diff --git a/dlt/common/storages/configuration.py b/dlt/common/storages/configuration.py
index f6950873c2..f65e1a9edd 100644
--- a/dlt/common/storages/configuration.py
+++ b/dlt/common/storages/configuration.py
@@ -201,7 +201,7 @@ class FilesystemConfiguration(BaseConfiguration):
         "sftp": SFTPCredentials,
     }
 
-    bucket_url: str = None
+    bucket_url: str = "."
 
     # should be a union of all possible credentials as found in PROTOCOL_CREDENTIALS
     credentials: FileSystemCredentials = None
diff --git a/tests/load/filesystem/test_filesystem_factory.py b/tests/load/filesystem/test_filesystem_factory.py
index 5ef85ca8e9..497341bb7c 100644
--- a/tests/load/filesystem/test_filesystem_factory.py
+++ b/tests/load/filesystem/test_filesystem_factory.py
@@ -81,7 +81,7 @@ def test_resolve_bucket_url_ignores_foreign_credentials():
         fs = filesystem()
         assert fs.is_hf
 
-    # without bucket_url, _resolve_bucket_url returns None and is_hf is False
+    # without explicit bucket_url, defaults to "." (local filesystem), so is_hf is False
     with custom_environ({"CREDENTIALS": "postgres://loader:password@localhost:5432/dlt_data"}):
         fs = filesystem()
         assert not fs.is_hf
diff --git a/tests/sources/filesystem/test_config_sections.py b/tests/sources/filesystem/test_config_sections.py
index 11caf8733d..a8a71d4080 100644
--- a/tests/sources/filesystem/test_config_sections.py
+++ b/tests/sources/filesystem/test_config_sections.py
@@ -1,17 +1,37 @@
 import pytest
+import os
 
 from dlt.sources.filesystem import filesystem, read_parquet
 from dlt.common.configuration.exceptions import ConfigFieldMissingException
+from dlt.common.storages.configuration import FilesystemConfiguration
 
 
-def test_config_sections_resolution():
+def test_config_sections_resolution_defaults_to_cwd():
+    """filesystem() without bucket_url should default to current directory"""
     filesystem_resource = filesystem(file_glob="**/*.parquet")
     filesystem_pipe = filesystem_resource | read_parquet()
 
+    # Should NOT raise — defaults to "." (current working directory)
+    # We just verify the resource can be constructed and resolves correctly
+    config = FilesystemConfiguration()
+    assert config.bucket_url == "."
+    assert config.protocol == "file"
+
+
+def test_config_sections_resolution_missing_credentials():
+    """Cloud bucket_url still requires credentials — check config section path"""
+    filesystem_resource = filesystem(
+        bucket_url="s3://some-bucket", file_glob="**/*.parquet"
+    )
+    filesystem_pipe = filesystem_resource | read_parquet()
+
     with pytest.raises(ConfigFieldMissingException) as exc_info:
         list(filesystem_pipe)
 
-    # NOTE: we check that the first trace related to filesystem has the correct
-    # sections set
-    flat_trace = exc_info.value.attrs()["traces"]["bucket_url"]
-    assert flat_trace[0].key.startswith("SOURCES__FILESYSTEM__FILESYSTEM__")
+    flat_trace = exc_info.value.attrs()["traces"]
+    assert "credentials" in flat_trace
+    # Verify the correct config section path is used
+    assert any(
+        trace.sections[:3] == ["sources", "filesystem", "filesystem"]
+        for trace in flat_trace["credentials"]
+    )
\ No newline at end of file
diff --git a/tests/workspace/cli/test_config_toml_writer.py b/tests/workspace/cli/test_config_toml_writer.py
index 81b4c369d5..682ccd479f 100644
--- a/tests/workspace/cli/test_config_toml_writer.py
+++ b/tests/workspace/cli/test_config_toml_writer.py
@@ -236,11 +236,8 @@ def test_write_spec_without_defaults(example_toml) -> None:
         is_default_of_interest=True,
     )
 
-    # bucket_url is mandatory, same for aws credentials
-    assert example_toml.as_string() == """[filesystem]
-bucket_url = "<configure me>" # fill this in!
-
-[filesystem.credentials]
+    # bucket_url now defaults to "." , same for aws credentials
+    assert example_toml.as_string() == """[filesystem.credentials]
 aws_access_key_id = "<configure me>" # fill this in!
 aws_secret_access_key = "<configure me>" # fill this in!
 """
@@ -296,4 +293,4 @@ class SnowflakeDatabaseConfiguration(SnowflakeClientConfiguration):
     )
 
     # still here because marked specifically as of interest
-    assert example_toml["snowflake"]["database"] == "dlt_db"
+    assert example_toml["snowflake"]["database"] == "dlt_db"
\ No newline at end of file