diff --git a/packages/bundler/package.json b/packages/bundler/package.json
index 37de5f54ba4..0a7eae35e2f 100644
--- a/packages/bundler/package.json
+++ b/packages/bundler/package.json
@@ -38,7 +38,7 @@
     "!dist/test/**"
   ],
   "dependencies": {
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@rollup/plugin-virtual": "~3.0.1",
     "@rollup/plugin-commonjs": "~23.0.2",
     "@rollup/plugin-json": "~5.0.1",
diff --git a/packages/cadl-vscode/package.json b/packages/cadl-vscode/package.json
index 668164ddb56..281acf63bf9 100644
--- a/packages/cadl-vscode/package.json
+++ b/packages/cadl-vscode/package.json
@@ -121,7 +121,7 @@
     "@types/mocha": "~10.0.0",
     "@types/node": "~18.11.9",
     "@types/vscode": "~1.53.0",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/eslint-config-cadl": "~0.5.0",
     "@cadl-lang/internal-build-utils": "~0.3.2",
     "eslint": "^8.12.0",
diff --git a/packages/compiler/CHANGELOG.json b/packages/compiler/CHANGELOG.json
index 8db87071fa3..6e5159a8347 100644
--- a/packages/compiler/CHANGELOG.json
+++ b/packages/compiler/CHANGELOG.json
@@ -1,6 +1,18 @@
 {
   "name": "@cadl-lang/compiler",
   "entries": [
+    {
+      "version": "0.38.4",
+      "tag": "@cadl-lang/compiler_v0.38.4",
+      "date": "Thu, 15 Dec 2022 02:21:08 GMT",
+      "comments": {
+        "patch": [
+          {
+            "comment": "Fix: `--arg` wasn't being picked up"
+          }
+        ]
+      }
+    },
     {
       "version": "0.38.3",
       "tag": "@cadl-lang/compiler_v0.38.3",
diff --git a/packages/compiler/CHANGELOG.md b/packages/compiler/CHANGELOG.md
index 46fb9a212d5..785332fd7b9 100644
--- a/packages/compiler/CHANGELOG.md
+++ b/packages/compiler/CHANGELOG.md
@@ -1,6 +1,13 @@
 # Change Log - @cadl-lang/compiler
 
-This log was last generated on Fri, 09 Dec 2022 22:03:04 GMT and should not be manually modified.
+This log was last generated on Thu, 15 Dec 2022 02:21:08 GMT and should not be manually modified.
+
+## 0.38.4
+Thu, 15 Dec 2022 02:21:08 GMT
+
+### Patches
+
+- Fix: `--arg` wasn't being picked up
 
 ## 0.38.3
 Fri, 09 Dec 2022 22:03:04 GMT
diff --git a/packages/compiler/config/config-interpolation.ts b/packages/compiler/config/config-interpolation.ts
index 0c333d81b94..2c4556bac14 100644
--- a/packages/compiler/config/config-interpolation.ts
+++ b/packages/compiler/config/config-interpolation.ts
@@ -55,8 +55,9 @@ function resolveArgs(
   if (declarations !== undefined) {
     for (const [name, definition] of Object.entries(declarations)) {
       unmatchedArgs.delete(name);
-      result[name] =
-        args?.[name] ?? ignoreDiagnostics(resolveValue(definition.default, predefinedVariables));
+      result[name] = ignoreDiagnostics(
+        resolveValue(args?.[name] ?? definition.default, predefinedVariables)
+      );
     }
   }
 
diff --git a/packages/compiler/core/cli/cli.ts b/packages/compiler/core/cli/cli.ts
index be29e62b04a..555e39673ee 100644
--- a/packages/compiler/core/cli/cli.ts
+++ b/packages/compiler/core/cli/cli.ts
@@ -116,6 +116,7 @@ async function main() {
           })
           .option("arg", {
             type: "array",
+            alias: "args",
             string: true,
             describe: "Key/value of arguments that are used in the configuration.",
           });
diff --git a/packages/compiler/package.json b/packages/compiler/package.json
index dce59d8d374..49e14eff8f3 100644
--- a/packages/compiler/package.json
+++ b/packages/compiler/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@cadl-lang/compiler",
-  "version": "0.38.3",
+  "version": "0.38.4",
   "description": "Cadl Compiler Preview",
   "author": "Microsoft Corporation",
   "license": "MIT",
