diff --git a/src/khoj/processor/tools/run_code.py b/src/khoj/processor/tools/run_code.py
index 26edad27..c62c710e 100644
--- a/src/khoj/processor/tools/run_code.py
+++ b/src/khoj/processor/tools/run_code.py
@@ -39,7 +39,7 @@ from khoj.utils.rawconfig import LocationData
 logger = logging.getLogger(__name__)
 
 
-SANDBOX_URL = os.getenv("KHOJ_TERRARIUM_URL", "http://localhost:8080")
+SANDBOX_URL = os.getenv("KHOJ_TERRARIUM_URL")
 DEFAULT_E2B_TEMPLATE = "pmt2o0ghpang8gbiys57"
 
 
diff --git a/src/khoj/routers/helpers.py b/src/khoj/routers/helpers.py
index 3bfbdb4c..4cad0dd9 100644
--- a/src/khoj/routers/helpers.py
+++ b/src/khoj/routers/helpers.py
@@ -118,6 +118,7 @@ from khoj.utils.helpers import (
     ToolDefinition,
     get_file_type,
     in_debug_mode,
+    is_code_sandbox_enabled,
     is_none_or_empty,
     is_operator_enabled,
     is_valid_url,
@@ -370,6 +371,8 @@ async def aget_data_sources_and_output_format(
             continue
         if source in [ConversationCommand.Online, ConversationCommand.Webpage] and not is_web_search_enabled():
             continue
+        if source == ConversationCommand.Code and not is_code_sandbox_enabled():
+            continue
         source_options[source.value] = description
         if len(agent_sources) == 0 or source.value in agent_sources:
             source_options_str += f'- "{source.value}": "{description}"\n'
diff --git a/src/khoj/routers/research.py b/src/khoj/routers/research.py
index d242c5b9..5f8719ce 100644
--- a/src/khoj/routers/research.py
+++ b/src/khoj/routers/research.py
@@ -34,6 +34,7 @@ from khoj.utils.helpers import (
     ConversationCommand,
     ToolDefinition,
     dict_to_tuple,
+    is_code_sandbox_enabled,
     is_none_or_empty,
     is_operator_enabled,
     is_web_search_enabled,
@@ -120,6 +121,10 @@ async def apick_next_tool(
         # Skip showing web search tool if agent has no access to internet
         if tool in web_research_tools and not is_web_search_enabled():
             continue
+        # Skip showing code tool if agent has no access to code execution sandbox
+        if tool == ConversationCommand.PythonCoder and not is_code_sandbox_enabled():
+            continue
+        # Format description with relevant usage limits
         if tool == ConversationCommand.SemanticSearchFiles:
             description = tool_data.description.format(max_search_queries=max_document_searches)
         elif tool == ConversationCommand.ReadWebpage:
diff --git a/src/khoj/utils/helpers.py b/src/khoj/utils/helpers.py
index a43521d2..c746455f 100644
--- a/src/khoj/utils/helpers.py
+++ b/src/khoj/utils/helpers.py
@@ -777,6 +777,12 @@ def is_operator_enabled():
     return is_env_var_true("KHOJ_OPERATOR_ENABLED")
 
 
+def is_code_sandbox_enabled():
+    """Check if Khoj can run code in sandbox.
+    Set KHOJ_TERRARIUM_URL or E2B api key via env var to enable it."""
+    return not is_none_or_empty(os.getenv("KHOJ_TERRARIUM_URL")) or is_e2b_code_sandbox_enabled()
+
+
 def is_valid_url(url: str) -> bool:
     """Check if a string is a valid URL"""
     try: