diff --git a/src/app/api/cli-tools/guide-settings/[toolId]/route.ts b/src/app/api/cli-tools/guide-settings/[toolId]/route.ts
index 660bcd4951..164a341a37 100644
--- a/src/app/api/cli-tools/guide-settings/[toolId]/route.ts
+++ b/src/app/api/cli-tools/guide-settings/[toolId]/route.ts
@@ -8,7 +8,7 @@ import { getOpenCodeConfigPath } from "@/shared/services/cliRuntime";
 import { mergeOpenCodeConfigText } from "@/shared/services/opencodeConfig";
 import { guideSettingsSaveSchema } from "@/shared/validation/schemas";
 import { isValidationFailure, validateBody } from "@/shared/validation/helpers";
-import { resolveApiKey } from "@/shared/services/apiKeyResolver";
+import { resolveApiKey, getOrCreateApiKey } from "@/shared/services/apiKeyResolver";
 
 /**
  * POST /api/cli-tools/guide-settings/:toolId
@@ -43,7 +43,10 @@ export async function POST(request, { params }) {
   const { baseUrl, model, models, modelLabels } = validation.data;
   // (#523) Extract keyId BEFORE validation — Zod strips unknown fields!
   const apiKeyId = typeof rawBody?.keyId === "string" ? rawBody.keyId.trim() : null;
-  const apiKey = await resolveApiKey(apiKeyId, validation.data.apiKey);
+  // If no keyId provided, auto-create a valid DB-backed key instead of using placeholder
+  const apiKey = apiKeyId
+    ? await resolveApiKey(apiKeyId, validation.data.apiKey)
+    : await getOrCreateApiKey();
 
   try {
     switch (toolId) {
@@ -186,50 +189,25 @@ async function saveOpenCodeConfig({ baseUrl, apiKey, model, models, modelLabels
 }
 
 /**
- * Save Qwen Code config to ~/.qwen/settings.json + ~/.qwen/.env
+ * Save Qwen Code config to ~/.qwen/settings.json
  *
- * Per official docs, credentials go in .env via envKey references,
- * not hardcoded in settings.json modelProviders entries.
- * Writes openai, anthropic, and gemini providers pointing to OmniRoute.
+ * Uses security.auth format (not modelProviders) since Qwen Code
+ * prioritizes security.auth.selectedType over modelProviders entries.
+ * Per official docs: security.auth takes highest precedence.
  */
 async function saveQwenConfig({ baseUrl, apiKey, model }) {
   const home = os.homedir();
   const configPath = path.join(home, ".qwen", "settings.json");
-  const envPath = path.join(home, ".qwen", ".env");
-  const configDir = path.dirname(configPath);
 
-  await fs.mkdir(configDir, { recursive: true });
+  await fs.mkdir(path.dirname(configPath), { recursive: true });
 
   const normalizedBaseUrl = String(baseUrl || "")
     .trim()
     .replace(/\/+$/, "");
   const resolvedApiKey = apiKey || "sk_omniroute";
-  const resolvedModel = model || "coder-model";
+  const resolvedModel = model || "gemini-cli/gemini-3.1-pro-preview";
 
-  // --- Write API keys to .env ---
-  let envContent = "";
-  try {
-    envContent = await fs.readFile(envPath, "utf-8");
-  } catch {
-    // File doesn't exist
-  }
-
-  const envLines = envContent.split("\n").filter((line) => {
-    // Remove old OmniRoute-related keys we're about to write
-    return (
-      !line.startsWith("OPENAI_API_KEY=") &&
-      !line.startsWith("ANTHROPIC_API_KEY=") &&
-      !line.startsWith("GEMINI_API_KEY=")
-    );
-  });
-
-  envLines.push(`OPENAI_API_KEY=${resolvedApiKey}`);
-  envLines.push(`ANTHROPIC_API_KEY=${resolvedApiKey}`);
-  envLines.push(`GEMINI_API_KEY=${resolvedApiKey}`);
-
-  await fs.writeFile(envPath, envLines.join("\n").trim() + "\n", "utf-8");
-
-  // --- Write modelProviders to settings.json ---
+  // Read existing config to preserve other settings (permissions, mcpServers, etc.)
   let existingConfig: Record<string, any> = {};
   try {
     const raw = await fs.readFile(configPath, "utf-8");
@@ -238,75 +216,28 @@ async function saveQwenConfig({ baseUrl, apiKey, model }) {
     // File doesn't exist or invalid JSON
   }
 
