fix(patch): cherry-pick 58df1c6 to release/v0.30.0-pr-20374 [CONFLICTS]

docs/tools/mcp-server.md

@@ -163,7 +163,8 @@ Each server configuration supports the following properties:
 - **`args`** (string[]): Command-line arguments for Stdio transport
 - **`headers`** (object): Custom HTTP headers when using `url` or `httpUrl`
 - **`env`** (object): Environment variables for the server process. Values can
-  reference environment variables using `$VAR_NAME` or `${VAR_NAME}` syntax
+  reference environment variables using `$VAR_NAME` or `${VAR_NAME}` syntax (all
+  platforms), or `%VAR_NAME%` (Windows only).
 - **`cwd`** (string): Working directory for Stdio transport
 - **`timeout`** (number): Request timeout in milliseconds (default: 600,000ms =
   10 minutes)
@@ -184,6 +185,63 @@ Each server configuration supports the following properties:
   Service Account to impersonate. Used with
   `authProviderType: 'service_account_impersonation'`.
 
+### Environment variable expansion
+
+Gemini CLI automatically expands environment variables in the `env` block of
+your MCP server configuration. This allows you to securely reference variables
+defined in your shell or environment without hardcoding sensitive information
+directly in your `settings.json` file.
+
+The expansion utility supports:
+
+- **POSIX/Bash syntax:** `$VARIABLE_NAME` or `${VARIABLE_NAME}` (supported on
+  all platforms)
+- **Windows syntax:** `%VARIABLE_NAME%` (supported only when running on Windows)
+
+If a variable is not defined in the current environment, it resolves to an empty
+string.
+
+**Example:**
+
+```json
+"env": {
+  "API_KEY": "$MY_EXTERNAL_TOKEN",
+  "LOG_LEVEL": "$LOG_LEVEL",
+  "TEMP_DIR": "%TEMP%"
+}
+```
+
+### Security and environment sanitization
+
+To protect your credentials, Gemini CLI performs environment sanitization when
+spawning MCP server processes.
+
+#### Automatic redaction
+
+By default, the CLI redacts sensitive environment variables from the base
+environment (inherited from the host process) to prevent unintended exposure to
+third-party MCP servers. This includes:
+
+- Core project keys: `GEMINI_API_KEY`, `GOOGLE_API_KEY`, etc.
+- Variables matching sensitive patterns: `*TOKEN*`, `*SECRET*`, `*PASSWORD*`,
+  `*KEY*`, `*AUTH*`, `*CREDENTIAL*`.
+- Certificates and private key patterns.
+
+#### Explicit overrides
+
+If an environment variable must be passed to an MCP server, you must explicitly
+state it in the `env` property of the server configuration in `settings.json`.
+Explicitly defined variables (including those from extensions) are trusted and
+are **not** subjected to the automatic redaction process.
+
+This follows the security principle that if a variable is explicitly configured
+by the user for a specific server, it constitutes informed consent to share that
+specific data with that server.
+
+> **Note:** Even when explicitly defined, you should avoid hardcoding secrets.
+> Instead, use environment variable expansion (e.g., `"MY_KEY": "$MY_KEY"`) to
+> securely pull the value from your host environment at runtime.
+
 ### OAuth support for remote MCP servers
 
 The Gemini CLI supports OAuth 2.0 authentication for remote MCP servers using
@@ -738,7 +796,9 @@ The MCP integration tracks several states:
 - **Trust settings:** The `trust` option bypasses all confirmation dialogs. Use
   cautiously and only for servers you completely control
 - **Access tokens:** Be security-aware when configuring environment variables
-  containing API keys or tokens
+  containing API keys or tokens. See
+  [Security and environment sanitization](#security-and-environment-sanitization)
+  for details on how Gemini CLI protects your credentials.
 - **Sandbox compatibility:** When using sandboxing, ensure MCP servers are
   available within the sandbox environment
 - **Private data:** Using broadly scoped personal access tokens can lead to

packages/core/package.json

@@ -53,6 +53,8 @@
     "ajv-formats": "^3.0.0",
     "chardet": "^2.1.0",
     "diff": "^8.0.3",
+    "dotenv": "^17.2.4",
+    "dotenv-expand": "^12.0.3",
     "fast-levenshtein": "^2.0.6",
     "fdir": "^6.4.6",
     "fzf": "^0.5.2",

packages/core/src/tools/mcp-client.test.ts

@@ -1696,6 +1696,114 @@ describe('mcp-client', () => {
       expect(callArgs.env!['GEMINI_CLI_EXT_VAR']).toBeUndefined();
     });
 
