diff --git a/guix/ui.scm b/guix/ui.scm
index 09cb6f48ff..9558d38ca8 100644
--- a/guix/ui.scm
+++ b/guix/ui.scm
@@ -769,7 +769,7 @@ Command-line options take precedence those passed via 'GUIX_BUILD_OPTIONS'.
 
 ARGUMENT-HANDLER is called for non-option arguments, like the 'operand-proc'
 parameter of 'args-fold'."
-  (define (parse-options-from args)
+  (define (parse-options-from args seeds)
     ;; Actual parsing takes place here.
     (apply args-fold* args options
            (lambda (opt name arg . rest)
@@ -777,8 +777,12 @@ parameter of 'args-fold'."
            argument-handler
            seeds))
 
-  (append (parse-options-from args)
-          (parse-options-from (environment-build-options))))
+  (call-with-values
+      (lambda ()
+        (parse-options-from (environment-build-options) seeds))
+    (lambda seeds
+      ;; ARGS take precedence over what the environment variable specifies.
+      (parse-options-from args seeds))))
 
 (define (show-guix-usage)
   (format (current-error-port)
diff --git a/tests/ui.scm b/tests/ui.scm
index c71fc71cc1..1478fe213e 100644
--- a/tests/ui.scm
+++ b/tests/ui.scm
@@ -82,6 +82,15 @@ interface, and powerful string processing.")
                         %standard-build-options
                         (list '()))))
 
+(test-equal "parse-command-line and --no options"
+  '((argument . "foo")
+    (substitutes? . #f))                          ;takes precedence
+
+  (with-environment-variable "GUIX_BUILD_OPTIONS" "--no-substitutes"
+    (parse-command-line '("foo")
+                        %standard-build-options
+                        (list '((substitutes? . #t))))))
+
 (test-assert "fill-paragraph"
   (every (lambda (column)
            (every (lambda (width)