diff --git a/README.md b/README.md
index c0395a2e05..33d38e287e 100644
--- a/README.md
+++ b/README.md
@@ -207,6 +207,12 @@ to get the hang of things.
 
 ## Configuration
 
+configuration conssist of two file:
+- zulip_key, file contains the api_key
+- zuliprc, file consist of login configurations
+
+The `zulip_key`contains only the api_key.
+
 The `zuliprc` file contains two sections:
 - an `[api]` section with information required to connect to your Zulip server
 - a `[zterm]` section with configuration specific to `zulip-term`
@@ -216,13 +222,15 @@ A file with only the first section can be auto-generated in some cases by
 above). Parts of the second section can be added and adjusted in stages when
 you wish to customize the behavior of `zulip-term`.
 
+If you’re downloading the config file from your Zulip account, you should replace the `key` field with `passcmd`, setting its value to a command that outputs the api_key (e.g., cat zulip_key). If you’re not downloading it manually, zulip-term will configure this for you automatically, though it’s recommended to update the passcmd value afterward for better security.
+
 The example below, with dummy `[api]` section contents, represents a working
 configuration file with all the default compatible `[zterm]` values uncommented
 and with accompanying notes:
 ```
 [api]
 email=example@example.com
-key=xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
+passcmd=cat zulip_key
 site=https://example.zulipchat.com
 
 [zterm]
@@ -257,6 +265,7 @@ transparency=disabled
 # editor: nano
 ```
 
+
 > **NOTE:** Most of these configuration settings may be specified on the
 command line when `zulip-term` is started; `zulip-term -h` or `zulip-term --help`
 will give the full list of options.
diff --git a/tests/cli/test_run.py b/tests/cli/test_run.py
index fba198e422..bf24a9b5a1 100644
--- a/tests/cli/test_run.py
+++ b/tests/cli/test_run.py
@@ -398,6 +398,7 @@ def test_main_cannot_write_zuliprc_given_good_credentials(
 
     # This is default base path to use
     zuliprc_path = os.path.join(str(tmp_path), path_to_use)
+    zuliprc_file = os.path.join(zuliprc_path, "zuliprc")
     monkeypatch.setenv("HOME", zuliprc_path)
 
     # Give some arbitrary input and fake that it's always valid
@@ -412,12 +413,18 @@ def test_main_cannot_write_zuliprc_given_good_credentials(
     captured = capsys.readouterr()
     lines = captured.out.strip().split("\n")
 
-    expected_line = (
-        "\x1b[91m"
-        f"{expected_exception}: zuliprc could not be created "
-        f"at {os.path.join(zuliprc_path, 'zuliprc')}"
-        "\x1b[0m"
-    )
+    if expected_exception == "FileNotFoundError":
+        expected_error = (
+            f"could not create {zuliprc_file} "
+            f"([Errno 2] No such file or directory: '{zuliprc_file}')"
+        )
+    else:  # PermissionError
+        expected_error = (
+            f"could not create {zuliprc_file} "
+            f"([Errno 13] Permission denied: '{zuliprc_file}')"
+        )
+
+    expected_line = f"\x1b[91m{expected_exception}: {expected_error}\x1b[0m"
     assert lines[-1] == expected_line
 
 
@@ -573,17 +580,29 @@ def test_exit_with_error(
 def test__write_zuliprc__success(
     tmp_path: Path, id: str = "id", key: str = "key", url: str = "url"
 ) -> None:
-    path = os.path.join(str(tmp_path), "zuliprc")
-
-    error_message = _write_zuliprc(path, api_key=key, server_url=url, login_id=id)
+    """Test successful creation of zuliprc and zulip_key files."""
+    path = tmp_path / "zuliprc"
+    key_path = tmp_path / "zulip_key"
+
+    error_message = _write_zuliprc(
+        to_path=str(path),
+        key_path=str(key_path),
+        login_id=id,
+        api_key=key,
+        server_url=url,
+    )
 
     assert error_message == ""
 
-    expected_contents = f"[api]\nemail={id}\nkey={key}\nsite={url}"
+    expected_contents = f"[api]\nemail={id}\npasscmd=cat zulip_key\nsite={url}"
     with open(path) as f:
         assert f.read() == expected_contents
 
+    with open(key_path) as f:
+        assert f.read() == key
+
     assert stat.filemode(os.stat(path).st_mode)[-6:] == 6 * "-"
+    assert stat.filemode(os.stat(key_path).st_mode)[-6:] == 6 * "-"
 
 
 def test__write_zuliprc__fail_file_exists(
@@ -593,11 +612,24 @@ def test__write_zuliprc__fail_file_exists(
     key: str = "key",
     url: str = "url",
 ) -> None:
-    path = os.path.join(str(tmp_path), "zuliprc")
-
-    error_message = _write_zuliprc(path, api_key=key, server_url=url, login_id=id)
+    """Test that _write_zuliprc fails when files already exist."""
+    path = tmp_path / "zuliprc"
+    key_path = tmp_path / "zulip_key"
+
+    # Create the files first to simulate they already exist
+    with open(path, "w") as f:
+        f.write("existing content")
+
+    error_message = _write_zuliprc(
+        to_path=str(path),
+        key_path=str(key_path),
+        login_id=id,
+        api_key=key,
+        server_url=url,
+    )
 
