diff --git a/packages/plugins/apps/README.md b/packages/plugins/apps/README.md
index 7a1ca0ccb..16aa87e23 100644
--- a/packages/plugins/apps/README.md
+++ b/packages/plugins/apps/README.md
@@ -72,13 +72,15 @@ Additional glob patterns (relative to the project root) to include in the upload
 
 ### apps.authOverrides.method
 
-> default: `apiKey`
+> default: `apiKey` when both `DD_API_KEY` and `DD_APP_KEY` are configured, otherwise `oauth`
 
 Authentication method for uploading app bundles.
 
 Use `apiKey` to send `DD_API_KEY`/`DD_APP_KEY` credentials from the shared `auth` config. Use `oauth` to complete a local Authorization Code + PKCE flow and upload with a short-lived bearer token instead.
 
-You can also set `DATADOG_APPS_AUTH_METHOD=oauth` or `DD_APPS_AUTH_METHOD=oauth`.
+When `apps.authOverrides.method` is not set, the plugin uses API/App-key auth if both keys are configured. If either key is missing, it uses OAuth by default.
+
+You can also set `DATADOG_APPS_AUTH_METHOD` or `DD_APPS_AUTH_METHOD` to `apiKey` or `oauth`.
 
 When the method is `oauth`, the plugin derives OAuth client settings from the resolved Datadog site. The plugin reads tokens from the OS credential store, refreshes expired access tokens when a refresh token is available, and only starts browser authorization when no usable stored token exists.
 
diff --git a/packages/plugins/apps/src/validate.test.ts b/packages/plugins/apps/src/validate.test.ts
index d9ad0c512..22e2e42de 100644
--- a/packages/plugins/apps/src/validate.test.ts
+++ b/packages/plugins/apps/src/validate.test.ts
@@ -4,13 +4,47 @@
 
 import { validateOptions } from '@dd/apps-plugin/validate';
 
+const authEnvVars = [
+    'DATADOG_API_KEY',
+    'DD_API_KEY',
+    'DATADOG_APP_KEY',
+    'DD_APP_KEY',
+    'DATADOG_APPS_AUTH_METHOD',
+    'DD_APPS_AUTH_METHOD',
+] as const;
+
+const savedAuthEnv = Object.fromEntries(
+    authEnvVars.map((key) => [key, process.env[key]]),
+) as Record<(typeof authEnvVars)[number], string | undefined>;
+
+const restoreAuthEnv = () => {
+    for (const key of authEnvVars) {
+        const value = savedAuthEnv[key];
+        if (value === undefined) {
+            delete process.env[key];
+        } else {
+            process.env[key] = value;
+        }
+    }
+};
+
 describe('Apps Plugin - validateOptions', () => {
+    beforeEach(() => {
+        for (const key of authEnvVars) {
+            delete process.env[key];
+        }
+    });
+
+    afterEach(() => {
+        restoreAuthEnv();
+    });
+
     describe('defaults', () => {
-        test('Should set defaults when nothing is provided', () => {
+        test('Should default to OAuth when API/App keys are not provided', () => {
             const result = validateOptions({});
             expect(result).toEqual({
                 authOverrides: {
-                    method: 'apiKey',
+                    method: 'oauth',
                 },
                 dryRun: true,
                 include: [],
@@ -19,6 +53,35 @@ describe('Apps Plugin - validateOptions', () => {
             });
         });
 
+        test('Should default to API-key auth when API/App keys are configured', () => {
+            const result = validateOptions({
+                auth: {
+                    apiKey: 'api-key',
+                    appKey: 'app-key',
+                },
+            });
+
+            expect(result.authOverrides.method).toBe('apiKey');
+        });
+
+        test('Should default to API-key auth when API/App keys are configured through env vars', () => {
+            process.env.DATADOG_API_KEY = 'api-key';
+            process.env.DATADOG_APP_KEY = 'app-key';
+
+            const result = validateOptions({});
+            expect(result.authOverrides.method).toBe('apiKey');
+        });
+
+        test('Should default to OAuth when API-key auth is incomplete', () => {
+            const result = validateOptions({
+                auth: {
+                    apiKey: 'api-key',
+                },
+            });
+
+            expect(result.authOverrides.method).toBe('oauth');
+        });
+
         test('Should set dryRun to false when DATADOG_APPS_UPLOAD_ASSETS is set', () => {
             process.env.DATADOG_APPS_UPLOAD_ASSETS = '1';
             try {
@@ -63,7 +126,7 @@ describe('Apps Plugin - validateOptions', () => {
 
