diff --git a/testsuite/tests/action/environment/test.py b/testsuite/tests/action/environment/test.py
new file mode 100644
index 000000000..ad388af33
--- /dev/null
+++ b/testsuite/tests/action/environment/test.py
@@ -0,0 +1,48 @@
+"""
+Verify the proper environment is set up for the action. We create an executable
+within a crate that will be run during pre-build. For it to be found, the
+proper path must be set in the crate environment. This should work for a
+regular build (as it did before) and for a manually triggered action (the bug
+being fixed).
+"""
+
+import os
+from shutil import which
+from drivers.alr import run_alr, init_local_crate, add_action, alr_manifest
+from drivers.helpers import on_windows
+
+tool_name = "myalrtestingtool"
+
+# Tool crate to be used during build
+init_local_crate(tool_name, enter=False)
+
+# Ensure the tool is not found in path by pure chance!
+assert not which(tool_name)
+
+# Build the tool
+run_alr("-C", tool_name, "build")
+
+# Create the new crate that uses this tool during pre-build step
+init_local_crate()
+
+# Edit its manifest to require it during pre-build
+add_action("pre-build", [tool_name + (".exe" if on_windows() else "")])
+
+# Build should fail because the tool is not found in the path
+run_alr("build", complain_on_error=False)
+
+# Likewise, stand-alone running of the action should fail
+run_alr("action", "pre-build", complain_on_error=False)
+
+# Add the tool location to the crate environment
+with open(alr_manifest(), "at") as f:
+    f.write(f"""
+[environment]
+PATH.append = "..{os.path.sep}{tool_name}{os.path.sep}bin"
+""")
+
+# Now both build and action should succeed
+run_alr("build")
+run_alr("action", "pre-build")
+
+print("SUCCESS")
diff --git a/testsuite/tests/action/environment/test.yaml b/testsuite/tests/action/environment/test.yaml
new file mode 100644
index 000000000..702010525
--- /dev/null
+++ b/testsuite/tests/action/environment/test.yaml
@@ -0,0 +1,4 @@
+driver: python-script
+build_mode: both
+indexes:
+    compiler_only_index: {}