diff --git a/packages/compiler/test/config/config-interpolation.test.ts b/packages/compiler/test/config/config-interpolation.test.ts
index a4d66b737b0..6d2fb0e02fa 100644
--- a/packages/compiler/test/config/config-interpolation.test.ts
+++ b/packages/compiler/test/config/config-interpolation.test.ts
@@ -170,6 +170,17 @@ describe("compiler: config interpolation", () => {
           outputDir: "/github-dir/my-output",
         });
       });
+
+      it("expand predefined variables inside args passed", () => {
+        const resolved = expectExpandConfigVariables(config, {
+          cwd: "/dev/wd",
+          args: { "repo-dir": "{cwd}/github-dir" },
+        });
+        deepStrictEqual(resolved, {
+          ...config,
+          outputDir: "/dev/wd/github-dir/my-output",
+        });
+      });
     });
 
     describe("interpolating env", () => {
diff --git a/packages/html-program-viewer/package.json b/packages/html-program-viewer/package.json
index 89a894d1957..667251e6b19 100644
--- a/packages/html-program-viewer/package.json
+++ b/packages/html-program-viewer/package.json
@@ -51,7 +51,7 @@
     "!dist/test/**"
   ],
   "peerDependencies": {
-    "@cadl-lang/compiler": "~0.38.3"
+    "@cadl-lang/compiler": "~0.38.4"
   },
   "dependencies": {
     "prettier": "~2.7.1",
@@ -66,7 +66,7 @@
     "@types/prettier": "2.6.0",
     "@types/react": "~18.0.5",
     "@types/react-dom": "~18.0.1",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/eslint-config-cadl": "~0.5.0",
     "@babel/core": "^7.0.0",
     "eslint": "^8.12.0",
diff --git a/packages/library-linter/package.json b/packages/library-linter/package.json
index f3b7e577a20..0818ee478c2 100644
--- a/packages/library-linter/package.json
+++ b/packages/library-linter/package.json
@@ -51,12 +51,12 @@
     "!dist/test/**"
   ],
   "peerDependencies": {
-    "@cadl-lang/compiler": "~0.38.3"
+    "@cadl-lang/compiler": "~0.38.4"
   },
   "devDependencies": {
     "@types/mocha": "~10.0.0",
     "@types/node": "~18.11.9",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/eslint-config-cadl": "~0.5.0",
     "eslint": "^8.12.0",
     "mocha": "~10.1.0",
diff --git a/packages/lint/package.json b/packages/lint/package.json
index c69ce552578..e7df257a95c 100644
--- a/packages/lint/package.json
+++ b/packages/lint/package.json
@@ -50,12 +50,12 @@
     "!dist/test/**"
   ],
   "peerDependencies": {
-    "@cadl-lang/compiler": "~0.38.3"
+    "@cadl-lang/compiler": "~0.38.4"
   },
   "devDependencies": {
     "@types/mocha": "~10.0.0",
     "@types/node": "~18.11.9",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/eslint-config-cadl": "~0.5.0",
     "@cadl-lang/eslint-plugin": "~0.38.0",
     "eslint": "^8.12.0",
diff --git a/packages/migrate/package.json b/packages/migrate/package.json
index 6a1fbead217..f2d696df470 100644
--- a/packages/migrate/package.json
+++ b/packages/migrate/package.json
@@ -39,13 +39,13 @@
   ],
   "dependencies": {
     "globby": "~13.1.1",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/compiler-v0.37": "npm:@cadl-lang/compiler@0.37.0"
   },
   "devDependencies": {
     "@types/mocha": "~10.0.0",
     "@types/node": "~18.11.9",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/eslint-config-cadl": "~0.5.0",
     "@cadl-lang/eslint-plugin": "~0.38.0",
     "eslint": "^8.12.0",
diff --git a/packages/openapi/package.json b/packages/openapi/package.json
index c0968bff162..dfc29efe73f 100644
--- a/packages/openapi/package.json
+++ b/packages/openapi/package.json
@@ -52,13 +52,13 @@
     "!dist/test/**"
   ],
   "peerDependencies": {
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/rest": "~0.38.1"
   },
   "devDependencies": {
     "@types/mocha": "~10.0.0",
