diff --git a/CHANGELOG.md b/CHANGELOG.md
index 7e068bb2..573b409b 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -49,6 +49,10 @@
   allows setting/saving/restoring/querying the keypad mode.
 * Sixel support can be disabled by setting `[tweak].sixel=no`
   (https://codeberg.org/dnkl/foot/issues/950).
+* footclient: `-E,--client-environment` command line option. When
+  used, the child process in the new terminal instance inherits the
+  environment from the footclient process instead of the server’s
+  (https://codeberg.org/dnkl/foot/issues/1004).
 
 
 ### Changed
diff --git a/client-protocol.h b/client-protocol.h
index b0f39055..505825f6 100644
--- a/client-protocol.h
+++ b/client-protocol.h
@@ -19,11 +19,13 @@ struct client_data {
     uint16_t cwd_len;
     uint16_t override_count;
     uint16_t argc;
+    uint16_t env_count;
 
     /* char cwd[static cwd_len]; */
     /* char token[static token_len]; */
     /* struct client_string overrides[static override_count]; */
     /* struct client_string argv[static argc]; */
+    /* struct client_string envp[static env_count]; */
 } __attribute__((packed));
 
-_Static_assert(sizeof(struct client_data) == 8, "protocol struct size error");
+_Static_assert(sizeof(struct client_data) == 10, "protocol struct size error");
diff --git a/client.c b/client.c
index a76d759a..ad88fe5b 100644
--- a/client.c
+++ b/client.c
@@ -25,11 +25,11 @@
 #include "version.h"
 #include "xmalloc.h"
 
-struct override {
+struct string {
     size_t len;
     char *str;
 };
-typedef tll(struct override) override_list_t;
+typedef tll(struct string) string_list_t;
 
 static volatile sig_atomic_t aborted = 0;
 
@@ -91,6 +91,7 @@ print_usage(const char *prog_name)
         "  -H,--hold                                remain open after child process exits\n"
         "  -N,--no-wait                             detach the client process from the running terminal, exiting immediately\n"
         "  -o,--override=[section.]key=value        override configuration option\n"
+        "  -E, --client-environment                 exec shell using footclient's environment, instead of the server's\n"
         "  -d,--log-level={info|warning|error|none} log level (info)\n"
         "  -l,--log-colorize=[{never|always|auto}]  enable/disable colorization of log output on stderr\n"
         "  -v,--version                             show the version number and quit\n"
@@ -102,20 +103,29 @@ print_usage(const char *prog_name)
 }
 
 static bool NOINLINE
-push_override(override_list_t *overrides, const char *s, uint64_t *total_len)
+push_string(string_list_t *string_list, const char *s, uint64_t *total_len)
 {
     size_t len = strlen(s) + 1;
-    if (len >= 1 << (8 * sizeof(struct client_string))) {
-        LOG_ERR("override length overflow");
+    if (len >= 1 << (8 * sizeof(uint16_t))) {
+        LOG_ERR("string length overflow");
         return false;
     }
 
-    struct override o = {len, xstrdup(s)};
-    tll_push_back(*overrides, o);
+    struct string o = {len, xstrdup(s)};
+    tll_push_back(*string_list, o);
     *total_len += sizeof(struct client_string) + o.len;
     return true;
 }
 
+static void
+free_string_list(string_list_t *string_list)
+{
+    tll_foreach(*string_list, it) {
+        free(it->item.str);
+        tll_remove(*string_list, it);
+    }
+}
+
 int
 main(int argc, char *const *argv)
 {
@@ -140,6 +150,7 @@ main(int argc, char *const *argv)
         {"hold",               no_argument,       NULL, 'H'},
         {"no-wait",            no_argument,       NULL, 'N'},
         {"override",           required_argument, NULL, 'o'},
+        {"client-environment", no_argument,       NULL, 'E'},
         {"log-level",          required_argument, NULL, 'd'},
         {"log-colorize",       optional_argument, NULL, 'l'},
         {"version",            no_argument,       NULL, 'v'},
@@ -152,6 +163,7 @@ main(int argc, char *const *argv)
     enum log_class log_level = LOG_CLASS_INFO;
     enum log_colorize log_colorize = LOG_COLORIZE_AUTO;
     bool hold = false;
+    bool client_environment = false;
 
