diff --git a/Auxiliary/vim/syntax/cmake.vim b/Auxiliary/vim/syntax/cmake.vim
index 64e18e814fee6a4ba701f1002ee79ab5eb65fc0d..00fb47c689d611bc77bf34022de5eb90e4b54136 100644
--- a/Auxiliary/vim/syntax/cmake.vim
+++ b/Auxiliary/vim/syntax/cmake.vim
@@ -2287,6 +2287,7 @@ syn keyword cmakeKWExternalProject contained
             \ BUILD_ALWAYS
             \ BUILD_BYPRODUCTS
             \ BUILD_COMMAND
+            \ BUILD_ENVIRONMENT_MODIFICATION
             \ BUILD_IN_SOURCE
             \ CHECKOUT
             \ CMAKE_ARGS
@@ -2296,6 +2297,7 @@ syn keyword cmakeKWExternalProject contained
             \ CMAKE_INSTALL_MODE
             \ COMMENT
             \ CONFIGURE_COMMAND
+            \ CONFIGURE_ENVIRONMENT_MODIFICATION
             \ CONFIGURE_HANDLED_BY_BUILD
             \ CVS
             \ CVSROOT
@@ -2312,6 +2314,7 @@ syn keyword cmakeKWExternalProject contained
             \ DOWNLOAD_NAME
             \ DOWNLOAD_NO_EXTRACT
             \ DOWNLOAD_NO_PROGRESS
+            \ ENVIRONMENT_MODIFICATION
             \ EP_BASE
             \ EP_INDEPENDENT_STEP_TARGETS
             \ EP_PREFIX
@@ -2341,6 +2344,7 @@ syn keyword cmakeKWExternalProject contained
             \ INSTALL_BYPRODUCTS
             \ INSTALL_COMMAND
             \ INSTALL_DIR
+            \ INSTALL_ENVIRONMENT_MODIFICATION
             \ JOB_POOLS
             \ LIST_SEPARATOR
             \ LOG_BUILD
@@ -2380,6 +2384,7 @@ syn keyword cmakeKWExternalProject contained
             \ TEST_AFTER_INSTALL
             \ TEST_BEFORE_INSTALL
             \ TEST_COMMAND
+            \ TEST_ENVIRONMENT_MODIFICATION
             \ TEST_EXCLUDE_FROM_MAIN
             \ TIMEOUT
             \ TLS_CAINFO
diff --git a/Help/include/ENVIRONMENT_MODIFICATION_OPS.rst b/Help/include/ENVIRONMENT_MODIFICATION_OPS.rst
new file mode 100644
index 0000000000000000000000000000000000000000..9ef4b1419b58a503f294592a853e89c36d02b2a4
--- /dev/null
+++ b/Help/include/ENVIRONMENT_MODIFICATION_OPS.rst
@@ -0,0 +1,20 @@
+- ``reset``: Reset to the unmodified value, ignoring all modifications to
+  ``MYVAR`` prior to this entry. Note that this will reset the variable to
+  the value set by :prop_test:`ENVIRONMENT`, if it was set, and otherwise
+  to its state from the rest of the CTest execution.
+- ``set``: Replaces the current value of ``MYVAR`` with ``VALUE``.
+- ``unset``: Unsets the current value of ``MYVAR``.
+- ``string_append``: Appends singular ``VALUE`` to the current value of
+  ``MYVAR``.
+- ``string_prepend``: Prepends singular ``VALUE`` to the current value of
+  ``MYVAR``.
+- ``path_list_append``: Appends singular ``VALUE`` to the current value of
+  ``MYVAR`` using the host platform's path list separator (``;`` on Windows
+  and ``:`` elsewhere).
+- ``path_list_prepend``: Prepends singular ``VALUE`` to the current value of
+  ``MYVAR`` using the host platform's path list separator (``;`` on Windows
+  and ``:`` elsewhere).
+- ``cmake_list_append``: Appends singular ``VALUE`` to the current value of
+  ``MYVAR`` using ``;`` as the separator.
+- ``cmake_list_prepend``: Prepends singular ``VALUE`` to the current value of
+  ``MYVAR`` using ``;`` as the separator.
diff --git a/Help/prop_test/ENVIRONMENT_MODIFICATION.rst b/Help/prop_test/ENVIRONMENT_MODIFICATION.rst
index c6c1a824ca3acf929619af0aa948004effcea6d0..cb9cfcd7b34621088bd891c900cecd9492918811 100644
--- a/Help/prop_test/ENVIRONMENT_MODIFICATION.rst
+++ b/Help/prop_test/ENVIRONMENT_MODIFICATION.rst
@@ -13,26 +13,7 @@ where ``MYVAR`` is the case-sensitive name of an environment variable
 to be modified.  Entries are considered in the order specified in the
 property's value.  The ``OP`` may be one of:
 
