diff --git a/.changeset/pseudo-config-schema.md b/.changeset/pseudo-config-schema.md
new file mode 100644
index 000000000..bb991b9d8
--- /dev/null
+++ b/.changeset/pseudo-config-schema.md
@@ -0,0 +1,6 @@
+---
+"@lingo.dev/_spec": patch
+"lingo.dev": patch
+---
+
+fix(cli): add dev.usePseudotranslator to config schema and respect it in CLI setup
diff --git a/packages/cli/src/cli/cmd/run/setup.ts b/packages/cli/src/cli/cmd/run/setup.ts
index b87f17a8f..0f3480b41 100644
--- a/packages/cli/src/cli/cmd/run/setup.ts
+++ b/packages/cli/src/cli/cmd/run/setup.ts
@@ -50,7 +50,8 @@ export default async function setup(input: CmdRunContext) {
       {
         title: "Selecting localization provider",
         task: async (ctx, task) => {
-          const provider = ctx.flags.pseudo ? "pseudo" : ctx.config?.provider;
+          const isPseudo = ctx.flags.pseudo || ctx.config?.dev?.usePseudotranslator;
+          const provider = isPseudo ? "pseudo" : ctx.config?.provider;
           const vNext = ctx.config?.vNext;
           ctx.localizer = createLocalizer(provider, ctx.flags.apiKey, vNext);
           if (!ctx.localizer) {
@@ -72,7 +73,8 @@ export default async function setup(input: CmdRunContext) {
         enabled: (ctx) =>
           (ctx.localizer?.id === "Lingo.dev" ||
             ctx.localizer?.id === "Lingo.dev vNext") &&
-          !ctx.flags.pseudo,
+          !ctx.flags.pseudo &&
+          !ctx.config?.dev?.usePseudotranslator,
         task: async (ctx, task) => {
           const authStatus = await ctx.localizer!.checkAuth();
           if (!authStatus.authenticated) {
diff --git a/packages/spec/src/config.spec.ts b/packages/spec/src/config.spec.ts
index 1fdc665fb..82d638325 100644
--- a/packages/spec/src/config.spec.ts
+++ b/packages/spec/src/config.spec.ts
@@ -115,6 +115,30 @@ describe("I18n Config Parser", () => {
     expect(result).toEqual(createV1_4Config());
   });
 
+  it("should parse config with dev.usePseudotranslator", () => {
+    const configWithDev = {
+      ...createV1_4Config(),
+      version: "1.14",
+      dev: {
+        usePseudotranslator: true,
+      },
+    };
+    const result = parseI18nConfig(configWithDev);
+
+    expect(result.dev?.usePseudotranslator).toBe(true);
+    expect(result.version).toBe("1.14");
+  });
+
+  it("should parse config without dev field", () => {
+    const configWithoutDev = {
+      ...createV1_4Config(),
+      version: "1.14",
+    };
+    const result = parseI18nConfig(configWithoutDev);
+
+    expect(result.dev).toBeUndefined();
+  });
+
   it("should throw an error for unsupported locales", () => {
     const invalidLocaleConfig = createInvalidLocaleConfig();
     expect(() => parseI18nConfig(invalidLocaleConfig)).toThrow(
diff --git a/packages/spec/src/config.ts b/packages/spec/src/config.ts
index c1f273c19..b7ad04152 100644
--- a/packages/spec/src/config.ts
+++ b/packages/spec/src/config.ts
@@ -574,8 +574,36 @@ export const configV1_13Definition = extendConfigDefinition(
   },
 );
 
+// v1.13 -> v1.14
+// Changes: Add "dev" field for development-specific settings
+const devSettingsSchema = Z.object({
+  usePseudotranslator: Z.boolean()
+    .optional()
+    .describe(
+      "Use pseudotranslator instead of real translation provider. Useful for testing i18n without API calls.",
+    ),
+}).describe("Development-specific settings.");
+
+export const configV1_14Definition = extendConfigDefinition(
+  configV1_13Definition,
+  {
+    createSchema: (baseSchema) =>
+      baseSchema.extend({
+        dev: devSettingsSchema.optional(),
+      }),
+    createDefaultValue: (baseDefaultValue) => ({
+      ...baseDefaultValue,
+      version: "1.14",
+    }),
+    createUpgrader: (oldConfig) => ({
+      ...oldConfig,
+      version: "1.14",
+    }),
+  },
+);
+
 // exports
-export const LATEST_CONFIG_DEFINITION = configV1_13Definition;
+export const LATEST_CONFIG_DEFINITION = configV1_14Definition;
 
 export type I18nConfig = Z.infer<(typeof LATEST_CONFIG_DEFINITION)["schema"]>;