diff --git a/src/lithic/_client.py b/src/lithic/_client.py
index 14b16915..f6b7fcc9 100644
--- a/src/lithic/_client.py
+++ b/src/lithic/_client.py
@@ -509,7 +509,7 @@ def copy(
         return self.__class__(
             api_key=api_key or self.api_key,
             webhook_secret=webhook_secret or self.webhook_secret,
-            base_url=base_url or self.base_url,
+            base_url=base_url or (None if environment is not None else self.base_url),
             environment=environment or self._environment,
             timeout=self.timeout if isinstance(timeout, NotGiven) else timeout,
             http_client=http_client,
@@ -951,7 +951,7 @@ def copy(
         return self.__class__(
             api_key=api_key or self.api_key,
             webhook_secret=webhook_secret or self.webhook_secret,
-            base_url=base_url or self.base_url,
+            base_url=base_url or (None if environment is not None else self.base_url),
             environment=environment or self._environment,
             timeout=self.timeout if isinstance(timeout, NotGiven) else timeout,
             http_client=http_client,
diff --git a/tests/test_environment_copy.py b/tests/test_environment_copy.py
new file mode 100644
index 00000000..52ff3b61
--- /dev/null
+++ b/tests/test_environment_copy.py
@@ -0,0 +1,74 @@
+from typing_extensions import Literal
+
+import httpx
+import pytest
+
+from lithic import Lithic, AsyncLithic
+
+Environment = Literal["production", "sandbox"]
+
+
+@pytest.mark.parametrize("initial,target", [("production", "sandbox"), ("sandbox", "production")])
+@pytest.mark.parametrize("method", ["copy", "with_options"])
+def test_sync_environment_override(
+    initial: Environment, target: Environment, method: str, monkeypatch: pytest.MonkeyPatch
+) -> None:
+    monkeypatch.delenv("LITHIC_BASE_URL", raising=False)
+    requests: list[httpx.Request] = []
+
+    def respond(request: httpx.Request) -> httpx.Response:
+        requests.append(request)
+        return httpx.Response(200, json={"data": []})
+
+    with Lithic(
+        api_key="test-key", environment=initial, http_client=httpx.Client(transport=httpx.MockTransport(respond))
+    ) as client:
+        original_url = client.base_url
+        switched = client.copy(environment=target) if method == "copy" else client.with_options(environment=target)
+        switched.cards.list()
+        assert client.base_url == original_url
+
+    expected_host = "api.lithic.com" if target == "production" else "sandbox.lithic.com"
+    assert requests[0].url.host == expected_host
+
+
+@pytest.mark.parametrize("initial,target", [("production", "sandbox"), ("sandbox", "production")])
+@pytest.mark.parametrize("method", ["copy", "with_options"])
+async def test_async_environment_override(
+    initial: Environment, target: Environment, method: str, monkeypatch: pytest.MonkeyPatch
+) -> None:
+    monkeypatch.delenv("LITHIC_BASE_URL", raising=False)
+    requests: list[httpx.Request] = []
+
+    def respond(request: httpx.Request) -> httpx.Response:
+        requests.append(request)
+        return httpx.Response(200, json={"data": []})
+
+    async with AsyncLithic(
+        api_key="test-key", environment=initial, http_client=httpx.AsyncClient(transport=httpx.MockTransport(respond))
+    ) as client:
+        original_url = client.base_url
+        switched = client.copy(environment=target) if method == "copy" else client.with_options(environment=target)
+        await switched.cards.list()
+        assert client.base_url == original_url
+
+    expected_host = "api.lithic.com" if target == "production" else "sandbox.lithic.com"
+    assert requests[0].url.host == expected_host
+
+
+@pytest.mark.parametrize("override", [False, True])
+def test_sync_custom_url_is_preserved(override: bool) -> None:
+    with Lithic(api_key="test-key", base_url="https://original.example/v1") as client:
+        copied = (
+            client.copy(environment="sandbox", base_url="https://override.example/v1") if override else client.copy()
+        )
+        assert copied.base_url.host == ("override.example" if override else "original.example")
+
+
+@pytest.mark.parametrize("override", [False, True])
+async def test_async_custom_url_is_preserved(override: bool) -> None:
+    async with AsyncLithic(api_key="test-key", base_url="https://original.example/v1") as client:
+        copied = (
+            client.copy(environment="sandbox", base_url="https://override.example/v1") if override else client.copy()
+        )
+        assert copied.base_url.host == ("override.example" if override else "original.example")