diff --git a/packages/babel-core/test/config-chain.js b/packages/babel-core/test/config-chain.js
index 7c85714f82..9e796fc29d 100644
--- a/packages/babel-core/test/config-chain.js
+++ b/packages/babel-core/test/config-chain.js
@@ -10,7 +10,23 @@ function fixture() {
   return path.join.apply(path, args);
 }
 
-suite("evaluation", function () {
+suite("buildConfigChain", function () {
+  var oldBabelEnv;
+  var oldNodeEnv;
+
+  beforeEach(function () {
+    oldBabelEnv = process.env.BABEL_ENV;
+    oldNodeEnv = process.env.NODE_ENV;
+
+    delete process.env.BABEL_ENV;
+    delete process.env.NODE_ENV;
+  });
+
+  afterEach(function () {
+    process.env.BABEL_ENV = oldBabelEnv;
+    process.env.NODE_ENV = oldNodeEnv;
+  });
+
   test("dir1", function () {
     var chain = buildConfigChain({
       filename: fixture("dir1", "src.js")
@@ -98,4 +114,146 @@ suite("evaluation", function () {
 
     assert.deepEqual(chain, expected);
   });
+
+  test("env - base", function () {
+    var chain = buildConfigChain({
+      filename: fixture("env", "src.js")
+    });
+
+    var expected = [
+      {
+        options: {
+          plugins: [
+            "env-base"
+          ]
+        },
+        alias: fixture("env", ".babelrc"),
+        loc: fixture("env", ".babelrc"),
+        dirname: fixture("env")
+      },
+      {
+        options: {
+          ignore: [
+            "root-ignore"
+          ]
+        },
+        alias: fixture(".babelignore"),
+        loc: fixture(".babelignore"),
+        dirname: fixture()
+      },
+      {
+        options: {
+          filename: fixture("env", "src.js")
+        },
+        alias: "base",
+        loc: "base",
+        dirname: fixture("env")
+      }
+    ];
+
+    assert.deepEqual(chain, expected);
+  });
+
+  test("env - foo", function () {
+    process.env.NODE_ENV = "foo";
+    
+    var chain = buildConfigChain({
+      filename: fixture("env", "src.js")
+    });
+
+    var expected = [
+      {
+        options: {
+          plugins: [
+            "env-base"
+          ]
+        },
+        alias: fixture("env", ".babelrc"),
+        loc: fixture("env", ".babelrc"),
+        dirname: fixture("env")
+      },
+      {
+        options: {
+          plugins: [
+            "env-foo"
+          ]
+        },
+        alias: fixture("env", ".babelrc.env.foo"),
+        loc: fixture("env", ".babelrc.env.foo"),
+        dirname: fixture("env")
+      },
+      {
+        options: {
+          ignore: [
+            "root-ignore"
+          ]
+        },
+        alias: fixture(".babelignore"),
+        loc: fixture(".babelignore"),
+        dirname: fixture()
+      },
+      {
+        options: {
+          filename: fixture("env", "src.js")
+        },
+        alias: "base",
+        loc: "base",
+        dirname: fixture("env")
+      }
+    ];
+
+    assert.deepEqual(chain, expected);
+  });
+  
+  test("env - bar", function () {
+    process.env.NODE_ENV = "foo"; // overridden
+    process.env.NODE_ENV = "bar";
+    
+    var chain = buildConfigChain({
+      filename: fixture("env", "src.js")
+    });
+
+    var expected = [
+      {
+        options: {
+          plugins: [
+            "env-base"
+          ]
+        },
+        alias: fixture("env", ".babelrc"),
+        loc: fixture("env", ".babelrc"),
+        dirname: fixture("env")
+      },
+      {
+        options: {
+          plugins: [
+            "env-bar"
+          ]
+        },
+        alias: fixture("env", ".babelrc.env.bar"),
+        loc: fixture("env", ".babelrc.env.bar"),
+        dirname: fixture("env")
+      },
+      {
+        options: {
+          ignore: [
+            "root-ignore"
+          ]
+        },
+        alias: fixture(".babelignore"),
+        loc: fixture(".babelignore"),
+        dirname: fixture()
+      },
+      {
+        options: {
+          filename: fixture("env", "src.js")
+        },
+        alias: "base",
+        loc: "base",
+        dirname: fixture("env")
+      }
+    ];
+
+    assert.deepEqual(chain, expected);
+  });
 });
diff --git a/packages/babel-core/test/fixtures/config/env/.babelrc b/packages/babel-core/test/fixtures/config/env/.babelrc
new file mode 100644
index 0000000000..8804d3b2fb
--- /dev/null
+++ b/packages/babel-core/test/fixtures/config/env/.babelrc
@@ -0,0 +1,11 @@
+{
+  "plugins": ["env-base"],
+  "env": {
+    "foo": {
+      "plugins": ["env-foo"]
+    },
+    "bar": {
+      "plugins": ["env-bar"]
+    }
+  }
+}
diff --git a/packages/babel-core/test/fixtures/config/env/src.js b/packages/babel-core/test/fixtures/config/env/src.js
new file mode 100644
index 0000000000..8b1a393741
--- /dev/null
+++ b/packages/babel-core/test/fixtures/config/env/src.js
@@ -0,0 +1 @@
+// empty