diff --git a/src/memory/README.md b/src/memory/README.md
index e405a0d4..eead5faf 100644
--- a/src/memory/README.md
+++ b/src/memory/README.md
@@ -158,6 +158,29 @@ Add this to your claude_desktop_config.json:
 }
 ```
 
+#### NPX with custom setting
+
+The server can be configured using the following environment variables:
+
+```json
+{
+  "mcpServers": {
+    "memory": {
+      "command": "npx",
+      "args": [
+        "-y",
+        "@modelcontextprotocol/server-memory"
+      ],
+      "env": {
+        "MEMORY_FILE_PATH": "/path/to/custom/memory.json"
+      }
+    }
+  }
+}
+```
+
+- `MEMORY_FILE_PATH`: Path to the memory storage JSON file (default: `memory.json` in the server directory)
+
 ### System Prompt
 
 The prompt for utilizing memory depends on the use case. Changing the prompt will help the model determine the frequency and types of memories created.
diff --git a/src/memory/index.ts b/src/memory/index.ts
index 0117c920..14ef92ad 100644
--- a/src/memory/index.ts
+++ b/src/memory/index.ts
@@ -10,10 +10,15 @@ import { promises as fs } from 'fs';
 import path from 'path';
 import { fileURLToPath } from 'url';
 
+// Define memory file path using environment variable with fallback
+const defaultMemoryPath = path.join(path.dirname(fileURLToPath(import.meta.url)), 'memory.json');
 
-// Define the path to the JSONL file, you can change this to your desired local path
-const __dirname = path.dirname(fileURLToPath(import.meta.url));
-const MEMORY_FILE_PATH = path.join(__dirname, 'memory.json');
+// If MEMORY_FILE_PATH is just a filename, put it in the same directory as the script
+const MEMORY_FILE_PATH = process.env.MEMORY_FILE_PATH
+  ? path.isAbsolute(process.env.MEMORY_FILE_PATH)
+    ? process.env.MEMORY_FILE_PATH
+    : path.join(path.dirname(fileURLToPath(import.meta.url)), process.env.MEMORY_FILE_PATH)
+  : defaultMemoryPath;
 
 // We are storing our memory using entities, relations, and observations in a graph structure
 interface Entity {
@@ -178,8 +183,7 @@ class KnowledgeGraphManager {
   }
 }
 
-const knowledgeGraphManager = new KnowledgeGraphManager();
-
+const knowledgeGraphManager = new KnowledgeGraphManager;
 
 // The server instance and tools exposed to Claude
 const server = new Server({
diff --git a/src/memory/package.json b/src/memory/package.json
index 741244b1..b64cf3b6 100644
--- a/src/memory/package.json
+++ b/src/memory/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@modelcontextprotocol/server-memory",
-  "version": "0.6.2",
+  "version": "0.6.3",
   "description": "MCP server for enabling memory for Claude through a knowledge graph",
   "license": "MIT",
   "author": "Anthropic, PBC (https://anthropic.com)",