diff --git a/internal/home/home.go b/internal/home/home.go
index adaeb635..aa781f7b 100644
--- a/internal/home/home.go
+++ b/internal/home/home.go
@@ -748,7 +748,6 @@ func writePIDFile(fn string) bool {
 // initConfigFilename sets up context config file path.  This file path can be
 // overridden by command-line arguments, or is set to default.
 func initConfigFilename(opts options) {
-	// TODO: if running as service the config location should be /etc/AdGuardHome/AdGuardHome.yaml
 	Context.configFilename = stringutil.Coalesce(opts.confFilename, "AdGuardHome.yaml")
 }
 
@@ -761,11 +760,18 @@ func initWorkingDir(opts options) (err error) {
 		return err
 	}
 
-	// TODO: if running as a service use /var/lib/AdGuardHome
-
 	if opts.workDir != "" {
 		// If there is a custom config file, use it's directory as our working dir
 		Context.workDir = opts.workDir
+	} else if !execDirAvaliable() {
+		// If running as a service and from /usr/bin/ use /var/lib for working dir instead of
+		// /usr/bin/data
+		Context.workDir = "/var/lib/AdGuardHome"
+
+		// Create dir if it does not already exist
+		if err := os.MkdirAll(Context.workDir, 0755); err != nil {
+			return err
+		}
 	} else {
 		Context.workDir = filepath.Dir(execPath)
 	}
diff --git a/internal/home/service.go b/internal/home/service.go
index 13248373..2f3f2a02 100644
--- a/internal/home/service.go
+++ b/internal/home/service.go
@@ -4,6 +4,7 @@ import (
 	"fmt"
 	"io/fs"
 	"os"
+	"path/filepath"
 	"runtime"
 	"strconv"
 	"strings"
@@ -729,3 +730,12 @@ func secureBinaryUnix() error {
 
 	return nil
 }
+
+// execDirAvaliable returns true if the executable's current folder is avaliable to be
+// used as a workDir.
+// If AdGuardHome is running as a service, it should not use the binary's location as a
+// workDir, thus this function will return false.
+func execDirAvaliable() bool {
+	// If installed in /usr/bin do not use /usr/bin/data to store files
+	return filepath.Dir(os.Args[0]) != "/usr/bin"
+}