diff --git a/src/testdir/test_vim9_disassemble.vim b/src/testdir/test_vim9_disassemble.vim
index 7f6d86a..7814952 100644
--- a/src/testdir/test_vim9_disassemble.vim
+++ b/src/testdir/test_vim9_disassemble.vim
@@ -130,6 +130,7 @@
   g:somevar = "value"
   unlet g:somevar
   unlet! g:somevar
+  unlet $SOMEVAR
 enddef
 
 def Test_disassemble_unlet()
@@ -141,7 +142,9 @@
         'unlet g:somevar.*' ..
         '\d UNLET g:somevar.*' ..
         'unlet! g:somevar.*' ..
-        '\d UNLET! g:somevar.*',
+        '\d UNLET! g:somevar.*' ..
+        'unlet $SOMEVAR.*' ..
+        '\d UNLETENV $SOMEVAR.*',
         res)
 enddef
 
diff --git a/src/testdir/test_vim9_script.vim b/src/testdir/test_vim9_script.vim
index 568338b..4b73399 100644
--- a/src/testdir/test_vim9_script.vim
+++ b/src/testdir/test_vim9_script.vim
@@ -289,6 +289,11 @@
         '  unlet s:svar',
         'enddef',
         ], 'E1081:')
+
+  $ENVVAR = 'foobar'
+  assert_equal('foobar', $ENVVAR)
+  unlet $ENVVAR
+  assert_equal('', $ENVVAR)
 enddef
 
 func Test_wrong_type()
diff --git a/src/version.c b/src/version.c
index 8902126..7af2e50 100644
--- a/src/version.c
+++ b/src/version.c
@@ -747,6 +747,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    605,
+/**/
     604,
 /**/
     603,
diff --git a/src/vim9.h b/src/vim9.h
index 64749ce..a75e175 100644
--- a/src/vim9.h
+++ b/src/vim9.h
@@ -45,6 +45,7 @@
     ISN_STORENR,    // store number into local variable isn_arg.storenr.stnr_idx
 
     ISN_UNLET,		// unlet variable isn_arg.unlet.ul_name
+    ISN_UNLETENV,	// unlet environment variable isn_arg.unlet.ul_name
 
     // constants
     ISN_PUSHNR,		// push number isn_arg.number
diff --git a/src/vim9compile.c b/src/vim9compile.c
index c4a5c08..daa1cbe 100644
--- a/src/vim9compile.c
+++ b/src/vim9compile.c
@@ -990,12 +990,12 @@
  * Generate an ISN_UNLET instruction.
  */
     static int
-generate_UNLET(cctx_T *cctx, char_u *name, int forceit)
+generate_UNLET(cctx_T *cctx, isntype_T isn_type, char_u *name, int forceit)
 {
     isn_T	*isn;
 
     RETURN_OK_IF_SKIP(cctx);
-    if ((isn = generate_instr(cctx, ISN_UNLET)) == NULL)
+    if ((isn = generate_instr(cctx, isn_type)) == NULL)
 	return FAIL;
     isn->isn_arg.unlet.ul_name = vim_strsave(name);
     isn->isn_arg.unlet.ul_forceit = forceit;
@@ -4594,10 +4594,12 @@
 
 	// Normal name.  Only supports g:, w:, t: and b: namespaces.
 	*name_end = NUL;
-	if (check_vim9_unlet(p) == FAIL)
+	if (*p == '$')
+	    ret = generate_UNLET(cctx, ISN_UNLETENV, p + 1, eap->forceit);
+	else if (check_vim9_unlet(p) == FAIL)
 	    ret = FAIL;
 	else
-	    ret = generate_UNLET(cctx, p, eap->forceit);
+	    ret = generate_UNLET(cctx, ISN_UNLET, p, eap->forceit);
 
 	*name_end = cc;
 	return ret;
@@ -6363,6 +6365,7 @@
 	    break;
 
 	case ISN_UNLET:
+	case ISN_UNLETENV:
 	    vim_free(isn->isn_arg.unlet.ul_name);
 	    break;
 
diff --git a/src/vim9execute.c b/src/vim9execute.c
index e675869..6c8b8c8 100644
--- a/src/vim9execute.c
+++ b/src/vim9execute.c
@@ -1073,6 +1073,9 @@
 				       iptr->isn_arg.unlet.ul_forceit) == FAIL)
 		    goto failed;
 		break;
+	    case ISN_UNLETENV:
+		vim_unsetenv(iptr->isn_arg.unlet.ul_name);
+		break;
 
 	    // create a list from items on the stack; uses a single allocation
 	    // for the list header and the items
@@ -2119,6 +2122,11 @@
 			iptr->isn_arg.unlet.ul_forceit ? "!" : "",
 			iptr->isn_arg.unlet.ul_name);
 		break;
+	    case ISN_UNLETENV:
+		smsg("%4d UNLETENV%s $%s", current,
+			iptr->isn_arg.unlet.ul_forceit ? "!" : "",
+			iptr->isn_arg.unlet.ul_name);
+		break;
 	    case ISN_NEWLIST:
 		smsg("%4d NEWLIST size %lld", current,
 					    (long long)(iptr->isn_arg.number));