-- ``reset``: Reset to the unmodified value, ignoring all modifications to
-  ``MYVAR`` prior to this entry. Note that this will reset the variable to
-  the value set by :prop_test:`ENVIRONMENT`, if it was set, and otherwise
-  to its state from the rest of the CTest execution.
-- ``set``: Replaces the current value of ``MYVAR`` with ``VALUE``.
-- ``unset``: Unsets the current value of ``MYVAR``.
-- ``string_append``: Appends singular ``VALUE`` to the current value of
-  ``MYVAR``.
-- ``string_prepend``: Prepends singular ``VALUE`` to the current value of
-  ``MYVAR``.
-- ``path_list_append``: Appends singular ``VALUE`` to the current value of
-  ``MYVAR`` using the host platform's path list separator (``;`` on Windows
-  and ``:`` elsewhere).
-- ``path_list_prepend``: Prepends singular ``VALUE`` to the current value of
-  ``MYVAR`` using the host platform's path list separator (``;`` on Windows
-  and ``:`` elsewhere).
-- ``cmake_list_append``: Appends singular ``VALUE`` to the current value of
-  ``MYVAR`` using ``;`` as the separator.
-- ``cmake_list_prepend``: Prepends singular ``VALUE`` to the current value of
-  ``MYVAR`` using ``;`` as the separator.
+ .. include:: ../include/ENVIRONMENT_MODIFICATION_OPS.rst
 
 Unrecognized ``OP`` values will result in the test failing before it is
 executed. This is so that future operations may be added without changing
diff --git a/Modules/ExternalProject.cmake b/Modules/ExternalProject.cmake
index 61e2ea56566c8440c3b237a49b056703a283336f..3fb822439b98b804aa412d5316cf81229f63484b 100644
--- a/Modules/ExternalProject.cmake
+++ b/Modules/ExternalProject.cmake
@@ -654,6 +654,48 @@ overridden if required.
   examples of build systems whose build step is smart enough to know if the
   configure step needs to be rerun.
 
+``CONFIGURE_ENVIRONMENT_MODIFICATION <modification>...``
+  .. versionadded: 4.2
+
+  Specify environment variables that should be modified for the configure step.
+
+  Set a :ref:`semicolon-separated list <CMake Language Lists>` of environment
+  variables and values of the form ``MYVAR=OP:VALUE``, where ``MYVAR`` is the
+  case-sensitive name of an environment variable to be modified.  Entries are
+  considered in the order specified in the property's value. The ``OP`` may be
+  one of:
+
+  .. include:: ../include/ENVIRONMENT_MODIFICATION_OPS.rst
+
+  .. code-block:: cmake
+
+    ExternalProject_Add(example
+      ... # Download options, etc...
+      CONFIGURE_ENVIRONMENT_MODIFICATION
+        SDKROOT=set:macosx
+        PKG_CONFIG_PATH=set:$ENV{PKG_CONFIG_PATH}
+    )
+
+  This snippet defines two environment variables when configuring the example
+  project. The ``SDKROOT`` environment variable is set to ``macosx`, while
+  the value of ``PKG_CONFIG_PATH`` is forwarded to the external project.
+
+  Environment modifications work with ``LIST_SEPARATOR`` to replace the
+  separator with a ``;`` in the environment variable.
+
+  .. code-block:: cmake
+
+    ExternalProject_Add(example
+      ... # Download options, etc...
+      LIST_SEPARATOR ,
+      CONFIGURE_ENVIRONMENT_MODIFICATION
+        LIST_VAR=set:a,b,c
+    )
+
+  This snippet
+  and the environment variable ``LIST_VAR`` is passed to the configure command
+  invocation with the value ``a;b;c``.
+
 Build Step Options
 """"""""""""""""""
 
