diff --git a/packages/nx/src/daemon/client/client.ts b/packages/nx/src/daemon/client/client.ts
index 7e54b14af59c6d..a2c6771853009f 100644
--- a/packages/nx/src/daemon/client/client.ts
+++ b/packages/nx/src/daemon/client/client.ts
@@ -29,7 +29,6 @@ import { DaemonProjectGraphError } from '../daemon-project-graph-error';
 import { ProjectGraphError } from '../../project-graph/project-graph';
 
 const DAEMON_ENV_SETTINGS = {
-  ...process.env,
   NX_PROJECT_GLOB_CACHE: 'false',
   NX_CACHE_PROJECTS_CONFIG: 'false',
 };
@@ -402,7 +401,7 @@ export class DaemonClient {
         detached: true,
         windowsHide: true,
         shell: false,
-        env: DAEMON_ENV_SETTINGS,
+        env: { ...process.env, ...DAEMON_ENV_SETTINGS },
       }
     );
     backgroundProcess.unref();
diff --git a/packages/nx/src/utils/dotenv.ts b/packages/nx/src/utils/dotenv.ts
new file mode 100644
index 00000000000000..9876e150f983cd
--- /dev/null
+++ b/packages/nx/src/utils/dotenv.ts
@@ -0,0 +1,17 @@
+import { config } from 'dotenv';
+import { expand } from 'dotenv-expand';
+
+/**
+ * This loads dotenv files from:
+ * - .env
+ * - .local.env
+ * - .env.local
+ */
+export function loadRootDotEnvFiles() {
+  for (const file of ['.local.env', '.env.local', '.env']) {
+    const myEnv = config({
+      path: file,
+    });
+    expand(myEnv);
+  }
+}