diff --git a/run-server.sh b/run-server.sh
index bf7deb0..ac9b373 100755
--- a/run-server.sh
+++ b/run-server.sh
@@ -35,6 +35,14 @@ readonly DESKTOP_CONFIG_FLAG=".desktop_configured"
 readonly LOG_DIR="logs"
 readonly LOG_FILE="mcp_server.log"
 
+# Determine portable arguments for sed -i (GNU vs BSD)
+declare -a SED_INPLACE_ARGS
+if sed --version >/dev/null 2>&1; then
+    SED_INPLACE_ARGS=(-i)
+else
+    SED_INPLACE_ARGS=(-i "")
+fi
+
 # ----------------------------------------------------------------------------
 # Utility Functions
 # ----------------------------------------------------------------------------
@@ -1057,14 +1065,6 @@ setup_env_file() {
     cp .env.example .env
     print_success "Created .env from .env.example"
 
-    # Detect sed version for cross-platform compatibility
-    local sed_cmd
-    if sed --version >/dev/null 2>&1; then
-        sed_cmd="sed -i"  # GNU sed (Linux)
-    else
-        sed_cmd="sed -i ''"  # BSD sed (macOS)
-    fi
-
     # Update API keys from environment if present
     local api_keys=(
         "GEMINI_API_KEY:your_gemini_api_key_here"
@@ -1080,7 +1080,7 @@ setup_env_file() {
         local key_value="${!key_name:-}"
 
         if [[ -n "$key_value" ]]; then
-            $sed_cmd "s/$placeholder/$key_value/" .env
+            sed "${SED_INPLACE_ARGS[@]}" "s/$placeholder/$key_value/" .env
             print_success "Updated .env with $key_name from environment"
         fi
     done
@@ -1100,16 +1100,8 @@ migrate_env_file() {
     # Create backup
     cp .env .env.backup_$(date +%Y%m%d_%H%M%S)
 
-    # Detect sed version for cross-platform compatibility
-    local sed_cmd
-    if sed --version >/dev/null 2>&1; then
-        sed_cmd="sed -i"  # GNU sed (Linux)
-    else
-        sed_cmd="sed -i ''"  # BSD sed (macOS)
-    fi
-
     # Replace host.docker.internal with localhost
-    $sed_cmd 's/host\.docker\.internal/localhost/g' .env
+    sed "${SED_INPLACE_ARGS[@]}" 's/host\.docker\.internal/localhost/g' .env
 
     print_success "Migrated Docker URLs to localhost in .env"
     echo "  (Backup saved as .env.backup_*)"
@@ -2499,5 +2491,6 @@ main() {
 # Script Entry Point
 # ----------------------------------------------------------------------------
 
-# Run main function with all arguments
-main "$@"
+if [[ "${BASH_SOURCE[0]}" == "$0" ]]; then
+    main "$@"
+fi
diff --git a/tests/test_pip_detection_fix.py b/tests/test_pip_detection_fix.py
index 3e8ec2e..9c88107 100644
--- a/tests/test_pip_detection_fix.py
+++ b/tests/test_pip_detection_fix.py
@@ -4,6 +4,7 @@ This test file ensures our pip detection improvements work correctly
 and don't break existing functionality.
 """
 
+import os
 import subprocess
 import tempfile
 from pathlib import Path
@@ -99,6 +100,29 @@ class TestPipDetectionFix:
         for pattern in expected_diagnostic_patterns:
             assert pattern in content, f"Enhanced diagnostic pattern '{pattern}' should be in script"
 
+    def test_setup_env_file_does_not_create_bsd_backup(self, tmp_path):
+        """Ensure setup_env_file avoids creating .env'' artifacts (BSD sed behavior)."""
+        script_path = Path("./run-server.sh").resolve()
+
+        # Prepare temp workspace with example env
+        env_example = Path(".env.example").read_text()
+        target_example = tmp_path / ".env.example"
+        target_example.write_text(env_example)
+
+        # Run setup_env_file inside isolated shell session
+        command = f"""
+        set -e
+        cd "{tmp_path}"
+        source "{script_path}"
+        setup_env_file
+        """
+        env = os.environ.copy()
+        subprocess.run(["bash", "-lc", command], check=True, env=env, text=True)
+
+        artifacts = {p.name for p in tmp_path.glob(".env*")}
+        assert ".env''" not in artifacts, "setup_env_file should not create BSD sed backup artifacts"
+        assert ".env" in artifacts, ".env should be created from .env.example"
+
 
 if __name__ == "__main__":
     pytest.main([__file__, "-v"])