diff --git a/.changeset/shy-brooms-feel.md b/.changeset/shy-brooms-feel.md
new file mode 100644
index 0000000000..6be489bb6f
--- /dev/null
+++ b/.changeset/shy-brooms-feel.md
@@ -0,0 +1,6 @@
+---
+"@pnpm/plugin-commands-config": patch
+pnpm: patch
+---
+
+When both `pnpm-workspace.yaml` and `.npmrc` exist, `pnpm config set --location=project` now writes to `pnpm-workspace.yaml` (matching read priority) [#10072](https://github.com/pnpm/pnpm/issues/10072).
diff --git a/config/plugin-commands-config/src/config.ts b/config/plugin-commands-config/src/config.ts
index 3ea78ff6d0..71362035c2 100644
--- a/config/plugin-commands-config/src/config.ts
+++ b/config/plugin-commands-config/src/config.ts
@@ -54,7 +54,7 @@ export function help (): string {
             shortAlias: '-g',
           },
           {
-            description: 'When set to "project", the .npmrc file at the nearest package.json will be used. If no .npmrc file is present in the directory, the setting will be written to a pnpm-workspace.yaml file.',
+            description: 'When set to "project", the pnpm-workspace.yaml file will be used if it exists. If only .npmrc exists, it will be used. If neither exists, a pnpm-workspace.yaml file will be created.',
             name: '--location <project|global>',
           },
           {
diff --git a/config/plugin-commands-config/src/configSet.ts b/config/plugin-commands-config/src/configSet.ts
index 9cdf2b4066..e88a39b99c 100644
--- a/config/plugin-commands-config/src/configSet.ts
+++ b/config/plugin-commands-config/src/configSet.ts
@@ -1,5 +1,3 @@
-import fs from 'fs'
-import path from 'path'
 import util from 'util'
 import { types } from '@pnpm/config'
 import { PnpmError } from '@pnpm/error'
@@ -11,6 +9,7 @@ import kebabCase from 'lodash.kebabcase'
 import { readIniFile } from 'read-ini-file'
 import { writeIniFile } from 'write-ini-file'
 import { type ConfigCommandOptions } from './ConfigCommandOptions.js'
+import { getConfigFilePath } from './getConfigFilePath.js'
 import { isStrictlyKebabCase } from './isStrictlyKebabCase.js'
 import { settingShouldFallBackToNpm } from './settingShouldFallBackToNpm.js'
 
@@ -36,8 +35,17 @@ export async function configSet (opts: ConfigCommandOptions, key: string, valueP
     }
     throw new PnpmError('CONFIG_SET_AUTH_NON_STRING', `Cannot set ${key} to a non-string value (${JSON.stringify(value)})`)
   }
-  if (opts.global === true || fs.existsSync(path.join(opts.dir, '.npmrc'))) {
-    const configPath = opts.global ? path.join(opts.configDir, 'rc') : path.join(opts.dir, '.npmrc')
+
+  const { configPath, isWorkspaceYaml } = getConfigFilePath(opts)
+
+  if (isWorkspaceYaml) {
+    key = camelCase(key)
+    await updateWorkspaceManifest(opts.workspaceDir ?? opts.dir, {
+      updatedFields: ({
+        [key]: castField(value, kebabCase(key)),
+      }),
+    })
+  } else {
     const settings = await safeReadIniFile(configPath)
     key = kebabCase(key)
     if (value == null) {
@@ -47,14 +55,7 @@ export async function configSet (opts: ConfigCommandOptions, key: string, valueP
       settings[key] = value
     }
     await writeIniFile(configPath, settings)
-    return
   }
-  key = camelCase(key)
-  await updateWorkspaceManifest(opts.workspaceDir ?? opts.dir, {
-    updatedFields: ({