-  if (!existingConfig.modelProviders) existingConfig.modelProviders = {};
-
-  // openai provider — primary, supports all models via OmniRoute
-  const openaiEntry = {
-    id: resolvedModel,
-    name: `${resolvedModel} (OmniRoute)`,
-    envKey: "OPENAI_API_KEY",
-    baseUrl: normalizedBaseUrl,
-    generationConfig: {
-      contextWindowSize: 200000,
+  // Set security.auth for openai auth type with direct credentials
+  // This takes priority over modelProviders entries (per Qwen docs)
+  existingConfig.security = {
+    ...existingConfig.security,
+    auth: {
+      selectedType: "openai",
+      apiKey: resolvedApiKey,
+      baseUrl: normalizedBaseUrl,
     },
   };
 
-  if (!existingConfig.modelProviders.openai) existingConfig.modelProviders.openai = [];
-  const openaiProviders = existingConfig.modelProviders.openai;
-  const openaiIdx = openaiProviders.findIndex(
-    (p: any) => p && (p.baseUrl === normalizedBaseUrl || p.id === "omniroute")
-  );
-  if (openaiIdx >= 0) {
-    openaiProviders[openaiIdx] = openaiEntry;
-  } else {
-    openaiProviders.push(openaiEntry);
-  }
-
-  // anthropic provider — for Claude models via OmniRoute
-  const anthropicEntry = {
-    id: "claude-sonnet-4-6",
-    name: "Claude Sonnet 4.6 (OmniRoute)",
-    envKey: "ANTHROPIC_API_KEY",
-    baseUrl: normalizedBaseUrl,
-    generationConfig: {
-      contextWindowSize: 200000,
-    },
+  // Set model to the selected model
+  existingConfig.model = {
+    ...existingConfig.model,
+    name: resolvedModel,
   };
 
-  if (!existingConfig.modelProviders.anthropic) existingConfig.modelProviders.anthropic = [];
-  const anthropicProviders = existingConfig.modelProviders.anthropic;
-  const anthropicIdx = anthropicProviders.findIndex(
-    (p: any) => p && p.baseUrl === normalizedBaseUrl
-  );
-  if (anthropicIdx >= 0) {
-    anthropicProviders[anthropicIdx] = anthropicEntry;
-  } else {
-    anthropicProviders.push(anthropicEntry);
-  }
-
-  // gemini provider — for Gemini models via OmniRoute
-  const geminiEntry = {
-    id: "gemini-3-flash",
-    name: "Gemini 3 Flash (OmniRoute)",
-    envKey: "GEMINI_API_KEY",
-    baseUrl: normalizedBaseUrl,
-  };
-
-  if (!existingConfig.modelProviders.gemini) existingConfig.modelProviders.gemini = [];
-  const geminiProviders = existingConfig.modelProviders.gemini;
-  const geminiIdx = geminiProviders.findIndex((p: any) => p && p.baseUrl === normalizedBaseUrl);
-  if (geminiIdx >= 0) {
-    geminiProviders[geminiIdx] = geminiEntry;
-  } else {
-    geminiProviders.push(geminiEntry);
-  }
-
   await fs.writeFile(configPath, JSON.stringify(existingConfig, null, 2), "utf-8");
 
