diff --git a/packages/flutter_tools/lib/src/base/process.dart b/packages/flutter_tools/lib/src/base/process.dart
index c25919a7063..8c9209a4881 100644
--- a/packages/flutter_tools/lib/src/base/process.dart
+++ b/packages/flutter_tools/lib/src/base/process.dart
@@ -10,6 +10,8 @@ import '../globals.dart';
 
 typedef String StringConverter(String string);
 
+final Map<String, String> childEnvironmentOverrides = new Map<String, String>();
+
 /// This runs the command in the background from the specified working
 /// directory. Completes when the process has been started.
 Future<Process> runCommand(List<String> cmd, { String workingDirectory }) async {
@@ -19,7 +21,8 @@ Future<Process> runCommand(List<String> cmd, { String workingDirectory }) async
   Process process = await Process.start(
     executable,
     arguments,
-    workingDirectory: workingDirectory
+    workingDirectory: workingDirectory,
+    environment: childEnvironmentOverrides
   );
   return process;
 }
@@ -108,8 +111,11 @@ String _runWithLoggingSync(List<String> cmd, {
   if (truncateCommand && cmdText.length > 160)
     cmdText = cmdText.substring(0, 160) + '…';
   printTrace(cmdText);
-  ProcessResult results =
-      Process.runSync(cmd[0], cmd.getRange(1, cmd.length).toList(), workingDirectory: workingDirectory);
+  ProcessResult results = Process.runSync(
+    cmd[0], cmd.getRange(1, cmd.length).toList(),
+    workingDirectory: workingDirectory,
+    environment: childEnvironmentOverrides
+  );
 
   printTrace('Exit code ${results.exitCode} from: ${cmd.join(' ')}');
 
diff --git a/packages/flutter_tools/lib/src/ios/mac.dart b/packages/flutter_tools/lib/src/ios/mac.dart
index d6db90dc568..15628eab4be 100644
--- a/packages/flutter_tools/lib/src/ios/mac.dart
+++ b/packages/flutter_tools/lib/src/ios/mac.dart
@@ -151,7 +151,8 @@ Future<bool> buildIOSXcodeProject(ApplicationPackage app, BuildMode mode,
   printTrace(commands.join(' '));
 
   ProcessResult result = Process.runSync(
-    commands.first, commands.sublist(1), workingDirectory: app.rootPath
+    commands.first, commands.sublist(1), workingDirectory: app.rootPath,
+    environment: childEnvironmentOverrides
   );
 
   if (result.exitCode != 0) {
diff --git a/packages/flutter_tools/lib/src/runner/flutter_command_runner.dart b/packages/flutter_tools/lib/src/runner/flutter_command_runner.dart
index d3711b1ba4a..461df9ee572 100644
--- a/packages/flutter_tools/lib/src/runner/flutter_command_runner.dart
+++ b/packages/flutter_tools/lib/src/runner/flutter_command_runner.dart
@@ -21,6 +21,7 @@ import '../version.dart';
 
 const String kFlutterRootEnvironmentVariableName = 'FLUTTER_ROOT'; // should point to //flutter/ (root of flutter/flutter repo)
 const String kFlutterEngineEnvironmentVariableName = 'FLUTTER_ENGINE'; // should point to //engine/src/ (root of flutter/engine repo)
+const String kFlutterBuildConfigEnvironmentVariableName = 'FLUTTER_BUILD_CONFIG'; // the directory in the out directory to use for local builds
 const String kSnapshotFileName = 'flutter_tools.snapshot'; // in //flutter/bin/cache/
 const String kFlutterToolsScriptFileName = 'flutter_tools.dart'; // in //flutter/packages/flutter_tools/bin/
 const String kFlutterEnginePackageName = 'sky_engine';
@@ -76,6 +77,7 @@ class FlutterCommandRunner extends CommandRunner {
         hide: !verboseHelp,
         help:
             'Name of a build output within the engine out directory, if you are building Flutter locally.\n'
+            'Defaults to \$$kFlutterBuildConfigEnvironmentVariableName if set.\n'
             'Use this to select a specific version of the engine if you have built multiple engine targets.\n'
             'This path is relative to --local-engine-src-path/out.');
   }
@@ -154,6 +156,11 @@ class FlutterCommandRunner extends CommandRunner {
     if (enginePath != null) {
       ToolConfiguration.instance.engineSrcPath = enginePath;
       ToolConfiguration.instance.engineBuildPath = _findEngineBuildPath(globalResults, enginePath);
+      // Forwards configuration information to recursive runs of the tool.
+      if (globalResults['local-engine-src-path'] != null)
+        childEnvironmentOverrides[kFlutterEngineEnvironmentVariableName] = globalResults['local-engine-src-path'];
+      if (globalResults['local-engine'] != null)
+        childEnvironmentOverrides[kFlutterBuildConfigEnvironmentVariableName] = globalResults['local-engine'];
     }
 
     // The Android SDK could already have been set by tests.
@@ -180,10 +187,12 @@ class FlutterCommandRunner extends CommandRunner {
     return null;
   }
 
+  String _getLocalBuildConfig(ArgResults globalResults) => globalResults['local-engine'] ?? Platform.environment[kFlutterBuildConfigEnvironmentVariableName];
+
   String _findEnginePath(ArgResults globalResults) {
     String engineSourcePath = globalResults['local-engine-src-path'] ?? Platform.environment[kFlutterEngineEnvironmentVariableName];
 
-    if (engineSourcePath == null && globalResults['local-engine'] != null) {
+    if (engineSourcePath == null && _getLocalBuildConfig(globalResults) != null) {
       try {
         Uri engineUri = PackageMap.instance.map[kFlutterEnginePackageName];
         engineSourcePath = path.dirname(path.dirname(path.dirname(path.dirname(engineUri.path))));
@@ -215,15 +224,13 @@ class FlutterCommandRunner extends CommandRunner {
   }
 
   String _findEngineBuildPath(ArgResults globalResults, String enginePath) {
-    String localEngine;
-    if (globalResults['local-engine'] != null) {
-      localEngine = globalResults['local-engine'];
-    } else {
+    String buildConfig = _getLocalBuildConfig(globalResults);
+    if (buildConfig == null) {
       printError('You must specify --local-engine if you are using a locally built engine.');
       throw new ProcessExit(2);
     }
 
-    String engineBuildPath = path.normalize(path.join(enginePath, 'out', localEngine));
+    String engineBuildPath = path.normalize(path.join(enginePath, 'out', buildConfig));
     if (!FileSystemEntity.isDirectorySync(engineBuildPath)) {
       printError('No Flutter engine build found at $engineBuildPath.');
       throw new ProcessExit(2);