diff --git a/.changeset/many-badgers-obey.md b/.changeset/many-badgers-obey.md
new file mode 100644
index 0000000000..6ec45f57f8
--- /dev/null
+++ b/.changeset/many-badgers-obey.md
@@ -0,0 +1,5 @@
+---
+"effect": patch
+---
+
+Allow schemas provided to CLI flags / arguments to utilize the environment required by the CLI
diff --git a/packages/effect/src/unstable/cli/Argument.ts b/packages/effect/src/unstable/cli/Argument.ts
index ca0fe5ddaf..950ead512a 100644
--- a/packages/effect/src/unstable/cli/Argument.ts
+++ b/packages/effect/src/unstable/cli/Argument.ts
@@ -17,6 +17,7 @@ import type * as Redacted from "../../Redacted.ts"
 import type * as Result from "../../Result.ts"
 import type * as Schema from "../../Schema.ts"
 import type * as CliError from "./CliError.ts"
+import type { Environment } from "./Command.ts"
 import * as Param from "./Param.ts"
 import type * as Primitive from "./Primitive.ts"
 
@@ -261,7 +262,7 @@ export const fileParse = (
  */
 export const fileSchema = <A>(
   name: string,
-  schema: Schema.Decoder<A>,
+  schema: Schema.Decoder<A, Environment>,
   options?: Primitive.FileSchemaOptions | undefined
 ): Argument<A> => Param.fileSchema(Param.argumentKind, name, schema, options)
 
@@ -339,11 +340,11 @@ export const withDescription: {
  */
 export const withDefault: {
   <const B>(
-    defaultValue: B | Effect.Effect<B, CliError.CliError, Param.Environment>
+    defaultValue: B | Effect.Effect<B, CliError.CliError, Environment>
   ): <A>(self: Argument<A>) => Argument<A | B>
   <A, const B>(
     self: Argument<A>,
-    defaultValue: B | Effect.Effect<B, CliError.CliError, Param.Environment>
+    defaultValue: B | Effect.Effect<B, CliError.CliError, Environment>
   ): Argument<A | B>
 } = Param.withDefault
 
@@ -471,15 +472,15 @@ export const map: {
  */
 export const mapEffect: {
   <A, B>(
-    f: (a: A) => Effect.Effect<B, CliError.CliError, Param.Environment>
+    f: (a: A) => Effect.Effect<B, CliError.CliError, Environment>
   ): (self: Argument<A>) => Argument<B>
   <A, B>(
     self: Argument<A>,
-    f: (a: A) => Effect.Effect<B, CliError.CliError, Param.Environment>
+    f: (a: A) => Effect.Effect<B, CliError.CliError, Environment>
   ): Argument<B>
 } = dual(2, <A, B>(
   self: Argument<A>,
-  f: (a: A) => Effect.Effect<B, CliError.CliError, Param.Environment>
+  f: (a: A) => Effect.Effect<B, CliError.CliError, Environment>
 ) => Param.mapEffect(self, f))
 
 /**
@@ -589,8 +590,8 @@ export const between: {
  * @since 4.0.0
  */
 export const withSchema: {
-  <A, B>(schema: Schema.Codec<B, A>): (self: Argument<A>) => Argument<B>
-  <A, B>(self: Argument<A>, schema: Schema.Codec<B, A>): Argument<B>
+  <A, B>(schema: Schema.Codec<B, A, Environment, Environment>): (self: Argument<A>) => Argument<B>
+  <A, B>(self: Argument<A>, schema: Schema.Codec<B, A, Environment, Environment>): Argument<B>
 } = dual(2, <A, B>(self: Argument<A>, schema: Schema.Codec<B, A>) => Param.withSchema(self, schema))
 