     /* Used to format overrides */
     bool no_wait = false;
@@ -169,35 +181,36 @@ main(int argc, char *const *argv)
     /* malloc:ed and needs to be in scope of all goto's */
     int fd = -1;
     char *_cwd = NULL;
-    override_list_t overrides = tll_init();
     struct client_string *cargv = NULL;
+    string_list_t overrides = tll_init();
+    string_list_t envp = tll_init();
 
     while (true) {
-        int c = getopt_long(argc, argv, "+t:T:a:w:W:mFLD:s:HNo:d:l::veh", longopts, NULL);
+        int c = getopt_long(argc, argv, "+t:T:a:w:W:mFLD:s:HNo:Ed:l::veh", longopts, NULL);
         if (c == -1)
             break;
 
         switch (c) {
         case 't':
             snprintf(buf, sizeof(buf), "term=%s", optarg);
-            if (!push_override(&overrides, buf, &total_len))
+            if (!push_string(&overrides, buf, &total_len))
                 goto err;
             break;
 
         case 'T':
             snprintf(buf, sizeof(buf), "title=%s", optarg);
-            if (!push_override(&overrides, buf, &total_len))
+            if (!push_string(&overrides, buf, &total_len))
                 goto err;
             break;
 
         case 'a':
             snprintf(buf, sizeof(buf), "app-id=%s", optarg);
-            if (!push_override(&overrides, buf, &total_len))
+            if (!push_string(&overrides, buf, &total_len))
                 goto err;
             break;
 
         case 'L':
-            if (!push_override(&overrides, "login-shell=yes", &total_len))
+            if (!push_string(&overrides, "login-shell=yes", &total_len))
                 goto err;
             break;
 
@@ -219,7 +232,7 @@ main(int argc, char *const *argv)
             }
 
             snprintf(buf, sizeof(buf), "initial-window-size-pixels=%ux%u", width, height);
-            if (!push_override(&overrides, buf, &total_len))
+            if (!push_string(&overrides, buf, &total_len))
                 goto err;
             break;
         }
@@ -232,18 +245,18 @@ main(int argc, char *const *argv)
             }
 
             snprintf(buf, sizeof(buf), "initial-window-size-chars=%ux%u", width, height);
-            if (!push_override(&overrides, buf, &total_len))
+            if (!push_string(&overrides, buf, &total_len))
                 goto err;
             break;
         }
 
         case 'm':
-            if (!push_override(&overrides, "initial-window-mode=maximized", &total_len))
+            if (!push_string(&overrides, "initial-window-mode=maximized", &total_len))
                 goto err;
             break;
 
         case 'F':
-            if (!push_override(&overrides, "initial-window-mode=fullscreen", &total_len))
+            if (!push_string(&overrides, "initial-window-mode=fullscreen", &total_len))
                 goto err;
             break;
 
@@ -260,10 +273,14 @@ main(int argc, char *const *argv)
             break;
 
         case 'o':
-            if (!push_override(&overrides, optarg, &total_len))
+            if (!push_string(&overrides, optarg, &total_len))
                 goto err;
             break;
 
+        case 'E':
+            client_environment = true;
+            break;
+
         case 'd': {
             int lvl = log_level_from_string(optarg);
             if (unlikely(lvl < 0)) {
@@ -373,9 +390,17 @@ main(int argc, char *const *argv)
         cwd = _cwd;
     }
 
+    if (client_environment) {
+        for (char **e = environ; *e != NULL; e++) {
+            if (!push_string(&envp, *e, &total_len))
+                goto err;
+        }
+    }
+
     /* String lengths, including NULL terminator */
     const size_t cwd_len = strlen(cwd) + 1;
     const size_t override_count = tll_length(overrides);
+    const size_t env_count = tll_length(envp);
 
     const struct client_data data = {
         .hold = hold,
@@ -385,6 +410,7 @@ main(int argc, char *const *argv)
         .cwd_len = cwd_len,
         .override_count = override_count,
         .argc = argc,
+        .env_count = env_count,
     };
 
     /* Total packet length, not (yet) including argv[] */
@@ -409,7 +435,8 @@ main(int argc, char *const *argv)
         cwd_len >= 1 << (8 * sizeof(data.cwd_len)) ||
         token_len >= 1 << (8 * sizeof(data.token_len)) ||
         override_count > (size_t)(unsigned int)data.override_count ||
-        argc > (int)(unsigned int)data.argc)
+        argc > (int)(unsigned int)data.argc ||
+        env_count > (size_t)(unsigned int)data.env_count)
     {
         LOG_ERR("size overflow");
         goto err;
@@ -435,7 +462,7 @@ main(int argc, char *const *argv)
 
