diff --git a/scripts/test_env.py b/scripts/test_env.py
index 9ab3270135e..748aac96254 100755
--- a/scripts/test_env.py
+++ b/scripts/test_env.py
@@ -77,7 +77,9 @@ def wait_for_genesis(self, n_tries: int):
                 logging.info(f"Error connecting to genesis peer: {e}. Sleeping 1 second...")
                 time.sleep(1)
         logging.critical(f"Genesis block wasn't created within {n_tries} seconds. Aborting...")
-        cleanup(self.out_dir)
+        cleanup(self.out_dir, True)
+        logging.critical(f"Test environment directory `{self.out_dir}` was left intact. "
+                         f"Inspect it or use `cleanup` subcommand to remove it.")
         sys.exit(2)
 
     def run(self):
@@ -148,11 +150,10 @@ def run(self):
         logging.info(f"Running peer {self.name}...")
 
         # FD never gets closed
-        stdout_file = open(self.peer_dir / ".stdout", "w")
-        stderr_file = open(self.peer_dir / ".stderr", "w")
+        log_file = open(self.peer_dir / "log.txt", "w")
         # These processes are created detached from the parent process already
         subprocess.Popen([self.name, "--config", self.config_path],
-                    executable=self.out_dir / "peers/irohad", stdout=stdout_file, stderr=stderr_file)
+                    executable=self.out_dir / "peers/irohad", stdout=log_file, stderr=log_file)
 
 def pos_int(arg):
     if int(arg) > 0:
@@ -241,7 +242,7 @@ def main(args: argparse.Namespace):
     if args.command == "setup":
         setup(args)
     elif args.command == "cleanup":
-        cleanup(args.out_dir)
+        cleanup(args.out_dir, False)
 
 def setup(args: argparse.Namespace):
     logging.info(f"Starting Iroha network with {args.n_peers} peers...")
@@ -254,11 +255,14 @@ def setup(args: argparse.Namespace):
 
     Network(args).run()
 
-def cleanup(out_dir: pathlib.Path):
+def cleanup(out_dir: pathlib.Path, keep_out_dir: bool):
     logging.info("Killing peer processes...")
     subprocess.run(["pkill", "-9", "iroha"])
-    logging.info(f"Cleaning up test directory `{out_dir}`...")
-    shutil.rmtree(out_dir)
+    if keep_out_dir:
+        logging.info(f"Leaving test directory `{out_dir}` as-is...")
+    else:
+        logging.info(f"Cleaning up test directory `{out_dir}`...")
+        shutil.rmtree(out_dir)