diff --git a/bake/bake.go b/bake/bake.go
index ad626ee6..66cd5d19 100644
--- a/bake/bake.go
+++ b/bake/bake.go
@@ -181,7 +181,7 @@ func readWithProgress(r io.Reader, setStatus func(st *client.VertexStatus)) (dt
 }
 
 func ListTargets(files []File) ([]string, error) {
-	c, _, err := ParseFiles(files, nil)
+	c, _, err := ParseFiles(files, nil, nil)
 	if err != nil {
 		return nil, err
 	}
@@ -196,7 +196,7 @@ func ListTargets(files []File) ([]string, error) {
 }
 
 func ReadTargets(ctx context.Context, files []File, targets, overrides []string, defaults map[string]string, ent *EntitlementConf) (map[string]*Target, map[string]*Group, error) {
-	c, _, err := ParseFiles(files, defaults)
+	c, _, err := ParseFiles(files, overrides, defaults)
 	if err != nil {
 		return nil, nil, err
 	}
@@ -304,7 +304,7 @@ func sliceToMap(env []string) (res map[string]string) {
 	return
 }
 
-func ParseFiles(files []File, defaults map[string]string) (_ *Config, _ *hclparser.ParseMeta, err error) {
+func ParseFiles(files []File, overrides []string, defaults map[string]string) (_ *Config, _ *hclparser.ParseMeta, err error) {
 	defer func() {
 		err = formatHCLError(err, files)
 	}()
@@ -312,8 +312,12 @@ func ParseFiles(files []File, defaults map[string]string) (_ *Config, _ *hclpars
 	var c Config
 	var composeFiles []File
 	var hclFiles []*hcl.File
+	envOverrides, err := parseEnvOverrides(overrides)
+	if err != nil {
+		return nil, nil, err
+	}
 	for _, f := range files {
-		isCompose, composeErr := validateComposeFile(f.Data, f.Name)
+		isCompose, composeErr := validateComposeFile(f.Data, f.Name, envOverrides)
 		if isCompose {
 			if composeErr != nil {
 				return nil, nil, composeErr
@@ -336,7 +340,7 @@ func ParseFiles(files []File, defaults map[string]string) (_ *Config, _ *hclpars
 	}
 
 	if len(composeFiles) > 0 {
-		cfg, cmperr := ParseComposeFiles(composeFiles)
+		cfg, cmperr := ParseComposeFiles(composeFiles, envOverrides)
 		if cmperr != nil {
 			return nil, nil, errors.Wrap(cmperr, "failed to parse compose file")
 		}
@@ -374,6 +378,28 @@ func ParseFiles(files []File, defaults map[string]string) (_ *Config, _ *hclpars
 	return &c, &pm, nil
 }
 
+// Considering overrides are "targetpattern.key=value"
+// Parse env overrides like example "env.key=value"
+func parseEnvOverrides(overrides []string) (map[string]string, error) {
+	envs := make(map[string]string)
+	for _, o := range overrides {
+		parts := strings.SplitN(o, "=", 2)
+		if len(parts) != 2 {
+			return nil, errors.Errorf("invalid env override %q", o)
+		}
+		key := strings.TrimSpace(parts[0])
+		value := strings.TrimSpace(parts[1])
+		if strings.HasPrefix(key, "env.") {
+			strippedKey := strings.TrimPrefix(key, "env.")
+			if strippedKey == "" || value == "" {
+				return nil, errors.Errorf("invalid env override %q", o)
+			}
+			envs[strippedKey] = value
+		}
+	}
+	return envs, nil
+}
+
 func dedupeConfig(c Config) Config {
 	c2 := c
 	c2.Groups = make([]*Group, 0, len(c2.Groups))
@@ -396,7 +422,7 @@ func dedupeConfig(c Config) Config {
 }
 
 func ParseFile(dt []byte, fn string) (*Config, error) {
-	c, _, err := ParseFiles([]File{{Data: dt, Name: fn}}, nil)
+	c, _, err := ParseFiles([]File{{Data: dt, Name: fn}}, nil, nil)
 	return c, err
 }
 