   return NextResponse.json({
     success: true,
-    message: `Qwen Code config saved to ${configPath} + ${envPath}`,
+    message: `Qwen Code config saved to ${configPath}`,
     configPath,
-    envPath,
   });
 }
diff --git a/src/shared/constants/cliTools.ts b/src/shared/constants/cliTools.ts
index 43adfb0cdf..d5ba3f60c8 100644
--- a/src/shared/constants/cliTools.ts
+++ b/src/shared/constants/cliTools.ts
@@ -504,29 +504,17 @@ amp --model "{{model}}"
     ],
     codeBlock: {
       language: "json",
-      code: `# ~/.qwen/settings.json — OmniRoute as multi-provider
+      code: `# ~/.qwen/settings.json — OmniRoute via security.auth
 {
-  "modelProviders": {
-    "openai": [{
-      "id": "{{model}}",
-      "name": "OmniRoute",
-      "envKey": "OPENAI_API_KEY",
-      "baseUrl": "{{baseUrl}}",
-      "generationConfig": { "contextWindowSize": 200000 }
-    }],
-    "anthropic": [{
-      "id": "claude-sonnet-4-6",
-      "name": "Claude Sonnet 4.6",
-      "envKey": "ANTHROPIC_API_KEY",
-      "baseUrl": "{{baseUrl}}",
-      "generationConfig": { "contextWindowSize": 200000 }
-    }],
-    "gemini": [{
-      "id": "gemini-3-flash",
-      "name": "Gemini 3 Flash",
-      "envKey": "GEMINI_API_KEY",
+  "security": {
+    "auth": {
+      "selectedType": "openai",
+      "apiKey": "{{apiKey}}",
       "baseUrl": "{{baseUrl}}"
-    }]
+    }
+  },
+  "model": {
+    "name": "{{model}}"
   }
 }`,
     },
diff --git a/src/shared/services/apiKeyResolver.ts b/src/shared/services/apiKeyResolver.ts
index 72124fad8f..9f14926e61 100644
--- a/src/shared/services/apiKeyResolver.ts
+++ b/src/shared/services/apiKeyResolver.ts
@@ -1,4 +1,5 @@
-import { getApiKeyById } from "@/lib/db/apiKeys";
+import { getApiKeyById, createApiKey } from "@/lib/localDb";
+import { getConsistentMachineId } from "@/shared/utils/machineId";
 
 export async function resolveApiKey(
   apiKeyId?: string | null,
@@ -14,3 +15,30 @@ export async function resolveApiKey(
   }
   return apiKey || "sk_omniroute";
 }
+
+/**
+ * Get or create a DB-backed API key for CLI tool setup.
+ * Returns a valid OmniRoute API key (not a placeholder like "sk_omniroute").
+ * Used when user has not explicitly selected a key from API Manager.
+ */
+export async function getOrCreateApiKey(apiKeyId?: string | null): Promise<string> {
+  if (apiKeyId) {
+    try {
+      const keyRecord = await getApiKeyById(apiKeyId);
+      if (keyRecord?.key) return keyRecord.key as string;
+    } catch {
+      /* fall through */
+    }
+  }
+
+  // No key found — auto-create one that will be valid in DB validation
+  let machineId = "unknown";
+  try {
+    machineId = await getConsistentMachineId();
+    const keyRecord = await createApiKey("CLI Auto-Key", machineId);
+    return keyRecord.key as string;
+  } catch {
+    // Fallback: generate a deterministic key if DB write fails
+    return `sk_${machineId}_fallback_${Date.now()}`;
+  }
+}
diff --git a/tests/unit/guide-settings-route.test.ts b/tests/unit/guide-settings-route.test.ts
index ee7d102726..04e447da1a 100644
--- a/tests/unit/guide-settings-route.test.ts
+++ b/tests/unit/guide-settings-route.test.ts
@@ -66,7 +66,7 @@ test("guide-settings POST creates new qwen settings.json if it doesn't exist", a
   const req = await buildRequest({
     baseUrl: "http://my-omni",
     apiKey: "sk-123",
-    model: "qwen-max",
+    model: "gemini-cli/gemini-3.1-pro-preview",
   });
   const response = (await guideSettingsRoute.POST(req, { params: { toolId: "qwen" } })) as Response;
   const data = (await response.json()) as any;
@@ -75,21 +75,11 @@ test("guide-settings POST creates new qwen settings.json if it doesn't exist", a
   assert.equal(data.success, true);
 
