diff --git a/lib/ExtUtils/Liblist.pm b/lib/ExtUtils/Liblist.pm
index 8ddf119da..b245809e5 100644
--- a/lib/ExtUtils/Liblist.pm
+++ b/lib/ExtUtils/Liblist.pm
@@ -97,6 +97,28 @@ dynamically at run time on this platform.  SunOS/Solaris does not need
 this because ld records the information (from LDLOADLIBS) into the
 object file.  This list is used to create a .bs (bootstrap) file.
 
+=head1 ENVIRONMENT
+
+=over 4
+
+=item LIBRARY_PATH
+
+On Unix and OS/2, if the C<LIBRARY_PATH> environment variable is set, its
+colon-separated list of directories is prepended to the default library search
+path derived from C<$Config{libpth}>.  This allows users to point to a
+custom or updated version of a library without modifying Perl's configuration:
+
+    LIBRARY_PATH=/opt/mylibs/lib perl Makefile.PL
+
+Directories listed in C<LIBRARY_PATH> take priority over those in
+C<$Config{libpth}>, but C<-L> flags explicitly passed via C<LIBS> still take
+the highest priority.
+
+On Win32 the same variable is honoured when GCC is in use (as
+C<$Config{cc}> contains C<gcc>).
+
+=back
+
 =head1 PORTABILITY
 
 This module deals with a lot of system dependencies and has quite a
diff --git a/lib/ExtUtils/Liblist/Kid.pm b/lib/ExtUtils/Liblist/Kid.pm
index 2e7210fb1..edb701af6 100644
--- a/lib/ExtUtils/Liblist/Kid.pm
+++ b/lib/ExtUtils/Liblist/Kid.pm
@@ -73,6 +73,11 @@ sub _unix_os2_ext {
 
     my @searchpath;    # from "-L/path" entries in $potential_libs
     my @libpath = _space_dirs_split($Config{libpth} || '');
+    # Honor LIBRARY_PATH environment variable (colon-separated, used by GCC and
+    # other tools).  Prepend so user-specified paths take priority over libpth.
+    if ( defined $ENV{LIBRARY_PATH} ) {
+        unshift @libpath, grep { length } split /:/, $ENV{LIBRARY_PATH};
+    }
     my ( @ldloadlibs, @bsloadlibs, @extralibs, @ld_run_path, %ld_run_path_seen );
     my ( @libs,       %libs_seen );
     my ( $fullname,   @fullname );
diff --git a/t/Liblist_Kid.t b/t/Liblist_Kid.t
index 49105fb01..c5f044911 100644
--- a/t/Liblist_Kid.t
+++ b/t/Liblist_Kid.t
@@ -149,6 +149,22 @@ sub test_kid_unix_os2 {
       my @got = _ext( '-ldir_test' );
       is_deeply \@got, [ '-ldir_test', '', '-ldir_test', 'di r' ], 'Config.libpth directories with spaces work' or diag explain \@got;
     }
+    {
+      my $abs = File::Spec->rel2abs('.');
+      local $ENV{LIBRARY_PATH} = $abs;
+      local $Config{libpth} = '';
+      my @got = _ext( '-lfoo' );
+      like $got[0], qr/-lfoo/, '$ENV{LIBRARY_PATH} adds search paths for extralibs' or diag explain \@got;
+      like $got[2], qr/-lfoo/, '$ENV{LIBRARY_PATH} adds search paths for ldloadlibs' or diag explain \@got;
+      ok $got[3], '$ENV{LIBRARY_PATH} results in non-empty LD_RUN_PATH' or diag explain \@got;
+    }
+    {
+      my $abs = File::Spec->rel2abs('.');
+      local $ENV{LIBRARY_PATH} = "/nonexistent:$abs";
+      local $Config{libpth} = '';
+      my @got = _ext( '-lfoo' );
+      like $got[0], qr/-lfoo/, '$ENV{LIBRARY_PATH} with multiple colon-separated entries finds lib in second path' or diag explain \@got;
+    }
     my $mm = WriteMakefile(
         NAME            => 'Big::Dummy',
         VERSION    => '1.00',