     "@types/node": "~18.11.9",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/rest": "~0.38.1",
     "@cadl-lang/eslint-config-cadl": "~0.5.0",
     "@cadl-lang/library-linter": "~0.38.0",
diff --git a/packages/openapi3/package.json b/packages/openapi3/package.json
index 9affc9690cb..74927f91d84 100644
--- a/packages/openapi3/package.json
+++ b/packages/openapi3/package.json
@@ -53,14 +53,14 @@
   ],
   "peerDependencies": {
     "@cadl-lang/versioning": "~0.38.0",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/rest": "~0.38.1",
     "@cadl-lang/openapi": "~0.38.0"
   },
   "devDependencies": {
     "@types/mocha": "~10.0.0",
     "@types/node": "~18.11.9",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/rest": "~0.38.1",
     "@cadl-lang/openapi": "~0.38.0",
     "@cadl-lang/versioning": "~0.38.0",
diff --git a/packages/playground/package.json b/packages/playground/package.json
index 8660a2bd52f..f26b5d214d1 100644
--- a/packages/playground/package.json
+++ b/packages/playground/package.json
@@ -42,7 +42,7 @@
   ],
   "dependencies": {
     "@cadl-lang/versioning": "~0.38.0",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/rest": "~0.38.1",
     "@cadl-lang/openapi3": "~0.38.0",
     "@cadl-lang/openapi": "~0.38.0",
diff --git a/packages/prettier-plugin-cadl/package.json b/packages/prettier-plugin-cadl/package.json
index 446e042508c..73d803fc82e 100644
--- a/packages/prettier-plugin-cadl/package.json
+++ b/packages/prettier-plugin-cadl/package.json
@@ -15,7 +15,7 @@
     "prettier": "~2.7.1"
   },
   "devDependencies": {
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/internal-build-utils": "~0.3.2",
     "@rollup/plugin-commonjs": "~23.0.2",
     "@rollup/plugin-json": "~5.0.1",
diff --git a/packages/ref-doc/package.json b/packages/ref-doc/package.json
index b208bc1b7d3..b5d133d8352 100644
--- a/packages/ref-doc/package.json
+++ b/packages/ref-doc/package.json
@@ -47,11 +47,11 @@
     "!dist/test/**"
   ],
   "dependencies": {
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "prettier": "~2.7.1"
   },
   "devDependencies": {
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/eslint-config-cadl": "~0.5.0",
     "@types/mocha": "~10.0.0",
     "@types/node": "~18.11.9",
diff --git a/packages/rest/package.json b/packages/rest/package.json
index d061522804f..ac38b623b6e 100644
--- a/packages/rest/package.json
+++ b/packages/rest/package.json
@@ -56,12 +56,12 @@
     "!dist/test/**"
   ],
   "peerDependencies": {
-    "@cadl-lang/compiler": "~0.38.3"
+    "@cadl-lang/compiler": "~0.38.4"
   },
   "devDependencies": {
     "@types/mocha": "~10.0.0",
     "@types/node": "~18.11.9",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/eslint-config-cadl": "~0.5.0",
     "@cadl-lang/library-linter": "~0.38.0",
     "@cadl-lang/eslint-plugin": "~0.38.0",
diff --git a/packages/samples/package.json b/packages/samples/package.json
index 8bb5ff7a1b8..e7058162847 100644
--- a/packages/samples/package.json
+++ b/packages/samples/package.json
@@ -33,7 +33,7 @@
   ],
   "dependencies": {
     "@cadl-lang/versioning": "~0.38.0",
-    "@cadl-lang/compiler": "~0.38.3",
+    "@cadl-lang/compiler": "~0.38.4",
     "@cadl-lang/rest": "~0.38.1",
     "@cadl-lang/openapi": "~0.38.0",
     "@cadl-lang/openapi3": "~0.38.0",
diff --git a/packages/versioning/package.json b/packages/versioning/package.json
index d890cf3f0bd..c79f9d0b39c 100644
--- a/packages/versioning/package.json
+++ b/packages/versioning/package.json
@@ -52,7 +52,7 @@
     "!dist/test/**"
   ],
   "dependencies": {
-    "@cadl-lang/compiler": "~0.38.3"
+    "@cadl-lang/compiler": "~0.38.4"
   },
   "devDependencies": {
     "@types/mocha": "~10.0.0",