diff --git a/README.md b/README.md
index 04a72be..6c17657 100644
--- a/README.md
+++ b/README.md
@@ -110,3 +110,9 @@ $ metalctlv2 ctx add <context-name> --activate --default-project <project-uuid>
 ```
 
 The configuration file is by default written to `~/.metal-stack/config.yaml`.
+
+## Environment Variables
+
+Important flags can also be provided as environment variables prefixed with `METAL_STACK_`. The flag name is uppercased and dashes are replaced by underscores, e.g. `--api-url` becomes `METAL_STACK_API_URL`.
+
+An explicitly provided flag takes precedence over an environment variable, which in turn takes precedence over the context in `~/.metal-stack/config.yaml`.
diff --git a/cmd/config/config.go b/cmd/config/config.go
index fdc692c..a83c3b5 100644
--- a/cmd/config/config.go
+++ b/cmd/config/config.go
@@ -21,7 +21,7 @@ const (
 	// BinaryName is the name of the cli in all help texts
 	BinaryName = "metalctlv2"
 	// ConfigDir is the directory in either the homedir or in /etc where the cli searches for a file config.yaml
-	// also used as prefix for environment based configuration, e.g. METAL_STACK_CLOUD_ will be the variable prefix.
+	// also used as prefix for environment based configuration, e.g. METAL_STACK_ will be the variable prefix.
 	ConfigDir = "metal-stack"
 )
 
diff --git a/cmd/root.go b/cmd/root.go
index 821a391..7f37abc 100644
--- a/cmd/root.go
+++ b/cmd/root.go
@@ -3,6 +3,7 @@ package cmd
 import (
 	"log/slog"
 	"os"
+	"strings"
 
 	client "github.com/metal-stack/api/go/client"
 	"github.com/metal-stack/metal-lib/pkg/genericcli"
@@ -42,6 +43,9 @@ func Execute() {
 }
 
 func NewRootCmd(c *config.Config) *cobra.Command {
+	viper.SetEnvPrefix(strings.ToUpper(config.ConfigDir))
+	viper.SetEnvKeyReplacer(strings.NewReplacer("-", "_"))
+
 	rootCmd := &cobra.Command{
 		Use:          config.BinaryName,
 		Aliases:      []string{"m"},
@@ -72,6 +76,13 @@ func NewRootCmd(c *config.Config) *cobra.Command {
 
 	genericcli.Must(viper.BindPFlags(rootCmd.PersistentFlags()))
 
+	viper.MustBindEnv("config")
+	viper.MustBindEnv("force-color")
+	viper.MustBindEnv("debug")
+	viper.MustBindEnv("timeout")
+	viper.MustBindEnv("api-url")
+	viper.MustBindEnv("api-token")
+
 	markdownCmd := &cobra.Command{
 		Use:   "markdown",
 		Short: "create markdown documentation",