@@ -719,6 +761,19 @@ pass ``-v`` to the external project's build step, even if it also uses
   ``JOB_SERVER_AWARE`` option for details.  This option is relevant
   only when an explicit ``BUILD_COMMAND`` is specified.
 
+``BUILD_ENVIRONMENT_MODIFICATION <modification>...``
+  .. versionadded: 4.2
+
+  Specify environment variables that should be modified for the build step.
+
+  Set a :ref:`semicolon-separated list <CMake Language Lists>` of environment
+  variables and values of the form ``MYVAR=OP:VALUE``, where ``MYVAR`` is the
+  case-sensitive name of an environment variable to be modified.  Entries are
+  considered in the order specified in the property's value. The ``OP`` may be
+  one of:
+
+  .. include:: ../include/ENVIRONMENT_MODIFICATION_OPS.rst
+
 Install Step Options
 """"""""""""""""""""
 
@@ -777,6 +832,19 @@ step. This can be overridden with custom install commands if required.
   :envvar:`CMAKE_INSTALL_MODE` environment variable changes from one run
   to another.
 
+``INSTALL_ENVIRONMENT_MODIFICATION <modification>...``
+  .. versionadded: 4.2
+
+  Specify environment variables that should be modified for the install step.
+
+  Set a :ref:`semicolon-separated list <CMake Language Lists>` of environment
+  variables and values of the form ``MYVAR=OP:VALUE``, where ``MYVAR`` is the
+  case-sensitive name of an environment variable to be modified.  Entries are
+  considered in the order specified in the property's value. The ``OP`` may be
+  one of:
+
+  .. include:: ../include/ENVIRONMENT_MODIFICATION_OPS.rst
+
 Test Step Options
 """""""""""""""""
 
@@ -815,6 +883,19 @@ options are provided.
   This may cause a step target to be created automatically for either
   the ``install`` or ``build`` step.  See policy :policy:`CMP0114`.
 
+``TEST_ENVIRONMENT_MODIFICATION <modification>...``
+  .. versionadded: 4.2
+
+  Specify environment variables that should be modified for the test step.
+
+  Set a :ref:`semicolon-separated list <CMake Language Lists>` of environment
+  variables and values of the form ``MYVAR=OP:VALUE``, where ``MYVAR`` is the
+  case-sensitive name of an environment variable to be modified.  Entries are
+  considered in the order specified in the property's value. The ``OP`` may be
+  one of:
+
+  .. include:: ../include/ENVIRONMENT_MODIFICATION_OPS.rst
+
 Output Logging Options
 """"""""""""""""""""""
 
@@ -940,7 +1021,8 @@ Miscellaneous Options
 """""""""""""""""""""
 
 ``LIST_SEPARATOR <sep>``
-  For any of the various ``..._COMMAND`` options, and ``CMAKE_ARGS``,
+  For any of the various ``..._COMMAND`` options, ``CMAKE_ARGS``, and
+  `..._ENVIRONMENT_MODIFICATION`` operations,
   ``ExternalProject`` will replace ``<sep>`` with ``;`` in the specified
   command lines. This can be used to ensure a command has a literal ``;`` in it
   where direct usage would otherwise be interpreted as argument separators to
@@ -1043,6 +1125,20 @@ control needed to implement such step-level capabilities.
   ``DEPENDS <file>...``
     Files on which this custom step depends.
 
