diff --git a/docker/api/exec_api.py b/docker/api/exec_api.py
index 6c3e6383..0382a647 100644
--- a/docker/api/exec_api.py
+++ b/docker/api/exec_api.py
@@ -8,7 +8,8 @@ class ExecApiMixin(object):
     @utils.minimum_version('1.15')
     @utils.check_resource
     def exec_create(self, container, cmd, stdout=True, stderr=True,
-                    stdin=False, tty=False, privileged=False, user=''):
+                    stdin=False, tty=False, privileged=False, user='',
+                    environment=None):
         """
         Sets up an exec instance in a running container.
 
@@ -22,6 +23,9 @@ class ExecApiMixin(object):
             tty (bool): Allocate a pseudo-TTY. Default: False
             privileged (bool): Run as privileged.
             user (str): User to execute command as. Default: root
+            environment (dict or list): A dictionary or a list of strings in
+                the following format ``["PASSWORD=xxx"]`` or
+                ``{"PASSWORD": "xxx"}``.
 
         Returns:
             (dict): A dictionary with an exec ``Id`` key.
@@ -39,9 +43,16 @@ class ExecApiMixin(object):
             raise errors.InvalidVersion(
                 'User-specific exec is not supported in API < 1.19'
             )
+        if environment and utils.compare_version('1.25', self._version) < 0:
+            raise errors.InvalidVersion(
+                'Setting environment for exec is not supported in API < 1.25'
+            )
         if isinstance(cmd, six.string_types):
             cmd = utils.split_command(cmd)
 
+        if isinstance(environment, dict):
+            environment = utils.utils.format_environment(environment)
+
         data = {
             'Container': container,
             'User': user,
@@ -50,7 +61,8 @@ class ExecApiMixin(object):
             'AttachStdin': stdin,
             'AttachStdout': stdout,
             'AttachStderr': stderr,
-            'Cmd': cmd
+            'Cmd': cmd,
+            'Env': environment,
         }
 
         url = self._url('/containers/{0}/exec', container)
diff --git a/docker/models/containers.py b/docker/models/containers.py
index 2213583a..7a1cd716 100644
--- a/docker/models/containers.py
+++ b/docker/models/containers.py
@@ -125,7 +125,7 @@ class Container(Model):
 
     def exec_run(self, cmd, stdout=True, stderr=True, stdin=False, tty=False,
                  privileged=False, user='', detach=False, stream=False,
-                 socket=False):
+                 socket=False, environment=None):
         """
         Run a command inside this container. Similar to
         ``docker exec``.
@@ -141,6 +141,9 @@ class Container(Model):
             detach (bool): If true, detach from the exec command.
                 Default: False
             stream (bool): Stream response data. Default: False
+            environment (dict or list): A dictionary or a list of strings in
+                the following format ``["PASSWORD=xxx"]`` or
+                ``{"PASSWORD": "xxx"}``.
 
         Returns:
             (generator or str): If ``stream=True``, a generator yielding
@@ -152,7 +155,7 @@ class Container(Model):
         """
         resp = self.client.api.exec_create(
             self.id, cmd, stdout=stdout, stderr=stderr, stdin=stdin, tty=tty,
-            privileged=privileged, user=user
+            privileged=privileged, user=user, environment=environment
         )
         return self.client.api.exec_start(
             resp['Id'], detach=detach, tty=tty, stream=stream, socket=socket
diff --git a/tests/integration/api_exec_test.py b/tests/integration/api_exec_test.py
index 55286e37..fb3c6f93 100644
--- a/tests/integration/api_exec_test.py
+++ b/tests/integration/api_exec_test.py
@@ -2,6 +2,7 @@ from docker.utils.socket import next_frame_size
 from docker.utils.socket import read_exactly
 
 from .base import BaseAPIIntegrationTest, BUSYBOX
+from ..helpers import requires_api_version
 
 
 class ExecTest(BaseAPIIntegrationTest):
@@ -121,3 +122,17 @@ class ExecTest(BaseAPIIntegrationTest):
         exec_info = self.client.exec_inspect(exec_id)
         self.assertIn('ExitCode', exec_info)
         self.assertNotEqual(exec_info['ExitCode'], 0)
+
+    @requires_api_version('1.25')
+    def test_exec_command_with_env(self):
+        container = self.client.create_container(BUSYBOX, 'cat',
+                                                 detach=True, stdin_open=True)
+        id = container['Id']
+        self.client.start(id)
+        self.tmp_containers.append(id)
+
+        res = self.client.exec_create(id, 'env', environment=["X=Y"])
+        self.assertIn('Id', res)
+
+        exec_log = self.client.exec_start(res)
+        self.assertIn(b'X=Y\n', exec_log)
diff --git a/tests/unit/models_containers_test.py b/tests/unit/models_containers_test.py
index 4f4dc0f3..e74bb7cd 100644
--- a/tests/unit/models_containers_test.py
+++ b/tests/unit/models_containers_test.py
@@ -366,7 +366,7 @@ class ContainerTest(unittest.TestCase):
         container.exec_run("echo hello world", privileged=True, stream=True)
         client.api.exec_create.assert_called_with(
             FAKE_CONTAINER_ID, "echo hello world", stdout=True, stderr=True,
-            stdin=False, tty=False, privileged=True, user=''
+            stdin=False, tty=False, privileged=True, user='', environment=None
         )
         client.api.exec_start.assert_called_with(
             FAKE_EXEC_ID, detach=False, tty=False, stream=True, socket=False