-    assert error_message == "zuliprc already exists at " + path
+    assert error_message == f"FileExistsError: {path} already exists"
+    assert not Path(key_path).exists()  # key_path should not be created
 
 
 @pytest.mark.parametrize(
diff --git a/zulipterminal/cli/run.py b/zulipterminal/cli/run.py
index a5cce2cf2d..bb66b34fa4 100755
--- a/zulipterminal/cli/run.py
+++ b/zulipterminal/cli/run.py
@@ -4,6 +4,7 @@
 
 import argparse
 import configparser
+import contextlib
 import logging
 import os
 import stat
@@ -311,36 +312,60 @@ def fetch_zuliprc(zuliprc_path: str) -> None:
         print(in_color("red", "\nIncorrect Email(or Username) or Password!\n"))
         login_data = get_api_key(realm_url)
 
+    zulip_key_path = os.path.join(
+        os.path.dirname(os.path.abspath(zuliprc_path)), "zulip_key"
+    )
+
     preferred_realm_url, login_id, api_key = login_data
     save_zuliprc_failure = _write_zuliprc(
-        zuliprc_path,
-        login_id=login_id,
+        to_path=zuliprc_path,
+        key_path=zulip_key_path,
         api_key=api_key,
+        login_id=login_id,
         server_url=preferred_realm_url,
     )
     if not save_zuliprc_failure:
-        print(f"Generated API key saved at {zuliprc_path}")
+        print(f"Generated config file saved at {zuliprc_path}")
     else:
         exit_with_error(save_zuliprc_failure)
 
 
 def _write_zuliprc(
-    to_path: str, *, login_id: str, api_key: str, server_url: str
+    to_path: str, *, key_path: str, login_id: str, api_key: str, server_url: str
 ) -> str:
     """
-    Writes a zuliprc file, returning a non-empty error string on failure
-    Only creates new private files; errors if file already exists
+    Writes both zuliprc and zulip_key files securely.
+    Ensures atomicity: if one file fails to write, cleans up the other.
+    Returns an empty string on success, or a descriptive error message on failure.
     """
+    zuliprc_created = False
+
     try:
+        # Write zuliprc
         with open(
             os.open(to_path, os.O_CREAT | os.O_WRONLY | os.O_EXCL, 0o600), "w"
         ) as f:
-            f.write(f"[api]\nemail={login_id}\nkey={api_key}\nsite={server_url}")
+            f.write(
+                f"[api]\nemail={login_id}\npasscmd=cat zulip_key\nsite={server_url}"
+            )
+        zuliprc_created = True
+        # Write zulip_key
+        with open(
+            os.open(key_path, os.O_CREAT | os.O_WRONLY | os.O_EXCL, 0o600), "w"
+        ) as f:
+            f.write(api_key)
+
         return ""
+
     except FileExistsError:
-        return f"zuliprc already exists at {to_path}"
+        filename = to_path if not zuliprc_created else key_path
+        return f"FileExistsError: {filename} already exists"
     except OSError as ex:
-        return f"{ex.__class__.__name__}: zuliprc could not be created at {to_path}"
+        if zuliprc_created:
+            with contextlib.suppress(Exception):
+                os.remove(to_path)
+        filename = key_path if zuliprc_created else to_path
+        return f"{ex.__class__.__name__}: could not create {filename} ({ex})"
 
 
 def parse_zuliprc(zuliprc_str: str) -> Dict[str, SettingData]:
@@ -366,12 +391,12 @@ def parse_zuliprc(zuliprc_str: str) -> Dict[str, SettingData]:
             in_color(
                 "red",
                 "ERROR: Please ensure your zuliprc is NOT publicly accessible:\n"
-                "  {0}\n"
-                "(it currently has permissions '{1}')\n"
+                f"  {zuliprc_path}\n"
+                f"(it currently has permissions '{stat.filemode(mode)}')\n"
                 "This can often be achieved with a command such as:\n"
-                "  chmod og-rwx {0}\n"
+                f"  chmod og-rwx {zuliprc_path}\n"
                 "Consider regenerating the [api] part of your zuliprc to ensure "
-                "your account is secure.".format(zuliprc_path, stat.filemode(mode)),
+                "your account is secure.",
             )
         )
         sys.exit(1)
@@ -687,8 +712,8 @@ def print_setting(setting: str, data: SettingData, suffix: str = "") -> None:
             # Dump stats only after temporary file is closed (for Win NT+ case)
             prof.dump_stats(profile_path)
             print(
-                "Profile data saved to {0}.\n"
-                "You can visualize it using e.g. `snakeviz {0}`".format(profile_path)
+                f"Profile data saved to {profile_path}.\n"
+                f"You can visualize it using e.g. `snakeviz {profile_path}`"
             )
 
         sys.exit(1)