diff --git a/src/Cli.Tests/EndToEndTests.cs b/src/Cli.Tests/EndToEndTests.cs
index 9648f119c5..745de4fd46 100644
--- a/src/Cli.Tests/EndToEndTests.cs
+++ b/src/Cli.Tests/EndToEndTests.cs
@@ -3,6 +3,7 @@
 
 using Azure.DataApiBuilder.Config.Converters;
 using Azure.DataApiBuilder.Product;
+using Azure.DataApiBuilder.Service;
 using Cli.Constants;
 using Microsoft.Data.SqlClient;
 
@@ -857,6 +858,80 @@ public void TestEngineStartUpWithVerboseAndLogLevelOptions(string logLevelOption
         StringAssert.Contains(output, $"User provided config file: {TEST_RUNTIME_CONFIG_FILE}", StringComparison.Ordinal);
     }
 
+    /// <summary>
+    /// Validates that `dab start` correctly sets <see cref="Startup.IsLogLevelOverriddenByCli"/>
+    /// based on whether the --LogLevel CLI flag is provided.
+    ///
+    /// When the --LogLevel flag is provided, IsLogLevelOverriddenByCli should be true.
+    /// When the --LogLevel flag is omitted (log level comes from the config file), IsLogLevelOverriddenByCli should be false.
+    /// </summary>
+    /// <param name="cliLogLevel">The --LogLevel CLI flag value, or null to omit the flag.</param>
+    /// <param name="expectedIsOverridden">Expected value of Startup.IsLogLevelOverriddenByCli.</param>
+    [DataTestMethod]
+    [DataRow(null, false, DisplayName = "IsLogLevelOverriddenByCli is false")]
+    [DataRow(LogLevel.Error, true, DisplayName = "IsLogLevelOverriddenByCli is true")]
+    public async Task TestStartCommandResolvesLogLevelFromConfigOrFlag(
+        LogLevel? cliLogLevel,
+        bool expectedIsOverridden)
+    {
+        string baseConfig = @"
+        {
+            ""$schema"": """ + DAB_DRAFT_SCHEMA_TEST_PATH + @""",
+            ""data-source"": {
+                ""database-type"": ""mssql"",
+                ""connection-string"": """ + SAMPLE_TEST_CONN_STRING + @"""
+            },
+            ""runtime"": {
+                ""rest"": {
+                    ""path"": ""/api"",
+                    ""enabled"": true
+                },
+                ""graphql"": {
+                    ""path"": ""/graphql"",
+                    ""enabled"": true,
+                    ""allow-introspection"": true
+                },
+                ""host"": {
+                    ""mode"": ""development"",
+                    ""cors"": {
+                        ""origins"": [],
+                        ""allow-credentials"": false
+                    },
+                    ""authentication"": {
+                        ""provider"": ""Unauthenticated""
+                    }
+                },
+                ""telemetry"": {
+                    ""log-level"": {
+                        ""default"": ""Warning""
+                    }
+                }
+            },
+            ""entities"": {}
+        }";
+
+        // Merge in an entity so the config is not rejected for having an empty entities section.
+        string configWithLogLevel = AddPropertiesToJson(baseConfig, BASIC_ENTITY_WITH_ANONYMOUS_ROLE);
+        _fileSystem!.File.WriteAllText(TEST_RUNTIME_CONFIG_FILE, configWithLogLevel);
+
+        StartOptions options = new(
+            verbose: false,
+            logLevel: cliLogLevel,
+            isHttpsRedirectionDisabled: false,
+            mcpStdio: false,
+            mcpRole: null,
+            config: TEST_RUNTIME_CONFIG_FILE);
+
+        // Run TryStartEngineWithOptions on a background task because StartEngine blocks until the host shuts down.
+        Task engineTask = Task.Run(() =>
+            TryStartEngineWithOptions(options, _runtimeConfigLoader!, _fileSystem!));
+
+        // Wait for the engine to finish loading the config.
+        await Task.Delay(TimeSpan.FromSeconds(5));
+
+        Assert.AreEqual(expectedIsOverridden, Startup.IsLogLevelOverriddenByCli);
+    }
+
     /// <summary>
     /// Validates that valid usage of verbs and associated options produce exit code 0 (CliReturnCode.SUCCESS).
     /// Verifies that explicitly implemented verbs (add, update, init, start) and appropriately
diff --git a/src/Cli/ConfigGenerator.cs b/src/Cli/ConfigGenerator.cs
index c89da760e4..a7eb79ffbd 100644
--- a/src/Cli/ConfigGenerator.cs
+++ b/src/Cli/ConfigGenerator.cs
@@ -2597,18 +2597,27 @@ public static bool TryStartEngineWithOptions(StartOptions options, FileSystemRun
 
                 minimumLogLevel = (LogLevel)options.LogLevel;
                 _logger.LogInformation("Setting minimum LogLevel: {minimumLogLevel}.", minimumLogLevel);
+                args.Add("--LogLevel");
+                args.Add(minimumLogLevel.ToString());
             }
             else
             {
                 minimumLogLevel = deserializedRuntimeConfig.GetConfiguredLogLevel();
                 HostMode hostModeType = deserializedRuntimeConfig.IsDevelopmentMode() ? HostMode.Development : HostMode.Production;
+                bool isValueFromDefault = !deserializedRuntimeConfig.IsLogLevelNull() && deserializedRuntimeConfig.Runtime!.Telemetry!.LoggerLevel!
+                    .SingleOrDefault(kvp => kvp.Key.Equals("default", StringComparison.OrdinalIgnoreCase)).Value != null;
 
-                _logger.LogInformation($"Setting default minimum LogLevel: {minimumLogLevel} for {hostModeType} mode.", minimumLogLevel, hostModeType);
+                // Check if we set the minimum LogLevel from the config file or if it is based on the host mode.
+                if (isValueFromDefault)
+                {
+                    _logger.LogInformation("Using default minimum LogLevel: {minimumLogLevel} from the 'Default' namespace in config file.", minimumLogLevel);
+                }
+                else
+                {
+                    _logger.LogInformation("Setting default minimum LogLevel: {minimumLogLevel} for {hostModeType} mode.", minimumLogLevel, hostModeType);
+                }
             }
 
-            args.Add("--LogLevel");
-            args.Add(minimumLogLevel.ToString());
-
             // This will add args to disable automatic redirects to https if specified by user
             if (options.IsHttpsRedirectionDisabled)
             {