 /**
diff --git a/packages/effect/src/unstable/cli/Flag.ts b/packages/effect/src/unstable/cli/Flag.ts
index 4ab5ee058f..4029a6b1b7 100644
--- a/packages/effect/src/unstable/cli/Flag.ts
+++ b/packages/effect/src/unstable/cli/Flag.ts
@@ -18,6 +18,7 @@ import type * as Redacted from "../../Redacted.ts"
 import type * as Result from "../../Result.ts"
 import type * as Schema from "../../Schema.ts"
 import type * as CliError from "./CliError.ts"
+import type { Environment } from "./Command.ts"
 import * as Param from "./Param.ts"
 import type * as Primitive from "./Primitive.ts"
 
@@ -355,7 +356,7 @@ export const fileParse = (
  */
 export const fileSchema = <A>(
   name: string,
-  schema: Schema.Decoder<A>,
+  schema: Schema.Decoder<A, Environment>,
   options?: Primitive.FileSchemaOptions | undefined
 ): Flag<A> => Param.fileSchema(Param.flagKind, name, schema, options)
 
@@ -579,8 +580,8 @@ export const optional = <A>(param: Flag<A>): Flag<Option.Option<A>> => Param.opt
  * @since 4.0.0
  */
 export const withDefault: {
-  <const B>(defaultValue: B | Effect.Effect<B, CliError.CliError, Param.Environment>): <A>(self: Flag<A>) => Flag<A | B>
-  <A, const B>(self: Flag<A>, defaultValue: B | Effect.Effect<B, CliError.CliError, Param.Environment>): Flag<A | B>
+  <const B>(defaultValue: B | Effect.Effect<B, CliError.CliError, Environment>): <A>(self: Flag<A>) => Flag<A | B>
+  <A, const B>(self: Flag<A>, defaultValue: B | Effect.Effect<B, CliError.CliError, Environment>): Flag<A | B>
 } = Param.withDefault
 
 /**
@@ -677,15 +678,15 @@ export const map: {
  */
 export const mapEffect: {
   <A, B>(
-    f: (a: A) => Effect.Effect<B, CliError.CliError, Param.Environment>
+    f: (a: A) => Effect.Effect<B, CliError.CliError, Environment>
   ): (self: Flag<A>) => Flag<B>
   <A, B>(
     self: Flag<A>,
-    f: (a: A) => Effect.Effect<B, CliError.CliError, Param.Environment>
+    f: (a: A) => Effect.Effect<B, CliError.CliError, Environment>
   ): Flag<B>
 } = dual(2, <A, B>(
   self: Flag<A>,
-  f: (a: A) => Effect.Effect<B, CliError.CliError, Param.Environment>
+  f: (a: A) => Effect.Effect<B, CliError.CliError, Environment>
 ) => Param.mapEffect(self, f))
 
 /**
@@ -981,6 +982,6 @@ export const orElseResult: {
  * @since 4.0.0
  */
 export const withSchema: {
-  <A, B>(schema: Schema.Codec<B, A>): (self: Flag<A>) => Flag<B>
-  <A, B>(self: Flag<A>, schema: Schema.Codec<B, A>): Flag<B>
+  <A, B>(schema: Schema.Codec<B, A, Environment, Environment>): (self: Flag<A>) => Flag<B>
+  <A, B>(self: Flag<A>, schema: Schema.Codec<B, A, Environment, Environment>): Flag<B>
 } = dual(2, <A, B>(self: Flag<A>, schema: Schema.Codec<B, A>) => Param.withSchema(self, schema))
diff --git a/packages/effect/src/unstable/cli/Param.ts b/packages/effect/src/unstable/cli/Param.ts
index 734ecbc9a9..689a3fc08b 100644
--- a/packages/effect/src/unstable/cli/Param.ts
+++ b/packages/effect/src/unstable/cli/Param.ts
@@ -12,19 +12,16 @@
  */
 import * as Config from "../../Config.ts"
 import * as Effect from "../../Effect.ts"
-import type * as FileSystem from "../../FileSystem.ts"
 import { dual, identity } from "../../Function.ts"
 import * as Option from "../../Option.ts"
-import type * as Path from "../../Path.ts"
 import { type Pipeable, pipeArguments } from "../../Pipeable.ts"
 import * as Predicate from "../../Predicate.ts"
 import type * as Redacted from "../../Redacted.ts"
 import * as Result from "../../Result.ts"
 import * as Schema from "../../Schema.ts"
-import type * as Terminal from "../../Terminal.ts"
 import type { Covariant } from "../../Types.ts"
-import type { ChildProcessSpawner } from "../process/ChildProcessSpawner.ts"
 import * as CliError from "./CliError.ts"
+import type { Environment } from "./Command.ts"
 import * as Primitive from "./Primitive.ts"
 import * as Prompt from "./Prompt.ts"
 
