diff --git a/packages/nx/src/command-line/nx-commands.spec.ts b/packages/nx/src/command-line/nx-commands.spec.ts
new file mode 100644
index 0000000000000..d37b249e91a66
--- /dev/null
+++ b/packages/nx/src/command-line/nx-commands.spec.ts
@@ -0,0 +1,24 @@
+import { commandsObject } from 'nx/src/command-line/nx-commands';
+
+describe('nx-commands', () => {
+  it('should parse dot notion cli args', () => {
+    const actual = commandsObject.parse(
+      'nx e2e project-e2e --env.NX_API_URL=http://localhost:4200 --abc.123.xyx=false --a.b=3'
+    );
+    expect(actual).toEqual(
+      expect.objectContaining({
+        abc: {
+          '123': {
+            xyx: 'false',
+          },
+        },
+        a: {
+          b: 3,
+        },
+        env: {
+          NX_API_URL: 'http://localhost:4200',
+        },
+      })
+    );
+  });
+});
diff --git a/packages/nx/src/command-line/nx-commands.ts b/packages/nx/src/command-line/nx-commands.ts
index 2c20ceb1bed7a..92fb3257ab365 100644
--- a/packages/nx/src/command-line/nx-commands.ts
+++ b/packages/nx/src/command-line/nx-commands.ts
@@ -25,7 +25,8 @@ yargs.wrap(yargs.terminalWidth());
 export const commandsObject = yargs
   .parserConfiguration({
     'strip-dashed': true,
-    'dot-notation': false,
+    // allow parsing --env.SOME_ARG for cypress cli env args
+    'dot-notation': true,
   })
   .usage(
     `