   const content = JSON.parse(await fs.readFile(QWEN_CONFIG_PATH, "utf-8"));
-  assert.ok(content.modelProviders.openai);
-
-  const omniProvider = content.modelProviders.openai.find(
-    (p: QwenProviderEntry) => p.baseUrl === "http://my-omni"
-  );
-  assert.ok(omniProvider);
-  assert.equal(omniProvider.id, "qwen-max");
-  assert.equal(omniProvider.baseUrl, "http://my-omni");
-  assert.equal(omniProvider.envKey, "OPENAI_API_KEY");
-  assert.equal(omniProvider.generationConfig?.contextWindowSize, 200000);
-
-  const envContent = await fs.readFile(QWEN_ENV_PATH, "utf-8");
-  assert.match(envContent, /^OPENAI_API_KEY=sk-123$/m);
-  assert.match(envContent, /^ANTHROPIC_API_KEY=sk-123$/m);
-  assert.match(envContent, /^GEMINI_API_KEY=sk-123$/m);
+  // Uses security.auth format (not modelProviders)
+  assert.equal(content.security?.auth?.selectedType, "openai");
+  assert.equal(content.security?.auth?.apiKey, "sk-123");
+  assert.equal(content.security?.auth?.baseUrl, "http://my-omni");
+  assert.equal(content.model?.name, "gemini-cli/gemini-3.1-pro-preview");
 });
 
 test("guide-settings POST merges into existing qwen settings.json", async () => {
@@ -97,38 +87,27 @@ test("guide-settings POST merges into existing qwen settings.json", async () =>
   await fs.writeFile(
     QWEN_CONFIG_PATH,
     JSON.stringify({
-      modelProviders: {
-        openai: [{ id: "other", baseUrl: "https://other" }],
-      },
+      permissions: { allow: ["Bash(*)"] },
     }),
     "utf-8"
   );
 
-  const req = await buildRequest({ baseUrl: "http://my-omni", apiKey: "sk-123", model: "auto" });
-  const response = (await guideSettingsRoute.POST(req, { params: { toolId: "qwen" } })) as Response;
+  const req = await buildRequest({
+    baseUrl: "http://my-omni",
+    apiKey: "sk-456",
+    model: "claude-sonnet-4-6",
+  });
+  const response = await guideSettingsRoute.POST(req, { params: { toolId: "qwen" } });
   assert.equal(response.status, 200);
 
   const content = JSON.parse(await fs.readFile(QWEN_CONFIG_PATH, "utf-8"));
-  assert.equal(content.modelProviders.openai.length, 2);
-
-  const otherProvider = content.modelProviders.openai.find(
-    (p: QwenProviderEntry) => p.id === "other"
-  );
-  assert.ok(otherProvider);
-  assert.equal(otherProvider.baseUrl, "https://other");
-
-  const omniProvider = content.modelProviders.openai.find(
-    (p: QwenProviderEntry) => p.baseUrl === "http://my-omni"
-  );
-  assert.ok(omniProvider);
-  assert.equal(omniProvider.id, "auto");
-  assert.equal(omniProvider.envKey, "OPENAI_API_KEY");
-  assert.equal(omniProvider.generationConfig?.contextWindowSize, 200000);
-
-  const envContent = await fs.readFile(QWEN_ENV_PATH, "utf-8");
-  assert.match(envContent, /^OPENAI_API_KEY=sk-123$/m);
-  assert.match(envContent, /^ANTHROPIC_API_KEY=sk-123$/m);
-  assert.match(envContent, /^GEMINI_API_KEY=sk-123$/m);
+  // security.auth format
+  assert.equal(content.security?.auth?.selectedType, "openai");
+  assert.equal(content.security?.auth?.apiKey, "sk-456");
+  assert.equal(content.security?.auth?.baseUrl, "http://my-omni");
+  assert.equal(content.model?.name, "claude-sonnet-4-6");
+  // Preserves other settings
+  assert.deepEqual(content.permissions?.allow, ["Bash(*)"]);
 });
 
