diff --git a/HISTORY.rst b/HISTORY.rst
index 68e1f024..86f150a8 100644
--- a/HISTORY.rst
+++ b/HISTORY.rst
@@ -16,6 +16,7 @@ PlatformIO Core 5
 - Upgraded build engine to the SCons 4.3 (`release notes <https://github.com/SCons/scons/blob/rel_4.3.0/CHANGES.txt>`__)
 - Fixed an issue with the CLion project generator when a macro contains a space (`issue #4102 <https://github.com/platformio/platformio-core/issues/4102>`_)
 - Fixed an issue with the NetBeans project generator when the path to PlatformIO contains a space (`issue #4096 <https://github.com/platformio/platformio-core/issues/4096>`_)
+- Fixed a bug when the system environment variable does not override a project configuration option (`issue #4125 <https://github.com/platformio/platformio-core/issues/4125>`_)
 
 5.2.3 (2021-11-05)
 ~~~~~~~~~~~~~~~~~~
diff --git a/platformio/project/config.py b/platformio/project/config.py
index d930dfa7..492bacf2 100644
--- a/platformio/project/config.py
+++ b/platformio/project/config.py
@@ -271,7 +271,7 @@ class ProjectConfigBase(object):
                 if value == MISSING:
                     value = ""
                 value += ("\n" if value else "") + envvar_value
-            elif envvar_value and value == MISSING:
+            elif envvar_value:
                 value = envvar_value
 
         if value == MISSING:
diff --git a/tests/test_projectconf.py b/tests/test_projectconf.py
index da9b7732..350bdeaa 100644
--- a/tests/test_projectconf.py
+++ b/tests/test_projectconf.py
@@ -226,7 +226,7 @@ def test_sysenv_options(config):
         "-DSYSENVDEPS1 -DSYSENVDEPS2",
     ]
     assert config.get("env:base", "upload_port") == "/dev/sysenv/port"
-    assert config.get("env:extra_2", "upload_port") == "/dev/extra_2/port"
+    assert config.get("env:extra_2", "upload_port") == "/dev/sysenv/port"
     assert config.get("env:base", "build_unflags") == ["-DREMOVE_MACRO"]
 
     # env var as option
@@ -244,10 +244,16 @@ def test_sysenv_options(config):
         "upload_port",
     ]
 
-    # sysenv
-    custom_core_dir = os.path.join(os.getcwd(), "custom")
+    # sysenv dirs
+    custom_core_dir = os.path.join(os.getcwd(), "custom-core")
+    custom_src_dir = os.path.join(os.getcwd(), "custom-src")
+    custom_build_dir = os.path.join(os.getcwd(), "custom-build")
     os.environ["PLATFORMIO_HOME_DIR"] = custom_core_dir
+    os.environ["PLATFORMIO_SRC_DIR"] = custom_src_dir
+    os.environ["PLATFORMIO_BUILD_DIR"] = custom_build_dir
     assert config.get("platformio", "core_dir") == os.path.realpath(custom_core_dir)
+    assert config.get("platformio", "src_dir") == os.path.realpath(custom_src_dir)
+    assert config.get("platformio", "build_dir") == os.path.realpath(custom_build_dir)
 
     # cleanup system environment variables
     del os.environ["PLATFORMIO_BUILD_FLAGS"]
@@ -255,6 +261,8 @@ def test_sysenv_options(config):
     del os.environ["PLATFORMIO_UPLOAD_PORT"]
     del os.environ["__PIO_TEST_CNF_EXTRA_FLAGS"]
     del os.environ["PLATFORMIO_HOME_DIR"]
+    del os.environ["PLATFORMIO_SRC_DIR"]
+    del os.environ["PLATFORMIO_BUILD_DIR"]
 
 
 def test_getraw_value(config):