     /* Send overrides */
     tll_foreach(overrides, it) {
-        const struct override *o = &it->item;
+        const struct string *o = &it->item;
         struct client_string s = {o->len};
         if (sendall(fd, &s, sizeof(s)) < 0 ||
             sendall(fd, o->str, o->len) < 0)
@@ -455,6 +482,18 @@ main(int argc, char *const *argv)
         }
     }
 
+    /* Send environment */
+    tll_foreach(envp, it) {
+        const struct string *e = &it->item;
+        struct client_string s = {e->len};
+        if (sendall(fd, &s, sizeof(s)) < 0 ||
+            sendall(fd, e->str, e->len) < 0)
+        {
+            LOG_ERRNO("failed to send setup packet (envp) to server");
+            goto err;
+        }
+    }
+
     struct sigaction sa = {.sa_handler = &sig_handler};
     sigemptyset(&sa.sa_mask);
     if (sigaction(SIGINT, &sa, NULL) < 0 || sigaction(SIGTERM, &sa, NULL) < 0) {
@@ -473,10 +512,8 @@ main(int argc, char *const *argv)
         ret = exit_code;
 
 err:
-    tll_foreach(overrides, it) {
-        free(it->item.str);
-        tll_remove(overrides, it);
-    }
+    free_string_list(&envp);
+    free_string_list(&overrides);
     free(cargv);
     free(_cwd);
     if (fd != -1)
diff --git a/main.c b/main.c
index 4011dcde..6da82ef2 100644
--- a/main.c
+++ b/main.c
@@ -608,7 +608,7 @@ main(int argc, char *const *argv)
 
     if (!as_server && (term = term_init(
                            &conf, fdm, reaper, wayl, "foot", cwd, token,
-                           argc, argv,
+                           argc, argv, NULL,
                            &term_shutdown_cb, &shutdown_ctx)) == NULL) {
         goto out;
     }
diff --git a/server.c b/server.c
index 2c41b479..31b8c633 100644
--- a/server.c
+++ b/server.c
@@ -146,6 +146,7 @@ fdm_client(struct fdm *fdm, int fd, int events, void *data)
 
     char **argv = NULL;
     config_override_t overrides = tll_init();
+    char **envp = NULL;
 
     if (events & EPOLLHUP)
         goto shutdown;
@@ -281,7 +282,21 @@ fdm_client(struct fdm *fdm, int fd, int events, void *data)
         argv[i] = (char *)p; p += arg.len;
         LOG_DBG("argv[%hu] = %.*s", i, arg.len, argv[i]);
     }
-    argv[cdata.argc] = NULL;
+
+    /* envp */
+    envp = cdata.env_count != 0
+        ? xcalloc(cdata.env_count + 1, sizeof(envp[0]))
+        : NULL;
+
+    for (uint16_t i = 0; i < cdata.env_count; i++) {
+        struct client_string e;
+        CHECK_BUF(sizeof(e));
+        memcpy(&e, p, sizeof(e)); p += sizeof(e);
+
+        CHECK_BUF_AND_NULL(e.len);
+        envp[i] = (char *)p; p += e.len;
+        LOG_DBG("env[%hu] = %.*s", i, e.len, envp[i]);
+    }
 
 #undef CHECK_BUF_AND_NULL
 #undef CHECK_BUF
@@ -317,7 +332,7 @@ fdm_client(struct fdm *fdm, int fd, int events, void *data)
     instance->terminal = term_init(
         conf != NULL ? conf : server->conf,
         server->fdm, server->reaper, server->wayl, "footclient", cwd, token,
-        cdata.argc, argv, &term_shutdown_handler, instance);
+        cdata.argc, argv, envp, &term_shutdown_handler, instance);
 
     if (instance->terminal == NULL) {
         LOG_ERR("failed to instantiate new terminal");
@@ -336,6 +351,7 @@ fdm_client(struct fdm *fdm, int fd, int events, void *data)
         instance->client = client;
         client->instance = instance;
         free(argv);
+        free(envp);
         tll_free_and_free(overrides, free);
     }
 