+    it('should include extension settings with defined values in environment', async () => {
+      const mockedTransport = vi
+        .spyOn(SdkClientStdioLib, 'StdioClientTransport')
+        .mockReturnValue({} as SdkClientStdioLib.StdioClientTransport);
+
+      await createTransport(
+        'test-server',
+        {
+          command: 'test-command',
+          extension: {
+            name: 'test-ext',
+            resolvedSettings: [
+              {
+                envVar: 'GEMINI_CLI_EXT_VAR',
+                value: 'defined-value',
+                sensitive: false,
+                name: 'ext-setting',
+              },
+            ],
+            version: '',
+            isActive: false,
+            path: '',
+            contextFiles: [],
+            id: '',
+          },
+        },
+        false,
+        EMPTY_CONFIG,
+      );
+
+      const callArgs = mockedTransport.mock.calls[0][0];
+      expect(callArgs.env).toBeDefined();
+      expect(callArgs.env!['GEMINI_CLI_EXT_VAR']).toBe('defined-value');
+    });
+
+    it('should resolve environment variables in mcpServerConfig.env using extension settings', async () => {
+      const mockedTransport = vi
+        .spyOn(SdkClientStdioLib, 'StdioClientTransport')
+        .mockReturnValue({} as SdkClientStdioLib.StdioClientTransport);
+
+      await createTransport(
+        'test-server',
+        {
+          command: 'test-command',
+          env: {
+            RESOLVED_VAR: '$GEMINI_CLI_EXT_VAR',
+          },
+          extension: {
+            name: 'test-ext',
+            resolvedSettings: [
+              {
+                envVar: 'GEMINI_CLI_EXT_VAR',
+                value: 'ext-value',
+                sensitive: false,
+                name: 'ext-setting',
+              },
+            ],
+            version: '',
+            isActive: false,
+            path: '',
+            contextFiles: [],
+            id: '',
+          },
+        },
+        false,
+        EMPTY_CONFIG,
+      );
+
+      const callArgs = mockedTransport.mock.calls[0][0];
+      expect(callArgs.env).toBeDefined();
+      expect(callArgs.env!['GEMINI_CLI_EXT_VAR']).toBe('ext-value');
+      expect(callArgs.env!['RESOLVED_VAR']).toBe('ext-value');
+    });
+
+    it('should expand environment variables in mcpServerConfig.env and not redact them', async () => {
+      const mockedTransport = vi
+        .spyOn(SdkClientStdioLib, 'StdioClientTransport')
+        .mockReturnValue({} as SdkClientStdioLib.StdioClientTransport);
+
+      const originalEnv = process.env;
+      process.env = {
+        ...originalEnv,
+        GEMINI_TEST_VAR: 'expanded-value',
+      };
+
+      try {
+        await createTransport(
+          'test-server',
+          {
+            command: 'test-command',
+            env: {
+              TEST_EXPANDED: 'Value is $GEMINI_TEST_VAR',
+              SECRET_KEY: 'intentional-secret-123',
+            },
+          },
+          false,
+          EMPTY_CONFIG,
+        );
+
+        const callArgs = mockedTransport.mock.calls[0][0];
+        expect(callArgs.env).toBeDefined();
+        expect(callArgs.env!['TEST_EXPANDED']).toBe('Value is expanded-value');
+        expect(callArgs.env!['SECRET_KEY']).toBe('intentional-secret-123');
+      } finally {
+        process.env = originalEnv;
+      }
+    });
+
     describe('useGoogleCredentialProvider', () => {
       beforeEach(() => {
         // Mock GoogleAuth client