+  ``ENVIRONMENT_MODIFICATION <modification>...``
+    .. versionadded: 4.2
+
+    Specify environment variables that should be modified while running the
+    commands in the external project step.
+
+    Set a :ref:`semicolon-separated list <CMake Language Lists>` of environment
+    variables and values of the form ``MYVAR=OP:VALUE``, where ``MYVAR`` is the
+    case-sensitive name of an environment variable to be modified.  Entries are
+    considered in the order specified in the property's value. The ``OP`` may be
+    one of:
+
+    .. include:: ../include/ENVIRONMENT_MODIFICATION_OPS.rst
+
   ``INDEPENDENT <bool>``
     .. versionadded:: 3.19
 
@@ -2057,6 +2153,7 @@ function(ExternalProject_Add_Step name step)
     DEPENDEES
     DEPENDERS
     DEPENDS
+    ENVIRONMENT_MODIFICATION
     INDEPENDENT
     BYPRODUCTS
     ALWAYS
@@ -2176,6 +2273,50 @@ function(ExternalProject_Add_Step name step)
     string(REPLACE "${sep}" "\\;" command "${command}")
   endif()
 
+  # Add environment here!
+  get_property(environment
+    TARGET ${name}
+    PROPERTY _EP_${step}_ENVIRONMENT_MODIFICATION)
+  if(environment AND command)
+    if("${sep}" STREQUAL ":")
+      # The environment modification operation and value is separated by a
+      # colon. We should not replace that colon with a semicolon, allowing
+      # colons to act as a valid list separator.
+      # <name>=<op>:<value>
+      # Note: Environment variable names can contain `:` on Windows
+      set(result "")
+      foreach(env_modification IN LISTS environment)
+        if("${env_modification}" MATCHES "(.*)=([a-z]*):(.*)?")
+          if(CMAKE_MATCH_COUNT EQUAL 3)
+            string(REPLACE "${sep}" "\\\\\\\\\\;" _escapedMod "${CMAKE_MATCH_3}")
+          endif()
+          list(APPEND result "${CMAKE_MATCH_1}=${CMAKE_MATCH_2}:${_escapedMod}")
+        else()
+          message(SEND_ERROR "Malformed environment modification specifier:"
+          " '${env_modification}'\n"
+          "Expected MYVAR=OP:VALUE")
+        endif()
+      endforeach()
+      set(environment ${result})
+    elseif(sep)
+      # if the separator is not a colon, we don't have to worry about
+      # accidentally replacing the separator between the modification and value
+      string(REPLACE "${sep}" "\\\\\\\\;" environment "${environment}")
+    endif()
+    list(JOIN environment ";--modify;" environment)
+    list(PREPEND environment "--modify")
+
+    set(_result "")
+    list(APPEND _result "${CMAKE_COMMAND}" -E env ${environment} --)
+    foreach(element IN LISTS command)
+      list(APPEND _result "${element}")
+      if("${element}" STREQUAL COMMAND)
+        list(APPEND _result "${CMAKE_COMMAND}" -E env ${environment} --)
+      endif()
+    endforeach()
+    set(command ${_result})
+  endif()
+
   # Replace location tags.
   _ep_replace_location_tags(
     ${name}
@@ -2660,6 +2801,14 @@ function(_ep_add_configure_command name)
     set(dependees patch)
   endif()
 
+  get_property(environment
+    TARGET ${name}
+    PROPERTY _EP_CONFIGURE_ENVIRONMENT_MODIFICATION
+  )
+  if(environment)
+    set(environment "ENVIRONMENT_MODIFICATION" ${environment})
+  endif()
+
   get_property(log
     TARGET ${name}
     PROPERTY _EP_LOG_CONFIGURE
@@ -2691,6 +2840,7 @@ function(_ep_add_configure_command name)
       WORKING_DIRECTORY \${binary_dir}
       DEPENDEES \${dependees}
       DEPENDS \${file_deps}
+      ${environment}
       ${log}
       ${uses_terminal}
     )"
@@ -2770,6 +2920,13 @@ function(_ep_add_build_command name)
     set(maybe_JOB_SERVER_AWARE "")
   endif()
 
