diff --git a/CHANGELOG.md b/CHANGELOG.md
index 95f81e5264..f6b1e55d5a 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -29,6 +29,8 @@
 
 #### :house: Internal
 
+- Editor: resolve @rescript/runtime via environment variable RESCRIPT_RUNTIME. https://github.com/rescript-lang/rescript/pull/8023
+
 # 12.0.0-rc.4
 
 #### :boom: Breaking Change
diff --git a/analysis/src/BuildSystem.ml b/analysis/src/BuildSystem.ml
index 69eed6990b..de8f9c9bbe 100644
--- a/analysis/src/BuildSystem.ml
+++ b/analysis/src/BuildSystem.ml
@@ -5,19 +5,39 @@ let namespacedName namespace name =
 
 let ( /+ ) = Filename.concat
 
+(*
+Editor tooling can more accurately resolve the runtime path and will try and pass it via an environment variable.
+Example path: "test-stdlib/node_modules/.pnpm/@rescript+runtime@12.0.0-rc.4/node_modules/@rescript/runtime"
+*)
+
 let getRuntimeDir rootPath =
   match !Cfg.isDocGenFromCompiler with
   | false -> (
-    let result =
-      ModuleResolution.resolveNodeModulePath ~startPath:rootPath
-        "@rescript/runtime"
-    in
-    match result with
-    | Some path -> Some path
-    | None ->
-      let message = "@rescript/runtime could not be found" in
-      Log.log message;
-      None)
+    (* First check RESCRIPT_RUNTIME environment variable, like bsc does *)
+    match Sys.getenv_opt "RESCRIPT_RUNTIME" with
+    | Some envPath ->
+      if Debug.verbose () then
+        Printf.printf "[getRuntimeDir] Using RESCRIPT_RUNTIME=%s\n" envPath;
+      Some envPath
+    | None -> (
+      let result =
+        ModuleResolution.resolveNodeModulePath ~startPath:rootPath
+          "@rescript/runtime"
+      in
+      match result with
+      | Some path ->
+        if Debug.verbose () then
+          Printf.printf "[getRuntimeDir] Resolved via node_modules: %s\n" path;
+        Some path
+      | None ->
+        let message = "@rescript/runtime could not be found" in
+        Log.log message;
+        if Debug.verbose () then
+          Printf.printf
+            "[getRuntimeDir] Failed to resolve @rescript/runtime from \
+             rootPath=%s\n"
+            rootPath;
+        None))
   | true -> Some rootPath
 
 let getLibBs path = Files.ifExists (path /+ "lib" /+ "bs")