diff --git a/README.md b/README.md
index 1318a7b8b975..0dc5e0c4a251 100644
--- a/README.md
+++ b/README.md
@@ -508,6 +508,8 @@ uv accepts the following command-line arguments as environment variables:
   file as the constraints file. Uses space-separated list of files.
 - `UV_LINK_MODE`: Equivalent to the `--link-mode` command-line argument. If set, uv will use this
   as a link mode.
+- `UV_NO_BUILD_ISOLATION`: Equivalent to the `--no-build-isolation` command-line argument. If set,
+  uv will skip isolation when building source distributions.
 
 In each case, the corresponding command-line argument takes precedence over an environment variable.
 
diff --git a/crates/uv/src/cli.rs b/crates/uv/src/cli.rs
index a202829f38c9..f4deaddeb33f 100644
--- a/crates/uv/src/cli.rs
+++ b/crates/uv/src/cli.rs
@@ -500,7 +500,12 @@ pub(crate) struct PipCompileArgs {
     /// Disable isolation when building source distributions.
     ///
     /// Assumes that build dependencies specified by PEP 518 are already installed.
-    #[arg(long, overrides_with("build_isolation"))]
+    #[arg(
+        long,
+        env = "UV_NO_BUILD_ISOLATION",
+        value_parser = clap::builder::BoolishValueParser::new(),
+        overrides_with("build_isolation")
+    )]
     pub(crate) no_build_isolation: bool,
 
     #[arg(long, overrides_with("no_build_isolation"), hide = true)]
@@ -801,7 +806,13 @@ pub(crate) struct PipSyncArgs {
     /// Disable isolation when building source distributions.
     ///
     /// Assumes that build dependencies specified by PEP 518 are already installed.
-    #[arg(long, overrides_with("build_isolation"))]
+
+    #[arg(
+        long,
+        env = "UV_NO_BUILD_ISOLATION",
+        value_parser = clap::builder::BoolishValueParser::new(),
+        overrides_with("build_isolation")
+    )]
     pub(crate) no_build_isolation: bool,
 
     #[arg(long, overrides_with("no_build_isolation"), hide = true)]
@@ -1176,7 +1187,12 @@ pub(crate) struct PipInstallArgs {
     /// Disable isolation when building source distributions.
     ///
     /// Assumes that build dependencies specified by PEP 518 are already installed.
-    #[arg(long, overrides_with("build_isolation"))]
+    #[arg(
+        long,
+        env = "UV_NO_BUILD_ISOLATION",
+        value_parser = clap::builder::BoolishValueParser::new(),
+        overrides_with("build_isolation")
+    )]
     pub(crate) no_build_isolation: bool,
 
     #[arg(long, overrides_with("no_build_isolation"), hide = true)]
diff --git a/crates/uv/tests/pip_install.rs b/crates/uv/tests/pip_install.rs
index 7edba6f97b24..43e1f75f8c3b 100644
--- a/crates/uv/tests/pip_install.rs
+++ b/crates/uv/tests/pip_install.rs
@@ -2676,6 +2676,77 @@ fn no_build_isolation() -> Result<()> {
     Ok(())
 }
 
+/// Ensure that `UV_NO_BUILD_ISOLATION` env var does the same as the `--no-build-isolation` flag
+#[test]
+fn respect_no_build_isolation_env_var() -> Result<()> {
+    let context = TestContext::new("3.12");
+    let requirements_in = context.temp_dir.child("requirements.in");
+    requirements_in.write_str("anyio @ https://files.pythonhosted.org/packages/db/4d/3970183622f0330d3c23d9b8a5f52e365e50381fd484d08e3285104333d3/anyio-4.3.0.tar.gz")?;
+
+    // We expect the build to fail, because `setuptools` is not installed.
+    let filters = std::iter::once((r"exit code: 1", "exit status: 1"))
+        .chain(context.filters())
+        .collect::<Vec<_>>();
+    uv_snapshot!(filters, context.install()
+        .arg("-r")
+        .arg("requirements.in")
+        .env("UV_NO_BUILD_ISOLATION", "yes"), @r###"
+    success: false
+    exit_code: 2
+    ----- stdout -----
+
+    ----- stderr -----
+    error: Failed to download and build: `anyio @ https://files.pythonhosted.org/packages/db/4d/3970183622f0330d3c23d9b8a5f52e365e50381fd484d08e3285104333d3/anyio-4.3.0.tar.gz`
+      Caused by: Failed to build: `anyio @ https://files.pythonhosted.org/packages/db/4d/3970183622f0330d3c23d9b8a5f52e365e50381fd484d08e3285104333d3/anyio-4.3.0.tar.gz`
+      Caused by: Build backend failed to determine metadata through `prepare_metadata_for_build_wheel` with exit status: 1
+    --- stdout:
+
+    --- stderr:
+    Traceback (most recent call last):
+      File "<string>", line 8, in <module>
+    ModuleNotFoundError: No module named 'setuptools'
+    ---
+    "###
+    );
+
+    // Install `setuptools` and `wheel`.
+    uv_snapshot!(context.install()
+        .arg("setuptools")
+        .arg("wheel"), @r###"
+    success: true
+    exit_code: 0
+    ----- stdout -----
+
+    ----- stderr -----
+    Resolved 2 packages in [TIME]
+    Downloaded 2 packages in [TIME]
+    Installed 2 packages in [TIME]
+     + setuptools==69.2.0
+     + wheel==0.43.0
+    "###);
+
+    // We expect the build to succeed, since `setuptools` is now installed.
+    uv_snapshot!(context.install()
+        .arg("-r")
+        .arg("requirements.in")
+        .env("UV_NO_BUILD_ISOLATION", "yes"), @r###"
+    success: true
+    exit_code: 0
+    ----- stdout -----
+
+    ----- stderr -----
+    Resolved 3 packages in [TIME]
+    Downloaded 3 packages in [TIME]
+    Installed 3 packages in [TIME]
+     + anyio==0.0.0 (from https://files.pythonhosted.org/packages/db/4d/3970183622f0330d3c23d9b8a5f52e365e50381fd484d08e3285104333d3/anyio-4.3.0.tar.gz)
+     + idna==3.6
+     + sniffio==1.3.1
+    "###
+    );
+
+    Ok(())
+}
+
 /// This tests that `uv` can read UTF-16LE encoded requirements.txt files.
 ///
 /// Ref: <https://github.com/astral-sh/uv/issues/2276>