+  get_property(environment
+    TARGET ${name}
+    PROPERTY _EP_BUILD_ENVIRONMENT_MODIFICATION
+  )
+  if(environment)
+    set(environment ENVIRONMENT_MODIFICATION ${environment})
+  endif()
 
   set(__cmdQuoted)
   foreach(__item IN LISTS cmd)
@@ -2785,6 +2942,7 @@ function(_ep_add_build_command name)
       DEPENDS \${file_deps}
       ALWAYS \${always}
       ${maybe_JOB_SERVER_AWARE}
+      ${environment}
       ${log}
       ${uses_terminal}
     )"
@@ -2857,6 +3015,14 @@ function(_ep_add_install_command name)
     set(maybe_JOB_SERVER_AWARE "")
   endif()
 
+  get_property(environment
+    TARGET ${name}
+    PROPERTY _EP_INSTALL_ENVIRONMENT_MODIFICATION
+  )
+  if(environment)
+    set(environment ENVIRONMENT_MODIFICATION ${environment})
+  endif()
+
   set(__cmdQuoted)
   foreach(__item IN LISTS cmd)
     string(APPEND __cmdQuoted " [==[${__item}]==]")
@@ -2870,6 +3036,7 @@ function(_ep_add_install_command name)
       DEPENDEES build
       ALWAYS \${always}
       ${maybe_JOB_SERVER_AWARE}
+      ${environment}
       ${log}
       ${uses_terminal}
     )"
@@ -2936,6 +3103,14 @@ function(_ep_add_test_command name)
       set(uses_terminal "")
     endif()
 
