diff --git a/docs/labwc-config.5.scd b/docs/labwc-config.5.scd
index 7be9d3e7..9444bd76 100644
--- a/docs/labwc-config.5.scd
+++ b/docs/labwc-config.5.scd
@@ -37,13 +37,23 @@ option.
 All configuration and theme files except autostart and shutdown are re-loaded on
 receiving signal SIGHUP.
 
-The *environment* file is parsed as *variable=value* and sets environment
-variables accordingly. It is recommended to specify keyboard layout settings and
-cursor size/theme here; see environment variable section below for details. Note
-that the environment file is treated differently by openbox where it is simply
-sourced prior to running openbox.
-Note: Tilde (~) and environment variables in the value are expanded, but
-subshell syntax and apostrophes are ignored.
+Environment variables may be set within *environment* files, wherein each line
+defines shell variables in the format *variable=value*. It is recommended to
+specify keyboard layout settings and cursor size/theme here; see environment
+variable section below for details. Within an XDG Base Directory, a file named
+"environment" will be parsed first, followed by any file matching the glob
+"environment.d/\*.env". Files within the environment.d directory are parsed in
+an arbitrary order; any variables that must be set in a particular sequence
+should be set within the same file. Unless the --merge-config option is
+specified, labwc will consider a particular XDG Base Directory to have provided
+an environment file if that directory contains either the "environment"
+directory or at least one "environment.d/\*.env" file.
+
+Note: environment files are treated differently by Openbox, which will simply
+source the file as a valid shell script before running the window manager. Files
+are instead parsed directly by labwc, although any environment variables
+referenced as $VARIABLE or ${VARIABLE} will be substituted and the tilde (~)
+will be expanded as the user's home directory.
 
 The *autostart* file is executed as a shell script after labwc has read its
 configuration and set variables defined in the environment file. Additionally,
diff --git a/include/common/string-helpers.h b/include/common/string-helpers.h
index 6d0ec905..e95b4e4a 100644
--- a/include/common/string-helpers.h
+++ b/include/common/string-helpers.h
@@ -59,7 +59,18 @@ char *strdup_printf(const char *fmt, ...);
  * The separator is arbitrary. When the separator is NULL, a single space will
  * be used.
  */
-char *str_join(const char * const parts[],
+char *str_join(const char *const parts[],
 	const char *restrict fmt, const char *restrict sep);
 
+/**
+ * str_endswith - indicate whether a string ends with a given suffix
+ * @string: string to test
+ * @suffix: suffix to expect in string
+ *
+ * If suffix is "" or NULL, this method always returns true; otherwise, this
+ * method returns true if and only if the full suffix exists at the end of the
+ * string.
+ */
+bool str_endswith(const char *const string, const char *const suffix);
+
 #endif /* LABWC_STRING_HELPERS_H */
diff --git a/src/common/string-helpers.c b/src/common/string-helpers.c
index 0a1a8c81..10978507 100644
--- a/src/common/string-helpers.c
+++ b/src/common/string-helpers.c
@@ -86,7 +86,7 @@ strdup_printf(const char *fmt, ...)
 }
 
 char *
-str_join(const char * const parts[],
+str_join(const char *const parts[],
 		const char *restrict fmt, const char *restrict sep)
 {
 	assert(parts);
@@ -154,3 +154,19 @@ str_join(const char * const parts[],
 	return buf;
 }
 
+bool
+str_endswith(const char *const string, const char *const suffix)
+{
+	size_t len_str = string ? strlen(string) : 0;
+	size_t len_sfx = suffix ? strlen(suffix) : 0;
+
+	if (len_str < len_sfx) {
+		return false;
+	}
+
+	if (len_sfx == 0) {
+		return true;
+	}
+
+	return strcmp(string + len_str - len_sfx, suffix) == 0;
+}
diff --git a/src/config/session.c b/src/config/session.c
index 56cef717..e657a9ab 100644
--- a/src/config/session.c
+++ b/src/config/session.c
@@ -1,11 +1,13 @@
 // SPDX-License-Identifier: GPL-2.0-only
 #define _POSIX_C_SOURCE 200809L
 #include <assert.h>
+#include <dirent.h>
 #include <stdbool.h>
 #include <stdio.h>
 #include <stdlib.h>
 #include <string.h>
 #include <sys/stat.h>
+#include <sys/types.h>
 #include <wlr/backend/drm.h>
 #include <wlr/backend/multi.h>
 #include <wlr/util/log.h>
@@ -49,9 +51,10 @@ process_line(char *line)
 	buf_add(&value, string_strip(++p));
 	buf_expand_shell_variables(&value);
 	buf_expand_tilde(&value);
-	if (string_null_or_empty(key) || !value.len) {
+	if (string_null_or_empty(key)) {
 		goto error;
 	}
+
 	setenv(key, value.buf, 1);
 error:
 	free(value.buf);
@@ -80,6 +83,71 @@ read_environment_file(const char *filename)
 	return true;
 }
 
+static char *
+strdup_env_path_validate(const char *prefix, struct dirent *dirent)
+{
+	assert(prefix);
+
+	/* Valid environment files always end in '.env' */
+	if (!str_endswith(dirent->d_name, ".env")) {
+		return NULL;
+	}
+
+	char *full_path = strdup_printf("%s/%s", prefix, dirent->d_name);
+	if (!full_path) {
+		return NULL;
+	}
+
+	/* Valid environment files must be regular files */
+	struct stat statbuf;
+	if (stat(full_path, &statbuf) == 0 && S_ISREG(statbuf.st_mode)) {
+		return full_path;
+	}
+
+	free(full_path);
+	return NULL;
+}
+
+static bool
+read_environment_dir(const char *path_prefix)
+{
+	bool success = false;
+	char *path = strdup_printf("%s.d", path_prefix);
+
+	errno = 0;
+	DIR *envdir = opendir(path);
+
+	if (!envdir) {
+		if (errno != ENOENT) {
+			const char *err_msg = strerror(errno);
+			wlr_log(WLR_INFO,
+				"failed to read environment directory: %s",
+				err_msg ? err_msg : "reason unknown");
+		}
+
+		goto env_dir_cleanup;
+	}
+
+	struct dirent *dirent;
+	while ((dirent = readdir(envdir)) != NULL) {
+		char *env_file_path = strdup_env_path_validate(path, dirent);
+		if (!env_file_path) {
+			continue;
+		}
+
+		if (read_environment_file(env_file_path)) {
+			success = true;
+		}
+
+		free(env_file_path);
+	}
+
+env_dir_cleanup:
+	closedir(envdir);
+	free(path);
+	return success;
+}
+
 static void
 backend_check_drm(struct wlr_backend *backend, void *is_drm)
 {
@@ -176,7 +244,13 @@ session_environment_init(void)
 
 	for (struct wl_list *elm = iter(&paths); elm != &paths; elm = iter(elm)) {
 		struct path *path = wl_container_of(elm, path, link);
+
+		/* Process an environment file itself */
 		bool success = read_environment_file(path->string);
+
+		/* Process a correponding environment.d directory */
+		success |= read_environment_dir(path->string);
+
 		if (success && !should_merge_config) {
 			break;
 		}