diff --git a/tests/integration/env-tests/README.md b/tests/integration/env-tests/README.md
deleted file mode 100644
index b1c96cf..0000000
--- a/tests/integration/env-tests/README.md
+++ /dev/null
@@ -1,5 +0,0 @@
-running the following command should give myval2
-
-```
-podman_compose run -l monkey -e ZZVAR1=myval2 env-test
-```
diff --git a/tests/integration/test_podman_compose_env.py b/tests/integration/test_podman_compose_env.py
new file mode 100644
index 0000000..2eb6d30
--- /dev/null
+++ b/tests/integration/test_podman_compose_env.py
@@ -0,0 +1,38 @@
+# SPDX-License-Identifier: GPL-2.0
+
+import os
+import unittest
+
+from tests.integration.test_podman_compose import podman_compose_path
+from tests.integration.test_podman_compose import test_path
+from tests.integration.test_utils import RunSubprocessMixin
+
+
+def compose_yaml_path():
+    return os.path.join(os.path.join(test_path(), "env-tests"), "container-compose.yml")
+
+
+class TestComposeEnv(unittest.TestCase, RunSubprocessMixin):
+    """Test that inline environment variable overrides environment variable from compose file."""
+
+    def test_env(self):
+        try:
+            output, _ = self.run_subprocess_assert_returncode([
+                podman_compose_path(),
+                "-f",
+                compose_yaml_path(),
+                "run",
+                "-l",
+                "monkey",
+                "-e",
+                "ZZVAR1=myval2",
+                "env-test",
+            ])
+            self.assertIn("ZZVAR1='myval2'", str(output))
+        finally:
+            self.run_subprocess_assert_returncode([
+                podman_compose_path(),
+                "-f",
+                compose_yaml_path(),
+                "down",
+            ])