diff --git a/cmd/invoke.go b/cmd/invoke.go
index 9ff96d37fa..d36e286d5e 100644
--- a/cmd/invoke.go
+++ b/cmd/invoke.go
@@ -179,6 +179,15 @@ func runInvoke(cmd *cobra.Command, _ []string, newClient ClientFactory) (err err
 			return fmt.Errorf("--extension flag is only valid with cloudevent format")
 		}
 	}
+	// If --file was specified, read the file contents into cfg.Data now
+	// that all config (including interactive --confirm prompts) is finalized.
+	if cfg.File != "" {
+		content, err := os.ReadFile(cfg.File)
+		if err != nil {
+			return err
+		}
+		cfg.Data = content
+	}
 
 	// Client instance from env vars, flags, args and user prompts (if --confirm)
 	client, done := newClient(ClientConfig{Verbose: cfg.Verbose, InsecureSkipVerify: cfg.Insecure})
@@ -197,15 +206,6 @@ func runInvoke(cmd *cobra.Command, _ []string, newClient ClientFactory) (err err
 		Extensions:  cfg.extensionsMap(),
 	}
 
-	// If --file was specified, use its content for message data
-	if cfg.File != "" {
-		content, err := os.ReadFile(cfg.File)
-		if err != nil {
-			return err
-		}
-		m.Data = content
-	}
-
 	// Invoke
 	metadata, body, err := client.Invoke(cmd.Context(), cfg.Path, cfg.Target, m)
 	if err != nil {
@@ -276,15 +276,6 @@ func newInvokeConfig() (cfg invokeConfig, err error) {
 		Extensions:  viper.GetStringSlice("extension"),
 	}
 
-	// If file was passed, read it in as data
-	if cfg.File != "" {
-		b, err := os.ReadFile(cfg.File)
-		if err != nil {
-			return cfg, err
-		}
-		cfg.Data = b
-	}
-
 	switch strings.ToLower(cfg.Format) {
 	case "cloudevent", "cloudevents":
 		cfg.Format = "cloudevent"
diff --git a/cmd/invoke_test.go b/cmd/invoke_test.go
index 7feae43f03..0601de26b2 100644
--- a/cmd/invoke_test.go
+++ b/cmd/invoke_test.go
@@ -4,9 +4,13 @@ import (
 	"context"
 	"errors"
 	"fmt"
+	"io"
 	"net"
 	"net/http"
 	"os"
+	"path/filepath"
+	"strings"
+	"sync"
 	"sync/atomic"
 	"testing"
 	"time"
@@ -78,3 +82,105 @@ func TestInvoke(t *testing.T) {
 		t.Fatal("function was not invoked")
 	}
 }
+
+// TestInvoke_FileFlag ensures that when --file is provided, the file's
+// contents are read and sent as the invocation data.
+func TestInvoke_FileFlag(t *testing.T) {
+	root := FromTempDirectory(t)
+
+	// Create a test function to be invoked
+	if _, err := fn.New().Init(fn.Function{Runtime: "go", Root: root}); err != nil {
+		t.Fatal(err)
+	}
+
+	// Create a test data file
+	testData := "custom file content for invoke test"
+	testFile := filepath.Join(root, "testdata.txt")
+	if err := os.WriteFile(testFile, []byte(testData), 0644); err != nil {
+		t.Fatal(err)
+	}
+
+	// Track what data is received by the mock server
+	var (
+		receivedData []byte
+		mu           sync.Mutex
+	)
+
+	// Mock Runner: starts a service which captures request body
+	runner := mock.NewRunner()
+	runner.RunFn = func(ctx context.Context, f fn.Function, _ string, _ time.Duration) (job *fn.Job, err error) {
+		var (
+			l net.Listener
+			h = http.NewServeMux()
+			s = http.Server{Handler: h}
+		)
+		if l, err = net.Listen("tcp4", "127.0.0.1:"); err != nil {
+			t.Fatal(err)
+		}
+		h.HandleFunc("/", func(res http.ResponseWriter, req *http.Request) {
+			body, _ := io.ReadAll(req.Body)
+			mu.Lock()
+			receivedData = body
+			mu.Unlock()
+			_, _ = res.Write([]byte("ok"))
+		})
+		go func() {
+			if err = s.Serve(l); err != nil && !errors.Is(err, http.ErrServerClosed) {
+				fmt.Fprintf(os.Stderr, "error serving: %v", err)
+			}
+		}()
+		host, port, _ := net.SplitHostPort(l.Addr().String())
+		errs := make(chan error, 10)
+		stop := func() error { _ = s.Close(); return nil }
+		return fn.NewJob(f, host, port, errs, stop, false)
+	}
+
+	// Run the mock http service
+	f, err := fn.NewFunction(root)
+	if err != nil {
+		t.Fatal(err)
+	}
+	client := fn.New(fn.WithRunner(runner))
+	job, err := client.Run(t.Context(), f)
+	if err != nil {
+		t.Fatal(err)
+	}
+	t.Cleanup(func() { _ = job.Stop() })
+
+	// Test that the invoke command reads and sends the file content
+	cmd := NewInvokeCmd(NewClient)
+	cmd.SetArgs([]string{"--file", testFile, "--content-type", "text/plain"})
+
+	if err := cmd.Execute(); err != nil {
+		t.Fatal(err)
+	}
+
+	mu.Lock()
+	got := string(receivedData)
+	mu.Unlock()
+	if got != testData {
+		t.Fatalf("expected file content %q to be sent, got %q", testData, got)
+	}
+}
+
+// TestInvoke_FileFlagNonExistent ensures that specifying a non-existent
+// file via --file returns an appropriate error.
+func TestInvoke_FileFlagNonExistent(t *testing.T) {
+	root := FromTempDirectory(t)
+
+	// Create a test function
+	if _, err := fn.New().Init(fn.Function{Runtime: "go", Root: root}); err != nil {
+		t.Fatal(err)
+	}
+
+	cmd := NewInvokeCmd(NewClient)
+	cmd.SetArgs([]string{"--file", "nonexistent_file.txt"})
+	err := cmd.Execute()
+
+	if err == nil {
+		t.Fatal("invoking with a nonexistent file should error")
+	}
+	if !strings.Contains(err.Error(), "nonexistent_file.txt") {
+		t.Fatalf("error should mention the missing file, got: %v", err)
+	}
+}