@@ -56,15 +53,6 @@ export interface Param<Kind extends ParamKind, out A> extends Param.Variance<A>
  */
 export type ParamKind = "argument" | "flag"
 
-/**
- * Services that parameter parsing can require, such as filesystem, path,
- * terminal, and child-process support.
- *
- * @category models
- * @since 4.0.0
- */
-export type Environment = FileSystem.FileSystem | Path.Path | Terminal.Terminal | ChildProcessSpawner
-
 /**
  * Defines the kind discriminator for positional argument parameters.
  *
@@ -859,7 +847,7 @@ export const fileParse = <Kind extends ParamKind>(
 export const fileSchema = <Kind extends ParamKind, A>(
   kind: Kind,
   name: string,
-  schema: Schema.Decoder<A>,
+  schema: Schema.Decoder<A, Environment>,
   options?: Primitive.FileSchemaOptions | undefined
 ): Param<Kind, A> =>
   makeSingle({
@@ -1799,8 +1787,15 @@ export const withMetavar: {
  * @since 4.0.0
  */
 export const withSchema: {
-  <A, B>(schema: Schema.Codec<B, A>): <Kind extends ParamKind>(self: Param<Kind, A>) => Param<Kind, B>
-  <Kind extends ParamKind, A, B>(self: Param<Kind, A>, schema: Schema.Codec<B, A>): Param<Kind, B>
+  <A, B>(
+    schema: Schema.Codec<B, A, Environment, Environment>
+  ): <Kind extends ParamKind>(
+    self: Param<Kind, A>
+  ) => Param<Kind, B>
+  <Kind extends ParamKind, A, B>(
+    self: Param<Kind, A>,
+    schema: Schema.Codec<B, A, Environment, Environment>
+  ): Param<Kind, B>
 } = dual(2, <Kind extends ParamKind, A, B>(
   self: Param<Kind, A>,
   schema: Schema.Codec<B, A>
diff --git a/packages/effect/src/unstable/cli/Primitive.ts b/packages/effect/src/unstable/cli/Primitive.ts
index 53c04b44d2..dd340e80b0 100644
--- a/packages/effect/src/unstable/cli/Primitive.ts
+++ b/packages/effect/src/unstable/cli/Primitive.ts
@@ -24,6 +24,7 @@ import * as Schema from "../../Schema.ts"
 import type { Formatter } from "../../SchemaIssue.ts"
 import type * as Struct from "../../Struct.ts"
 import type { Covariant } from "../../Types.ts"
+import type { Environment } from "./Command.ts"
 
 const TypeId = "~effect/cli/Primitive"
 
@@ -58,7 +59,7 @@ const TypeId = "~effect/cli/Primitive"
  */
 export interface Primitive<out A> extends Primitive.Variance<A> {
   readonly _tag: string
-  readonly parse: (value: string) => Effect.Effect<A, string, FileSystem.FileSystem | Path.Path>
+  readonly parse: (value: string) => Effect.Effect<A, string, Environment>
 }
 
