diff --git a/src/Aspire.Hosting/ApplicationModel/EnvironmentAnnotation.cs b/src/Aspire.Hosting/ApplicationModel/EnvironmentAnnotation.cs
new file mode 100644
index 00000000000..29444de3856
--- /dev/null
+++ b/src/Aspire.Hosting/ApplicationModel/EnvironmentAnnotation.cs
@@ -0,0 +1,20 @@
+// Licensed to the .NET Foundation under one or more agreements.
+// The .NET Foundation licenses this file to you under the MIT license.
+
+using System.Diagnostics;
+
+namespace Aspire.Hosting.ApplicationModel;
+
+// The purpose of this type is to improve the debugging experience when inspecting environment variables set without callback.
+[DebuggerDisplay("Type = {GetType().Name,nq}, Name = {_name}, Value = {_value}")]
+internal class EnvironmentAnnotation : EnvironmentCallbackAnnotation
+{
+    private readonly string _name;
+    private readonly string _value;
+
+    public EnvironmentAnnotation(string name, string value) : base(name, () => value)
+    {
+        _name = name;
+        _value = value;
+    }
+}
diff --git a/src/Aspire.Hosting/ApplicationModel/EnvironmentCallbackAnnotation.cs b/src/Aspire.Hosting/ApplicationModel/EnvironmentCallbackAnnotation.cs
index 7a5190a119e..d52e34428eb 100644
--- a/src/Aspire.Hosting/ApplicationModel/EnvironmentCallbackAnnotation.cs
+++ b/src/Aspire.Hosting/ApplicationModel/EnvironmentCallbackAnnotation.cs
@@ -1,13 +1,18 @@
 // Licensed to the .NET Foundation under one or more agreements.
 // The .NET Foundation licenses this file to you under the MIT license.
 
+using System.Diagnostics;
+
 namespace Aspire.Hosting.ApplicationModel;
 
 /// <summary>
 /// Represents an annotation that provides a callback to modify the environment variables of an application.
 /// </summary>
+[DebuggerDisplay("{DebuggerToString(),nq}")]
 public class EnvironmentCallbackAnnotation : IResourceAnnotation
 {
+    private readonly string? _name;
+
     /// <summary>
     /// Initializes a new instance of the <see cref="EnvironmentCallbackAnnotation"/> class with the specified name and callback function.
     /// </summary>
@@ -15,6 +20,7 @@ public class EnvironmentCallbackAnnotation : IResourceAnnotation
     /// <param name="callback">The callback function that returns the value to set the environment variable to.</param>
     public EnvironmentCallbackAnnotation(string name, Func<string> callback)
     {
+        _name = name;
         Callback = (c) => c.EnvironmentVariables[name] = callback();
     }
 
@@ -40,4 +46,14 @@ public EnvironmentCallbackAnnotation(Action<EnvironmentCallbackContext> callback
     /// Gets or sets the callback action to be executed when the environment is being built.
     /// </summary>
     public Action<EnvironmentCallbackContext> Callback { get; private set; }
+
+    private string DebuggerToString()
+    {
+        var text = $@"Type = {GetType().Name}";
+        if (_name != null)
+        {
+            text += $@", Name = ""{_name}""";
+        }
+        return text;
+    }
 }
diff --git a/src/Aspire.Hosting/Extensions/ResourceBuilderExtensions.cs b/src/Aspire.Hosting/Extensions/ResourceBuilderExtensions.cs
index 37033c15890..119701f4193 100644
--- a/src/Aspire.Hosting/Extensions/ResourceBuilderExtensions.cs
+++ b/src/Aspire.Hosting/Extensions/ResourceBuilderExtensions.cs
@@ -26,7 +26,7 @@ public static class ResourceBuilderExtensions
     /// <returns>A resource configured with the specified environment variable.</returns>
     public static IResourceBuilder<T> WithEnvironment<T>(this IResourceBuilder<T> builder, string name, string? value) where T : IResource
     {
-        return builder.WithAnnotation(new EnvironmentCallbackAnnotation(name, () => value ?? string.Empty));
+        return builder.WithAnnotation(new EnvironmentAnnotation(name, value ?? string.Empty));
     }
 
     /// <summary>
@@ -222,10 +222,7 @@ public static IResourceBuilder<TDestination> WithReference<TDestination>(this IR
             throw new InvalidOperationException("The uri absolute path must be \"/\".");
         }
 
-        return builder.WithEnvironment(context =>
-        {
-            context.EnvironmentVariables[$"services__{name}"] = uri.ToString();
-        });
+        return builder.WithEnvironment($"services__{name}", uri.ToString());
     }
 
     /// <summary>