diff --git a/_unit-test/merge-env-file-test.sh b/_unit-test/merge-env-file-test.sh
new file mode 100755
index 00000000000..156110d0060
--- /dev/null
+++ b/_unit-test/merge-env-file-test.sh
@@ -0,0 +1,25 @@
+#!/usr/bin/env bash
+
+# This is a test file for a part of `_lib.sh`, where we read `.env.custom` file if there is one.
+# We only want to give very minimal value to the `.env.custom` file, and expect that it would
+# be merged with the original `.env` file, with the `.env.custom` file taking precedence.
+cat <<EOF >".env.custom"
+SENTRY_EVENT_RETENTION_DAYS=10
+EOF
+
+# The `_test_setup.sh` script sources `install/_lib.sh`, so.. finger crossed this should works.
+source _unit-test/_test_setup.sh
+
+rm -f .env.custom
+
+echo "Expecting SENTRY_EVENT_RETENTION_DAYS to be 10, got ${SENTRY_EVENT_RETENTION_DAYS}"
+test "$SENTRY_EVENT_RETENTION_DAYS" == "10"
+echo "Pass"
+echo "Expecting SENTRY_BIND to be 9000, got ${SENTRY_BIND}"
+test "$SENTRY_BIND" == "9000"
+echo "Pass"
+echo "Expecting COMPOSE_PROJECT_NAME to be sentry-self-hosted, got ${COMPOSE_PROJECT_NAME}"
+test "$COMPOSE_PROJECT_NAME" == "sentry-self-hosted"
+echo "Pass"
+
+report_success
diff --git a/install/_lib.sh b/install/_lib.sh
index 3a76d8624f0..73ef0237df9 100644
--- a/install/_lib.sh
+++ b/install/_lib.sh
@@ -16,8 +16,16 @@ else
   _ENV=.env
 fi
 
+# Reading .env.custom has to come first. The value won't be overriden, instead
+# it would persist because of `export -p> >"$t"` later, which exports current
+# environment variables to a temporary file with a `declare -x KEY=value` format.
+# The new values on `.env` would be set only if they are not already set.
+if [[ "$_ENV" == ".env.custom" ]]; then
+  q=$(mktemp) && export -p >"$q" && set -a && . ".env.custom" && set +a && . "$q" && rm "$q" && unset q
+fi
+
 # Read .env for default values with a tip o' the hat to https://stackoverflow.com/a/59831605/90297
-t=$(mktemp) && export -p >"$t" && set -a && . $_ENV && set +a && . "$t" && rm "$t" && unset t
+t=$(mktemp) && export -p >"$t" && set -a && . ".env" && set +a && . "$t" && rm "$t" && unset t
 
 if [ "${GITHUB_ACTIONS:-}" = "true" ]; then
   _group="::group::"