 /**
@@ -97,9 +98,7 @@ export const isBoolean = (p: Primitive<unknown>): p is Primitive<boolean> => p._
 
 const makePrimitive = <A>(
   tag: string,
-  parse: (
-    value: string
-  ) => Effect.Effect<A, string, FileSystem.FileSystem | Path.Path>
+  parse: (value: string) => Effect.Effect<A, string, Environment>
 ): Primitive<A> =>
   Object.assign(Object.create(Proto), {
     _tag: tag,
@@ -108,7 +107,7 @@ const makePrimitive = <A>(
 
 const makeSchemaPrimitive = <T, E>(
   tag: string,
-  schema: Schema.Codec<T, E>
+  schema: Schema.Codec<T, E, Environment, Environment>
 ): Primitive<T> => {
   const toCodecStringTree = Schema.toCodecStringTree(schema)
   const decode = Schema.decodeUnknownEffect(toCodecStringTree)
@@ -614,7 +613,7 @@ export type FileSchemaOptions = Struct.Simplify<
  * @since 4.0.0
  */
 export const fileSchema = <A>(
-  schema: Schema.Decoder<A>,
+  schema: Schema.Decoder<A, Environment>,
   options?: FileSchemaOptions | undefined
 ): Primitive<A> => {
   const decode = Schema.decodeUnknownEffect(schema)
diff --git a/packages/effect/src/unstable/cli/internal/parser.ts b/packages/effect/src/unstable/cli/internal/parser.ts
index 40abd776e8..18fb1e3cc1 100644
--- a/packages/effect/src/unstable/cli/internal/parser.ts
+++ b/packages/effect/src/unstable/cli/internal/parser.ts
@@ -27,7 +27,7 @@
 import * as Effect from "../../../Effect.ts"
 import * as Option from "../../../Option.ts"
 import * as CliError from "../CliError.ts"
-import type { Command, ParsedTokens } from "../Command.ts"
+import type { Command, Environment, ParsedTokens } from "../Command.ts"
 import * as Param from "../Param.ts"
 import * as Primitive from "../Primitive.ts"
 import { suggest } from "./auto-suggest.ts"
@@ -50,7 +50,7 @@ export const parseArgs = (
   lexResult: LexResult,
   command: Command.Any,
   commandPath: ReadonlyArray<string> = []
-): Effect.Effect<ParsedTokens, never, Param.Environment> =>
+): Effect.Effect<ParsedTokens, never, Environment> =>
   Effect.gen(function*() {
     const { tokens, trailingOperands: afterEndOfOptions } = lexResult
     const newCommandPath = [...commandPath, command.name]
diff --git a/packages/effect/test/unstable/cli/Arguments.test.ts b/packages/effect/test/unstable/cli/Arguments.test.ts
index 29b16436bf..7314bf3755 100644
--- a/packages/effect/test/unstable/cli/Arguments.test.ts
+++ b/packages/effect/test/unstable/cli/Arguments.test.ts
@@ -1,5 +1,5 @@
 import { assert, describe, expect, it } from "@effect/vitest"
-import { Effect, FileSystem, Layer, Option, Path, PlatformError, Ref, Result } from "effect"
+import { Effect, FileSystem, Layer, Option, Path, PlatformError, Ref, Result, Stdio } from "effect"
 import { TestConsole } from "effect/testing"
 import { Argument, CliOutput, Command, Flag } from "effect/unstable/cli"
 import * as ChildProcessSpawner from "effect/unstable/process/ChildProcessSpawner"
@@ -32,6 +32,11 @@ const CliOutputLayer = CliOutput.layer(
     colors: false
   })
 )
+const StdioLayer = Stdio.layerTest({})
+const ChildProcessSpawnerLayer = Layer.succeed(
+  ChildProcessSpawner.ChildProcessSpawner,
+  ChildProcessSpawner.make(() => Effect.die("Not implemented"))
+)
 
