diff --git a/src/libcmd/command.cc b/src/libcmd/command.cc
index 31f64fd5a..7361e58b5 100644
--- a/src/libcmd/command.cc
+++ b/src/libcmd/command.cc
@@ -360,6 +360,8 @@ void MixEnvironment::setEnviron()
     for (const auto & [name, value] : setVars)
         env[name] = value;
 
+    env["IN_NIX_SHELL"] = ignoreEnvironment ? "pure" : "impure";
+
     if (!unsetVars.empty())
         std::erase_if(env, [&](const auto & var) { return unsetVars.contains(var.first); });
 
diff --git a/tests/functional/flakes/run.sh b/tests/functional/flakes/run.sh
index c92ddca2b..b9e12ef07 100755
--- a/tests/functional/flakes/run.sh
+++ b/tests/functional/flakes/run.sh
@@ -43,6 +43,7 @@ nix run -f shell-hello.nix env > $TEST_ROOT/actual-env
 # - __CF_USER_TEXT_ENCODING is set by macOS and is beyond our control
 sed -i \
   -e 's/PATH=.*/PATH=.../' \
+  -e '/^IN_NIX_SHELL=.*/d' \
   -e 's/_=.*/_=.../' \
   -e '/^TMPDIR=\/var\/folders\/.*/d' \
   -e '/^__CF_USER_TEXT_ENCODING=.*$/d' \
diff --git a/tests/functional/shell.sh b/tests/functional/shell.sh
index 51032ff1b..043ab0c9c 100755
--- a/tests/functional/shell.sh
+++ b/tests/functional/shell.sh
@@ -36,6 +36,7 @@ nix shell -f shell-hello.nix hello -c env > "$TEST_ROOT/actual-env"
 # - __CF_USER_TEXT_ENCODING is set by macOS and is beyond our control
 sed -i \
   -e 's/PATH=.*/PATH=.../' \
+  -e '/^IN_NIX_SHELL=.*/d' \
   -e 's/_=.*/_=.../' \
   -e '/^TMPDIR=\/var\/folders\/.*/d' \
   -e '/^__CF_USER_TEXT_ENCODING=.*$/d' \