diff --git a/bitbake/lib/bb/command.py b/bitbake/lib/bb/command.py
index 60f9ac08aa..29b0a53e98 100644
--- a/bitbake/lib/bb/command.py
+++ b/bitbake/lib/bb/command.py
@@ -273,7 +273,8 @@ class CommandsSync:
 
     def updateConfig(self, command, params):
         options = params[0]
-        command.cooker.updateConfigOpts(options)
+        environment = params[1]
+        command.cooker.updateConfigOpts(options, environment)
 
 class CommandsAsync:
     """
diff --git a/bitbake/lib/bb/cooker.py b/bitbake/lib/bb/cooker.py
index 95f65ac685..9086f92e5c 100644
--- a/bitbake/lib/bb/cooker.py
+++ b/bitbake/lib/bb/cooker.py
@@ -489,9 +489,29 @@ class BBCooker:
 
         self.handleCollections( self.data.getVar("BBFILE_COLLECTIONS", True) )
 
-    def updateConfigOpts(self,options):
+    def updateConfigOpts(self, options, environment):
         for o in options:
             setattr(self.configuration, o, options[o])
+        clean = True
+        for k in bb.utils.approved_variables():
+            if k in environment and k not in self.configuration.env:
+                logger.debug(1, "Updating environment variable %s to %s" % (k, environment[k]))
+                self.configuration.env[k] = environment[k]
+                clean = False
+            if k in self.configuration.env and k not in environment:
+                logger.debug(1, "Updating environment variable %s (deleted)" % (k))
+                del self.configuration.env[k]
+                clean = False
+            if k not in self.configuration.env and k not in environment:
+                 continue
+            if environment[k] != self.configuration.env[k]:
+                logger.debug(1, "Updating environment variable %s to %s" % (k, environment[k]))
+                self.configuration.env[k] = environment[k]
+                clean = False
+        if not clean:
+            logger.debug(1, "Base environment change, triggering reparse")
+            self.baseconfig_valid = False        
+            self.reset()
 
     def runCommands(self, server, data, abort):
         """
diff --git a/bitbake/lib/bb/cookerdata.py b/bitbake/lib/bb/cookerdata.py
index 2ceed2d867..7eae761d59 100644
--- a/bitbake/lib/bb/cookerdata.py
+++ b/bitbake/lib/bb/cookerdata.py
@@ -69,14 +69,14 @@ class ConfigParameters(object):
             if bbpkgs:
                 self.options.pkgs_to_build.extend(bbpkgs.split())
 
-    def updateToServer(self, server):
+    def updateToServer(self, server, environment):
         options = {}
         for o in ["abort", "tryaltconfigs", "force", "invalidate_stamp", 
                   "verbose", "debug", "dry_run", "dump_signatures", 
                   "debug_domains", "extra_assume_provided", "profile"]:
             options[o] = getattr(self.options, o)
 
-        ret, error = server.runCommand(["updateConfig", options])
+        ret, error = server.runCommand(["updateConfig", options, environment])
         if error:
                 raise Exception("Unable to update the server configuration with local parameters: %s" % error)
 
diff --git a/bitbake/lib/bb/ui/knotty.py b/bitbake/lib/bb/ui/knotty.py
index 9e58b31727..ea20ddc7e0 100644
--- a/bitbake/lib/bb/ui/knotty.py
+++ b/bitbake/lib/bb/ui/knotty.py
@@ -284,7 +284,7 @@ def main(server, eventHandler, params, tf = TerminalFilter):
 
     if not params.observe_only:
         params.updateFromServer(server)
-        params.updateToServer(server)
+        params.updateToServer(server, os.environ.copy())
         cmdline = params.parseActions()
         if not cmdline:
             print("Nothing to do.  Use 'bitbake world' to build everything, or run 'bitbake --help' for usage information.")