             expect(result).toEqual({
                 authOverrides: {
-                    method: 'apiKey',
+                    method: 'oauth',
                 },
                 dryRun: true,
                 include: ['public/**/*', 'dist/**/*'],
@@ -83,14 +146,44 @@ describe('Apps Plugin - validateOptions', () => {
             expect(result.authOverrides.method).toBe('oauth');
         });
 
+        test('Should prefer configured OAuth over available API/App keys', () => {
+            const result = validateOptions({
+                auth: {
+                    apiKey: 'api-key',
+                    appKey: 'app-key',
+                },
+                apps: {
+                    enable: true,
+                    authOverrides: { method: 'oauth' },
+                },
+            });
+
+            expect(result.authOverrides.method).toBe('oauth');
+        });
+
+        test('Should enable API-key method when configured', () => {
+            const result = validateOptions({
+                apps: {
+                    enable: true,
+                    authOverrides: { method: 'apiKey' },
+                },
+            });
+
+            expect(result.authOverrides.method).toBe('apiKey');
+        });
+
         test('Should allow env vars to opt into OAuth', () => {
             process.env.DATADOG_APPS_AUTH_METHOD = 'oauth';
-            try {
-                const result = validateOptions({ apps: {} });
-                expect(result.authOverrides.method).toBe('oauth');
-            } finally {
-                delete process.env.DATADOG_APPS_AUTH_METHOD;
-            }
+
+            const result = validateOptions({ apps: {} });
+            expect(result.authOverrides.method).toBe('oauth');
+        });
+
+        test('Should allow env vars to opt into API-key auth', () => {
+            process.env.DATADOG_APPS_AUTH_METHOD = 'apiKey';
+
+            const result = validateOptions({ apps: {} });
+            expect(result.authOverrides.method).toBe('apiKey');
         });
     });
 });
diff --git a/packages/plugins/apps/src/validate.ts b/packages/plugins/apps/src/validate.ts
index 4ceac46b3..026e9d9a0 100644
--- a/packages/plugins/apps/src/validate.ts
+++ b/packages/plugins/apps/src/validate.ts
@@ -22,12 +22,18 @@ const resolveAuthMethod = (value: string | undefined): AuthMethod | undefined =>
     throw new Error(`apps.authOverrides.method must be one of: ${AUTH_METHODS.join(', ')}`);
 };
 
+const hasApiKeyAuth = (options: Options): boolean =>
+    Boolean(
+        (getDDEnvValue('API_KEY') || options.auth?.apiKey) &&
+            (getDDEnvValue('APP_KEY') || options.auth?.appKey),
+    );
+
 export const validateOptions = (options: Options): AppsOptionsWithDefaults => {
     const resolvedOptions = (options[CONFIG_KEY] || {}) as AppsOptions;
     const method =
         resolveAuthMethod(
             getDDEnvValue('APPS_AUTH_METHOD') || resolvedOptions.authOverrides?.method,
-        ) || 'apiKey';
+        ) || (hasApiKeyAuth(options) ? 'apiKey' : 'oauth');
 
     return {
         include: resolvedOptions.include || [],
diff --git a/packages/plugins/apps/src/vite/dev-server.test.ts b/packages/plugins/apps/src/vite/dev-server.test.ts
index 7a8620500..5de05e8d1 100644
--- a/packages/plugins/apps/src/vite/dev-server.test.ts
+++ b/packages/plugins/apps/src/vite/dev-server.test.ts
@@ -478,7 +478,7 @@ describe('Dev Server Middleware', () => {
             expect(apiScope.isDone()).toBe(true);
         });
 
-        test('Should return 400 with auth guidance when default API-key auth is missing keys', async () => {
+        test('Should return 400 with auth guidance when explicit API-key auth is missing keys', async () => {
             const noKeyMiddleware = createDevServerMiddleware(
                 mockViteBuild,
                 () => mockFunctions,