diff --git a/frontend/src/hooks/mutation/use-create-conversation.ts b/frontend/src/hooks/mutation/use-create-conversation.ts
index a44d921e44..8f6df2c272 100644
--- a/frontend/src/hooks/mutation/use-create-conversation.ts
+++ b/frontend/src/hooks/mutation/use-create-conversation.ts
@@ -4,8 +4,8 @@ import V1ConversationService from "#/api/conversation-service/v1-conversation-se
 import { SuggestedTask } from "#/utils/types";
 import { Provider } from "#/types/settings";
 import { CreateMicroagent, Conversation } from "#/api/open-hands.types";
-import { USE_V1_CONVERSATION_API } from "#/utils/feature-flags";
 import { useTracking } from "#/hooks/use-tracking";
+import { useSettings } from "#/hooks/query/use-settings";
 
 interface CreateConversationVariables {
   query?: string;
@@ -34,6 +34,7 @@ interface CreateConversationResponse extends Partial<Conversation> {
 export const useCreateConversation = () => {
   const queryClient = useQueryClient();
   const { trackConversationCreated } = useTracking();
+  const { data: settings } = useSettings();
 
   return useMutation({
     mutationKey: ["create-conversation"],
@@ -50,7 +51,7 @@ export const useCreateConversation = () => {
         agentType,
       } = variables;
 
-      const useV1 = USE_V1_CONVERSATION_API() && !createMicroagent;
+      const useV1 = !!settings?.V1_ENABLED && !createMicroagent;
 
       if (useV1) {
         // Use V1 API - creates a conversation start task
diff --git a/frontend/src/hooks/mutation/use-save-settings.ts b/frontend/src/hooks/mutation/use-save-settings.ts
index c8a433e9dc..099ab41ea4 100644
--- a/frontend/src/hooks/mutation/use-save-settings.ts
+++ b/frontend/src/hooks/mutation/use-save-settings.ts
@@ -35,6 +35,7 @@ const saveSettingsMutationFn = async (settings: Partial<PostSettings>) => {
       settings.GIT_USER_NAME?.trim() || DEFAULT_SETTINGS.GIT_USER_NAME,
     git_user_email:
       settings.GIT_USER_EMAIL?.trim() || DEFAULT_SETTINGS.GIT_USER_EMAIL,
+    v1_enabled: settings.V1_ENABLED,
   };
 
   await SettingsService.saveSettings(apiSettings);
diff --git a/frontend/src/hooks/query/use-settings.ts b/frontend/src/hooks/query/use-settings.ts
index 74a516f4a6..c1769c8422 100644
--- a/frontend/src/hooks/query/use-settings.ts
+++ b/frontend/src/hooks/query/use-settings.ts
@@ -36,6 +36,7 @@ const getSettingsQueryFn = async (): Promise<Settings> => {
     GIT_USER_EMAIL:
       apiSettings.git_user_email || DEFAULT_SETTINGS.GIT_USER_EMAIL,
     IS_NEW_USER: false,
+    V1_ENABLED: apiSettings.v1_enabled ?? DEFAULT_SETTINGS.V1_ENABLED,
   };
 };
 
diff --git a/frontend/src/hooks/query/use-start-tasks.ts b/frontend/src/hooks/query/use-start-tasks.ts
index 833ce86258..6af56f2296 100644
--- a/frontend/src/hooks/query/use-start-tasks.ts
+++ b/frontend/src/hooks/query/use-start-tasks.ts
@@ -1,6 +1,6 @@
 import { useQuery } from "@tanstack/react-query";
 import V1ConversationService from "#/api/conversation-service/v1-conversation-service.api";
-import { USE_V1_CONVERSATION_API } from "#/utils/feature-flags";
+import { useSettings } from "#/hooks/query/use-settings";
 
 /**
  * Hook to fetch in-progress V1 conversation start tasks
@@ -13,13 +13,17 @@ import { USE_V1_CONVERSATION_API } from "#/utils/feature-flags";
  * @param limit Maximum number of tasks to return (max 100)
  * @returns Query result with array of in-progress start tasks
  */
-export const useStartTasks = (limit = 10) =>
-  useQuery({
+export const useStartTasks = (limit = 10) => {
+  const { data: settings } = useSettings();
+  const isV1Enabled = settings?.V1_ENABLED;
+
+  return useQuery({
     queryKey: ["start-tasks", "search", limit],
     queryFn: () => V1ConversationService.searchStartTasks(limit),
-    enabled: USE_V1_CONVERSATION_API(),
+    enabled: isV1Enabled,
     select: (tasks) =>
       tasks.filter(
         (task) => task.status !== "READY" && task.status !== "ERROR",
       ),
   });
+};
diff --git a/frontend/src/routes/llm-settings.tsx b/frontend/src/routes/llm-settings.tsx
index d78df48cd9..81c864fc25 100644
--- a/frontend/src/routes/llm-settings.tsx
+++ b/frontend/src/routes/llm-settings.tsx
@@ -28,7 +28,6 @@ import { KeyStatusIcon } from "#/components/features/settings/key-status-icon";
 import { DEFAULT_SETTINGS } from "#/services/settings";
 import { getProviderId } from "#/utils/map-provider";
 import { DEFAULT_OPENHANDS_MODEL } from "#/utils/verified-models";
-import { USE_V1_CONVERSATION_API } from "#/utils/feature-flags";
 
