diff --git a/frigate/test/test_env.py b/frigate/test/test_env.py
new file mode 100644
index 000000000..fe2ce8d3e
--- /dev/null
+++ b/frigate/test/test_env.py
@@ -0,0 +1,105 @@
+"""Tests for environment variable handling."""
+
+import os
+import unittest
+
+from frigate.config.env import (
+    FRIGATE_ENV_VARS,
+    validate_env_string,
+    validate_env_vars,
+)
+
+
+class TestEnvString(unittest.TestCase):
+    def setUp(self):
+        self._original_env_vars = dict(FRIGATE_ENV_VARS)
+
+    def tearDown(self):
+        FRIGATE_ENV_VARS.clear()
+        FRIGATE_ENV_VARS.update(self._original_env_vars)
+
+    def test_substitution(self):
+        """EnvString substitutes FRIGATE_ env vars."""
+        FRIGATE_ENV_VARS["FRIGATE_TEST_HOST"] = "192.168.1.100"
+        result = validate_env_string("{FRIGATE_TEST_HOST}")
+        self.assertEqual(result, "192.168.1.100")
+
+    def test_substitution_in_url(self):
+        """EnvString substitutes vars embedded in a URL."""
+        FRIGATE_ENV_VARS["FRIGATE_CAM_USER"] = "admin"
+        FRIGATE_ENV_VARS["FRIGATE_CAM_PASS"] = "secret"
+        result = validate_env_string(
+            "rtsp://{FRIGATE_CAM_USER}:{FRIGATE_CAM_PASS}@10.0.0.1/stream"
+        )
+        self.assertEqual(result, "rtsp://admin:secret@10.0.0.1/stream")
+
+    def test_no_placeholder(self):
+        """Plain strings pass through unchanged."""
+        result = validate_env_string("192.168.1.1")
+        self.assertEqual(result, "192.168.1.1")
+
+    def test_unknown_var_raises(self):
+        """Referencing an unknown var raises KeyError."""
+        with self.assertRaises(KeyError):
+            validate_env_string("{FRIGATE_NONEXISTENT_VAR}")
+
+
+class TestEnvVars(unittest.TestCase):
+    def setUp(self):
+        self._original_env_vars = dict(FRIGATE_ENV_VARS)
+        self._original_environ = os.environ.copy()
+
+    def tearDown(self):
+        FRIGATE_ENV_VARS.clear()
+        FRIGATE_ENV_VARS.update(self._original_env_vars)
+        # Clean up any env vars we set
+        for key in list(os.environ.keys()):
+            if key not in self._original_environ:
+                del os.environ[key]
+
+    def _make_context(self, install: bool):
+        """Create a mock ValidationInfo with the given install flag."""
+
+        class MockContext:
+            def __init__(self, ctx):
+                self.context = ctx
+
+        mock = MockContext({"install": install})
+        return mock
+
+    def test_install_sets_os_environ(self):
+        """validate_env_vars with install=True sets os.environ."""
+        ctx = self._make_context(install=True)
+        validate_env_vars({"MY_CUSTOM_VAR": "value123"}, ctx)
+        self.assertEqual(os.environ.get("MY_CUSTOM_VAR"), "value123")
+
+    def test_install_updates_frigate_env_vars(self):
+        """validate_env_vars with install=True updates FRIGATE_ENV_VARS for FRIGATE_ keys."""
+        ctx = self._make_context(install=True)
+        validate_env_vars({"FRIGATE_MQTT_PASS": "secret"}, ctx)
+        self.assertEqual(FRIGATE_ENV_VARS["FRIGATE_MQTT_PASS"], "secret")
+
+    def test_install_skips_non_frigate_in_env_vars_dict(self):
+        """Non-FRIGATE_ keys are set in os.environ but not in FRIGATE_ENV_VARS."""
+        ctx = self._make_context(install=True)
+        validate_env_vars({"OTHER_VAR": "value"}, ctx)
+        self.assertEqual(os.environ.get("OTHER_VAR"), "value")
+        self.assertNotIn("OTHER_VAR", FRIGATE_ENV_VARS)
+
+    def test_no_install_does_not_set(self):
+        """validate_env_vars without install=True does not modify state."""
+        ctx = self._make_context(install=False)
+        validate_env_vars({"FRIGATE_SKIP": "nope"}, ctx)
+        self.assertNotIn("FRIGATE_SKIP", FRIGATE_ENV_VARS)
+        self.assertNotIn("FRIGATE_SKIP", os.environ)
+
+    def test_env_vars_available_for_env_string(self):
+        """Vars set via validate_env_vars are usable in validate_env_string."""
+        ctx = self._make_context(install=True)
+        validate_env_vars({"FRIGATE_BROKER": "mqtt.local"}, ctx)
+        result = validate_env_string("{FRIGATE_BROKER}")
+        self.assertEqual(result, "mqtt.local")
+
+
+if __name__ == "__main__":
+    unittest.main()