 const TestLayer = Layer.mergeAll(
   ConsoleLayer,
@@ -39,7 +44,8 @@ const TestLayer = Layer.mergeAll(
   PathLayer,
   TerminalLayer,
   CliOutputLayer,
-  Layer.succeed(ChildProcessSpawner.ChildProcessSpawner, ChildProcessSpawner.make(() => Effect.die("Not implemented")))
+  StdioLayer,
+  ChildProcessSpawnerLayer
 )
 
 describe("Command arguments", () => {
diff --git a/packages/effect/test/unstable/cli/Param.test.ts b/packages/effect/test/unstable/cli/Param.test.ts
index 42f38f3b70..9e69900743 100644
--- a/packages/effect/test/unstable/cli/Param.test.ts
+++ b/packages/effect/test/unstable/cli/Param.test.ts
@@ -1,5 +1,5 @@
 import { assert, describe, it } from "@effect/vitest"
-import { Config, ConfigProvider, Effect, FileSystem, Layer, Option, Path, Ref } from "effect"
+import { Config, ConfigProvider, Effect, FileSystem, Layer, Option, Path, Ref, Stdio } from "effect"
 import { TestConsole } from "effect/testing"
 import { Argument, CliError, Flag, Prompt } from "effect/unstable/cli"
 import { ChildProcessSpawner } from "effect/unstable/process"
@@ -9,13 +9,19 @@ const ConsoleLayer = TestConsole.layer
 const FileSystemLayer = FileSystem.layerNoop({})
 const PathLayer = Path.layer
 const TerminalLayer = MockTerminal.layer
+const StdioLayer = Stdio.layerTest({})
+const ChildProcessSpawnerLayer = Layer.succeed(
+  ChildProcessSpawner.ChildProcessSpawner,
+  ChildProcessSpawner.make(() => Effect.die("Not implemented"))
+)
 
 const TestLayer = Layer.mergeAll(
   ConsoleLayer,
   FileSystemLayer,
   PathLayer,
   TerminalLayer,
-  Layer.succeed(ChildProcessSpawner.ChildProcessSpawner, ChildProcessSpawner.make(() => Effect.die("Not implemented")))
+  StdioLayer,
+  ChildProcessSpawnerLayer
 )
 
 describe("Param", () => {
diff --git a/packages/effect/test/unstable/cli/Primitive.test.ts b/packages/effect/test/unstable/cli/Primitive.test.ts
index ddbc8e9ebf..0b83b1ee63 100644
--- a/packages/effect/test/unstable/cli/Primitive.test.ts
+++ b/packages/effect/test/unstable/cli/Primitive.test.ts
@@ -1,13 +1,27 @@
 import { assert, describe, it } from "@effect/vitest"
-import { Effect, FileSystem, Layer, Path, PlatformError, Redacted } from "effect"
+import { Effect, FileSystem, Layer, Path, PlatformError, Redacted, Stdio } from "effect"
+import { TestConsole } from "effect/testing/index"
 import { Primitive } from "effect/unstable/cli"
+import { ChildProcessSpawner } from "effect/unstable/process"
+import * as MockTerminal from "./services/MockTerminal.ts"
 
+const ConsoleLayer = TestConsole.layer
 const FileSystemLayer = FileSystem.layerNoop({})
 const PathLayer = Path.layer
+const TerminalLayer = MockTerminal.layer
+const StdioLayer = Stdio.layerTest({})
+const ChildProcessSpawnerLayer = Layer.succeed(
+  ChildProcessSpawner.ChildProcessSpawner,
+  ChildProcessSpawner.make(() => Effect.die("Not implemented"))
+)
 
 const TestLayer = Layer.mergeAll(
+  ConsoleLayer,
   FileSystemLayer,
-  PathLayer
+  PathLayer,
+  TerminalLayer,
+  StdioLayer,
+  ChildProcessSpawnerLayer
 )
 
 // Helper functions to reduce repetition