 interface OpenHandsApiKeyHelpProps {
   testId: string;
@@ -119,8 +118,8 @@ function LlmSettingsScreen() {
   const isSaasMode = config?.APP_MODE === "saas";
   const shouldUseOpenHandsKey = isOpenHandsProvider && isSaasMode;
 
-  // Determine if we should hide the agent dropdown when V1 conversation API feature flag is enabled
-  const isV1Enabled = USE_V1_CONVERSATION_API();
+  // Determine if we should hide the agent dropdown when V1 conversation API is enabled
+  const isV1Enabled = settings?.V1_ENABLED;
 
   React.useEffect(() => {
     const determineWhetherToToggleAdvancedSettings = () => {
diff --git a/frontend/src/services/settings.ts b/frontend/src/services/settings.ts
index f7cad15b43..7c648247d6 100644
--- a/frontend/src/services/settings.ts
+++ b/frontend/src/services/settings.ts
@@ -31,6 +31,7 @@ export const DEFAULT_SETTINGS: Settings = {
   },
   GIT_USER_NAME: "openhands",
   GIT_USER_EMAIL: "openhands@all-hands.dev",
+  V1_ENABLED: false,
 };
 
 /**
diff --git a/frontend/src/settings-service/settings.types.ts b/frontend/src/settings-service/settings.types.ts
index bdd1610f49..c6d33a7ee5 100644
--- a/frontend/src/settings-service/settings.types.ts
+++ b/frontend/src/settings-service/settings.types.ts
@@ -35,6 +35,7 @@ export type ApiSettings = {
   email_verified?: boolean;
   git_user_name?: string;
   git_user_email?: string;
+  v1_enabled?: boolean;
 };
 
 export type PostApiSettings = ApiSettings & {
diff --git a/frontend/src/types/settings.ts b/frontend/src/types/settings.ts
index f76fcaa19a..2299288132 100644
--- a/frontend/src/types/settings.ts
+++ b/frontend/src/types/settings.ts
@@ -63,6 +63,7 @@ export type Settings = {
   EMAIL_VERIFIED?: boolean;
   GIT_USER_NAME?: string;
   GIT_USER_EMAIL?: string;
+  V1_ENABLED?: boolean;
 };
 
 export type PostSettings = Settings & {
diff --git a/frontend/src/utils/feature-flags.ts b/frontend/src/utils/feature-flags.ts
index acbe83d7d7..0f38a4d7ea 100644
--- a/frontend/src/utils/feature-flags.ts
+++ b/frontend/src/utils/feature-flags.ts
@@ -17,6 +17,4 @@ export const HIDE_LLM_SETTINGS = () => loadFeatureFlag("HIDE_LLM_SETTINGS");
 export const VSCODE_IN_NEW_TAB = () => loadFeatureFlag("VSCODE_IN_NEW_TAB");
 export const ENABLE_TRAJECTORY_REPLAY = () =>
   loadFeatureFlag("TRAJECTORY_REPLAY");
-export const USE_V1_CONVERSATION_API = () =>
-  loadFeatureFlag("USE_V1_CONVERSATION_API");
 export const USE_PLANNING_AGENT = () => loadFeatureFlag("USE_PLANNING_AGENT");
diff --git a/openhands/storage/data_models/settings.py b/openhands/storage/data_models/settings.py
index 6e2f6038c3..0dc9b99e62 100644
--- a/openhands/storage/data_models/settings.py
+++ b/openhands/storage/data_models/settings.py
@@ -1,5 +1,7 @@
 from __future__ import annotations
 
+import os
+
 from pydantic import (
     BaseModel,
     ConfigDict,
@@ -48,7 +50,7 @@ class Settings(BaseModel):
     email_verified: bool | None = None
     git_user_name: str | None = None
     git_user_email: str | None = None
-    v1_enabled: bool | None = None
+    v1_enabled: bool | None = Field(default=bool(os.getenv('V1_ENABLED') == '1'))
 
     model_config = ConfigDict(
         validate_assignment=True,