diff --git a/bake/bake_test.go b/bake/bake_test.go
index 482b83ad..452a5a94 100644
--- a/bake/bake_test.go
+++ b/bake/bake_test.go
@@ -1641,7 +1641,7 @@ services:
 	c, _, err := ParseFiles([]File{
 		{Data: dt, Name: "c1.foo"},
 		{Data: dt2, Name: "c2.bar"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Targets))
diff --git a/bake/compose.go b/bake/compose.go
index 1ca046d0..f0ee4b70 100644
--- a/bake/compose.go
+++ b/bake/compose.go
@@ -19,8 +19,8 @@ import (
 	"gopkg.in/yaml.v3"
 )
 
-func ParseComposeFiles(fs []File) (*Config, error) {
-	envs, err := composeEnv()
+func ParseComposeFiles(fs []File, envOverrides map[string]string) (*Config, error) {
+	envs, err := composeEnv(envOverrides)
 	if err != nil {
 		return nil, err
 	}
@@ -199,8 +199,8 @@ func ParseCompose(cfgs []composetypes.ConfigFile, envs map[string]string) (*Conf
 	return &c, nil
 }
 
-func validateComposeFile(dt []byte, fn string) (bool, error) {
-	envs, err := composeEnv()
+func validateComposeFile(dt []byte, fn string, envOverrides map[string]string) (bool, error) {
+	envs, err := composeEnv(envOverrides)
 	if err != nil {
 		return true, err
 	}
@@ -233,7 +233,7 @@ func validateCompose(dt []byte, envs map[string]string) error {
 	return err
 }
 
-func composeEnv() (map[string]string, error) {
+func composeEnv(envOverrides map[string]string) (map[string]string, error) {
 	envs := sliceToMap(os.Environ())
 	if wd, err := os.Getwd(); err == nil {
 		envs, err = loadDotEnv(envs, wd)
@@ -241,6 +241,12 @@ func composeEnv() (map[string]string, error) {
 			return nil, err
 		}
 	}
+	if envOverrides != nil {
+		// Apply envOverrides on envs
+		for key, value := range envOverrides {
+			envs[key] = value
+		}
+	}
 	return envs, nil
 }
 
diff --git a/bake/compose_test.go b/bake/compose_test.go
index e19ff138..9ed62ec5 100644
--- a/bake/compose_test.go
+++ b/bake/compose_test.go
@@ -437,7 +437,33 @@ services:
 	c, err := ParseComposeFiles([]File{{
 		Name: "docker-compose.yml",
 		Data: dt,
-	}})
+	}}, nil)
+	require.NoError(t, err)
+	require.Equal(t, map[string]*string{"FOO": ptrstr("bar")}, c.Targets[0].Args)
+}
+
+func TestEnvOverrides(t *testing.T) {
+	tmpdir := t.TempDir()
+
+	overrides := []string{"env.FOO=bar"}
+
+	envOverrides, err := parseEnvOverrides(overrides)
+	require.NoError(t, err)
+
+	dt := []byte(`
+services:
+  scratch:
+    build:
+     context: .
+     args:
+        FOO:
+`)
+
+	chdir(t, tmpdir)
+	c, err := ParseComposeFiles([]File{{
+		Name: "docker-compose.yml",
+		Data: dt,
+	}}, envOverrides)
 	require.NoError(t, err)
 	require.Equal(t, map[string]*string{"FOO": ptrstr("bar")}, c.Targets[0].Args)
 }
@@ -664,7 +690,7 @@ target "default" {
 	}
 	for _, tt := range cases {
 		t.Run(tt.name, func(t *testing.T) {
-			isCompose, err := validateComposeFile(tt.dt, tt.fn)
+			isCompose, err := validateComposeFile(tt.dt, tt.fn, nil)
 			assert.Equal(t, tt.isCompose, isCompose)
 			if tt.wantErr {
 				require.Error(t, err)
@@ -738,7 +764,7 @@ services:
 	c, err := ParseComposeFiles([]File{{
 		Name: "composetypes.yml",
 		Data: dt,
-	}})
+	}}, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 2, len(c.Targets))
diff --git a/bake/hcl_test.go b/bake/hcl_test.go
index db1ca9c6..47cdfc83 100644
--- a/bake/hcl_test.go
+++ b/bake/hcl_test.go
@@ -284,7 +284,7 @@ func TestHCLMultiFileSharedVariables(t *testing.T) {
 	c, _, err := ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.hcl"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, "app", c.Targets[0].Name)
@@ -296,7 +296,7 @@ func TestHCLMultiFileSharedVariables(t *testing.T) {
 	c, _, err = ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.hcl"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Targets))
@@ -333,7 +333,7 @@ func TestHCLVarsWithVars(t *testing.T) {
 	c, _, err := ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.hcl"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, "app", c.Targets[0].Name)
@@ -345,7 +345,7 @@ func TestHCLVarsWithVars(t *testing.T) {
 	c, _, err = ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.hcl"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Targets))
@@ -841,7 +841,7 @@ func TestHCLMultiFileAttrs(t *testing.T) {
 	c, _, err := ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.hcl"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, "app", c.Targets[0].Name)
@@ -852,7 +852,7 @@ func TestHCLMultiFileAttrs(t *testing.T) {
 	c, _, err = ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.hcl"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Targets))
@@ -876,7 +876,7 @@ func TestHCLMultiFileGlobalAttrs(t *testing.T) {
 	c, _, err := ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.hcl"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 	require.Equal(t, 1, len(c.Targets))
 	require.Equal(t, "app", c.Targets[0].Name)
@@ -1060,7 +1060,7 @@ func TestHCLRenameMultiFile(t *testing.T) {
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.hcl"},
 		{Data: dt3, Name: "c3.hcl"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 2, len(c.Targets))
@@ -1278,7 +1278,7 @@ func TestHCLMatrixArgsOverride(t *testing.T) {
 
