diff --git a/src/commands/dev-child.ts b/src/commands/dev-child.ts
index 18480e69..0c391a22 100644
--- a/src/commands/dev-child.ts
+++ b/src/commands/dev-child.ts
@@ -2,14 +2,15 @@ import type { NuxtDevContext, NuxtDevIPCMessage } from '../utils/dev'
 
 import process from 'node:process'
 
+import { setupDotenv } from 'c12'
 import { defineCommand } from 'citty'
 import { resolve } from 'pathe'
-import { isTest } from 'std-env'
 
+import { isTest } from 'std-env'
 import { createNuxtDevServer } from '../utils/dev'
 import { overrideEnv } from '../utils/env'
 import { logger } from '../utils/logger'
-import { cwdArgs, envNameArgs, legacyRootDirArgs, logLevelArgs } from './_shared'
+import { cwdArgs, dotEnvArgs, envNameArgs, legacyRootDirArgs, logLevelArgs } from './_shared'
 
 export default defineCommand({
   meta: {
@@ -22,6 +23,7 @@ export default defineCommand({
     ...logLevelArgs,
     ...envNameArgs,
     ...legacyRootDirArgs,
+    ...dotEnvArgs,
   },
   async run(ctx) {
     if (!process.send && !isTest) {
@@ -30,9 +32,14 @@ export default defineCommand({
       )
     }
 
+    const envFileName = typeof ctx.args.dotenv === 'string'
+      ? (ctx.args.dotenv || '.env')
+      : undefined
+
     // Prepare
     overrideEnv('development')
     const cwd = resolve(ctx.args.cwd || ctx.args.rootDir)
+    await setupDotenv({ cwd, fileName: envFileName })
 
     // Get dev context info
     const devContext: NuxtDevContext
@@ -64,7 +71,7 @@ export default defineCommand({
       overrides: ctx.data?.overrides,
       logLevel: ctx.args.logLevel as 'silent' | 'info' | 'verbose',
       clear: !!ctx.args.clear,
-      dotenv: !!ctx.args.dotenv,
+      dotenv: envFileName,
       envName: ctx.args.envName,
       port: process.env._PORT ?? undefined,
       devContext,
diff --git a/src/commands/dev.ts b/src/commands/dev.ts
index c78a3921..9ede9dc4 100644
--- a/src/commands/dev.ts
+++ b/src/commands/dev.ts
@@ -46,11 +46,15 @@ const command = defineCommand({
     },
   },
   async run(ctx) {
+    const envFileName = typeof ctx.args.dotenv === 'string'
+      ? (ctx.args.dotenv || '.env')
+      : undefined
+
     // Prepare
     overrideEnv('development')
     const cwd = resolve(ctx.args.cwd || ctx.args.rootDir)
     await showVersions(cwd)
-    await setupDotenv({ cwd, fileName: ctx.args.dotenv })
+    await setupDotenv({ cwd, fileName: envFileName })
 
     // Load Nuxt Config
     const { loadNuxtConfig } = await loadKit(cwd)
@@ -82,7 +86,7 @@ const command = defineCommand({
           overrides: ctx.data?.overrides,
           logLevel: ctx.args.logLevel as 'silent' | 'info' | 'verbose',
           clear: ctx.args.clear,
-          dotenv: !!ctx.args.dotenv,
+          dotenv: envFileName,
           envName: ctx.args.envName,
           loadingTemplate: nuxtOptions.devServer.loadingTemplate,
           devContext: {},
diff --git a/src/commands/preview.ts b/src/commands/preview.ts
index e25f48b8..2d495e7c 100644
--- a/src/commands/preview.ts
+++ b/src/commands/preview.ts
@@ -89,14 +89,22 @@ export default defineCommand({
       ),
     )
 
-    const envExists = ctx.args.dotenv
-      ? existsSync(resolve(cwd, ctx.args.dotenv))
-      : existsSync(cwd)
-    if (envExists) {
-      logger.info(
-        `Loading \`${ctx.args.dotenv || '.env'}\`. This will not be loaded when running the server in production.`,
-      )
-      await setupDotenv({ cwd, fileName: ctx.args.dotenv })
+    if (typeof ctx.args.dotenv === 'string') {
+      const envFileName = ctx.args.dotenv || '.env'
+
+      const envExists = existsSync(resolve(cwd, envFileName))
+
+      if (envExists) {
+        logger.info(
+          `Loading \`${envFileName}\`. This will not be loaded when running the server in production.`,
+        )
+
+        await setupDotenv({ cwd, fileName: envFileName })
+      }
+      else {
+        logger.error(`Cannot find \`${envFileName}\`.`)
+        process.exit(1)
+      }
     }
 
     logger.info(`Starting preview command: \`${nitroJSON.commands.preview}\``)
diff --git a/src/utils/dev.ts b/src/utils/dev.ts
index 920ee632..c4f313c8 100644
--- a/src/utils/dev.ts
+++ b/src/utils/dev.ts
@@ -38,7 +38,7 @@ export interface NuxtDevContext {
 interface NuxtDevServerOptions {
   cwd: string
   logLevel: 'silent' | 'info' | 'verbose'
-  dotenv: boolean
+  dotenv: string | undefined
   envName: string
   clear: boolean
   overrides: NuxtConfig
@@ -177,6 +177,12 @@ class NuxtDevServer extends EventEmitter {
     const kit = await loadKit(this.options.cwd)
     this._currentNuxt = await kit.loadNuxt({
       cwd: this.options.cwd,
+      dotenv: this.options.dotenv
+        ? {
+            cwd: this.options.cwd,
+            fileName: this.options.dotenv,
+          }
+        : undefined,
       dev: true,
       ready: false,
       envName: this.options.envName,
@@ -315,7 +321,7 @@ class NuxtDevServer extends EventEmitter {
         return
       }
       const file = relative(this.options.cwd, _file)
-      if (file === (this.options.dotenv || '.env')) {
+      if (this.options.dotenv && file === this.options.dotenv) {
         this.emit('restart')
       }
       if (RESTART_RE.test(file)) {