diff --git a/actions/setup/js/repo_helpers.cjs b/actions/setup/js/repo_helpers.cjs
index 4f9e2d3c688..d0fc57e236d 100644
--- a/actions/setup/js/repo_helpers.cjs
+++ b/actions/setup/js/repo_helpers.cjs
@@ -109,8 +109,16 @@ function getDefaultTargetRepo(config) {
   if (targetRepoSlug) {
     return targetRepoSlug;
   }
-  // Fall back to context repo
-  return `${context.repo.owner}/${context.repo.repo}`;
+  // Fall back to context repo (only available in github-script or shim-provided context)
+  if (typeof context !== "undefined" && context.repo?.owner && context.repo?.repo) {
+    return `${context.repo.owner}/${context.repo.repo}`;
+  }
+  // Fall back to GITHUB_REPOSITORY env var (available in standalone daemon mode)
+  const githubRepo = process.env.GITHUB_REPOSITORY;
+  if (githubRepo) {
+    return githubRepo;
+  }
+  return "";
 }
 
 /**
@@ -214,11 +222,23 @@ function resolveTargetRepoConfig(config) {
  * @returns {RepoResolutionResult}
  */
 function resolveAndValidateRepo(item, defaultTargetRepo, allowedRepos, operationType) {
-  // Determine target repository for this operation
-  const itemRepo = item.repo ? String(item.repo).trim() : defaultTargetRepo;
+  // Normalize the default target repo (may be empty if not configured)
+  const trimmedDefaultTargetRepo = defaultTargetRepo ? String(defaultTargetRepo).trim() : "";
+
+  // Determine target repository for this operation, allowing item.repo to override
+  const rawItemRepo = item && item.repo != null ? String(item.repo).trim() : "";
+  const itemRepo = rawItemRepo || trimmedDefaultTargetRepo;
+
+  // If we still don't have a repo after considering overrides, treat as configuration/environment issue
+  if (!itemRepo) {
+    return {
+      success: false,
+      error: `Unable to determine target repository for ${operationType}. Set GH_AW_TARGET_REPO_SLUG, ensure GITHUB_REPOSITORY is available, or configure target-repo in safe-outputs settings.`,
+    };
+  }
 
   // Validate the repository is allowed
-  const repoValidation = validateRepo(itemRepo, defaultTargetRepo, allowedRepos);
+  const repoValidation = validateRepo(itemRepo, trimmedDefaultTargetRepo, allowedRepos);
   if (!repoValidation.valid) {
     // When valid is false, error is guaranteed to be non-null
     const errorMessage = repoValidation.error;
diff --git a/actions/setup/js/repo_helpers.test.cjs b/actions/setup/js/repo_helpers.test.cjs
index 8df2ab0c72f..53e5fe1c841 100644
--- a/actions/setup/js/repo_helpers.test.cjs
+++ b/actions/setup/js/repo_helpers.test.cjs
@@ -14,6 +14,7 @@ describe("repo_helpers", () => {
   beforeEach(() => {
     vi.resetModules();
     delete process.env.GH_AW_TARGET_REPO_SLUG;
+    delete process.env.GITHUB_REPOSITORY;
     global.context = mockContext;
   });
 
@@ -97,6 +98,31 @@ describe("repo_helpers", () => {
       const result = getDefaultTargetRepo();
       expect(result).toBe("test-owner/test-repo");
     });
+
+    it("should use GITHUB_REPOSITORY env var when context is not defined", async () => {
+      process.env.GITHUB_REPOSITORY = "env-owner/env-repo";
+      // @ts-expect-error - Simulating standalone daemon where context is not available
+      delete global.context;
+      const { getDefaultTargetRepo } = await import("./repo_helpers.cjs");
+      const result = getDefaultTargetRepo();
+      expect(result).toBe("env-owner/env-repo");
+    });
+
+    it("should prefer GH_AW_TARGET_REPO_SLUG over GITHUB_REPOSITORY", async () => {
+      process.env.GH_AW_TARGET_REPO_SLUG = "slug-org/slug-repo";
+      process.env.GITHUB_REPOSITORY = "env-owner/env-repo";
+      const { getDefaultTargetRepo } = await import("./repo_helpers.cjs");
+      const result = getDefaultTargetRepo();
+      expect(result).toBe("slug-org/slug-repo");
+    });
+
+    it("should return empty string when no config, no env vars, and no context", async () => {
+      // @ts-expect-error - Simulating standalone daemon where context is not available
+      delete global.context;
+      const { getDefaultTargetRepo } = await import("./repo_helpers.cjs");
+      const result = getDefaultTargetRepo();
+      expect(result).toBe("");
+    });
   });
 
   describe("isRepoAllowed", () => {
@@ -371,6 +397,31 @@ describe("repo_helpers", () => {
       expect(result.repo).toBe("github/gh-aw");
       expect(result.repoParts).toEqual({ owner: "github", repo: "gh-aw" });
     });
+
+    it("should fail with descriptive error when defaultTargetRepo is empty", async () => {
+      const { resolveAndValidateRepo } = await import("./repo_helpers.cjs");
+      const item = {};
+      const allowedRepos = new Set();
+
+      const result = resolveAndValidateRepo(item, "", allowedRepos, "pull request");
+
+      expect(result.success).toBe(false);
+      expect(result.error).toContain("Unable to determine target repository for pull request");
+      expect(result.error).toContain("GH_AW_TARGET_REPO_SLUG");
+      expect(result.error).toContain("GITHUB_REPOSITORY");
+    });
+
+    it("should succeed when item.repo is provided even if defaultTargetRepo is empty", async () => {
+      const { resolveAndValidateRepo } = await import("./repo_helpers.cjs");
+      const item = { repo: "org/explicit-repo" };
+      const allowedRepos = new Set(["org/explicit-repo"]);
+
+      const result = resolveAndValidateRepo(item, "", allowedRepos, "pull request");
+
+      expect(result.success).toBe(true);
+      expect(result.repo).toBe("org/explicit-repo");
+      expect(result.repoParts).toEqual({ owner: "org", repo: "explicit-repo" });
+    });
   });
 
   describe("resolveTargetRepoConfig", () => {
diff --git a/actions/setup/js/unassign_from_user.test.cjs b/actions/setup/js/unassign_from_user.test.cjs
index 47f65861b9a..af12277978c 100644
--- a/actions/setup/js/unassign_from_user.test.cjs
+++ b/actions/setup/js/unassign_from_user.test.cjs
@@ -43,6 +43,8 @@ describe("unassign_from_user (Handler Factory Architecture)", () => {
 
   beforeEach(async () => {
     vi.clearAllMocks();
+    delete process.env.GITHUB_REPOSITORY;
+    delete process.env.GH_AW_TARGET_REPO_SLUG;
 
     const { main } = require("./unassign_from_user.cjs");
     handler = await main({