diff --git a/package.json b/package.json
index 5d00c9db1..d27a7a01d 100644
--- a/package.json
+++ b/package.json
@@ -4,8 +4,8 @@
     "description": "",
     "scripts": {
         "build": "pnpm -r build",
-        "test": "pnpm -r run test --silent",
-        "test-ci": "pnpm -r run test --silent",
+        "test": "ZENSTACK_TEST=1 pnpm -r run test --silent",
+        "test-ci": "ZENSTACK_TEST=1 pnpm -r run test --silent",
         "lint": "pnpm -r lint",
         "publish-all": "pnpm --filter \"./packages/**\" -r publish --access public",
         "publish-preview": "pnpm --filter \"./packages/**\" -r publish --registry http://localhost:4873"
diff --git a/packages/runtime/src/enhancements/model-meta.ts b/packages/runtime/src/enhancements/model-meta.ts
index 53fed4702..8109bbacc 100644
--- a/packages/runtime/src/enhancements/model-meta.ts
+++ b/packages/runtime/src/enhancements/model-meta.ts
@@ -1,20 +1,24 @@
 /* eslint-disable @typescript-eslint/no-var-requires */
 import { lowerCaseFirst } from 'lower-case-first';
-import { ModelMeta } from './types';
 import path from 'path';
+import { ModelMeta } from './types';
 
 /**
  * Load model meta from standard location.
  */
 export function getDefaultModelMeta(): ModelMeta {
     try {
-        if (process.env.NODE_ENV === 'test') {
-            // handling the case when running as tests, resolve relative to CWD
-            return require(path.join(process.cwd(), 'node_modules', '.zenstack', 'model-meta')).default;
-        } else {
-            return require('.zenstack/model-meta').default;
-        }
+        // normal load
+        return require('.zenstack/model-meta').default;
     } catch {
+        if (process.env.ZENSTACK_TEST === '1') {
+            try {
+                // special handling for running as tests, try resolving relative to CWD
+                return require(path.join(process.cwd(), 'node_modules', '.zenstack', 'model-meta')).default;
+            } catch {
+                throw new Error('Model meta cannot be loaded. Please make sure "zenstack generate" has been run.');
+            }
+        }
         throw new Error('Model meta cannot be loaded. Please make sure "zenstack generate" has been run.');
     }
 }
diff --git a/packages/runtime/src/enhancements/policy/index.ts b/packages/runtime/src/enhancements/policy/index.ts
index 59c4fb453..1fbe249f1 100644
--- a/packages/runtime/src/enhancements/policy/index.ts
+++ b/packages/runtime/src/enhancements/policy/index.ts
@@ -1,5 +1,7 @@
+/* eslint-disable @typescript-eslint/no-var-requires */
 /* eslint-disable @typescript-eslint/no-explicit-any */
 
+import path from 'path';
 import { AuthUser, DbClientContract } from '../../types';
 import { getDefaultModelMeta } from '../model-meta';
 import { makeProxy } from '../proxy';
@@ -74,9 +76,18 @@ export function withPolicy<DbClient extends object>(
 
 function getDefaultPolicy(): PolicyDef {
     try {
-        // eslint-disable-next-line @typescript-eslint/no-var-requires
         return require('.zenstack/policy').default;
     } catch {
+        if (process.env.ZENSTACK_TEST === '1') {
+            try {
+                // special handling for running as tests, try resolving relative to CWD
+                return require(path.join(process.cwd(), 'node_modules', '.zenstack', 'policy')).default;
+            } catch {
+                throw new Error(
+                    'Policy definition cannot be loaded from default location. Please make sure "zenstack generate" has been run.'
+                );
+            }
+        }
         throw new Error(
             'Policy definition cannot be loaded from default location. Please make sure "zenstack generate" has been run.'
         );
@@ -88,6 +99,14 @@ function getDefaultZodSchemas(): ZodSchemas | undefined {
         // eslint-disable-next-line @typescript-eslint/no-var-requires
         return require('.zenstack/zod');
     } catch {
+        if (process.env.ZENSTACK_TEST === '1') {
+            try {
+                // special handling for running as tests, try resolving relative to CWD
+                return require(path.join(process.cwd(), 'node_modules', '.zenstack', 'zod'));
+            } catch {
+                return undefined;
+            }
+        }
         return undefined;
     }
 }