diff --git a/src/elevenlabs/client.py b/src/elevenlabs/client.py
index 6fd75a53..63c66ebe 100644
--- a/src/elevenlabs/client.py
+++ b/src/elevenlabs/client.py
@@ -19,6 +19,15 @@ def get_base_url_host(base_url: str) -> str:
     return httpx.URL(base_url).host
 
 
+def _resolve_api_key(api_key: typing.Optional[str]) -> str:
+    resolved = api_key if api_key is not None else os.getenv("ELEVENLABS_API_KEY")
+    if not resolved:
+        raise ValueError(
+            "Please pass in your ElevenLabs API Key or export ELEVENLABS_API_KEY in your environment."
+        )
+    return resolved
+
+
 class ElevenLabs(BaseElevenLabs):
     """
     Use this class to access the different functions within the SDK. You can instantiate any number of clients with different configuration that will propogate to these functions.
@@ -47,14 +56,15 @@ def __init__(
         *,
         base_url: typing.Optional[str] = None,
         environment: ElevenLabsEnvironment = ElevenLabsEnvironment.PRODUCTION,
-        api_key: typing.Optional[str] = os.getenv("ELEVENLABS_API_KEY"),
+        api_key: typing.Optional[str] = None,
         timeout: typing.Optional[float] = 240,
         httpx_client: typing.Optional[httpx.Client] = None
     ):
+        resolved_api_key = _resolve_api_key(api_key)
         super().__init__(
             base_url=base_url,
             environment=environment,
-            api_key=api_key,
+            api_key=resolved_api_key,
             timeout=timeout,
             httpx_client=httpx_client
         )
@@ -93,14 +103,15 @@ def __init__(
         *,
         base_url: typing.Optional[str] = None,
         environment: ElevenLabsEnvironment = ElevenLabsEnvironment.PRODUCTION,
-        api_key: typing.Optional[str] = os.getenv("ELEVENLABS_API_KEY"),
+        api_key: typing.Optional[str] = None,
         timeout: typing.Optional[float] = 240,
         httpx_client: typing.Optional[httpx.AsyncClient] = None
     ):
+        resolved_api_key = _resolve_api_key(api_key)
         super().__init__(
             base_url=base_url,
             environment=environment,
-            api_key=api_key,
+            api_key=resolved_api_key,
             timeout=timeout,
             httpx_client=httpx_client
         )
diff --git a/tests/test_client_init.py b/tests/test_client_init.py
new file mode 100644
index 00000000..e2d27ca9
--- /dev/null
+++ b/tests/test_client_init.py
@@ -0,0 +1,70 @@
+import os
+from unittest import mock
+
+import pytest
+
+from elevenlabs.client import ElevenLabs, AsyncElevenLabs, _resolve_api_key
+
+
+class TestResolveApiKey:
+    def test_explicit_key(self):
+        assert _resolve_api_key("my-key") == "my-key"
+
+    def test_env_var_fallback(self):
+        with mock.patch.dict(os.environ, {"ELEVENLABS_API_KEY": "env-key"}):
+            assert _resolve_api_key(None) == "env-key"
+
+    def test_explicit_key_takes_precedence_over_env(self):
+        with mock.patch.dict(os.environ, {"ELEVENLABS_API_KEY": "env-key"}):
+            assert _resolve_api_key("explicit-key") == "explicit-key"
+
+    def test_missing_key_raises(self):
+        with mock.patch.dict(os.environ, {}, clear=True):
+            with pytest.raises(ValueError, match="API Key"):
+                _resolve_api_key(None)
+
+    def test_empty_string_does_not_fall_through_to_env(self):
+        with mock.patch.dict(os.environ, {"ELEVENLABS_API_KEY": "env-key"}):
+            with pytest.raises(ValueError, match="API Key"):
+                _resolve_api_key("")
+
+    def test_empty_env_var_raises(self):
+        with mock.patch.dict(os.environ, {"ELEVENLABS_API_KEY": ""}, clear=True):
+            with pytest.raises(ValueError, match="API Key"):
+                _resolve_api_key(None)
+
+
+class TestElevenLabsInit:
+    def test_explicit_api_key(self):
+        client = ElevenLabs(api_key="test-key")
+        headers = client._client_wrapper.get_headers()
+        assert headers["xi-api-key"] == "test-key"
+
+    def test_env_var_api_key(self):
+        with mock.patch.dict(os.environ, {"ELEVENLABS_API_KEY": "env-key"}):
+            client = ElevenLabs()
+            headers = client._client_wrapper.get_headers()
+            assert headers["xi-api-key"] == "env-key"
+
+    def test_missing_api_key_raises(self):
+        with mock.patch.dict(os.environ, {}, clear=True):
+            with pytest.raises(ValueError, match="API Key"):
+                ElevenLabs()
+
+
+class TestAsyncElevenLabsInit:
+    def test_explicit_api_key(self):
+        client = AsyncElevenLabs(api_key="test-key")
+        headers = client._client_wrapper.get_headers()
+        assert headers["xi-api-key"] == "test-key"
+
+    def test_env_var_api_key(self):
+        with mock.patch.dict(os.environ, {"ELEVENLABS_API_KEY": "env-key"}):
+            client = AsyncElevenLabs()
+            headers = client._client_wrapper.get_headers()
+            assert headers["xi-api-key"] == "env-key"
+
+    def test_missing_api_key_raises(self):
+        with mock.patch.dict(os.environ, {}, clear=True):
+            with pytest.raises(ValueError, match="API Key"):
+                AsyncElevenLabs()
diff --git a/tests/test_convai_imports.py b/tests/test_convai_imports.py
index 7cd9f0b8..08beaaa3 100644
--- a/tests/test_convai_imports.py
+++ b/tests/test_convai_imports.py
@@ -2,5 +2,5 @@
 
 
 def test_convai_imports():
-    client = ElevenLabs(api_key="")
+    client = ElevenLabs(api_key="test")
     client.conversational_ai.agents