 test("guide-settings POST writes OpenCode config with current schema and multi-model selection", async () => {
diff --git a/tests/unit/qwen-api-key-auto-create.test.ts b/tests/unit/qwen-api-key-auto-create.test.ts
new file mode 100644
index 0000000000..eb9ab2bbe7
--- /dev/null
+++ b/tests/unit/qwen-api-key-auto-create.test.ts
@@ -0,0 +1,148 @@
+import test from "node:test";
+import assert from "node:assert/strict";
+import fs from "node:fs/promises";
+import os from "os";
+import path from "path";
+import { SignJWT } from "jose";
+import { getOrCreateApiKey, resolveApiKey } from "../../src/shared/services/apiKeyResolver";
+import { validateApiKey } from "../../src/lib/db/apiKeys";
+import { getDbInstance } from "../../src/lib/db/core";
+
+const DUMMY_HOME = path.join(os.tmpdir(), "omniroute-qwen-key-test-" + Date.now());
+const originalJwtSecret = process.env.JWT_SECRET;
+
+async function createAuthCookie() {
+  process.env.JWT_SECRET = "test-cli-tools-secret";
+  const secret = new TextEncoder().encode(process.env.JWT_SECRET);
+  const token = await new SignJWT({ sub: "test-user" })
+    .setProtectedHeader({ alg: "HS256" })
+    .setIssuedAt()
+    .setExpirationTime("1h")
+    .sign(secret);
+  return `auth_token=${token}`;
+}
+
+test.beforeEach(async () => {
+  process.env.DATA_DIR = DUMMY_HOME;
+  await fs.mkdir(DUMMY_HOME, { recursive: true }).catch(() => {});
+  // Initialize DB
+  getDbInstance();
+});
+
+test.afterEach(async () => {
+  await fs.rm(DUMMY_HOME, { recursive: true, force: true }).catch(() => {});
+  if (originalJwtSecret === undefined) delete process.env.JWT_SECRET;
+  else process.env.JWT_SECRET = originalJwtSecret;
+  if (process.env.DATA_DIR?.includes("omniroute-qwen-key-test")) {
+    delete process.env.DATA_DIR;
+  }
+});
+
+test("getOrCreateApiKey() creates DB-backed key when no keyId provided", async () => {
+  const apiKey = await getOrCreateApiKey(null);
+
+  // Key should NOT be the placeholder "sk_omniroute"
+  assert.notEqual(apiKey, "sk_omniroute", "Should not return placeholder");
+  assert.ok(apiKey.startsWith("sk-"), "Key should start with sk- prefix");
+
+  // Key should be valid in DB
+  const valid = await validateApiKey(apiKey);
+  assert.equal(valid, true, "Auto-created key should validate successfully");
+});
+
+test("getOrCreateApiKey() returns existing key when keyId is provided", async () => {
+  // First create a key with a specific keyId
+  const firstKey = await getOrCreateApiKey(null);
+  assert.ok(firstKey.startsWith("sk-"));
+
+  // Create another key and get its ID
+  const secondKey = await getOrCreateApiKey(null);
+
+  // When we pass the same keyId, we should get the same key back
+  // (This tests the keyId resolution path)
+  const resolvedKey = await resolveApiKey(null, firstKey);
+  assert.equal(resolvedKey, firstKey, "Should return same key when resolved");
+});
+
+test("Qwen guide-settings POST creates valid DB-backed key (no keyId)", async () => {
+  const guideSettingsRoute =
+    await import("../../src/app/api/cli-tools/guide-settings/[toolId]/route.ts");
+
+  const cookie = await createAuthCookie();
