diff --git a/src/Runner.Worker/ExecutionContext.cs b/src/Runner.Worker/ExecutionContext.cs
index 7bb7e7efc..4b63b15bc 100644
--- a/src/Runner.Worker/ExecutionContext.cs
+++ b/src/Runner.Worker/ExecutionContext.cs
@@ -67,6 +67,8 @@ namespace GitHub.Runner.Worker
 
         bool IsEmbedded { get; }
 
+        List<string> StepEnvironmentOverrides { get; }
+
         ExecutionContext Root { get; }
 
         // Initialize
@@ -237,6 +239,8 @@ namespace GitHub.Runner.Worker
             }
         }
 
+        public List<string> StepEnvironmentOverrides { get; } = new List<string>();
+
         public override void Initialize(IHostContext hostContext)
         {
             base.Initialize(hostContext);
diff --git a/src/Runner.Worker/Handlers/CompositeActionHandler.cs b/src/Runner.Worker/Handlers/CompositeActionHandler.cs
index 0dc538157..04afb100c 100644
--- a/src/Runner.Worker/Handlers/CompositeActionHandler.cs
+++ b/src/Runner.Worker/Handlers/CompositeActionHandler.cs
@@ -266,7 +266,11 @@ namespace GitHub.Runner.Worker.Handlers
 #endif
                     foreach (var pair in dict)
                     {
-                        envContext[pair.Key] = pair.Value;
+                        // Skip global env, otherwise we merge an outdated global env
+                        if (ExecutionContext.StepEnvironmentOverrides.Contains(pair.Key))
+                        {
+                            envContext[pair.Key] = pair.Value;
+                        }
                     }
                 }
 
@@ -275,11 +279,13 @@ namespace GitHub.Runner.Worker.Handlers
                     if (step is IActionRunner actionStep)
                     {
                         // Evaluate and merge embedded-step env
+                        step.ExecutionContext.StepEnvironmentOverrides.AddRange(ExecutionContext.StepEnvironmentOverrides);
                         var templateEvaluator = step.ExecutionContext.ToPipelineTemplateEvaluator();
                         var actionEnvironment = templateEvaluator.EvaluateStepEnvironment(actionStep.Action.Environment, step.ExecutionContext.ExpressionValues, step.ExecutionContext.ExpressionFunctions, Common.Util.VarUtil.EnvironmentVariableKeyComparer);
                         foreach (var env in actionEnvironment)
                         {
                             envContext[env.Key] = new StringContextData(env.Value ?? string.Empty);
+                            step.ExecutionContext.StepEnvironmentOverrides.Add(env.Key);
                         }
                     }
                 }
diff --git a/src/Runner.Worker/StepsRunner.cs b/src/Runner.Worker/StepsRunner.cs
index 38928c6eb..dc3e80a25 100644
--- a/src/Runner.Worker/StepsRunner.cs
+++ b/src/Runner.Worker/StepsRunner.cs
@@ -112,6 +112,7 @@ namespace GitHub.Runner.Worker
                         foreach (var env in actionEnvironment)
                         {
                             envContext[env.Key] = new StringContextData(env.Value ?? string.Empty);
+                            step.ExecutionContext.StepEnvironmentOverrides.Add(env.Key);
                         }
                     }
                     catch (Exception ex)
diff --git a/src/Test/L0/Worker/StepsRunnerL0.cs b/src/Test/L0/Worker/StepsRunnerL0.cs
index 6f1cad8ab..e090dd1c0 100644
--- a/src/Test/L0/Worker/StepsRunnerL0.cs
+++ b/src/Test/L0/Worker/StepsRunnerL0.cs
@@ -622,6 +622,7 @@ namespace GitHub.Runner.Common.Tests.Worker
                     _stepContext.SetOutcome("", stepContext.Object.ContextName, (stepContext.Object.Outcome ?? stepContext.Object.Result ?? TaskResult.Succeeded).ToActionResult());
                     _stepContext.SetConclusion("", stepContext.Object.ContextName, (stepContext.Object.Result ?? TaskResult.Succeeded).ToActionResult());
                 });
+            stepContext.Setup(x => x.StepEnvironmentOverrides).Returns(new List<string>());
 
             stepContext.Setup(x => x.UpdateGlobalStepsContext()).Callback(() =>
             {