From c1acbe2fb614ad9702b0feb95bd8f83764cc0b3c Mon Sep 17 00:00:00 2001
From: Clement Yan <yanclement94@gmail.com>
Date: Mon, 9 Mar 2026 00:31:53 +0800
Subject: [PATCH 1/3] fix(core): resolve `config.projectCwd` before `.env.yarn`
 path

---
 packages/yarnpkg-core/sources/Configuration.ts | 10 ++--------
 1 file changed, 2 insertions(+), 8 deletions(-)

diff --git a/packages/yarnpkg-core/sources/Configuration.ts b/packages/yarnpkg-core/sources/Configuration.ts
index ed63eb4cd20d..a993ef516301 100644
--- a/packages/yarnpkg-core/sources/Configuration.ts
+++ b/packages/yarnpkg-core/sources/Configuration.ts
@@ -1176,6 +1176,8 @@ export class Configuration {
     delete environmentSettings.rcFilename;
 
     const configuration = new Configuration(startingCwd);
+    configuration.projectCwd = await Configuration.findProjectCwd(startingCwd);
+
     const rcFiles = await Configuration.findRcFiles(startingCwd);
 
     const homeRcFile = await Configuration.findFolderRcFile(folderUtils.getHomeFolder());
@@ -1239,17 +1241,9 @@ export class Configuration {
       }
     }
 
-    // We need to know the project root before being able to truly instantiate
-    // our configuration.
-
-    const projectCwd = await Configuration.findProjectCwd(startingCwd);
-
     // Great! We now have enough information to really start to setup the
     // core configuration object.
 
-    configuration.startingCwd = startingCwd;
-    configuration.projectCwd = projectCwd;
-
     const env = Object.assign(Object.create(null), process.env);
     configuration.env = env;
 

From c4d8f351b08e7c5cf6ad7f1322dbb8716528bb0a Mon Sep 17 00:00:00 2001
From: Clement Yan <yanclement94@gmail.com>
Date: Mon, 9 Mar 2026 00:36:53 +0800
Subject: [PATCH 2/3] test: Add tests

---
 .../sources/features/dotEnvFiles.test.ts      | 19 +++++++++++++++++++
 1 file changed, 19 insertions(+)

diff --git a/packages/acceptance-tests/pkg-tests-specs/sources/features/dotEnvFiles.test.ts b/packages/acceptance-tests/pkg-tests-specs/sources/features/dotEnvFiles.test.ts
index 744e10f45b15..b6147da4ad17 100644
--- a/packages/acceptance-tests/pkg-tests-specs/sources/features/dotEnvFiles.test.ts
+++ b/packages/acceptance-tests/pkg-tests-specs/sources/features/dotEnvFiles.test.ts
@@ -126,4 +126,23 @@ describe(`DotEnv files`, () => {
       stdout: `hello\n`,
     });
   }));
+
+  it(`should correctly resolve .env.yarn files from project root`, makeTemporaryEnv({}, async ({path, run, source}) => {
+    const subdir = ppath.join(path, `subdir`);
+    await xfs.mkdirPromise(subdir);
+
+    await xfs.writeFilePromise(ppath.join(subdir, `.env.yarn`), [
+      `INJECTED_FROM_SUBDIR_ENV_FILE=hello\n`,
+    ].join(``));
+    await xfs.writeFilePromise(ppath.join(path, `.env.yarn`), [
+      `INJECTED_FROM_ENV_FILE=hello\n`,
+    ].join(``));
+
+    await run(`install`);
+
+    const {stdout} = await run(`exec`, `env`, {cwd: subdir});
+
+    expect(stdout).toMatch(/^INJECTED_FROM_ENV_FILE=hello$/m);
+    expect(stdout).not.toMatch(/^INJECTED_FROM_SUBDIR_ENV_FILE=hello$/m);
+  }));
 });

From b2a38cb893340d6aeffb9a98161ffb86714e8312 Mon Sep 17 00:00:00 2001
From: Clement Yan <yanclement94@gmail.com>
Date: Mon, 9 Mar 2026 00:42:39 +0800
Subject: [PATCH 3/3] versions

---
 .yarn/versions/b32850f7.yml | 36 ++++++++++++++++++++++++++++++++++++
 1 file changed, 36 insertions(+)
 create mode 100644 .yarn/versions/b32850f7.yml

diff --git a/.yarn/versions/b32850f7.yml b/.yarn/versions/b32850f7.yml
new file mode 100644
index 000000000000..560a6144009a
--- /dev/null
+++ b/.yarn/versions/b32850f7.yml
@@ -0,0 +1,36 @@
+releases:
+  "@yarnpkg/cli": patch
+  "@yarnpkg/core": patch
+  "@yarnpkg/doctor": patch
+  "@yarnpkg/plugin-constraints": patch
+  "@yarnpkg/plugin-dlx": patch
+  "@yarnpkg/plugin-essentials": patch
+  "@yarnpkg/plugin-init": patch
+  "@yarnpkg/plugin-interactive-tools": patch
+  "@yarnpkg/plugin-npm-cli": patch
+  "@yarnpkg/plugin-pack": patch
+  "@yarnpkg/plugin-patch": patch
+  "@yarnpkg/plugin-pnp": patch
+  "@yarnpkg/plugin-stage": patch
+  "@yarnpkg/plugin-version": patch
+  "@yarnpkg/plugin-workspace-tools": patch
+
+declined:
+  - "@yarnpkg/plugin-catalog"
+  - "@yarnpkg/plugin-compat"
+  - "@yarnpkg/plugin-exec"
+  - "@yarnpkg/plugin-file"
+  - "@yarnpkg/plugin-git"
+  - "@yarnpkg/plugin-github"
+  - "@yarnpkg/plugin-http"
+  - "@yarnpkg/plugin-jsr"
+  - "@yarnpkg/plugin-link"
+  - "@yarnpkg/plugin-nm"
+  - "@yarnpkg/plugin-npm"
+  - "@yarnpkg/plugin-pnpm"
+  - "@yarnpkg/plugin-typescript"
+  - "@yarnpkg/builder"
+  - "@yarnpkg/extensions"
+  - "@yarnpkg/nm"
+  - "@yarnpkg/pnpify"
+  - "@yarnpkg/sdks"