diff --git a/edgedb/con_utils.py b/edgedb/con_utils.py
index 78a450be..285790fc 100644
--- a/edgedb/con_utils.py
+++ b/edgedb/con_utils.py
@@ -706,6 +706,12 @@ def _parse_connect_dsn_and_args(
                     f'project defined cloud profile ("{cloud_profile}")'
                 ),
             )
+
+            opt_database_file = os.path.join(stash_dir, 'database')
+            if os.path.exists(opt_database_file):
+                with open(opt_database_file, 'rt') as f:
+                    database = f.read().strip()
+                resolved_config.set_database(database, "project")
         else:
             raise errors.ClientConnectionError(
                 f'Found `edgedb.toml` but the project is not initialized. '
diff --git a/tests/shared-client-testcases b/tests/shared-client-testcases
index f16d2c17..b8959be8 160000
--- a/tests/shared-client-testcases
+++ b/tests/shared-client-testcases
@@ -1 +1 @@
-Subproject commit f16d2c17f502ad5bd5c35d8872cd5dc962d0fb7e
+Subproject commit b8959be8968aceeeac2af3da7639de02b19d7030
diff --git a/tests/test_con_utils.py b/tests/test_con_utils.py
index 742391ba..c2820a6e 100644
--- a/tests/test_con_utils.py
+++ b/tests/test_con_utils.py
@@ -32,6 +32,7 @@
 
 
 class TestConUtils(unittest.TestCase):
+    maxDiff = 1000
 
     error_mapping = {
         'credentials_file_not_found': (
@@ -184,6 +185,9 @@ def run_testcase(self, testcase):
                             if 'cloud-profile' in v:
                                 profile = os.path.join(dir, 'cloud-profile')
                                 files[profile] = v['cloud-profile']
+                            if 'database' in v:
+                                database_file = os.path.join(dir, 'database')
+                                files[database_file] = v['database']
                             del files[f]
 
                     es.enter_context(