diff --git a/nemoguardrails/rails/llm/config.py b/nemoguardrails/rails/llm/config.py
index d0e0cf03e..1004adef7 100644
--- a/nemoguardrails/rails/llm/config.py
+++ b/nemoguardrails/rails/llm/config.py
@@ -1473,7 +1473,7 @@ def from_path(
         """
         # If the config path is a file, we load the YAML content.
         # Otherwise, if it's a folder, we iterate through all files.
-        if config_path.endswith(".yaml") or config_path.endswith(".yml"):
+        if os.path.isfile(config_path) and config_path.endswith((".yaml", ".yml")):
             with open(config_path) as f:
                 raw_config = yaml.safe_load(f.read())
 
diff --git a/tests/test_rails_config.py b/tests/test_rails_config.py
index 8ccbb9497..6fe54f487 100644
--- a/tests/test_rails_config.py
+++ b/tests/test_rails_config.py
@@ -15,6 +15,8 @@
 
 import logging
 import os
+import tempfile
+from pathlib import Path
 from unittest import mock
 
 import pytest
@@ -117,6 +119,33 @@ def test_rails_config_from_path():
     assert config.sample_conversation is not None
 
 
+def test_rails_config_from_path_yml_extension():
+    """Test loading RailsConfig when the config directory ends with a .yml suffix.
+
+    Ensures a directory mistakenly named with a YAML extension is treated as a directory,
+    not a file, and its internal YAML config is loaded properly.
+    """
+
+    with tempfile.TemporaryDirectory(suffix=".yml") as temp_dir:
+        temp_path = Path(temp_dir)
+
+        minimal_yaml = (
+            "models: []\n"
+            "instructions:\n"
+            "  - type: general\n"
+            "    content: Test instruction\n"
+            "sample_conversation: Test conversation\n"
+        )
+
+        # place a config file inside the directory-with-.yml suffix
+        (temp_path / "config.yml").write_text(minimal_yaml)
+
+        config = RailsConfig.from_path(str(temp_path))
+        assert config is not None
+        assert len(config.instructions) > 0
+        assert config.sample_conversation is not None
+
+
 def test_rails_config_parse_obj():
     """Test parsing RailsConfig from object."""