diff --git a/src/workspace/environment.rs b/src/workspace/environment.rs
index 39d4a816e3..f45eaaac4c 100644
--- a/src/workspace/environment.rs
+++ b/src/workspace/environment.rs
@@ -298,12 +298,21 @@ impl<'p> Environment<'p> {
     /// The environment variables of all features are combined in the order they
     /// are defined for the environment.
     pub(crate) fn activation_env(&self, platform: Option<Platform>) -> IndexMap<String, String> {
-        self.features()
-            .map(|f| f.activation_env(platform))
-            .fold(IndexMap::new(), |mut acc, env| {
+        // As self.features() would put "default" envs in the last item, but the "default" env priority should be the lowest.
+        // Here, we use rfold (reverse fold) to ensure later features override earlier features
+        // for environment variables. Processing features in reverse order means that
+        // features appearing later in the list will have higher precedence.
+        //
+        // Example: If features: [override_feature, user_feature, default]
+        // - rfold processes as: [default, user_feature, override_feature]
+        // - Result: override_feature env vars take precedence over all others
+        self.features().map(|f| f.activation_env(platform)).rfold(
+            IndexMap::new(),
+            |mut acc, env| {
                 acc.extend(env.iter().map(|(k, v)| (k.clone(), v.clone())));
                 acc
-            })
+            },
+        )
     }
 
     /// Validates that the given platform is supported by this environment.
@@ -614,6 +623,58 @@ mod tests {
         );
     }
 
+     #[test]
+    fn test_activation_env_priority() {
+        let manifest = Workspace::from_str(
+            Path::new("pixi.toml"),
+            r#"
+            [project]
+            name = "foobar"
+            channels = []
+            platforms = ["linux-64", "osx-64"]
+
+            [activation.env]
+            FOO_VAR = "default"
+
+            [feature.foo.activation.env]
+            FOO_VAR = "foo"
+
+            [feature.cuda1.activation.env]
+            FOO_VAR = "cuda1"
+
+            [feature.cuda2.activation.env]
+            FOO_VAR = "cuda2"
+
+            [environments]
+            foo = ["foo"]
+            cuda = ["cuda1", "cuda2"] 
+            "#,
+        )
+        .unwrap();
+
+        let default_env = manifest.default_environment();
+        let foo_env = manifest.environment("foo").unwrap();
+        let cuda_env = manifest.environment("cuda").unwrap();
+          assert_eq!(
+            default_env.activation_env(None),
+            indexmap! {
+                "FOO_VAR".to_string() => "default",
+            }
+        );
+        assert_eq!(
+            foo_env.activation_env(None),
+            indexmap! {
+                "FOO_VAR".to_string() => "foo",
+            }
+        );
+        assert_eq!(
+            cuda_env.activation_env(None),
+            indexmap! {
+                "FOO_VAR".to_string() => "cuda1",
+            }
+        );
+    }
+
     #[test]
     fn test_channel_feature_priority() {
         let manifest = Workspace::from_str(
diff --git a/tests/integration_python/test_run_cli.py b/tests/integration_python/test_run_cli.py
index e552757b71..36688e07e1 100644
--- a/tests/integration_python/test_run_cli.py
+++ b/tests/integration_python/test_run_cli.py
@@ -1554,7 +1554,8 @@ def test_run_with_environment_variable_priority(
         stdout_excludes="outside_env",
         env={"MY_ENV": "outside_env"},
     )
-    
+
+
 @pytest.mark.skipif(
     sys.platform == "win32",
     reason="Signal handling is different on Windows",