@@ -345,6 +361,7 @@ shutdown:
     LOG_DBG("client FD=%d: disconnected", client->fd);
 
     free(argv);
+    free(envp);
     tll_free_and_free(overrides, free);
     fdm_del(fdm, fd);
     client->fd = -1;
diff --git a/slave.c b/slave.c
index 4fbd5c9b..4e8610ce 100644
--- a/slave.c
+++ b/slave.c
@@ -145,8 +145,8 @@ emit_notifications(int fd, const user_notifications_t *notifications)
 }
 
 static noreturn void
-slave_exec(int ptmx, char *argv[], int err_fd, bool login_shell,
-           const user_notifications_t *notifications)
+slave_exec(int ptmx, char *argv[], char *const envp[], int err_fd,
+           bool login_shell, const user_notifications_t *notifications)
 {
     int pts = -1;
     const char *pts_name = ptsname(ptmx);
@@ -232,7 +232,7 @@ slave_exec(int ptmx, char *argv[], int err_fd, bool login_shell,
     } else
         file = argv[0];
 
-    execvp(file, argv);
+    execvpe(file, argv, envp);
 
 err:
     (void)!write(err_fd, &errno, sizeof(errno));
@@ -246,8 +246,8 @@ err:
 
 pid_t
 slave_spawn(int ptmx, int argc, const char *cwd, char *const *argv,
-            const char *term_env, const char *conf_shell, bool login_shell,
-            const user_notifications_t *notifications)
+            char *const *envp, const char *term_env, const char *conf_shell,
+            bool login_shell, const user_notifications_t *notifications)
 {
     int fork_pipe[2];
     if (pipe2(fork_pipe, O_CLOEXEC) < 0) {
@@ -319,7 +319,8 @@ slave_spawn(int ptmx, int argc, const char *cwd, char *const *argv,
         if (is_valid_shell(shell_argv[0]))
             setenv("SHELL", shell_argv[0], 1);
 
-        slave_exec(ptmx, shell_argv, fork_pipe[1], login_shell, notifications);
+        slave_exec(ptmx, shell_argv, envp != NULL ? envp : environ,
+                   fork_pipe[1], login_shell, notifications);
         BUG("Unexpected return from slave_exec()");
         break;
 
diff --git a/slave.h b/slave.h
index 538588b1..4b47bfde 100644
--- a/slave.h
+++ b/slave.h
@@ -6,6 +6,6 @@
 #include "user-notification.h"
 
 pid_t slave_spawn(
-    int ptmx, int argc, const char *cwd, char *const *argv, const char *term_env,
-    const char *conf_shell, bool login_shell,
+    int ptmx, int argc, const char *cwd, char *const *argv, char *const *envp,
+    const char *term_env, const char *conf_shell, bool login_shell,
     const user_notifications_t *notifications);
diff --git a/terminal.c b/terminal.c
index 84edec65..b78279e4 100644
--- a/terminal.c
+++ b/terminal.c
@@ -1034,7 +1034,7 @@ static void fdm_client_terminated(
 struct terminal *
 term_init(const struct config *conf, struct fdm *fdm, struct reaper *reaper,
           struct wayland *wayl, const char *foot_exe, const char *cwd,
-          const char *token, int argc, char *const *argv,
+          const char *token, int argc, char *const *argv, char *const *envp,
           void (*shutdown_cb)(void *data, int exit_code), void *shutdown_data)
 {
     int ptmx = -1;
@@ -1241,7 +1241,7 @@ term_init(const struct config *conf, struct fdm *fdm, struct reaper *reaper,
 
     /* Start the slave/client */
     if ((term->slave = slave_spawn(
-             term->ptmx, argc, term->cwd, argv,
+             term->ptmx, argc, term->cwd, argv, envp,
              conf->term, conf->shell, conf->login_shell,
              &conf->notifications)) == -1)
     {
diff --git a/terminal.h b/terminal.h
index 03297678..5b7d6d07 100644
--- a/terminal.h
+++ b/terminal.h
@@ -670,7 +670,7 @@ struct config;
 struct terminal *term_init(
     const struct config *conf, struct fdm *fdm, struct reaper *reaper,
     struct wayland *wayl, const char *foot_exe, const char *cwd,
-    const char *token, int argc, char *const *argv,
+    const char *token, int argc, char *const *argv, char *const *envp,
     void (*shutdown_cb)(void *data, int exit_code), void *shutdown_data);
 
 bool term_shutdown(struct terminal *term);