diff --git a/.changeset/strong-cars-visit.md b/.changeset/strong-cars-visit.md
new file mode 100644
index 000000000..c3a4a7a52
--- /dev/null
+++ b/.changeset/strong-cars-visit.md
@@ -0,0 +1,5 @@
+---
+"@trigger.dev/init": patch
+---
+
+Fixed an issue that cause environment variables to be incorrectly added to .env.local
diff --git a/packages/init-trigger/src/cli/index.ts b/packages/init-trigger/src/cli/index.ts
index f398443ef..499ab35ef 100644
--- a/packages/init-trigger/src/cli/index.ts
+++ b/packages/init-trigger/src/cli/index.ts
@@ -202,8 +202,8 @@ const promptEndpointUrl = async (instanceUrl: string): Promise<string> => {
   }>({
     type: "input",
     name: "endpointUrl",
-    message:
-      "What's the URL of your Next.js project? (e.g. http://localhost:3000)",
+    default: "http://localhost:3000",
+    message: "What's the URL of your Next.js project?",
     validate: (input) => {
       if (!input) {
         return "Please enter the URL of your Next.js project";
@@ -214,7 +214,7 @@ const promptEndpointUrl = async (instanceUrl: string): Promise<string> => {
       const triggerUrl = new URL(instanceUrl);
 
       if (triggerUrl.hostname !== "localhost" && url.hostname === "localhost") {
-        return `Your Trigger.dev instance is hosted at ${triggerUrl.hostname}, so your Next.js project must also be publicly accessible. See our docs for more info: https://trigger.dev/docs/guides/tunneling`;
+        return `Your Trigger.dev instance is hosted at ${triggerUrl.hostname}, so your Next.js project must also be publicly accessible. See our docs for more info: https://trigger.dev/docs/documentation/guides/tunneling-localhost`;
       }
 
       // Make sure triggerUrl and url don't use the same port if they are both localhost
diff --git a/packages/init-trigger/src/index.ts b/packages/init-trigger/src/index.ts
index c664b719f..af4b0aec1 100644
--- a/packages/init-trigger/src/index.ts
+++ b/packages/init-trigger/src/index.ts
@@ -11,6 +11,7 @@ import { simpleGit } from "simple-git";
 import { TriggerApi } from "./utils/triggerApi.js";
 import { DEFAULT_TRIGGER_URL } from "./consts.js";
 import ora from "ora";
+import { renderApiKey } from "./utils/renderApiKey.js";
 
 const main = async () => {
   renderTitle();
@@ -315,69 +316,78 @@ export const { POST, dynamic } = createAppRoute(client, {
 }
 
 async function setupEnvironmentVariables(path: string, cliResults: CliResults) {
-  const envFilePath = pathModule.join(path, ".env.local");
-  const envFileExists = await pathExists(envFilePath);
+  if (cliResults.flags.apiKey) {
+    await setupEnvironmentVariable(
+      path,
+      ".env.local",
+      "TRIGGER_API_KEY",
+      cliResults.flags.apiKey,
+      true,
+      renderApiKey
+    );
+  }
 
-  if (envFileExists) {
-    const envFileContent = await fs.readFile(envFilePath, "utf-8");
+  if (cliResults.flags.triggerUrl) {
+    await setupEnvironmentVariable(
+      path,
+      ".env.local",
+      "TRIGGER_API_URL",
+      cliResults.flags.triggerUrl,
+      true
+    );
+  }
 
-    if (envFileContent.includes("TRIGGER_API_KEY")) {
-      // Update the existing value
-      const updatedEnvFileContent = envFileContent.replace(
-        /TRIGGER_API_KEY=.*/g,
-        `TRIGGER_API_KEY=${cliResults.flags.apiKey}`
+  if (cliResults.flags.endpointUrl) {
+    await setupEnvironmentVariable(
+      path,
+      ".env.local",
+      "VERCEL_URL",
+      cliResults.flags.endpointUrl,
+      false
+    );
+  }
+}
+
+async function setupEnvironmentVariable(
+  dir: string,
+  fileName: string,
+  variableName: string,
+  value: string,
+  replaceValue: boolean = true,
+  renderer: (value: string) => string = (value) => value
+) {
+  const path = pathModule.join(dir, fileName);
+  const envFileExists = await pathExists(path);
+
+  if (!envFileExists) {
+    await fs.writeFile(path, "");
+  }
+
+  const envFileContent = await fs.readFile(path, "utf-8");
+
+  if (envFileContent.includes(variableName)) {
+    if (!replaceValue) {
+      logger.info(
+        `☑ Skipping setting ${variableName}=${renderer(
+          value
+        )} because it already exists`
       );
-
-      await fs.writeFile(envFilePath, updatedEnvFileContent);
-
-      logger.success("✅ Updated TRIGGER_API_KEY in .env.local");
-    } else {
-      await fs.appendFile(
-        envFilePath,
-        `TRIGGER_API_KEY=${cliResults.flags.apiKey}\n`
-      );
-
-      logger.success("✅ Added TRIGGER_API_KEY to .env.local");
+      return;
     }
+    // Update the existing value
+    const updatedEnvFileContent = envFileContent.replace(
+      new RegExp(`${variableName}=.*\\n`, "g"),
+      `${variableName}=${value}\n`
+    );
 
-    if (envFileContent.includes("TRIGGER_API_URL")) {
-      // Update existing value
-      const updatedEnvFileContent = envFileContent.replace(
-        /TRIGGER_API_URL=.*/g,
-        `TRIGGER_API_URL=${cliResults.flags.triggerUrl}`
-      );
+    await fs.writeFile(path, updatedEnvFileContent);
 
-      await fs.writeFile(envFilePath, updatedEnvFileContent);
-
-      logger.success("✅ Updated TRIGGER_API_URL in .env.local");
-    } else {
-      await fs.appendFile(
-        envFilePath,
-        `TRIGGER_API_URL=${cliResults.flags.triggerUrl}\n`
-      );
-
-      logger.success("✅ Added TRIGGER_API_URL to .env.local");
-    }
-
-    if (!envFileContent.includes("VERCEL_URL")) {
-      await fs.appendFile(
-        envFilePath,
-        `VERCEL_URL=${cliResults.flags.endpointUrl}\n`
-      );
-
-      logger.success("✅ Added VERCEL_URL to .env.local");
-    }
+    logger.success(`✅ Set ${variableName}=${renderer(value)} in ${fileName}`);
   } else {
-    const envFileContent = `
-TRIGGER_API_KEY=${cliResults.flags.apiKey}
-TRIGGER_API_URL=${cliResults.flags.triggerUrl}
-VERCEL_URL=${cliResults.flags.endpointUrl}
-  `;
-
-    await fs.writeFile(envFilePath, envFileContent);
+    await fs.appendFile(path, `\n${variableName}=${value}`);
 
     logger.success(
-      "✅ Created .env.local and added required environment variables"
+      `✅ Added ${variableName}=${renderer(value)} to ${fileName}`
     );
   }
 }
diff --git a/packages/init-trigger/src/utils/renderApiKey.ts b/packages/init-trigger/src/utils/renderApiKey.ts
new file mode 100644
index 000000000..adf213a3a
--- /dev/null
+++ b/packages/init-trigger/src/utils/renderApiKey.ts
@@ -0,0 +1,4 @@
+// Obfuscate the API key (will be in the format tr_dev_XXXX)
+export function renderApiKey(apiKey: string): string {
+  return apiKey.replace(/tr_dev_[a-zA-Z0-9]{6}/g, "tr_dev_********");
+}