ import annotations
+
+import unittest
+from pathlib import Path
+
+from contribarena.config.schema import (
+    DEFAULT_MEMORY_RELATIVE,
+    ArtifactConfig,
+    DiscoveryConfig,
+    MemoryConfig,
+    RepoCandidate,
+    RunConfig,
+    RunSection,
+    WorkspaceConfig,
+)
+from contribarena.engine.runtime_config import apply_output_dir
+
+
+def _base_config(
+    *,
+    memory: MemoryConfig | None = None,
+    artifacts: ArtifactConfig | None = None,
+) -> RunConfig:
+    return RunConfig(
+        run=RunSection(mode="shadow", model="local-stub"),
+        discovery=DiscoveryConfig(
+            candidates=[
+                RepoCandidate(
+                    owner="example",
+                    repo="repo",
+                    url="https://github.com/example/repo",
+                )
+            ]
+        ),
+        workspace=WorkspaceConfig(),
+        artifacts=artifacts if artifacts is not None else ArtifactConfig(),
+        memory=memory if memory is not None else MemoryConfig(),
+    )
+
+
+class ApplyOutputDirTest(unittest.TestCase):
+    """apply_output_dir wires output_dir into artifacts and (conditionally) memory."""
+
+    def test_none_output_dir_returns_input_config_unchanged(self) -> None:
+        config = _base_config()
+
+        result = apply_output_dir(config, None)
+
+        # When output_dir is None, the helper short-circuits and returns the
+        # exact same RunConfig instance, leaving artifacts and memory untouched.
+        self.assertIs(config, result)
+        self.assertEqual(Path("runs"), result.artifacts.output_root)
+        self.assertEqual(DEFAULT_MEMORY_RELATIVE, result.memory.root)
+
+    def test_output_dir_updates_artifacts_output_root(self) -> None:
+        config = _base_config()
+        output_dir = Path("/tmp/contribarena/runs/run-1")
+
+        result = apply_output_dir(config, output_dir)
+
+        self.assertEqual(output_dir, result.artifacts.output_root)
+
+    def test_default_relative_memory_root_is_rebased_under_output_dir_parent(self) -> None:
+        # MemoryConfig defaults memory.root to DEFAULT_MEMORY_RELATIVE
+        # (".contribarena/memory"). In that case the helper rebases memory.root
+        # to output_dir.parent / "memory" so per-run artifacts and shared
+        # memory live as siblings under the same parent.
+        config = _base_config()
+        output_dir = Path("/tmp/contribarena/runs/run-1")
+
+        result = apply_output_dir(config, output_dir)
+
+        self.assertEqual(Path("/tmp/contribarena/runs/memory"), result.memory.root)
+
+    def test_absolute_memory_root_is_preserved(self) -> None:
+        # An operator-provided absolute memory.root must not be silently moved.
+        absolute_memory_root = Path("/var/contribarena/memory")
+        config = _base_config(memory=MemoryConfig(root=absolute_memory_root))
+        output_dir = Path("/tmp/contribarena/runs/run-1")
+
+        result = apply_output_dir(config, output_dir)
+
+        self.assertEqual(absolute_memory_root, result.memory.root)
+
+    def test_non_default_relative_memory_root_is_preserved(self) -> None:
+        # A non-default relative memory.root is also preserved verbatim;
+        # only the default sentinel triggers the rebasing behavior.
+        custom_relative = Path("custom-memory")
+        config = _base_config(memory=MemoryConfig(root=custom_relative))
+        output_dir = Path("/tmp/contribarena/runs/run-1")
+
+        result = apply_output_dir(config, output_dir)
+
+        self.assertEqual(custom_relative, result.memory.root)
+
+    def test_returns_new_config_without_mutating_input(self) -> None:
+        # The helper relies on Pydantic model_copy and must not mutate the
+        # input config's nested artifacts/memory submodels.
+        config = _base_config()
+        original_output_root = config.artifacts.output_root
+        original_memory_root = config.memory.root
+        output_dir = Path("/tmp/contribarena/runs/run-1")
+
+        result = apply_output_dir(config, output_dir)
+
+        self.assertIsNot(config, result)
+        self.assertEqual(original_output_root, config.artifacts.output_root)
+        self.assertEqual(original_memory_root, config.memory.root)
+        self.assertEqual(output_dir, result.artifacts.output_root)
+
+    def test_other_config_sections_are_preserved(self) -> None:
+        # Fields outside artifacts and memory must round-trip unchanged.
+        config = _base_config()
+        output_dir = Path("/tmp/contribarena/runs/run-1")
+
+        result = apply_output_dir(config, output_dir)
+
+        self.assertEqual(config.run.mode, result.run.mode)
+        self.assertEqual(config.run.model, result.run.model)
+        self.assertEqual(
+            config.discovery.candidates[0].full_name,
+            result.discovery.candidates[0].full_name,
+        )
+        self.assertEqual(config.workspace.backend, result.workspace.backend)
+
+    def test_memory_config_fields_other_than_root_are_preserved(self) -> None:
+        # When memory.root is rebased, other MemoryConfig fields must survive
+        # the model_copy untouched.
+        config = _base_config(
+            memory=MemoryConfig(
+                enabled=False,
+                backend="graphiti",
+                graphiti_enabled=True,
+            )
+        )
+        output_dir = Path("/tmp/contribarena/runs/run-1")
+
+        result = apply_output_dir(config, output_dir)
+
+        # backend/enabled/graphiti_enabled round-trip
+        self.assertFalse(result.memory.enabled)
+        self.assertEqual("graphiti", result.memory.backend)
+        self.assertTrue(result.memory.graphiti_enabled)
+        # memory.root rebased because the default sentinel was in use
+        self.assertEqual(Path("/tmp/contribarena/runs/memory"), result.memory.root)
+
+    def test_relative_output_dir_rebases_memory_under_relative_parent(self) -> None:
+        # The helper inspects output_dir.parent without requiring it to be
+        # absolute; a relative output_dir produces a relative memory.root.
+        config = _base_config()
+        output_dir = Path("runs/run-1")
+
+        result = apply_output_dir(config, output_dir)
+
+        self.assertEqual(Path("runs") / "memory", result.memory.root)
+        self.assertEqual(output_dir, result.artifacts.output_root)