+    get_property(environment
+      TARGET ${name}
+      PROPERTY _EP_TEST_ENVIRONMENT_MODIFICATION
+    )
+    if(environment)
+      set(environment ENVIRONMENT_MODIFICATION ${environment})
+    endif()
+
     set(__cmdQuoted)
     foreach(__item IN LISTS cmd)
       string(APPEND __cmdQuoted " [==[${__item}]==]")
@@ -2948,6 +3123,7 @@ function(_ep_add_test_command name)
         ${dependees_args}
         ${dependers_args}
         ${exclude_args}
+        ${environment}
         ${log}
         ${uses_terminal}
       )"
diff --git a/Modules/ExternalProject/shared_internal_commands.cmake b/Modules/ExternalProject/shared_internal_commands.cmake
index cb7b7722254fa5348f613d6989e819970f8d174b..c2e5b47214968024afbd7a9d00082f140a4ee3bc 100644
--- a/Modules/ExternalProject/shared_internal_commands.cmake
+++ b/Modules/ExternalProject/shared_internal_commands.cmake
@@ -1896,6 +1896,7 @@ macro(_ep_get_add_keywords out_var)
     # Configure step options
     #
     CONFIGURE_COMMAND
+    CONFIGURE_ENVIRONMENT_MODIFICATION
     CMAKE_COMMAND
     CMAKE_GENERATOR
     CMAKE_GENERATOR_PLATFORM
@@ -1910,6 +1911,7 @@ macro(_ep_get_add_keywords out_var)
     # Build step options
     #
     BUILD_COMMAND
+    BUILD_ENVIRONMENT_MODIFICATION
     BUILD_IN_SOURCE
     BUILD_ALWAYS
     BUILD_BYPRODUCTS
@@ -1918,12 +1920,14 @@ macro(_ep_get_add_keywords out_var)
     # Install step options
     #
     INSTALL_COMMAND
+    INSTALL_ENVIRONMENT_MODIFICATION
     INSTALL_BYPRODUCTS
     INSTALL_JOB_SERVER_AWARE
     #
     # Test step options
     #
     TEST_COMMAND
+    TEST_ENVIRONMENT_MODIFICATION
     TEST_BEFORE_INSTALL
     TEST_AFTER_INSTALL
     TEST_EXCLUDE_FROM_MAIN
diff --git a/Tests/RunCMake/ExternalProject/EnvVars-build-stdout.txt b/Tests/RunCMake/ExternalProject/EnvVars-build-stdout.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d3d6d2c64cba0f87c63b938de9833f5f26d2f194
--- /dev/null
+++ b/Tests/RunCMake/ExternalProject/EnvVars-build-stdout.txt
@@ -0,0 +1,32 @@
+.*(Performing custom step for 'CustomCommandEnvVars'|CustomCommandEnvVars-custom).*
+ *-- Variable - CustomVar: custom.*
+ *-- Variable - CustomVar2: custom2.*
+ *-- Stage: custom
+ *-- Separator: ;
+ *-- List: 1;2;3
+.*(Performing configure step for 'CustomCommandEnvVars'|CustomCommandEnvVars-configure).*
+ *-- Stage: config
+ *-- Separator: ;
+ *-- List: 4;5;6.*
+ *-- Variable - Stage: config.*
+ *-- Variable - ListVar: 4;5;6
+.*(Performing build step for 'CustomCommandEnvVars'|CustomCommandEnvVars-build).*
+ *-- Stage: build
+ *-- Separator: ;
+ *-- List: 4;5;6
+.*(Performing install step for 'CustomCommandEnvVars'|CustomCommandEnvVars-install).*
+ *-- Stage: install
+ *-- Separator: ;
+ *-- List: 4;5;6
+.*(Performing test step for 'CustomCommandEnvVars'|CustomCommandEnvVars-test).*
+ *-- Stage: test
+ *-- Separator: ;
+ *-- List: 4;5;6
+.*(Performing configure step for 'DefaultCommandEnvVars'|DefaultCommandEnvVars-configure).*
+ *-- ConfigVar: config
+ *-- Separator: ,
+ *-- List: 7,8,9
+.*(Performing build step for 'DefaultCommandEnvVars'|DefaultCommandEnvVars-build).*
+ *-- Stage: build
+ *-- Separator: ,
+ *-- List: 7,8,9,10
diff --git a/Tests/RunCMake/ExternalProject/EnvVars.cmake b/Tests/RunCMake/ExternalProject/EnvVars.cmake
new file mode 100644
index 0000000000000000000000000000000000000000..22528458ec13029abe93fac6800d5bf3b9ebdad6