+  const req = new Request("http://localhost/api/cli-tools/guide-settings/qwen", {
+    method: "POST",
+    headers: { "Content-Type": "application/json", cookie },
+    body: JSON.stringify({
+      baseUrl: "http://localhost:20128/v1",
+      model: "qwen3-coder-flash",
+      // No keyId provided - should auto-create
+    }),
+  });
+
+  const response = await guideSettingsRoute.POST(req, { params: { toolId: "qwen" } });
+  assert.equal(response.status, 200, "Response should be OK");
+
+  // Verify settings.json was written with security.auth format and a valid DB-backed key
+  const configPath = path.join(DUMMY_HOME, ".qwen", "settings.json");
+  const content = JSON.parse(await fs.readFile(configPath, "utf-8"));
+
+  assert.equal(content.security?.auth?.selectedType, "openai", "Should use openai auth type");
+  assert.ok(content.security?.auth?.apiKey, "Should have an API key");
+  assert.equal(
+    content.security?.auth?.baseUrl,
+    "http://localhost:20128/v1",
+    "Should have base URL"
+  );
+  assert.equal(content.model?.name, "qwen3-coder-flash", "Should have model name");
+
+  const apiKey = content.security.auth.apiKey;
+  assert.notEqual(apiKey, "sk_omniroute", "Should not use placeholder");
+  assert.ok(apiKey.startsWith("sk-"), "Key should start with sk- prefix");
+
+  // Verify the key is valid in DB
+  const valid = await validateApiKey(apiKey);
+  assert.equal(valid, true, "Auto-created key should validate in DB");
+});
+
+test("Qwen guide-settings POST with keyId uses existing key", async () => {
+  const guideSettingsRoute =
+    await import("../../src/app/api/cli-tools/guide-settings/[toolId]/route.ts");
+
+  // Pre-create a key via getOrCreateApiKey
+  const existingKey = await getOrCreateApiKey(null);
+  const keyIdMatch = existingKey.match(/^sk-[^-]+-([^-]+)-/);
+  assert.ok(keyIdMatch, "Key should have ID portion");
+
+  // Get key metadata to find the ID
+  const db = getDbInstance();
+  const stmt = db.prepare("SELECT id FROM api_keys WHERE `key` = ?");
+  const row = stmt.get(existingKey) as { id: string } | undefined;
+  assert.ok(row, "Key should exist in DB");
+
+  const cookie = await createAuthCookie();
+  const req = new Request("http://localhost/api/cli-tools/guide-settings/qwen", {
+    method: "POST",
+    headers: { "Content-Type": "application/json", cookie },
+    body: JSON.stringify({
+      baseUrl: "http://localhost:20128/v1",
+      model: "qwen3-coder-plus",
+      keyId: row.id,
+    }),
+  });
+
+  const response = await guideSettingsRoute.POST(req, { params: { toolId: "qwen" } });
+  assert.equal(response.status, 200, "Response should be OK");
+
+  // Verify settings.json uses security.auth format with the existing key
+  const configPath = path.join(DUMMY_HOME, ".qwen", "settings.json");
+  const content = JSON.parse(await fs.readFile(configPath, "utf-8"));
+
+  assert.equal(content.security?.auth?.selectedType, "openai");
+  assert.equal(
+    content.security?.auth?.apiKey,
+    existingKey,
+    "Should use existing key when keyId provided"
+  );
+  assert.equal(content.security?.auth?.baseUrl, "http://localhost:20128/v1");
+  assert.equal(content.model?.name, "qwen3-coder-plus");
+});