diff --git a/crates/language/src/language_registry.rs b/crates/language/src/language_registry.rs
index 4870c4ed53..918da4873f 100644
--- a/crates/language/src/language_registry.rs
+++ b/crates/language/src/language_registry.rs
@@ -860,7 +860,7 @@ impl LanguageRegistry {
         adapter: Arc<CachedLspAdapter>,
         root_path: Arc<Path>,
         delegate: Arc<dyn LspAdapterDelegate>,
-        cli_environment: Shared<Task<Option<HashMap<String, String>>>>,
+        project_environment: Shared<Task<Option<HashMap<String, String>>>>,
         cx: &mut AppContext,
     ) -> Option<PendingLanguageServer> {
         let server_id = self.state.write().next_language_server_id();
@@ -881,7 +881,7 @@ impl LanguageRegistry {
         let task = cx.spawn({
             let container_dir = container_dir.clone();
             move |mut cx| async move {
-                let cli_environment = cli_environment.await;
+                let project_environment = project_environment.await;
 
                 let binary_result = adapter
                     .clone()
@@ -892,15 +892,16 @@ impl LanguageRegistry {
 
                 let mut binary = binary_result?;
 
-                // If this Zed project was opened from the CLI and the language server command itself
+                // If we do have a project environment (either by spawning a shell in in the project directory
+                // or by getting it from the CLI) and the language server command itself
                 // doesn't have an environment (which it would have, if it was found in $PATH), then
-                // we pass along the CLI environment that we inherited.
-                if binary.env.is_none() && cli_environment.is_some() {
+                // we use the project environment.
+                if binary.env.is_none() && project_environment.is_some() {
                     log::info!(
-                        "using CLI environment for language server {:?}, id: {server_id}",
+                        "using project environment for language server {:?}, id: {server_id}",
                         adapter.name.0
                     );
-                    binary.env = cli_environment.clone();
+                    binary.env = project_environment.clone();
                 }
 
                 let options = adapter
diff --git a/crates/project/src/lsp_store.rs b/crates/project/src/lsp_store.rs
index fb3d52eb9e..e1e6001d24 100644
--- a/crates/project/src/lsp_store.rs
+++ b/crates/project/src/lsp_store.rs
@@ -4646,7 +4646,7 @@ impl LspStore {
 
         let stderr_capture = Arc::new(Mutex::new(Some(String::new())));
         let lsp_adapter_delegate = ProjectLspAdapterDelegate::for_local(self, worktree_handle, cx);
-        let cli_environment = local.environment.update(cx, |environment, cx| {
+        let project_environment = local.environment.update(cx, |environment, cx| {
             environment.get_environment(Some(worktree_id), Some(worktree_path.clone()), cx)
         });
 
@@ -4656,7 +4656,7 @@ impl LspStore {
             adapter.clone(),
             Arc::clone(&worktree_path),
             lsp_adapter_delegate.clone(),
-            cli_environment,
+            project_environment,
             cx,
         ) {
             Some(pending_server) => pending_server,