--- /dev/null
+++ b/Tests/RunCMake/ExternalProject/EnvVars.cmake
@@ -0,0 +1,102 @@
+include(ExternalProject)
+
+#
+## Set environment variables on custom commands
+#
+
+# Comma list-separator
+set(ScriptPath "${CMAKE_CURRENT_SOURCE_DIR}/EnvVars/EchoVar.cmake")
+ExternalProject_Add(CustomCommandEnvVars
+  DOWNLOAD_COMMAND ""
+  UPDATE_COMMAND ""
+  PATCH_COMMAND ""
+  LIST_SEPARATOR ,
+  CONFIGURE_COMMAND "${CMAKE_COMMAND}" -P ${ScriptPath}
+  COMMAND "${CMAKE_COMMAND}" -DVARNAME=Stage -P ${ScriptPath}
+  COMMAND "${CMAKE_COMMAND}" -DVARNAME=ListVar -P ${ScriptPath}
+  CONFIGURE_ENVIRONMENT_MODIFICATION
+    Stage=set:config
+    ListVar=set:4,5,6
+    ListSeparator=set:,
+  BUILD_COMMAND "${CMAKE_COMMAND}" -P ${ScriptPath}
+  BUILD_ENVIRONMENT_MODIFICATION
+    Stage=set:build
+    ListVar=set:4,5,6
+    ListSeparator=set:,
+  INSTALL_COMMAND "${CMAKE_COMMAND}" -P ${ScriptPath}
+  INSTALL_ENVIRONMENT_MODIFICATION
+    InstallVar=set:install
+    Stage=set:install
+    ListVar=set:4,5,6
+    ListSeparator=set:,
+  TEST_COMMAND "${CMAKE_COMMAND}" -P ${ScriptPath}
+  TEST_ENVIRONMENT_MODIFICATION
+    Stage=set:test
+    ListVar=set:4,5,6
+    ListSeparator=set:,)
+
+ExternalProject_Add_Step(CustomCommandEnvVars custom
+  DEPENDERS configure
+  COMMAND "${CMAKE_COMMAND}" -DVARNAME=CustomVar -P ${ScriptPath}
+  COMMAND "${CMAKE_COMMAND}" -DVARNAME=CustomVar2 -P ${ScriptPath}
+  COMMAND "${CMAKE_COMMAND}" -P ${ScriptPath}
+  ENVIRONMENT_MODIFICATION
+    CustomVar=set:custom
+    CustomVar2=set:custom2
+    Stage=set:custom
+    ListVar=set:1,2,3
+    ListSeparator=set:,)
+
+#
+## Set environment variables on the default commands
+#
+
+# No list separator
+ExternalProject_Add(DefaultCommandEnvVars
+  SOURCE_DIR "${CMAKE_CURRENT_SOURCE_DIR}/EnvVars"
+  DOWNLOAD_COMMAND ""
+  UPDATE_COMMAND ""
+  PATCH_COMMAND ""
+  DEPENDS CustomCommandEnvVars
+  CMAKE_ARGS
+    -DVARIABLE=ConfigVar
+  CONFIGURE_ENVIRONMENT_MODIFICATION
+    ConfigVar=set:config
+    ListVar=set:7,8,9
+    ListSeparator=set:,
+  BUILD_ENVIRONMENT_MODIFICATION
+    Stage=set:build
+    ListVar=set:7,8,9,10
+    ListSeparator=set:,
+  INSTALL_COMMAND ""                 # empty install command should not show up
+  INSTALL_ENVIRONMENT_MODIFICATION
+    Stage=set:install
+    Separator=set:,)
+
+# Using `:` as a list separator on Windows does not work as it replaces the `:`
+# between the drive letter and the filepath with `;`.
+if(NOT WIN32)
+  # Ensure that using `:` as a list-separator does not break setting environment
+  # variables
+  ExternalProject_Add(DefaultCommandListSepEnvVars
+    SOURCE_DIR "${CMAKE_CURRENT_SOURCE_DIR}/EnvVars"
+    DOWNLOAD_COMMAND ""
+    UPDATE_COMMAND ""
+    PATCH_COMMAND ""
+    DEPENDS DefaultCommandEnvVars
+    LIST_SEPARATOR :
+    CMAKE_ARGS
+      -DVARIABLE=ConfigVar
+    CONFIGURE_ENVIRONMENT_MODIFICATION
+      ConfigVar=set:config
+      ListVar=set:10:11:12
+      ListSeparator=set::
+    BUILD_ENVIRONMENT_MODIFICATION
+      Stage=set:build
+      ListVar=set:10:11:12
+      ListSeparator=set::
+    INSTALL_ENVIRONMENT_MODIFICATION
+      Stage=set:install
+      ListSeparator=set::
+      ListVar=set:10:11:12:13)
+endif()
diff --git a/Tests/RunCMake/ExternalProject/EnvVars/CMakeLists.txt b/Tests/RunCMake/ExternalProject/EnvVars/CMakeLists.txt
