diff --git a/checker/checker.go b/checker/checker.go
index e4e2b50d..c214acf3 100644
--- a/checker/checker.go
+++ b/checker/checker.go
@@ -157,6 +157,12 @@ func (v *checker) IdentifierNode(node *ast.IdentifierNode) (reflect.Type, info)
 	if node.Value == "$env" {
 		return mapType, info{}
 	}
+	if fn, ok := v.config.Builtins[node.Value]; ok {
+		return functionType, info{fn: fn}
+	}
+	if fn, ok := v.config.Functions[node.Value]; ok {
+		return functionType, info{fn: fn}
+	}
 	return v.env(node, node.Value, true)
 }
 
@@ -166,13 +172,9 @@ type NodeWithIndexes interface {
 	SetMethodIndex(methodIndex int)
 }
 
+// env method returns type of environment variable. env only lookups for
+// environment variables, no builtins, no custom functions.
 func (v *checker) env(node NodeWithIndexes, name string, strict bool) (reflect.Type, info) {
-	if fn, ok := v.config.Builtins[name]; ok {
-		return functionType, info{fn: fn}
-	}
-	if fn, ok := v.config.Functions[name]; ok {
-		return functionType, info{fn: fn}
-	}
 	if t, ok := v.config.Types[name]; ok {
 		if t.Ambiguous {
 			return v.error(node, "ambiguous identifier %v", name)
diff --git a/expr_test.go b/expr_test.go
index 873d726f..eb77408b 100644
--- a/expr_test.go
+++ b/expr_test.go
@@ -1971,7 +1971,32 @@ func TestEnv_keyword(t *testing.T) {
 
 		})
 	}
+}
+
+func TestEnv_keyword_with_custom_functions(t *testing.T) {
+	fn := expr.Function("fn", func(params ...any) (any, error) {
+		return "ok", nil
+	})
+
+	var tests = []struct {
+		code  string
+		error bool
+	}{
+		{`fn()`, false},
+		{`$env.fn()`, true},
+		{`$env["fn"]`, true},
+	}
 
+	for _, tt := range tests {
+		t.Run(tt.code, func(t *testing.T) {
+			_, err := expr.Compile(tt.code, expr.Env(mock.Env{}), fn)
+			if tt.error {
+				require.Error(t, err)
+			} else {
+				require.NoError(t, err)
+			}
+		})
+	}
 }
 
 func TestIssue401(t *testing.T) {