 	c, _, err := ParseFiles([]File{
 		{Data: dt, Name: "docker-bake.hcl"},
-	}, map[string]string{"ABC": "11,22,33"})
+	}, nil, map[string]string{"ABC": "11,22,33"})
 	require.NoError(t, err)
 
 	require.Equal(t, 3, len(c.Targets))
@@ -1465,7 +1465,7 @@ services:
 	c, _, err := ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
 		{Data: dt2, Name: "c2.yml"},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Targets))
@@ -1486,7 +1486,7 @@ func TestHCLBuiltinVars(t *testing.T) {
 
 	c, _, err := ParseFiles([]File{
 		{Data: dt, Name: "c1.hcl"},
-	}, map[string]string{
+	}, nil, map[string]string{
 		"BAKE_CMD_CONTEXT": "foo",
 	})
 	require.NoError(t, err)
@@ -1549,7 +1549,7 @@ target "b" {
   }]
 }`),
 		},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Groups))
@@ -1606,7 +1606,7 @@ target "two" {
 			Name: "bar.json",
 			Data: []byte(`{"ABC": "ghi", "DEF": "jkl"}`),
 		},
-	}, nil)
+	}, nil, nil)
 	require.NoError(t, err)
 
 	require.Equal(t, 1, len(c.Groups))
@@ -2267,6 +2267,7 @@ func TestJSONOverridePriority(t *testing.T) {
 		t.Setenv("FOO_JSON", "[3,4,5]")
 		c, _, err := ParseFiles(
 			[]File{{Name: "docker-bake.hcl", Data: dt}},
+			nil,
 			map[string]string{"FOO_JSON": "whatever"},
 		)
 		require.NoError(t, err)
diff --git a/commands/bake.go b/commands/bake.go
index e9636e2f..5a024092 100644
--- a/commands/bake.go
+++ b/commands/bake.go
@@ -198,7 +198,7 @@ func runBake(ctx context.Context, dockerCli command.Cli, targets []string, in ba
 	}
 
 	if in.list != "" {
-		cfg, pm, err := bake.ParseFiles(files, defaults)
+		cfg, pm, err := bake.ParseFiles(files, overrides, defaults)
 		if err != nil {
 			return err
 		}