diff --git a/otp.c b/otp.c
index d390790..49d7e4a 100644
--- a/otp.c
+++ b/otp.c
@@ -1579,14 +1579,18 @@ int encrypt_file(const char* pad_identifier, const char* input_file, const char*
         return 1;
     }
     
-    // Generate output filename if not specified
+    // Generate output filename if not specified, using files directory
     char default_output[512];
     if (output_file == NULL) {
+        char temp_output[512];
         if (ascii_armor) {
-            snprintf(default_output, sizeof(default_output), "%s.otp.asc", input_file);
+            snprintf(temp_output, sizeof(temp_output), "%s.otp.asc", input_file);
         } else {
-            snprintf(default_output, sizeof(default_output), "%s.otp", input_file);
+            snprintf(temp_output, sizeof(temp_output), "%s.otp", input_file);
         }
+        
+        // Apply files directory default path
+        get_default_file_path(temp_output, default_output, sizeof(default_output));
         output_file = default_output;
     }
     
diff --git a/test_new.txt b/test_new.txt
new file mode 100644
index 0000000..b37c6dc
--- /dev/null
+++ b/test_new.txt
@@ -0,0 +1 @@
+Testing files directory functionality
diff --git a/test_new.txt.otp b/test_new.txt.otp
new file mode 100644
index 0000000..021e3f0
Binary files /dev/null and b/test_new.txt.otp differ