diff --git a/commands/install-runner.go b/commands/install-runner.go
index 67ceafeb..173bdeb4 100644
--- a/commands/install-runner.go
+++ b/commands/install-runner.go
@@ -126,10 +126,12 @@ func ensureStandaloneRunnerAvailable(ctx context.Context, printer standalone.Sta
 
 	// Create the model runner container.
 	port := uint16(standalone.DefaultControllerPortMoby)
+	environment := "moby"
 	if engineKind == desktop.ModelRunnerEngineKindCloud {
 		port = standalone.DefaultControllerPortCloud
+		environment = "cloud"
 	}
-	if err := standalone.CreateControllerContainer(ctx, dockerClient, port, false, gpu, modelStorageVolume, printer); err != nil {
+	if err := standalone.CreateControllerContainer(ctx, dockerClient, port, environment, false, gpu, modelStorageVolume, printer); err != nil {
 		return nil, fmt.Errorf("unable to initialize standalone model runner container: %w", err)
 	}
 
@@ -188,6 +190,12 @@ func newInstallRunner() *cobra.Command {
 				port = standalone.DefaultControllerPortCloud
 			}
 
+			// Set the appropriate environment.
+			environment := "moby"
+			if engineKind == desktop.ModelRunnerEngineKindCloud {
+				environment = "cloud"
+			}
+
 			// Create a Docker client for the active context.
 			dockerClient, err := desktop.DockerClientForContext(dockerCLI, dockerCLI.CurrentContext())
 			if err != nil {
@@ -230,7 +238,7 @@ func newInstallRunner() *cobra.Command {
 				return fmt.Errorf("unable to initialize standalone model storage: %w", err)
 			}
 			// Create the model runner container.
-			if err := standalone.CreateControllerContainer(cmd.Context(), dockerClient, port, doNotTrack, gpu, modelStorageVolume, cmd); err != nil {
+			if err := standalone.CreateControllerContainer(cmd.Context(), dockerClient, port, environment, doNotTrack, gpu, modelStorageVolume, cmd); err != nil {
 				return fmt.Errorf("unable to initialize standalone model runner container: %w", err)
 			}
 
diff --git a/pkg/standalone/containers.go b/pkg/standalone/containers.go
index 9858ce37..10e0fac3 100644
--- a/pkg/standalone/containers.go
+++ b/pkg/standalone/containers.go
@@ -66,7 +66,7 @@ func determineBridgeGatewayIP(ctx context.Context, dockerClient *client.Client)
 }
 
 // CreateControllerContainer creates and starts a controller container.
-func CreateControllerContainer(ctx context.Context, dockerClient *client.Client, port uint16, doNotTrack bool, gpu gpupkg.GPUSupport, modelStorageVolume string, printer StatusPrinter) error {
+func CreateControllerContainer(ctx context.Context, dockerClient *client.Client, port uint16, environment string, doNotTrack bool, gpu gpupkg.GPUSupport, modelStorageVolume string, printer StatusPrinter) error {
 	// Determine the target image.
 	var imageName string
 	switch gpu {
@@ -78,7 +78,10 @@ func CreateControllerContainer(ctx context.Context, dockerClient *client.Client,
 
 	// Set up the container configuration.
 	portStr := strconv.Itoa(int(port))
-	env := []string{"MODEL_RUNNER_PORT=" + portStr}
+	env := []string{
+		"MODEL_RUNNER_PORT=" + portStr,
+		"MODEL_RUNNER_ENVIRONMENT=" + environment,
+	}
 	if doNotTrack {
 		env = append(env, "DO_NOT_TRACK=1")
 	}