diff --git a/cmd/soroban-cli/src/cli.rs b/cmd/soroban-cli/src/cli.rs
index 9183d0e30..76c5c3194 100644
--- a/cmd/soroban-cli/src/cli.rs
+++ b/cmd/soroban-cli/src/cli.rs
@@ -2,6 +2,7 @@ use clap::CommandFactory;
 use dotenvy::dotenv;
 use tracing_subscriber::{fmt, EnvFilter};
 
+use crate::config::Config;
 use crate::print::Print;
 use crate::upgrade_check::upgrade_check;
 use crate::{commands, Root};
@@ -33,6 +34,8 @@ pub async fn main() {
         }
     }
 
+    set_env_from_config();
+
     let mut root = Root::new().unwrap_or_else(|e| match e {
         commands::Error::Clap(e) => {
             let mut cmd = Root::command();
@@ -86,3 +89,27 @@ pub async fn main() {
         std::process::exit(1);
     }
 }
+
+// Load ~/.config/stellar/config.toml defaults as env vars.
+fn set_env_from_config() {
+    if let Ok(config) = Config::new() {
+        set_env_value_from_config("STELLAR_ACCOUNT", config.defaults.identity);
+        set_env_value_from_config("STELLAR_NETWORK", config.defaults.network);
+    }
+}
+
+// Set an env var from a config file if the env var is not already set.
+// Additionally, a `$NAME_SOURCE` variant will be set, which allows
+// `stellar env` to properly identity the source.
+fn set_env_value_from_config(name: &str, value: Option<String>) {
+    let Some(value) = value else {
+        return;
+    };
+
+    std::env::remove_var(format!("{name}_SOURCE"));
+
+    if std::env::var(name).is_err() {
+        std::env::set_var(name, value);
+        std::env::set_var(format!("{name}_SOURCE"), "use");
+    }
+}
diff --git a/cmd/soroban-cli/src/commands/env/mod.rs b/cmd/soroban-cli/src/commands/env/mod.rs
index 4d745400c..298cac3d2 100644
--- a/cmd/soroban-cli/src/commands/env/mod.rs
+++ b/cmd/soroban-cli/src/commands/env/mod.rs
@@ -1,9 +1,6 @@
 use crate::{
     commands::global,
-    config::{
-        locator::{self},
-        Config,
-    },
+    config::locator::{self},
     print::Print,
 };
 use clap::Parser;
@@ -23,14 +20,13 @@ pub enum Error {
 impl Cmd {
     pub fn run(&self, global_args: &global::Args) -> Result<(), Error> {
         let print = Print::new(global_args.quiet);
-        let config = Config::new()?;
         let mut lines: Vec<(String, String)> = Vec::new();
 
-        if let Some(data) = get("STELLAR_NETWORK", config.defaults.network) {
+        if let Some(data) = get("STELLAR_NETWORK") {
             lines.push(data);
         }
 
-        if let Some(data) = get("STELLAR_ACCOUNT", config.defaults.identity) {
+        if let Some(data) = get("STELLAR_ACCOUNT") {
             lines.push(data);
         }
 
@@ -51,13 +47,14 @@ impl Cmd {
     }
 }
 
-fn get(env_var: &str, default_value: Option<String>) -> Option<(String, String)> {
-    if let Ok(value) = std::env::var(env_var) {
-        return Some((format!("{env_var}={value}"), "env".to_string()));
-    }
+fn get(env_var: &str) -> Option<(String, String)> {
+    // The _SOURCE env var is set from cmd/soroban-cli/src/cli.rs#set_env_value_from_config
+    let source = std::env::var(format!("{env_var}_SOURCE"))
+        .ok()
+        .unwrap_or("env".to_string());
 
-    if let Some(value) = default_value {
-        return Some((format!("{env_var}={value}"), "default".to_string()));
+    if let Ok(value) = std::env::var(env_var) {
+        return Some((format!("{env_var}={value}"), source));
     }
 
     None