-      [key]: castField(value, kebabCase(key)),
-    }),
-  })
 }
 
 function castField (value: unknown, key: string) {
diff --git a/config/plugin-commands-config/src/getConfigFilePath.ts b/config/plugin-commands-config/src/getConfigFilePath.ts
new file mode 100644
index 0000000000..8532b5bd46
--- /dev/null
+++ b/config/plugin-commands-config/src/getConfigFilePath.ts
@@ -0,0 +1,42 @@
+import fs from 'fs'
+import path from 'path'
+import { type ConfigCommandOptions } from './ConfigCommandOptions.js'
+
+interface ConfigFilePathInfo {
+  configPath: string
+  isWorkspaceYaml: boolean
+}
+
+/**
+ * Priority: pnpm-workspace.yaml > .npmrc > default to pnpm-workspace.yaml
+ */
+export function getConfigFilePath (opts: Pick<ConfigCommandOptions, 'global' | 'configDir' | 'dir'>): ConfigFilePathInfo {
+  if (opts.global) {
+    return {
+      configPath: path.join(opts.configDir, 'rc'),
+      isWorkspaceYaml: false,
+    }
+  }
+
+  const workspaceYamlPath = path.join(opts.dir, 'pnpm-workspace.yaml')
+  if (fs.existsSync(workspaceYamlPath)) {
+    return {
+      configPath: workspaceYamlPath,
+      isWorkspaceYaml: true,
+    }
+  }
+
+  const npmrcPath = path.join(opts.dir, '.npmrc')
+  if (fs.existsSync(npmrcPath)) {
+    return {
+      configPath: npmrcPath,
+      isWorkspaceYaml: false,
+    }
+  }
+
+  // If neither exists, return pnpm-workspace.yaml
+  return {
+    configPath: workspaceYamlPath,
+    isWorkspaceYaml: true,
+  }
+}
diff --git a/config/plugin-commands-config/test/configSet.test.ts b/config/plugin-commands-config/test/configSet.test.ts
index 4087df1320..a4d70cb679 100644
--- a/config/plugin-commands-config/test/configSet.test.ts
+++ b/config/plugin-commands-config/test/configSet.test.ts
@@ -290,3 +290,48 @@ test('config set with location=project and json=true', async () => {
     },
   })
 })
+
+test('config set when both pnpm-workspace.yaml and .npmrc exist, pnpm-workspace.yaml has priority', async () => {
+  const tmp = tempDir()
+  const configDir = path.join(tmp, 'global-config')
+  fs.mkdirSync(configDir, { recursive: true })
+  fs.writeFileSync(path.join(tmp, '.npmrc'), 'store-dir=~/store')
+  fs.writeFileSync(path.join(tmp, 'pnpm-workspace.yaml'), 'fetchRetries: 5')
+
+  await config.handler({
+    dir: process.cwd(),
+    cliOptions: {},
+    configDir,
+    location: 'project',
+    rawConfig: {},
+  }, ['set', 'fetch-timeout', '2000'])
+
+  expect(readYamlFile(path.join(tmp, 'pnpm-workspace.yaml'))).toEqual({
+    fetchRetries: 5,
+    fetchTimeout: 2000,
+  })
+  expect(readIniFileSync(path.join(tmp, '.npmrc'))).toEqual({
+    'store-dir': '~/store',
+  })
+})
+
+test('config set when only pnpm-workspace.yaml exists, writes to it', async () => {
+  const tmp = tempDir()
+  const configDir = path.join(tmp, 'global-config')
+  fs.mkdirSync(configDir, { recursive: true })
+  fs.writeFileSync(path.join(tmp, 'pnpm-workspace.yaml'), 'fetchRetries: 5')
+
+  await config.handler({
+    dir: process.cwd(),
+    cliOptions: {},
+    configDir,
+    location: 'project',
+    rawConfig: {},
+  }, ['set', 'fetch-timeout', '3000'])
+
+  expect(readYamlFile(path.join(tmp, 'pnpm-workspace.yaml'))).toEqual({
+    fetchRetries: 5,
+    fetchTimeout: 3000,
+  })
+  expect(fs.existsSync(path.join(tmp, '.npmrc'))).toBeFalsy()
+})