diff --git a/src/redux/reducers/Connect.js b/src/redux/reducers/Connect.js
index e3e1b1b823..af41bb818e 100644
--- a/src/redux/reducers/Connect.js
+++ b/src/redux/reducers/Connect.js
@@ -21,6 +21,7 @@ import {
   memberIsBlockedForCostReasons,
 } from 'src/utilities/institutionBlocks'
 import { InstitutionStatus } from 'src/utilities/institutionStatus'
+import { getEnvironment, Environments } from 'src/utilities/global'
 
 export const defaultState = {
   error: null, // The most recent job request error, if any
@@ -278,7 +279,7 @@ const selectInstitutionSuccess = (state, action) => {
   // 2. Additional product - if the client is offering a product AND the institution has support for the product
   // 3. Consent - if the Client has enabled consent
   // 4. Institution disabled - if the institution is disabled by the client
-  // 5. Demo connect guard - if the user is a demo user but the institution is not a demo institution
+  // 5. Demo connect guard - if the user is a demo user, but the institution is not a demo institution, and the environment is production.
   let nextStep = STEPS.ENTER_CREDENTIALS
 
   const canOfferVerification =
@@ -287,13 +288,21 @@ const selectInstitutionSuccess = (state, action) => {
   const canOfferAggregation =
     action.payload.additionalProductOption === COMBO_JOB_DATA_TYPES.TRANSACTIONS
 
+  const isProdEnvironment = getEnvironment() === Environments.PRODUCTION
+
   if (
     action.payload.institution &&
     (institutionIsBlockedForCostReasons(action.payload.institution) ||
       action.payload.institutionStatus === InstitutionStatus.UNAVAILABLE)
   ) {
     nextStep = STEPS.INSTITUTION_STATUS_DETAILS
-  } else if (action.payload.user?.is_demo && !action.payload.institution?.is_demo) {
+  } else if (
+    action.payload.user?.is_demo &&
+    !action.payload.institution?.is_demo &&
+    isProdEnvironment
+  ) {
+    // Show the demo connect guard screen only when the user is a demo user, the selected institution is not a demo institution, and the environment is production.
+    // In non-production environments, allow connections to any institution.
     nextStep = STEPS.DEMO_CONNECT_GUARD
   } else if (canOfferVerification || canOfferAggregation) {
     nextStep = STEPS.ADDITIONAL_PRODUCT
diff --git a/src/redux/reducers/__tests__/Connect-test.js b/src/redux/reducers/__tests__/Connect-test.js
index 84b30b3472..29c84aadfe 100644
--- a/src/redux/reducers/__tests__/Connect-test.js
+++ b/src/redux/reducers/__tests__/Connect-test.js
@@ -25,6 +25,7 @@ import { JOB_TYPES, JOB_STATUSES } from 'src/const/consts'
 import { MicrodepositsStatuses } from 'src/views/microdeposits/const'
 import { COMBO_JOB_DATA_TYPES } from 'src/const/comboJobDataTypes'
 import { ACTIONABLE_ERROR_CODES } from 'src/views/actionableError/consts'
+import * as globalUtilities from 'src/utilities/global'
 
 describe('Connect redux store', () => {
   const credential1 = { guid: 'CRD-123' }
@@ -641,17 +642,42 @@ describe('Connect redux store', () => {
       )
     })
 
-    it('should set the step to DEMO_CONNECT_GUARD when the user is a demo user but the institution is not a demo institution', () => {
-      const institution = { guid: 'INST-1', is_demo: false, credentials }
-      const user = { guid: 'USR-1', is_demo: true }
-      const afterState = reducer(defaultState, {
-        type: ActionTypes.SELECT_INSTITUTION_SUCCESS,
-        payload: { institution, user },
+    describe('demo connect guard', () => {
+      afterEach(() => {
+        vi.restoreAllMocks()
       })
 
-      expect(afterState.location[afterState.location.length - 1].step).toEqual(
-        STEPS.DEMO_CONNECT_GUARD,
-      )
+      it('should set the step to DEMO_CONNECT_GUARD when the user is a demo user, the institution is not a demo institution, and the environment is production', () => {
+        vi.spyOn(globalUtilities, 'getEnvironment').mockReturnValue(
+          globalUtilities.Environments.PRODUCTION,
+        )
+        const institution = { guid: 'INST-1', is_demo: false, credentials }
+        const user = { guid: 'USR-1', is_demo: true }
+        const afterState = reducer(defaultState, {
+          type: ActionTypes.SELECT_INSTITUTION_SUCCESS,
+          payload: { institution, user },
+        })
+
+        expect(afterState.location[afterState.location.length - 1].step).toEqual(
+          STEPS.DEMO_CONNECT_GUARD,
+        )
+      })
+
+      it('should NOT set the step to DEMO_CONNECT_GUARD when the environment is not production', () => {
+        vi.spyOn(globalUtilities, 'getEnvironment').mockReturnValue(
+          globalUtilities.Environments.SANDBOX,
+        )
+        const institution = { guid: 'INST-1', is_demo: false, credentials }
+        const user = { guid: 'USR-1', is_demo: true }
+        const afterState = reducer(defaultState, {
+          type: ActionTypes.SELECT_INSTITUTION_SUCCESS,
+          payload: { institution, user },
+        })
+
+        expect(afterState.location[afterState.location.length - 1].step).not.toEqual(
+          STEPS.DEMO_CONNECT_GUARD,
+        )
+      })
     })
   })