new file mode 100644
index 0000000000000000000000000000000000000000..59f0309a0814f88d76ed54771be6a3f607860aee
--- /dev/null
+++ b/Tests/RunCMake/ExternalProject/EnvVars/CMakeLists.txt
@@ -0,0 +1,12 @@
+cmake_minimum_required(VERSION 4.0)
+
+project(EnvVars LANGUAGES NONE)
+
+message(STATUS "${VARIABLE}: $ENV{${VARIABLE}}")
+message(STATUS "Separator: $ENV{ListSeparator}")
+message(STATUS "List: $ENV{ListVar}")
+
+add_custom_target(EchoEnvVars ALL COMMAND
+  "${CMAKE_COMMAND}" -P "${CMAKE_CURRENT_SOURCE_DIR}/EchoVar.cmake")
+
+install(SCRIPT "${CMAKE_CURRENT_SOURCE_DIR}/EchoVar.cmake")
diff --git a/Tests/RunCMake/ExternalProject/EnvVars/EchoVar.cmake b/Tests/RunCMake/ExternalProject/EnvVars/EchoVar.cmake
new file mode 100644
index 0000000000000000000000000000000000000000..e8cbfcfd4f4f157313733ee8fc334024cb0d7c76
--- /dev/null
+++ b/Tests/RunCMake/ExternalProject/EnvVars/EchoVar.cmake
@@ -0,0 +1,7 @@
+if(VARNAME)
+  message(STATUS "Variable - ${VARNAME}: $ENV{${VARNAME}}")
+else()
+  message(STATUS "Stage: $ENV{Stage}")
+  message(STATUS "Separator: $ENV{ListSeparator}")
+  message(STATUS "List: $ENV{ListVar}")
+endif()
diff --git a/Tests/RunCMake/ExternalProject/InvalidEnvModification-result.txt b/Tests/RunCMake/ExternalProject/InvalidEnvModification-result.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d00491fd7e5bb6fa28c517a0bb32b8b506539d4d
--- /dev/null
+++ b/Tests/RunCMake/ExternalProject/InvalidEnvModification-result.txt
@@ -0,0 +1 @@
+1
diff --git a/Tests/RunCMake/ExternalProject/InvalidEnvModification-stderr.txt b/Tests/RunCMake/ExternalProject/InvalidEnvModification-stderr.txt
new file mode 100644
index 0000000000000000000000000000000000000000..292511752c06cd6d5a11431b8314d1b636d285f6
--- /dev/null
+++ b/Tests/RunCMake/ExternalProject/InvalidEnvModification-stderr.txt
@@ -0,0 +1,6 @@
+.* Malformed environment modification specifier: 'HI'
+.* Expected MYVAR=OP:VALUE
+.* Malformed environment modification specifier: 'INVALID=SETTING'
+.* Expected MYVAR=OP:VALUE
+.* Malformed environment modification specifier: 'INVALID=OP1:operation:10'
+.* Expected MYVAR=OP:VALUE
diff --git a/Tests/RunCMake/ExternalProject/InvalidEnvModification.cmake b/Tests/RunCMake/ExternalProject/InvalidEnvModification.cmake
new file mode 100644
index 0000000000000000000000000000000000000000..96dfa14029b7a3dc8f42b87af572cfc769de5132
--- /dev/null
+++ b/Tests/RunCMake/ExternalProject/InvalidEnvModification.cmake
@@ -0,0 +1,12 @@
+include(ExternalProject)
+
+ExternalProject_Add(EnvModification
+  SOURCE_DIR "${CMAKE_CURRENT_SOURCE_DIR}/EnvVars"
+  DOWNLOAD_COMMAND ""
+  UPDATE_COMMAND ""
+  PATCH_COMMAND ""
+  LIST_SEPARATOR :
+  CONFIGURE_ENVIRONMENT_MODIFICATION
+    HI
+    INVALID=SETTING
+    INVALID=OP1:operation:10)
diff --git a/Tests/RunCMake/ExternalProject/RunCMakeTest.cmake b/Tests/RunCMake/ExternalProject/RunCMakeTest.cmake
index 98e3996c89291c630c38e9f729d7d51eee75d5b7..61862922a1c4583a54e062d2cd00db1e57164881 100644
--- a/Tests/RunCMake/ExternalProject/RunCMakeTest.cmake
+++ b/Tests/RunCMake/ExternalProject/RunCMakeTest.cmake
@@ -259,3 +259,8 @@ if(GIT_EXECUTABLE)
   run_cmake(TLSVersionBadVar)
   run_cmake(TLSVersionBadEnv)
 endif()
+
+set(RunCMake_TEST_OUTPUT_MERGE 1)
+__ep_test_with_build(EnvVars)
+unset(RunCMake_TEST_OUTPUT_MERGE)
+run_cmake(InvalidEnvModification)