diff --git a/packages/schema/src/cli/actions/format.ts b/packages/schema/src/cli/actions/format.ts
index 0d717343c..67f2d8a14 100644
--- a/packages/schema/src/cli/actions/format.ts
+++ b/packages/schema/src/cli/actions/format.ts
@@ -1,14 +1,21 @@
 import { getVersion } from '@zenstackhq/runtime';
-import { formatDocument } from '../cli-util';
 import colors from 'colors';
-import ora from 'ora';
+import fs from 'fs';
 import { writeFile } from 'fs/promises';
+import ora from 'ora';
+import { CliError } from '../cli-error';
+import { formatDocument, getDefaultSchemaLocation } from '../cli-util';
 
-export async function format(projectPath: string, options: { schema: string }) {
+export async function format(_projectPath: string, options: { schema: string }) {
     const version = getVersion();
     console.log(colors.bold(`⌛️ ZenStack CLI v${version}`));
 
-    const schemaFile = options.schema;
+    const schemaFile = options.schema ?? getDefaultSchemaLocation();
+    if (!fs.existsSync(schemaFile)) {
+        console.error(colors.red(`File ${schemaFile} does not exist.`));
+        throw new CliError('schema file does not exist');
+    }
+
     const spinner = ora(`Formatting ${schemaFile}`).start();
     try {
         const formattedDoc = await formatDocument(schemaFile);
diff --git a/packages/schema/src/cli/actions/generate.ts b/packages/schema/src/cli/actions/generate.ts
index ead57803f..bb6b798dd 100644
--- a/packages/schema/src/cli/actions/generate.ts
+++ b/packages/schema/src/cli/actions/generate.ts
@@ -5,6 +5,7 @@ import { CliError } from '../cli-error';
 import {
     checkNewVersion,
     checkRequiredPackage,
+    getDefaultSchemaLocation,
     getZenStackPackages,
     loadDocument,
     requiredPrismaVersion,
@@ -12,7 +13,7 @@ import {
 import { PluginRunner, PluginRunnerOptions } from '../plugin-runner';
 
 type Options = {
-    schema: string;
+    schema?: string;
     output?: string;
     dependencyCheck: boolean;
     versionCheck: boolean;
@@ -52,11 +53,13 @@ export async function generate(projectPath: string, options: Options) {
 }
 
 async function runPlugins(options: Options) {
-    const model = await loadDocument(options.schema);
+    const schema = options.schema ?? getDefaultSchemaLocation();
+
+    const model = await loadDocument(schema);
 
     const runnerOpts: PluginRunnerOptions = {
         schema: model,
-        schemaPath: path.resolve(options.schema),
+        schemaPath: path.resolve(schema),
         defaultPlugins: options.defaultPlugins,
         output: options.output,
         compile: options.compile,
diff --git a/packages/schema/src/cli/cli-util.ts b/packages/schema/src/cli/cli-util.ts
index 04a64af24..bb9aa525b 100644
--- a/packages/schema/src/cli/cli-util.ts
+++ b/packages/schema/src/cli/cli-util.ts
@@ -276,3 +276,22 @@ export async function formatDocument(fileName: string) {
     const edits = await formatter.formatDocument(document, { options, textDocument: identifier });
     return TextDocument.applyEdits(document.textDocument, edits);
 }
+
+export function getDefaultSchemaLocation() {
+    let location = path.resolve('schema.zmodel');
+
+    if (fs.existsSync('./package.json')) {
+        try {
+            // eslint-disable-next-line @typescript-eslint/no-var-requires
+            const pkgJson = require(path.resolve('./package.json'));
+            if (typeof pkgJson.zenstack?.schema === 'string') {
+                location = path.resolve(pkgJson.zenstack.schema);
+            }
+        } catch (e) {
+            console.error(e);
+            // noop
+        }
+    }
+
+    return location;
+}
diff --git a/packages/schema/src/cli/index.ts b/packages/schema/src/cli/index.ts
index 84861bdd4..7012d05ed 100644
--- a/packages/schema/src/cli/index.ts
+++ b/packages/schema/src/cli/index.ts
@@ -76,8 +76,9 @@ export function createProgram() {
         .showHelpAfterError()
         .showSuggestionAfterError();
 
-    const schemaOption = new Option('--schema <file>', `schema file (with extension ${schemaExtensions})`).default(
-        './schema.zmodel'
+    const schemaOption = new Option(
+        '--schema <file>',
+        `schema file (with extension ${schemaExtensions}). Defaults to "schema.zmodel" unless specified in package.json.`
     );
 
     const configOption = new Option('-c, --config [file]', 'config file');