diff --git a/cmd/root.go b/cmd/root.go
index 3bbc7d91..f28805e5 100644
--- a/cmd/root.go
+++ b/cmd/root.go
@@ -18,7 +18,9 @@ limitations under the License.
 package cmd
 
 import (
+	"errors"
 	"fmt"
+	"io"
 	"os"
 	"strings"
 
@@ -119,10 +121,7 @@ func initConfig() {
 		viperInstance.SetConfigName(".fga")
 	}
 
-	// If a config file is found, read it in.
-	if err := viperInstance.ReadInConfig(); err == nil {
-		fmt.Fprintln(os.Stderr, "Using config file:", viperInstance.ConfigFileUsed())
-	}
+	readConfig(viperInstance, os.Stderr)
 
 	viperInstance.SetEnvPrefix("FGA")
 	viperInstance.SetEnvKeyReplacer(strings.NewReplacer("-", "_"))
@@ -131,3 +130,19 @@ func initConfig() {
 
 	cmdutils.BindViperToFlags(rootCmd, viperInstance)
 }
+
+// readConfig reads the config file into viperInstance, if one is found, and reports on stderr which file is
+// used. A config file that exists but can't be read, e.g. because of invalid YAML, is reported as a
+// warning instead of being ignored silently.
+func readConfig(viperInstance *viper.Viper, stderr io.Writer) {
+	err := viperInstance.ReadInConfig()
+	if err == nil {
+		fmt.Fprintln(stderr, "Using config file:", viperInstance.ConfigFileUsed())
+
+		return
+	}
+
+	if !errors.As(err, &viper.ConfigFileNotFoundError{}) {
+		fmt.Fprintf(stderr, "Warning: ignoring config file %s: %v\n", viperInstance.ConfigFileUsed(), err)
+	}
+}
diff --git a/cmd/root_test.go b/cmd/root_test.go
new file mode 100644
index 00000000..100f0950
--- /dev/null
+++ b/cmd/root_test.go
@@ -0,0 +1,98 @@
+package cmd
+
+import (
+	"bytes"
+	"os"
+	"path/filepath"
+	"testing"
+
+	"github.com/spf13/viper"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+func TestReadConfig(t *testing.T) {
+	t.Parallel()
+
+	t.Run("valid config file", func(t *testing.T) {
+		t.Parallel()
+
+		configFile := filepath.Join(t.TempDir(), ".fga.yaml")
+		require.NoError(t, os.WriteFile(configFile, []byte("api-url: https://api.fga.example\n"), 0o600))
+
+		viperInstance := viper.New()
+		viperInstance.SetConfigFile(configFile)
+
+		var stderr bytes.Buffer
+		readConfig(viperInstance, &stderr)
+
+		assert.Equal(t, "Using config file: "+configFile+"\n", stderr.String())
+		assert.Equal(t, "https://api.fga.example", viperInstance.GetString("api-url"))
+	})
+
+	t.Run("invalid config file", func(t *testing.T) {
+		t.Parallel()
+
+		configFile := filepath.Join(t.TempDir(), ".fga.yaml")
+		// YAML doesn't allow tabs for indentation
+		content := "api-url: https://api.fga.example\nstore-id: 01H0H015178Y2V4CX10C2KGHF4\n\tapi-token: token\n"
+		require.NoError(t, os.WriteFile(configFile, []byte(content), 0o600))
+
+		viperInstance := viper.New()
+		viperInstance.SetConfigFile(configFile)
+
+		var stderr bytes.Buffer
+		readConfig(viperInstance, &stderr)
+
+		assert.Contains(t, stderr.String(), "Warning: ignoring config file "+configFile+": ")
+		assert.Empty(t, viperInstance.GetString("api-url"))
+	})
+
+	t.Run("invalid config file found in the search paths", func(t *testing.T) {
+		t.Parallel()
+
+		configDir := t.TempDir()
+		configFile := filepath.Join(configDir, ".fga.yaml")
+		// YAML doesn't allow tabs for indentation
+		content := "api-url: https://api.fga.example\nstore-id: 01H0H015178Y2V4CX10C2KGHF4\n\tapi-token: token\n"
+		require.NoError(t, os.WriteFile(configFile, []byte(content), 0o600))
+
+		viperInstance := viper.New()
+		viperInstance.AddConfigPath(configDir)
+		viperInstance.SetConfigName(".fga")
+		viperInstance.SetConfigType("yaml")
+
+		var stderr bytes.Buffer
+		readConfig(viperInstance, &stderr)
+
+		assert.Contains(t, stderr.String(), "Warning: ignoring config file "+configFile+": ")
+		assert.Empty(t, viperInstance.GetString("api-url"))
+	})
+
+	t.Run("config file given with --config doesn't exist", func(t *testing.T) {
+		t.Parallel()
+
+		configFile := filepath.Join(t.TempDir(), "missing.fga.yaml")
+
+		viperInstance := viper.New()
+		viperInstance.SetConfigFile(configFile)
+
+		var stderr bytes.Buffer
+		readConfig(viperInstance, &stderr)
+
+		assert.Contains(t, stderr.String(), "Warning: ignoring config file "+configFile+": ")
+	})
+
+	t.Run("no config file found", func(t *testing.T) {
+		t.Parallel()
+
+		viperInstance := viper.New()
+		viperInstance.AddConfigPath(t.TempDir())
+		viperInstance.SetConfigName(".fga")
+
+		var stderr bytes.Buffer
+		readConfig(viperInstance, &stderr)
+
+		assert.Empty(t, stderr.String())
+	})
+}