diff --git a/doc/source/configuration.rst b/doc/source/configuration.rst
index 5331603b1..4e88c2e97 100644
--- a/doc/source/configuration.rst
+++ b/doc/source/configuration.rst
@@ -173,21 +173,18 @@ will be built using the provider snapshot approach::
     qemu-img-options: compat=0.10
     env-vars:
         DIB_DISTRIBUTION_MIRROR: http://archive.ubuntu.com
+        DIB_EXTRA_VARIABLE: foobar
 
 For diskimages, the `name` is required. The `elements` section
-enumerates all the elements that will be included when building
-the image, and will point to the `elements-dir` path referenced
-in the same config file. `release` specifies the distro to be
-used as a base image to build the image using diskimage-builder.
-`qemu-img-options` allows to specify custom settings that qemu
-will be using to build the final image. Settings there have to
-be separated by commas, and must follow qemu syntax.
-
-The `env-vars` key is optional. It allows to specify a list of
-environment variables that will be appended to the variables
-that are send by default to diskimage-builder. Using that approach
-it is possible to send the DIB_*environment variables neeeded by
-diskimage-builder elements per image type.
+enumerates all the elements that will be included when building the
+image, and will point to the `elements-dir` path referenced in the
+same config file. `release` specifies the distro to be used as a base
+image to build the image using diskimage-builder.  `qemu-img-options`
+allows to specify custom settings that qemu will be using to build the
+final image. Settings there have to be separated by commas, and must
+follow qemu syntax.  `env-vars` is an optional dictionary of arbitrary
+environment variables that will be available in the spawned
+diskimage-builder child process.
 
 providers
 ---------
diff --git a/nodepool/nodepool.py b/nodepool/nodepool.py
index fb2dc9fcc..c0da269f8 100644
--- a/nodepool/nodepool.py
+++ b/nodepool/nodepool.py
@@ -766,11 +766,13 @@ class DiskImageBuilder(threading.Thread):
                              image.qemu_img_options)
         img_elements = image.elements
 
-        cmd = ('disk-image-create -x --no-tmpfs %s -o %s %s' %
-               (extra_options, out_file_path, img_elements))
-
         if 'fake-' in filename:
-            cmd = 'echo ' + cmd
+            dib_cmd = 'nodepool/tests/fake-image-create'
+        else:
+            dib_cmd = 'disk-image-create'
+
+        cmd = ('%s -x --no-tmpfs %s -o %s %s' %
+               (dib_cmd, extra_options, out_file_path, img_elements))
 
         log = logging.getLogger("nodepool.image.build.%s" %
                                 (image_name,))
@@ -1247,9 +1249,10 @@ class NodePool(threading.Thread):
                     d.elements = ''
                 d.release = diskimage.get('release', '')
                 d.qemu_img_options = diskimage.get('qemu-img-options', '')
-                if 'env-vars' in diskimage:
-                    d.env_vars = diskimage['env-vars']
-                else:
+                d.env_vars = diskimage.get('env-vars', {})
+                if not isinstance(d.env_vars, dict):
+                    self.log.error("%s: ignoring env-vars; "
+                                   "should be a dict" % d.name)
                     d.env_vars = {}
 
         for provider in config['providers']:
diff --git a/nodepool/tests/fake-image-create b/nodepool/tests/fake-image-create
new file mode 100755
index 000000000..da6936dfe
--- /dev/null
+++ b/nodepool/tests/fake-image-create
@@ -0,0 +1,31 @@
+#!/bin/bash
+
+echo "*** fake-image-create: start"
+
+echo "arguments:"
+echo "----"
+echo $*
+echo "----"
+
+# test passing of real-life env-vars
+if [[ "${TMPDIR}" != "/opt/dib_tmp" ]]; then
+    echo "TMPDIR not set"
+    exit 1
+fi
+
+if [[ "${DIB_IMAGE_CACHE}" != "/opt/dib_cache" ]]; then
+    echo "DIB_IMAGE_CACHE not set"
+    exit 1
+fi
+
+if [[ "${DIB_CLOUD_IMAGES}" != "http://download.fedoraproject.org/pub/fedora/linux/releases/test/21-Beta/Cloud/Images/x86_64/" ]]; then
+    echo "DIB_CLOUD_IMAGES not set"
+    exit 1
+fi
+
+if [[ "${BASE_IMAGE_FILE}" != "Fedora-Cloud-Base-20141029-21_Beta.x86_64.qcow2" ]]; then
+    echo "BASE_IMAGE_FILE not set"
+    exit 1
+fi
+
+echo "*** fake-image-create: done"
diff --git a/nodepool/tests/fixtures/node_dib.yaml b/nodepool/tests/fixtures/node_dib.yaml
index 3443cfcfa..68c09bb85 100644
--- a/nodepool/tests/fixtures/node_dib.yaml
+++ b/nodepool/tests/fixtures/node_dib.yaml
@@ -53,4 +53,8 @@ diskimages:
       - ubuntu
       - vm
     release: precise
-
+    env-vars:
+      TMPDIR: /opt/dib_tmp
+      DIB_IMAGE_CACHE: /opt/dib_cache
+      DIB_CLOUD_IMAGES: http://download.fedoraproject.org/pub/fedora/linux/releases/test/21-Beta/Cloud/Images/x86_64/
+      BASE_IMAGE_FILE: Fedora-Cloud-Base-20141029-21_Beta.x86_64.qcow2
diff --git a/nodepool/tests/fixtures/node_dib_and_snap.yaml b/nodepool/tests/fixtures/node_dib_and_snap.yaml
index feec7f7c9..e692faacc 100644
--- a/nodepool/tests/fixtures/node_dib_and_snap.yaml
+++ b/nodepool/tests/fixtures/node_dib_and_snap.yaml
@@ -70,4 +70,9 @@ diskimages:
       - ubuntu
       - vm
     release: precise
+    env-vars:
+      TMPDIR: /opt/dib_tmp
+      DIB_IMAGE_CACHE: /opt/dib_cache
+      DIB_CLOUD_IMAGES: http://download.fedoraproject.org/pub/fedora/linux/releases/test/21-Beta/Cloud/Images/x86_64/
+      BASE_IMAGE_FILE: Fedora-Cloud-Base-20141029-21_Beta.x86_64.qcow2